Boeing’s Washington influence network tested in 737 Max crisis

The company has almost tripled its spending on US politicians and political committees in the past decade. Such expenditures have helped make Boeing one of the most powerful influence brokers in the nation’s capital

by BILL ALLISON & JOHN MCCORMICK / pic by BLOOMBERG

Boeing Co has spent decades spreading big money around Washington. Now, the aerospace giant will need to lean on its network of lawmakers and lobbyists as it grapples with one of the worst crises in its history.

The company has almost tripled its spending on US politicians and political committees in the past decade. It’s also shelled out US$15 million (RM61.5 million) to US$21 million annually in the same period on lobbying in Washington — topping spending by rivals Lockheed Martin Corp, United Technologies Corp and other corporate giants such as Amazon.com Inc and Comcast Corp.

Such expenditures have helped make the aviation company one of the most powerful influence brokers in the nation’s capital. Its carefully cultivated relationships — including one with US President Donald Trump — are being tested as lawmakers, regulators and federal prosecutors scrutinise the company’s coziness with the Federal Aviation Administration (FAA) following two catastrophic crashes of its 737 Max 8 aircraft.

An Ethiopian Airlines Max jet crashed on March 10 after taking off from Addis Ababa, five months after a Lion Air Max plane went down outside Jakarta, Indonesia. Both crashes killed everyone aboard.

Planes Grounded

Senators and representatives from both parties called for the planes to be grounded, and Trump himself announced the decision to ban the Max planes from flying on March 13 after the FAA wavered. The Transportation Department has ordered a full audit of the FAA’s 2017 certification of the Max and the Justice Department is also investigating.

A Senate panel is hearing from government officials that oversee commercial aviation this week and also intends to call Boeing executives, pilots and other aviation industry groups in the near future.

“Everyone has pretty much turned on them,” said Craig Holman, a lobbyist for corporate watchdog Public Citizen. “In the end, they may come out all right because they invest so much money in Washington.”

Boeing said in a statement that its government operations team is “focused on sharing the most accurate and up-to-date information possible with members of Congress, their staff and the relevant agency officials”.

Tim Keating, a former legislative director for the Clinton White House who heads Boeing’s lobbying team in Washington, is well-known for working on both sides of the political spectrum. He’ll especially need to leverage those relationships now.

Influence Spenders

Much of the lobbying outlay by Chicago-based Boeing — the second-largest US government contractor — is related to defence spending, not commercial aviation. Boeing ranked 11th among the nation’s top influence spenders by the Centre for Responsive Politics for the US$15.1 million it spent in 2018. The US Chamber of Commerce was first at US$94.8 million.

Boeing has some high-profile figures on its team, including former Representative Norm Dicks, a Democrat from Washington State who served as chairman and ranking member of the House Defence Appropriations Subcommittee in his final years in office. Dicks lobbied on two of the company’s projects for the Pentagon, the F/A-18 Super Hornet and the KC-46A tanker plane, disclosures show. He didn’t respond to a request for comment.

Boeing added that Ballard Partners, founded by one of Trump’s biggest fundraisers in the 2016 election, to its roster of lobbying firms in January. That month Brian Ballard and two of his colleagues registered to lobby on international trade and aviation issues, according to a disclosure filed with the Senate Office of Public Records. Ballard declined to comment on the firm’s work for Boeing.

Lobbyist Ranks

Last year, the company employed 98 lobbyists, including 31 in-house, who contacted Congress and 24 federal agencies and offices on its behalf, according to federal disclosures. That was more than the 65 lobbyists that Lockheed, the largest defence contractor, employed or the 59 working for Northrop Grumman Corp.

Aerospace has been a top issue for Boeing as the company faces increased competition from upstart competitors like Elon Musk’s SpaceX. The bulk of its lobbying is directed at Congress, with just four of 73 reports from 2018 listing contacts with the FAA.

In addition to defence issues, Boeing lobbies on a wide range of matters, including taxes, trade, health issues and the federal budget, according to its disclosures.

Shanahan Recused

Shanahan, who spent more than 3 decades at Boeing, is under investigation by the Pentagon’s office of inspector General

Acting Defence Secretary Patrick Shanahan, who spent more than three decades at Boeing, is under investigation by the Pentagon’s Office of Inspector General because of allegations he improperly advocated on behalf of his former employer even though he has recused himself from decisions on Boeing contracts.

Boeing is also generous with campaign contributions. Its spending ranked third among corporate Political Action Committees (PACs) in the 2018 midterms, behind only Honeywell International Inc and AT&T Inc. Boeing spread money to more than 375 incumbent members of Congress, reports filed with the Federal Election Commission (FEC) show.

The Boeing PAC, which is financed by employees, has expanded its contributions to federal candidates in virtually every two-year election cycle since 2000, according to data from the nonpartisan Centre for Responsive Politics.

The PAC gave US$5.9 million to federal candidates and committees in the 2018 election cycle, almost three times as much as it gave in a decade earlier, FEC figures show.

Single Donations

In last year’s midterm congressional election, its biggest single donations — US$250,000 each — went to Republican-aligned groups, including the Senate Leadership Fund that’s linked to Senate Majority Leader Mitch McConnell, the American Action Network, and One Nation.

Among federal candidates, Republicans received 57% and Democrats got 43% from the Boeing PAC during the midterms, according to the Centre for Responsive Politics.

The Boeing PAC continues to contribute at a rapid clip in a non-election year. The Republican Governors Association, the Democratic Governors Association and the Republican State Leadership Committee, got its biggest single contributions — each for US$100,000 — according to the monthly report for February filed on March 20 with the FEC.

Congressional Donations

In total, it gave to almost 100 members of Congress during February alone. That’s more than AT&T, which has one of the most prolific corporate PACs in recent years and gave to 74 members that month.

Boeing has focused its campaign donations on incumbents of both parties, slightly favouring Democrats in some years and Republicans in others. That’s a strategy that may help in this crisis.

It’s also cultivated former presidents from both parties. In January, it lined up former President Barack Obama, a Democrat, as a motivational speaker for an executive retreat in Arizona, while George W Bush, a Republican, addressed the group last year.

Similarly, Boeing contributed US$10 million to help fund Obama’s library and museum in Chicago and also gave US$10 million to the Dallas-based George W Bush Presidential Centre to fund an initiative aimed at helping US military veterans transition into civilian life.

Boeing got off to a rocky start with Trump, who criticised the company on the 2016 campaign trail for building a factory in China. He also said the company shared its intellectual property with the Chinese government to secure business there.

Inaugural Donation

Boeing got o to a rocky start with Trump, who criticised the company on the 2016 campaign trail for building a factory in China

After his White House win, Trump said he wanted to cancel the US$4 billion contract Boeing had to develop future versions of Air Force One, the specialised aircraft that flies US presidents around the globe. Boeing swung into action. CEO Dennis Muilenburg called the president-elect and secured a meeting at Trump’s Mar-a-Lago resort to discuss the contract. Boeing also made a US$1 million contribution to Trump’s inaugural committee, as it did for Obama’s festivities in 2013.

In February 2017, Trump visited Boeing’s South Carolina plant and called its 787-10 Dreamliner long haul jet “an amazing piece of art”. Just over a year later, the White House announced it had reached a deal with Boeing for two copies of the presidential airplane — customised versions of the 747-8 aircraft — at a cost of US$3.9 billion. — Bloomberg