Boeing’s grip on DC wanes
The aviation giant has more than 17 government affairs companies on its books – but its lobbying efforts in the Capitol are not yielding what they once did. Emily Birnbaum reports.
Boeing, which builds planes for presidents and holds billions in government contracts, is at risk of losing its unmatched clout in Washington.
This week, the Senate Permanent Subcommittee on Investigations held a hearing on what it calls a “broken safety culture” at the maker of Air Force One, Super Hornet fighter jets and commercial airplanes on which millions of people fly every year.
Boeing has been facing allegations of shortcuts and short-sightedness after a series of safety problems, including a January 5 incident where a door plug was sucked off an Alaska Airlines Boeing 737 Max 9 mid-flight.
The increased scrutiny is expected to test a Boeing lobbying operation that has seen a series of changes. The company has severed its connection with one of Washington’s most powerful firms, and some veteran lobbying staffers have left to join competitors. A key lawmaker has said she won’t accept campaign donations from Boeing executives.
In February, Boeing cut ties with Cornerstone Government Affairs, which helped it navigate the aftermath of two 737 Max crashes in 2018 and 2019 that killed 346 people. Ziad “Z” Ojakli, Boeing’s chief in-house lobbyist, ended the relationship because Cornerstone had taken on a client, Sierra Space Corp, that had hired Ojakli’s predecessor at Boeing, Tim Keating, according to people familiar with the matter.
Cornerstone didn’t respond to requests for comment. Boeing said the termination was amicable.
Chief executive Dave Calhoun ousted Keating, who had been at Boeing for more than 14 years, in 2021 and tapped Ojakli, a former Ford lobbyist, as his successor. The transition is said to have been bumpy: Ojakli and many staffers he hired are still coming up to speed on the aerospace business, according to people familiar with the matter, and so far haven’t forged ties with many lawmakers who’d advocated for Boeing in the past.
Boeing was long celebrated as an American industrial icon, winning a range of allies in Washington. Yet its recent controversies could pose risks to its defense contracts, slow its commercial operations and lead to more stringent government oversight, according to lawmakers, congressional staffers and former and current company lobbyists.
The company spent $US14.4 million (24.4 million) on lobbying in 2023 and has more than 100 lobbyists and 17 government affairs firms on its payroll. Its political action committee is currently the second-largest corporate PAC in the US based on receipts, according to Federal Election Commission data.
“They’ve had a huge influence in DC for a long, long time,” said Ed Pierson, a former Boeing engineer who runs an aviation-safety foundation and is scheduled to testify at Wednesday’s hearing. “The whole world is questioning what they can trust from Boeing. Our legislators are finally waking up. Boeing’s protective shield has been damaged.”
Beyond Congress, Boeing is facing friction across the US government. The Federal Aviation Administration, which for decades has deputized Boeing employees to sign off on some safety matters on the agency’s behalf, has forced it to limit production.
And the Justice Department has launched a criminal probe of the door-plug episode and is reviewing whether the incident constitutes a breach of a deal protecting Boeing from prosecution related to the earlier crashes.
Bradley Akubuiro, a former Boeing employee and current consultant, said its lobbyists are dealing with “a company that was already recovering from the first set of crises” from the Max crashes. Those sparked a global grounding of the aircraft and unleashed bipartisan fury on Capitol Hill, which helped cost then-CEO Dennis Muilenburg his job.
Cornerstone had a key role in containing that controversy, said four people with direct knowledge of the matter. Cornerstone lobbyists, particularly principal and director Jim Richards, helped Boeing arrange meetings with every member of Congress following the crashes, according to two of the people. They also helped advise Muilenburg on testimony to the Senate Commerce Committee, the people said, and persuaded lawmakers to make changes to proposed bills that saved Boeing millions of dollars.
Cornerstone is a heavy hitter in Washington; it took in US$44 million (NZ$74m) in 2023 from nearly 300 clients. An event the firm hosted in January was attended by 32 Senate Democrats, including Commerce Committee chair Maria Cantwell. Cantwell’s state of Washington is home to several of Boeing’s biggest manufacturing facilities.
Ojakli has parted ways with many of the company’s previous advisers, including Republican lobbying firm Ballard Partners, bipartisan firm Roberti Global and defenceconsulting company Lamont Consulting Services LLC, according to disclosure filings.
Additionally, 13 of Boeing’s in-house lobbyists, roughly half the group, have left in the past five years. Some of the most recognisable names left for defence rival RTX Corp after Keating departed.
