WASHINGTON – Leslie Bergland says she's not surprised by the ongoing attempt by Tea Party Republicans and free-market conservatives to kill the government-run Export-Import Bank.
One of three principal owners of Edina-based Trade Acceptance Group Ltd., Bergland came from Minnesota to Capitol Hill on Wednesday to explain lessons learned from 18 years brokering international trade deals for small businesses in the Midwest.
"Ex-Im has programs that the private sector doesn't offer or aren't suitable for small companies," she said as she prepared to meet Senate and House members.
Bergland's experience counters critics' claims that the bank, which offers loan guarantees and other kinds of financial supports to U.S. exporters, caters to big multinational corporations that don't need help.
Critics, especially Tea Party Republicans, call Ex-Im's business "crony capitalism" and "corporate welfare." They have used the charge to turn the bank's reauthorization into a political controversy that limited its funding to a temporary measure that ends in June.
The fight heated up again last week when the conservative political action committee Heritage Action announced plans to target 31 Republicans who signed on to a new bill that offers reforms to Ex-Im in exchange for extending its funding until 2019.
This was the tense situation that Bergland and four other Minnesota businesspeople faced Wednesday as they stumped for the bank.
"We believe it should be funded in the long term going forward," said Tom Schabel, CEO of Alexandria Industries, which is located in Alexandria, Minn., and makes engineered products such as aluminum extrusions or molded plastic parts.
Like several other Minnesota businesses, Schabel had been asked by one of his bigger corporate customers — GE — to come to Washington to make a point about how Export-Import Bank programs help suppliers of the big companies using its services. But Schabel said his business also uses Ex-Im occasionally, paying the bank premiums to buy insurance policies that guarantee it will be able to collect for products sold abroad.
"It's limiting the risk," Schabel said of Ex-Im. "We certainly are not big enough for anyone to pay attention to us. We've never seen the cronyism part of it."
Fastenal Co., the Winona-based supplier of nuts, bolts and inventory management systems, had $3.8 billion in sales in 22 countries in 2014. It hasn't used the Export-Import Bank, but the company sent its chief financial officer and vice president of national sales to Washington to back the bank because two of its biggest customers — Westinghouse and GE — do use the bank.
Fastenal did not come "with an overly political agenda," sales vice president Bill Drazkowski said. "We came to represent our 18,000 employees."
Todd Cronin, business development director of Winona-based Miller Ingenuity, a maker of train parts, came for a much smaller workforce, but the same reason.
"I'm against corporate cronyism," Cronin said. "But when large corporations can compete overseas, it's good for me."
The Ex-Im debate spins largely around how you measure what the bank does.
The bank's website summarizes its mission as follows:
"Ex-Im Bank provides working capital guarantees (pre-export financing); export credit insurance; and loan guarantees and direct loans (buyer financing). No transaction is too large or too small. On average, more than 85 percent of our transactions directly benefit U.S. small businesses."
While most of the businesses it helps are small, the total dollar value of the deals it protects are concentrated among a handful of the country's biggest companies. A study by the Mercatus Center at George Mason University showed that in 2013, 10 companies got 76 percent of the bank's financial benefits. These companies, critics argue, would do just fine without Ex-Im.
Such political constructs mean little to businesses that need help, Bergland countered. For instance, she noted, a company with a single foreign sales contract might have to pay Ex-Im $1,500 in premiums to insure it, while a private bank would charge $20,000.
While no members of the Minnesota House delegation are signed on to the new Republican-sponsored bill to extend funding for Ex-Im to 2019, Democratic Reps. Rick Nolan, Tim Walz and Keith Ellison said they were generally supportive of reauthorization in some form.
"Put simply, the bank helps move our country's economy forward, especially in rural areas of our state," Walz said in an e-mail.
Republicans John Kline, Erik Paulsen and Tom Emmer did not respond to requests for comment. Neither did Democratic Reps. Collin Peterson and Betty McCollum.
The political tension surrounding Ex-Im puzzled some in Minnesota's visiting business contingent.
"You always think Republicans are pro-business," Fastenal's Drazkowski said.
Nevertheless, the bank has "become a political football," Rich Wasielewski, CEO of Wayzata-based Nortech Systems Inc., conceded. "I stay out of politics. But I am surprised because it [the bank] has been around so long and helps businesses."
Each year, Wasielewski's company sells $100 million worth of wire and cable assemblies, circuit boards and other electrical supplies to major corporations that use Ex-Im. However, as Nortech expands sales into Mexico, Asia and Europe, it also hopes to buy repayment insurance from the bank.
Whether that happens largely depends on whether the Republican party closes a breach between its pro-business and populist wings.
In any case, brokers at the Trade Acceptance Group do not expect the private sector to step in and fill many gaps.
"If they were going to do that," Bergland said, "they would have been doing it for the last 18 years we've been in business."