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.
Lobbying shakeup
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, bi partisan firm Roberti Global and defence consulting 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”.
Communication breakdown
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
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