To fill the gaps, Ojakli has hired former auto lobbyists, an ex-National Highway Traffic Safety Administration official, past Senate and House aides and the former National Guard general counsel, but few people with a background in air-transport lobbying.
The group’s relative lack of aviation-policy expertise came to a head when Calhoun visited Capitol Hill in January after the Alaska Airlines episode, according to people familiar with the meetings. Ojakli and his team at first only arranged meetings with select lawmakers, leaving out legislators on key committees.
However, two congressional aides pushed back on the idea that Boeing’s team was inexperienced or uncommunicative. One Democratic aide said Boeing’s problem wasn’t its government-affairs approach, but the safety concerns around its planes. Another aide said the team had been highly communicative since the door-plug incident.
“This is a time of unprecedented challenges for the company,” said John Scofield, a Boeing consultant who has worked for the company for 15 years. “Any time a company goes through a tough time, they’re going to take their shots from competitors and displaced consultants.”
Scofield said Boeing’s lobbying team was “bestof-breed” and “a group of professionals”.
Lawmakers have grumbled privately that they have felt disrespected by what they see as Boeing’s sometimes sparse and evasive communications. Some felt blindsided when the company said last month that its chairman and commercial aviation chief would be stepping down immediately and that Calhoun would depart by the end of the year.
Boeing did not tell any congressional offices about Calhoun’s planned exit before it was announced but the company said it was legally prohibited from sharing material information before it was publicly disclosed.
Boeing said it had reached out to all 535 congressional offices twice and that it has conducted additional rounds of outreach to the Senate Commerce Committee, House Transportation Committee and other key offices since January 5. Calhoun has had calls and meetings with lawmakers regularly, the company said. Boeing’s chief engineer of commercial airplanes has also met with lawmakers.
The company still has sway with important lawmakers. South Carolina Republican Senator Lindsey Graham, whose state is home to a major Boeing plane-assembly facility, said the company’s government-relations team had been “candid when it comes to communicating the changes that are required”.
Yet, other politicians are keeping the company at arm’s length. Cantwell’s campaign refunded at least two Boeing executives for donations they made at a fundraiser in December: US$500 from Elizabeth Lund, senior vice president of quality for Boeing Commercial Airplanes, and US$250 from Bill McSherry, Boeing’s vice president of state and local government operations.
“Given the increased scrutiny of Boeing’s activities by the Senate Commerce Committee, the 2024 Cantwell campaign is not taking any Boeing leadership contributions,” the campaign said in a statement. - Bloomberg
With the heritage restoration of popular Christchurch complex The Welder now complete, its owners are selling to release capital for a new venture.
The central city development originally comprised six character buildings dating as far back as circa 1880, containing a mix of local artisan businesses. In the past six years, it has been transformed into a thriving retail, hospitality, and wellbeing complex.
The Welder is being marketed by investment specialists Mark Macauley and Marius Ogg of Colliers, by Deadline Private Treating closing May 9.
Macauley says The Welder is a stellar example of breathing new life into a heritage site.
“Purchasing The Welder in 2017, the owners repurposed and strengthened the buildings in 2018 while retaining their original unique mix of materials and eccentric features. With the complex now housing an eclectic mix of well-established tenants, the vendors are selling to release capital for other projects.”
Located at 20–26 Welles Street, the buildings originally housed businesses including a blacksmith, a welder, and an engineer.
The owners have interconnected the buildings and provided dual entrances past the various tenancies to a central courtyard and hospitality area with common amenities on the ground floor.
“This is an opportunity to secure a diversified income stream from a stunning and unique complex situated in a highly regarded central city location. Underpinning the investment is the large land holding and subsequent land value,” Ogg says.
The 17 tenants include the highly popular Bar Yoku, Salut Salut, Two Raw Sisters, Grizzly, and Corkin + Friends. There are two separate first floor areas – O Studio fronting onto Welles Street and two office tenancies from Quills Lane. Larger events and gatherings can be accommodated on the ground floor and there is a separate event space.
Net lettable floor area covers 1421 square metres, excluding common areas, on 2157sqm of freehold land in four titles.
Zoned Commercial Central City Mixed Use, it is surrounded by a mix of complimentary hospitality options as well as various office, retail, showroom and commercial uses, interspersed within inner city townhouse and apartment product.
Three well-performing Hawke’s Bay vineyard properties have been placed on the market for sale providing an opportunity for buyers to secure one or more established viticulture operations to continue grape production, or convert the large-scale landholdings to an alternative use.
