The art of the Boe­ing deal

A Pres­i­dent Trump could cost Boe­ing a lot more than Air force One

The Washington Times Daily - - COMMENTARY - By Kelly Rid­dell

Con­sider Pres­i­dent-elect Don­ald Trump’s tweet threat­en­ing to can­cel Boe­ing’s con­tract for Air Force One the first a shot across the bow in an up­com­ing battle with the aero­space com­pany. If Mr. Trump is se­ri­ous about dis­man­tling Pres­i­dent Barack Obama’s Ira­nian nu­clear deal — which by all indi­ca­tions he is — then Boe­ing is go­ing to be­come a cen­tral player in do­ing so. And it’s go­ing to cost them. Bigly.

In June, Iran an­nounced it had reached a $25 bil­lion agree­ment to buy or lease more than 100 air­craft from Chicago-based Boe­ing — the big­gest U.S. busi­ness deal with Iran since Wash­ing­ton cut diplo­matic ties with Tehran in 1979.

It was all made pos­si­ble un­der Mr. Obama’s nu­clear deal, where Iran agreed to limit its en­rich­ment of ura­nium in ex­change for the lift­ing of some in­ter­na­tional sanc­tions, with com­mer­cial air­lin­ers specif­i­cally ex­empted.

Call it crony cap­i­tal­ism.

While Boe­ing was lob­by­ing Congress to keep its U.S. Ex­port-Im­port bank sub­si­dies — and pub­licly threat­en­ing to move jobs abroad if their cor­po­rate wel­fare wasn’t main­tained — it was also seek­ing fa­vors from the Obama ad­min­is­tra­tion to do more busi­ness with Iran.

Ac­cord­ing to a re­port from the Daily Beast, Boe­ing paid a lob­by­ing firm to “mon­i­tor” the nu­clear agree­ment, and had on its pay­roll a for­mer top Clin­ton ad­min­is­tra­tion of­fi­cial,

Thomas Pick­er­ing, who threw his sup­port be­hind the Iran deal, by tes­ti­fy­ing be­fore Congress, writ­ing let­ters to high-level of­fi­cials, and pen­ning op-eds in sup­port of the deal.

Now all bets are off.

Mr. Trump has called the Iran deal “in­com­pe­tently ne­go­ti­ated” led by “stupid peo­ple,” where Iran can “rip us off... take our money… make us look like fools.” He sug­gested he would tear it up and “dou­ble up and triple sanc­tions.”

Of Mr. Trump’s na­tional se­cu­rity picks — re­tired Ma­rine Gen. James Mat­tis, Rep. Mike Pom­peo, Lt.

Gen Michael T. Flynn, re­tired Gen. John Kelly, and South Carolina Gov. Nikki Ha­ley — all are united in their en­mity to­ward Iran and are fierce crit­ics of the U.S. nu­clear deal.

There­fore, Boe­ing’s nat­u­rally in their cross-hairs.

In Oc­to­ber, the U.S. Trea­sury De­part­ment’s Of­fice of For­eign As­sets Con­trol (OFAC) cleared Boe­ing to de­liver com­mer­cial air­craft to Iran Air as part of the nu­clear agree­ment. A month later, the Repub­li­can­con­trolled House of Rep­re­sen­ta­tives passed a bill block­ing the sale. The leg­is­la­tion has yet to be picked up by the Se­nate, but Mr. Obama vowed to veto it, if it ever be­came law.

That’s be­cause Boe­ing is hold­ing his nu­clear deal to­gether.

The Boe­ing air­lin­ers are sym­bol­i­cally im­por­tant for Ira­nian Pres­i­dent Has­san Rouhani to de­liver. Mr. Rouhani is ex­pected to seek re­elec­tion next year in part by ar­gu­ing that he has im­proved Iran’s re­la­tions with the West, ac­cord­ing to a Septem­ber re­port from The New York Times.

It will also help re­pair and make safe Ira­nian’s di­lap­i­dated fleet — a vis­ual and ac­tual ac­com­plish­ment for the Ira­nian peo­ple, and a win for Pres­i­dent Rouhani. Not to men­tion Iran Air has been used to smug­gle weapons into Syria, and has been taken over by mem­bers of Iran’s Rev­o­lu­tion­ary Guards when it was car­ry­ing sen­si­tive cargo. Have it be­ing re­li­able, is a bonus.

If Boe­ing sales are de­layed or pro­hib­ited — well, Iran will cite it as ev­i­dence that the U.S. isn’t liv­ing up to its end of the nu­clear pact, and give the hard­lin­ers, an ex­cuse to exit it.

“It is cer­tainly a vi­o­la­tion of [the agree­ment] and we will con­front it,” Iran’s nu­clear ne­go­tia­tor, Hamid Baei­dine­jad, said in July about any pos­si­ble de­lay in the Boe­ing deal.

Boe­ing, for its part, has de­fended its deal with Iran (its $25 bil­lion in sales af­ter-all).

In June, Tim Keat­ing, vice pres­i­dent of govern­ment op­er­a­tions for Boe­ing, told law­mak­ers the cor­po­ra­tion had “a vig­or­ous com­pli­ance mech­a­nism at Boe­ing with re­gard to the screen­ing of all par­ties with which we do busi­ness,” and had strictly ad­hered to deal­ings with Ira­nian en­ti­ties ap­proved by U.S. sanc­tions mon­i­tors.

But none of that mat­ters any­more.

It’s now all up for a Trump ne­go­ti­a­tion, where Boe­ing will have to be at the table. That’s not Mr. Trump pick­ing cor­po­rate winners or losers — it’s him liv­ing up to a cam­paign prom­ise he made to the Amer­i­can peo­ple re­gard­ing in­ter­na­tional re­la­tions.

Boe­ing will­fully in­jected it­self into the U.S. Ira­nian drama be­cause it thought it could pay­off or con­trol Wash­ing­ton politi­cians (who posed the risk with their pol­icy de­ci­sions) all the while reap­ing the re­ward of added sales. Not any­more.

Now ev­ery­thing’s up for grabs — Air Force One, the con­di­tions of the Ex-Im Bank, the Iran Air deal — and Boe­ing is go­ing to have to choose what they find most dear.

Be­cause Mr. Trump will be pulling all the levers he can, to get what he wants. It’s the art of the deal, af­ter all.


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