WASHINGTON -- Sen. Jim DeMint (R-S.C.) on Tuesday led a conservative Senate bloc opposing a government loan program on the grounds that it functioned as a corporate welfare agency. Just weeks earlier, he donated $500,000 to a hardline conservative group that opposes the program as a central part of its legislative strategy. But behind this seemingly natural ideological alliance, there are powerful political forces in play -- corporate patronage, aggressive partisanship and a strategic struggle for the soul of the Republican Party.
Caught in DeMint's crosshairs: Boeing, a company that DeMint has spent much of the last few months defending in its public feud with the National Labor Relations Board. The agency tried to block the company from moving from Washington to South Carolina, arguing that the airline and weapons manufacturer was doing so in order to punish its unionized workers. DeMint repeatedly cited the value that Boeing will bring to South Carolina.
Boeing, it turns out, had more to lose than anyone in Tuesday's congressional contest to reauthorize the little-known Export-Import Bank -- a federal agency that provides taxpayer guarantees on loans taken out by foreign companies that purchase American goods. DeMint's efforts to derail the Export-Import Bank renewal put him in the unusual place of leading a legislative charge against a major homestate employer.
The Ex-Im Bank is supposed to enable the export of small business products that would otherwise be difficult to sell abroad. Conservatives and progressives have derided much of its work. A 2009 study performed by the nonpartisan Pew Charitable Trusts determined that nearly two-thirds of all the loan guarantees provided by the Ex-Im Bank in 2007 and 2008 went to subsidize Boeing, one of the largest and most profitable companies in the U.S.
DeMint, meanwhile, did not object to the Ex-Im Bank when it was last subjected to a Senate renewal vote in 2006 -- a time when its corporate welfare was being distributed by Republicans. And while he was waging his war against the agency this year, he was also writing a check to the Super PAC operated by the Club for Growth, a conservative think-tank that engages aggressively in Republican politics, particularly in the primary process.
The Club for Growth has opposed the Ex-Im Bank's very existence for years, but as National Journal has reported, current Club for Growth President Chris Chocola has benefitted handsomely from Ex-Im subsidies. Chocola previously worked as the CEO of CTB Inc., a midwestern firm that received several doses of what the Club for Growth calls "corporate welfare" from the Ex-Im Bank. National Journalcited congressional testimony indicating that Chocola's firm received subsidies for shipments to Venezuela and Khazakstan. According to minutes of Ex-Im meetings, the company also received subsidies to ship goods to Mexico.
Ideological purity is often sacrificed to political pragmatism in Washington, but both DeMint and the Club for Growth have garnered reputations for hardline adherence to conservative principles in recent years. Both actively courted and financially supported Tea Party candidates for Senate in 2010, including eccentric candidates Christine O'Donnell and Sharron Angle, who were derided by much of the Republican establishment as unelectable (both lost to vulnerable Democrats). At this year's Conservative Political Action Conference, DeMint dismissed the idea of compromising with Democrats in Congress, saying the idea was akin to football teams negotiating with each other during the Super Bowl.
"I can guarantee you that Coach Tom Coughlin did not tell his Giants to go out on the field and work with those other guys," DeMint said. "They weren't cooperating with [New England Patriots quarterback] Tom Brady."
The 2010 elections forged a strong alliance between DeMint and the Club for Growth. Club for Growth employees donated more than $150,000 to DeMint's campaign, according to the Center for Responsive Politics, and both the Club for Growth and DeMint earned enemies among the Republican leadership for targeting GOP candidates, including incumbent lawmakers, with negative ads during primaries. While some of their preferred candidates, including Sen. Marco Rubio (R-Fla.) have been popular with GOP leaders, others, including Angle and O'Donnell, were not well-received. Many other Super PACs, including the Karl Rove-affiliated American Crossroads, opt out of the primary process, focusing on defeating Democrats rather than enforcing ideological purity among Republicans.
DeMint vowed not to repeat those tactics in 2012, but the Club for Growth made no such promise. By cutting a big check for the Club for Growth, DeMint can get around the letter of his promise, while cementing a key ally in his efforts to reshape the GOP into a more intrasigently conservative outfit.
But the maneuver comes at a high price for DeMint, who is cutting off a lucrative revenue stream for Boeing, a major employer in DeMint's South Carolina and the 12th largest contributor to DeMint's Senate campaign, according to data from the Center for Responsive Politics.
Boeing is less than enthusiastic about DeMint's defection. “We work closely with Senator DeMint on a number of issues, but we have a principled disagreement with him concerning Ex-Im Bank reauthorization," Boeing spokesman Sean McCormack said in a statement to HuffPost. "We and others with significant business presence in South Carolina believe reauthorization is critical for American exporters as they fight to win business in a global economy," McCormack said. "We will continue to talk to Senator DeMint about the issue, and we will also work closely with other members of the South Carolina delegation who support Ex-Im Bank reauthorization so that American businesses are not disadvantaged in the global marketplace.”
DeMint's enthusiastic public opposition to the Export-Import Bank emerged after Democrats grabbed the reins on the Bank. The bank was last reauthorized in the fall of 2006, when Republicans controlled both chambers of Congress. Not a single senator, including DeMint, opposed the legislation at the time, and it cleared the upper chamber by unanimous consent. The Club for Growth did not contribute to DeMint's victorious 2006 Senate campaign.
Ex-Im Bank critics are not exclusively conservative. Progressive stalwarts, including Sen. Bernie Sanders (I-Vt.) have blasted the group for guaranteeing wasteful and unwarranted projects, including subsidies for Enron and bogus companies tied to drug cartels.
DeMint's office declined to comment for this article, but Club for Growth spokesman Barney Keller emphasized that his organization has always opposed the Ex-Im Bank, and that Chocola currently shares that view.
"We're proud that we pushed this issue to the forefront," Keller told HuffPost. "It's a New Deal program that should have been eliminated a long time ago."
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