Six Senators Demand Ex-Im Bank Liquidation Plan
Ex-Im Bank supporters were wrong if they thought the bank’s opposition would trail off after the charter’s authorization expired on June 30.
Six Republican senators Wednesday demanded a plan for “orderly liquidation” of the bank in a letter to Chairman Fred Hochberg.
Ex-Im supporters felt modest comfort Tuesday knowing that a lapse in the charter’s authorization didn’t mean total demise, as it could still service existing accounts until Congress voted for reauthorization — if Congress voted for reauthorization.
But the letter points out that one of the few allowable actions the bank can take without reauthorization is to “exercise certain functions for purposes of orderly liquidation.”
And like sharks circling a fresh batch of chum in the water, the gang of six demanded details of the plan, such as identifying which employees are part of the liquidation plan, justifying why their continued employment is necessary, producing a report on the dissolution of the Board of Directors, ending the administration of the bank’s website and other mortal remains.
The gang of six includes three presidential candidates, Marco Rubio of Florida, Ted Cruz of Texas and Rand Paul of Kentucky; one of the most vulnerable candidates up for re-election in 2016, Patrick J. Toomey of Pennsylvania; freshman Ben Sasse of Nebraska; and Mike Lee of Utah. They’ve given until July 15 for a response.
Don’t expect a positive response from the administration. President Barack Obama tweeted Wednesday afternoon that he’s still optimistic Congress will reauthorize the bank.
The letter’s text is included below:
July 1, 2015
The Honorable Fred Hochberg
Chairman and President, Export-Import Bank of the United States
811 Vermont Avenue, NW
Washington, DC 20571
Dear Chairman Hochberg:
We write regarding the recent expiration of the Export-Import Bank’s (Ex-Im Bank) authorization, which expired on June 30, 2015. As you know, the Ex-Im Bank’s charter has not been re-authorized by Congress. As provided by law (12 U.S. Code § 635f), the Ex-Im Bank is permitted certain legal authorities, such as the ability to:
- Acquire obligations prior to this the date of termination;
- Assume liabilities prior to this date for obligations that mature after the date of termination;
- Issue bonds or other debts that mature after the date of termination; and
- Continue as a corporate entity and exercise certain functions for purposes of an “orderly liquidation.”
However, according to the Comptroller General, “once a termination or sunset provision becomes effective, the agency ceases to exist and no new obligations may be incurred after the termination date.” Therefore, even though the Ex-Im Bank is fully funded through the end of the fiscal year, it is now prohibited from acquiring new obligations, assuming new liabilities, and issuing new bonds and debts.
Given the unique nature of your agency’s termination, we write to request clarity on your plan for an orderly liquidation, including:
A timeline for completion of orderly liquidation;
- A report on which employees are participating in the orderly liquidation and why it is necessary certain people remain employed during an orderly liquidation;
- A report on the dissolution of the Ex-Im Bank’s Board of Directors;
- The return of the Ex-Im Bank’s properties to the General Services Administration (GSA);
- The end of the administration of www.exim.gov;
- The continuance of servicing existing Ex-Im loans, obligations that have not completely matured, direct loans, or loan guarantees acquired or issued before sunset date; and
- Estimated savings on federal funding through September 30, 2015, through the orderly liquidation and wind-down of the Ex-Im Bank’s operations.
Moreover, the Comptroller General said that “payment of obligations incurred prior to the termination date is usually made by a successor agency, or by another agency pursuant to an Economy Act, 31 U.S.C. Sec. 1535, agreement entered into prior to the termination date.” We respectfully request which agency will be deemed your successor agency and, additionally, would like the estimated payments of obligations incurred.
We would appreciate a timely response on these important questions by July 15, 2015. Thank you and we look forward to your reply.
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