House Rejects Measure to Bar Ex-Im Financing for Terrorism Sponsors

Foreign Affairs chairman worries that U.S. will back Iranian airline sector used to support international terrorist proxies

An Iran Air Boeing 727 lands in Tehran / AP
November 5, 2015

Taxpayers could end up footing the bill for Iran’s purchase of American-manufactured planes thanks to legislation passed on Thursday that critics say facilitates U.S. support for an Iranian commercial airline sector frequently used in service of its international terrorist proxies.

If it materializes, that support would likely advance the interests of a major U.S. airline manufacturer that is eyeing business opportunities in Iran, has reported lobbying on the Iran deal, and has already benefitted tremendously from the controversial export finance agency at issue.

The House of Representatives on Thursday approved a highway support bill that reauthorizes funding for the U.S. Export-Import Bank, which finances the purchase of U.S. exports by foreign governments and corporations.

The day before, it rejected an amendment to the legislation that would have prohibited Ex-Im financing for governments that the State Department classifies as state sponsors of terrorism. There are three countries currently on that list: Syria, Sudan, and Iran.

The amendment’s opponents said it was unnecessary and duplicative of existing law. But its sponsor, Ed Royce (R., Calif.), chairman of the House Foreign Affairs Committee, explained in a floor speech that the recent Iranian nuclear deal could allow the Obama administration to circumvent existing prohibitions on Ex-Im support for the Islamic Republic.

"These common sense prohibitions are subject to presidential waivers and we have seen the president abuse waivers to pursue his agenda over and over again on Iran no matter what Congress thinks," Royce said in a Wednesday speech on the House floor.

According to a report on the Iran deal’s sanctions relief measures from the Congressional Research Service, the president has the authority to waive four different executive orders prohibiting Ex-Im financing of Iranian purchases of U.S. goods.

Loopholes in other laws prohibiting Ex-Im support for Iran "could result in aid being made available" through the bank, the report said.

On Wednesday evening, Ex-Im officials sent a letter to Royce saying that they would not pursue a waiver to prohibitions on financing for Iran. A spokesman said that Royce would seek legislative assurances on that front.

"The House Foreign Affairs Committee will continue to pursue options to ensure this is permanent and statutory," said Cory Fritz in an emailed statement.
Opponents of the nuclear deal worry that the president’s commitment to improving relations with the country might precipitate a waiver that would allow that financing.

"The [deal’s] public and non-public texts commit the United States to facilitating Iran’s economic normalization and growth," said a senior official at a group involved in the legislative fight over the Iran deal.

"Short of an explicit statute with no waivers or loopholes that prohibits Ex-Im from funneling money toward deals with Iran—which doesn't appear to exist—the President is not just able but almost compelled to promote those deals," the official said.

That could result in indirect U.S. taxpayer support for Iranian terrorist proxies, according to Royce.

"Iran has a long history of using its commercial airlines to support its terrorist proxies. Its commercial flights are now flying military personnel to Syria, and when I say now I mean right now," he said in his floor speech.

As early as August, Iranian officials signaled their intention to buy scores of commercial aircraft from the U.S. airline giant Boeing and its European competitor Airbus. Boeing is one of the top beneficiaries of Ex-Im financing, and that financing is often defended on the grounds that American companies might lose out on major contracts to foreign competitors.

"There’s no doubt there is huge potential, especially for Airbus and Boeing, to sell a large number of planes," Adam Pilarski, an aerospace consultant, told Bloomberg in July.

Boeing exercised some of its considerable lobbying muscle in the run-up to the nuclear deal. Eleven of its lobbyists at the firm Monument Policy Group reported working on the issue.

The company is also a financial contributor to lawmakers who voted to strike down the Iran financing prohibition. Of the 63 House Republicans who voted to oppose Royce’s amendment, 48 have received campaign contributions from Boeing’s political action committee this year.