The properties are owned by New Zealand-based company The Wine Portfolio which is looking to divest part of its extensive portfolio of vineyards.
Tantallon Vineyard is located at State Highway 50-Maraekakaho Road in Roys Hill-Bridge Pa within the Ngatarawa Triangle viticultural sub-region, while the Kinross Jurgen and Kinross Kent vineyards are in Omapere Road, in the viticulture area known as Crownthorpe.
Both of these areas are renowned for early cropping, with the subject vineyards having good soils and water, consistent production volumes, and producing quality fruit with a broad range of varietals suited to each of the specific sites.
Plantings include Cabernet Sauvignon, Merlot, Pinot Noir, Gewurztraminer, Malbec, Syrah, Montepulciano, Chardonnay, Pinot Gris and Viognier. Many award-winning wines have been made from grapes sourced from these vineyards for multiple wine companies around the world.
The properties have a combined land area of 334.2ha. There are no active supply contracts associated with any of the vineyards, and there are varying amounts of infrastructure across the individual landholdings, including some dwellings.
The vineyards are being offered for sale as individual lots, in some combination, or as a complete portfolio via a tender process closing 1st May through Mike Poff and Tim Wynne-Lewis of Bayleys,.
The agents say that unlike other parts of the region, these properties saw no significant damage during Cyclone Gabrielle, and given the soil and water credentials, the land could potentially be converted to horticulture or cropping ventures.
Poff says the subject vineyards are significant holdings and with the current owners rationalising their comprehensive national portfolio, there’s plenty of opportunity for a new owner or owners to gain entry to the enviable Hawke’s Bay viticulture sector or to add to an existing operation.
“Individually, these are viable, standalone productive units producing quality grapes that have contributed to some acclaimed wine.
“When bundled together, the combined landholdings would give a buyer a really solid foothold in the Hawke’s Bay market with all the most popular varietals covered off.
“There’s a documented nationwide shortage of chardonnay currently, and with Chardonnay grapes planted across all three of these blocks, astute buyers will recognise the opportunity.”
Tantallon Vineyard has streamlined access off both State Highway 50 and Maraekakaho Roads and comprises 119ha in total, with 106ha planted in a mix of Cabernet Sauvignon, Merlot, Malbec, Syrah, Montepulciano, Chardonnay, Pinot Gris and Viognier. Improvements include a tidy three-bedroom house, three bores, office, workshop, implement shed and other ancillary buildings.
In Omapere Road, the 54.9ha Kinross Jurgen block has 35ha planted in Chardonnay and Pinot Noir. The property is located on an elevated terrace headland, overlooking the Ngaruroro River and has additional land that could be planted.
The Kinross Kent block covers approximately 160ha, with 100.8ha planted in Chardonnay, Sauvignon Blanc, Gewurztraminer and Pinot Noir. This property spans both sides of Omapere Road, occupying a series of river terraces on one side and an additional square-shaped block on the other, with improvements including a four-bedroom family home, staff amenities, extensive shedding and a large workshop.
Wynne-Lewis says there has been some good enquiry to date and genuine interest from newcomers to the Hawke’s Bay viticulture market, established local grape growers, and national wine entities looking to expand operations and extend their geographical spread.
“There have only been a couple of vineyard sales and orchards transacted Hawke’s Bay in the last 12 months, so ascertaining value on these properties will be left to the tender process.
“The resilience of this land through an extreme weather event, the quality of the soils and water, and the proven production track record of the three landholdings, will ultimately dictate where buyers see the value.”
He says there has also been interest from people wanting to acquire large landholdings for apples, cropping and even solar farming to tap into the Bay’s high sunshine hours for renewable energy production.
“Productive land has always been coveted in the region and many larger wine companies are looking to the future and wishing to secure production options for the long term.
“Likewise, institutional and corporate investors are seeking diversification within their property portfolios to include valuable and proven productive land which these properties clearly demonstrate.”
Post-cyclone, grape yields are down In Hawke’s Bay but the fruit quality is excellent, says Poff.
“The same can be said for the apple harvest in the Bay, but we’ve had a decent summer this year and the cropping sector has had a fantastic run with good harvests of maize, sweetcorn, squash and onions.”
Hawke’s Bay is New Zealand’s oldest wine region and was last year crowned the 12th Great Wine Capital of the World joining other prestigious wine regions like Bordeaux in France, Napa Valley in California, and Adelaide in South Australia.
The honour recognises Hawke’s Bay’s wider viticultural industry, its history, and wine tourism experiences along with the region itself as a place to do business and as a destination.