CJ Hall leaves US Ex-Im: a vital US agency hamstrung by politics

Charles Hall, the acting chairman of US Ex-Im has retired from the bank. What does this mean for the agency which is still without a board quorum and unable to approve new export deals over $10 million?

Charles Hall, the acting chairman and president of the Export-Import Bank of the United States (US Ex-Im), has left the bank as of this past weekend. This is the latest development in the long drawn out saga of the bank, which is virtually moribund - without a board and only able to sign off new deals up to $10 million.

Hall has left the bank and officially taken retirement from the US civil service. He was an Obama appointee, and has acted as chairman over the past 11 months following the departure of Fred Hochberg, the previous chairman of Ex-Im. Taking over as the acting chairman will be Scott Schloegel, previously acting vice chairman and first vice president.

So where does that leave US Ex-Im? Will this development give impetus to the appointment of a quorum and a board so that new business can be approved? For the time being there is no real change in the agency. And the backlog of around $37 billion worth of US export contracts backed by Ex-Im awaiting approval from the Ex-Im board is still just sitting there frustrating many US exporting companies and their overseas clients.

US politicians (House and Senate) refused to reauthorise Ex-Im back in early 2015, leaving it in a complete state of limbo. Then it was given partial reauthorisation in December 2015, but that only allowed for the sign-off of any new deals up to $10 million and the see-through of existing business which had already been approved by the Ex-Im board. Obama appointees to the board in order to provide a quorum continued to be rejected by US politicians.

With the arrival of President Donald Trump there had been speculation that he would propose the complete elimination of Ex-Im in his initial budget – very much like he has put forward for OPIC. However, this did not happen, although Ex-Im has remained unable to do new business.

In September this year, President Trump put forward nominees for new officials to the Ex-Im board, including his choice of Scott Garrett as his nomination for Ex-Im chairman. Garrett, a New Jersey Republican, was a particularly controversial choice as he has always voiced his opposition to Ex-Im and stated that it should be scrapped. Garrett was interviewed by the Senate Banking Committee in November where he avoided properly answering any questions on his previously stated views of scrapping the agency.

One leading US industry veteran contacted by TXF comments: “The Senate hearing clearly demonstrated he is totally unfit for the job of leading Ex-Im to support US industry properly. I have heard that the White House is cooling on Garrett, though one never knows what to believe as everything there moves so slowly.” 

The source adds: “There have been suggestions and efforts to keep Garrett as a board nominee and make Spencer Bachus the chairman of Ex-Im. If such a situation took place, that could be workable. However, my personal feeling is there is so much in front of Congress at the moment that I just can’t see them turning their attention to this until the New Year and in the meantime efforts to sideline Garrett will continue.” 

Only three board members are needed to provide Ex-Im with a board quorum. 

Another contact states: “This whole issue could come to a head if the Senate Banking Committee puts forward its verdict to the Senate. And, even in the rejection of Garrett, there is still the probability that the other Trump nominees to the board will be approved.”

He adds: “This will be entirely a good thing as it would mean that Ex-Im could clear the backlog of deals, and once again approve new deals above the current $10 million limit. At least it gets the USA back in the global game competing with other export credit agencies and many US manufacturing exporters working on overseas contracts again.”

Apart from Garrett, the other current non-controversial nominees to the Ex-Im board are: Kimberly Reed, Judith Pryor and Claudia Slacik.

And when the Trump administration made this public in September this year, the National Association of Manufacturers (NAM) president and CEO Jay Timmons said: "With today's new nominations of Kimberley Reed, Judith Pryor and Claudia Slacik to the Ex-Im Bank, we are one step closer to a fully functioning agency, which is essential for manufacturers of all sizes to make deals that support American jobs and American workers. These nominees build on President Donald Trump’s vigorous and outspoken support of American manufacturing workers and the Ex-Im Bank. And manufacturers urge the Senate to quickly take up these three nominations as well as the previously announced nomination of Spencer Bachus.

“At the same time, we continue to call on the Senate to oppose the confirmation of Scott Garrett, who seeks to lead the Ex-Im Bank despite a long history of actions and statements designed to destroy the agency itself. President Trump understands exactly the critical role that Ex-Im Bank plays in supporting 1.4 million jobs in the United States. The Senate must ensure that Mr Garrett is not put in a position to both thwart the President’s stated goals and harm America’s manufacturing workers.”

In an interesting backdrop to all this, TXF understands that last Thursday in the White House there was a high-level discussion relating to increasing US exports and involvement in sub-Saharan Africa. Various experts at that meeting pointed out that in previous years the major US export drive in Africa had only taken place because of strong US Ex-Im support with guarantees and some direct loans. 

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