Putin’s Russia and America’s Export-Import Bank
It may not be the return of the Cold War, but Americans are increasingly alarmed by Russia’s hostility toward Ukraine. According to a new CNN/ORC International poll, more than two-thirds of Americans see Russia as a threat, which is a “25-percentage point increase since 2012 and represents the highest number on that question since the break-up of the Soviet Union,” according to polling director Keating Holland.
Even as Americans sour on Russia their financial activity in the country has soared through a little known credit export agency called the U.S. Export-Import (ExIm) Bank. According to the Bank’s 2013 annual report, it guaranteed more than $580 million in export funding during the last fiscal year — up 177-percent from fiscal year 2012.
As is typical with the ExIm Bank, the bulk of fiscal year 2013 activity centers around Boeing — 85-percent of the Russian guarantees, to be precise. As we’ve written before, even though Boeing can arrange its own financing, the $93 billion company “receives upwards of 80-percent of the Ex-Im Bank’s taxpayer-backed loan guarantees.”
Aircraft exports figure prominently in the ExIm Bank’s operation.
Last July, an exclusive Reuters report provided an intimate look at how foreign businesses go about trying to secure financing from the U.S. Export-Import Bank:
Billionaire Russian businessman Gennady Timchenko, a long-time associate of Russian President Vladimir Putin, plans to seek U.S. government-backed funding to buy luxury aircraft, Reuters has learned.
To smooth the path for financial backing from the U.S. Export-Import Bank and allay possible U.S. government concerns about him, Timchenko hired lobbyists from powerhouse Washington law firm Patton Boggs, according to emails and documents viewed by Reuters.
Timchenko is one of Russia’s richest oligarchs, the billionaire business barons who emerged following the fall of the Soviet Union, some of whom enjoy close ties to Putin. The plane order would bolster the fleet of Timchenko’s Finland-based luxury jet charterer, Airfix Aviation Oy, whose aircraft have reportedly transported Kremlin-linked businessmen and Russian government officials.
Patton Boggs acknowledged its work on Timchenko’s behalf. It told Reuters it has held preliminary talks with Ex-Im Bank, officials from two Senate offices and a U.S. congressional policy advisor, without naming the officials. The firm said the talks with Ex-Im Bank involved a loan guarantee for a single jet that Airfix has already ordered.
While it appears the effort fizzled out (there is no mention of Airfix Aviation Oy on the Bank’s website), big dollars were thrown at the effort:
Timchenko hired Patton Boggs through Ivanyan & Partners, a law firm in Moscow that represents the billionaire, said [Patton Boggs partner Joseph] Brand in an email. Ivanyan & Partners paid Patton Boggs $50,000 last quarter for lobbying in the U.S. Senate, according to a July 21 record submitted to Congress.
As Congress considers whether to reauthorize the Ex-Im Bank later this year, lawmakers should ask a simple question: do they agree with then-Senator Obama that the ExIm Bank is “little more than a fund for corporate welfare”?