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Catastrophic crashes test company’s clout in D.C.

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President Donald Trump visits a Boeing facility in South Carolina, praises company for its aircraft innovations and being an example for keeping jobs in the U.S. (Feb. 17)
AP

WASHINGTON –As lawmakers begin to scrutinize Boeing’s grounded 737 Max 8, they will be probing one of the nation’s most powerful corporate political players, backed with a multi-million-dollar lobbying budget and a direct line to the White House.

Chicago-based Boeing, the second-largest U.S. government contractor, suffered a setback this week when the Federal Aviation Administration (FAA) followed its counterparts around the world in grounding the 737 Max 8 after two catastrophic crashes raised new questions about the plane’s software. 

Now Boeing faces a test of its influence as congressional investigators look into how the plane was approved, what caused the crashes and why the FAA delayed its grounding order. The Senate Commerce Committee is scheduling a hearing and key House Democrats have vowed “rigorous oversight.”

Boeing influence 

Like other large U.S. employers, Boeing spends millions of dollars each year on lobbying the administration and making campaign contributions. The company spent $15 million lobbying in 2018, according to disclosure reports, more than household brands like Amazon and Facebook.

Boeing ranked 11th in a Center for Responsive Politics list of the nation’s top spenders on lobbying in 2018.  

The company contributed $1 million to Trump’s inaugural committee, Federal Election Commission records show. Boeing’s employees, meanwhile, pumped about $5 million into campaigns and political committees in last year’s midterm election, according to a USA TODAY analysis of FEC data.

“This does not bode well for Americans who fly,” Walter Shaub, senior adviser to the Washington-based Citizens for Responsibility and Ethics wrote in a post on Twitter. “Boeing donates $1 million to Trump’s sketchy inaugural fund and the U.S. breaks with other nations that have grounded the Boeing 737.”

Trump and Muilenburg

Large companies regularly contribute money to political candidates and spend heavily on lobbying. But what sets Boeing apart from most others is the care CEO Dennis Muilenburg has taken to cultivate a relationship with Trump, who owns one of the company’s planes, a 757.

That relationship wasn’t always so strong. During the 2016 campaign, Trump repeatedly slammed Boeing for the cost of its Air Force One design, suggesting it was “out of control.” Candidate Trump criticized the company for setting up a plant in China to finish its 737s, saying it would take “a tremendous number of jobs” out of the country. 

Shortly after the election, Muilenburg sought to smooth things over with the president during a visit to Trump’s Florida estate, Mar-a-Lago. A month later, and days before Trump became president, Muilenburg appeared at Trump Tower, praising Trump’s “engagement.” 

When it came time for Trump to make his first trip out of Washington in early 2017 he went to a Boeing plant in South Carolina to tout U.S. economic growth. The company was later awarded a contract to build two Air Force One planes for $3.9 billion.

“We’ve got a whole wave of policy issues, topics we’re working on,” Muilenburg told analysts on a call last year, “but we have a voice at the table, which is encouraging.”

A member of Trump’s Cabinet, acting Defense Secretary Patrick Shanahan, spent more three decades with Boeing as an executive before joining the administration in 2017.

Trump has continued to praise the company even as he announced the grounding. 

“It’s a great, great company with a track record that is so phenomenal,” Trump told reporters at the White House on Wednesday. “And they want this solved; they want it solved quickly.” 

Mixed record

Still, the company has had a mixed track record meeting its policy ambitions in Washington. Muilenburg personally spoke with Trump to lobby for the safety of the 737 Max 8. And the FAA initially stood by the plane as Britain, France and Germany joined a growing list of countries suspended its use in their airspace.

U.S. regulators relented Wednesday, citing new information from the crash site and satellite data that the agency said suggested similarities between the Ethiopian Airlines crash on Sunday that killed 157 people and the crash in October of a Lion Air Flight off the coast of Indonesia that killed 189 passengers and crew. 

“Pilots are no longer needed, but rather computer scientists from MIT,” Trump posted on Twitter days after the crash, a missive that preceded Muilenburg’s call to the White House. “I see it all the time in many products. Always seeking to go one unnecessary step further, when often old and simpler is far better.”

FAA: ‘No basis’ to order grounding of Boeing 737 MAX 8 despite calls worldwide

Experts said Boeing has long been a major player in Washington’s influence game, but noted there was no evidence that effort had anything to do with the FAA’s delay in grounding the latest 737 model. The federal government spent $23 billion with Boeing in 2017, a U.S. General Services Administration report on federal contracting shows. 

“They’re really good at capturing defense contracts,” said Richard Aboulafia, vice president for analysis at Teal Group and an aviation consultant. “But there’s absolutely no evidence that there’s anything untoward with the the FAA’s decision here.” 

A Boeing spokesman did not respond to a request for comment. 

Aviation oversight

Like many other agencies in the Trump administration, the Federal Aviation Administration isn’t working at full capacity. Daniel Elwell, a former Air Force lieutenant general and American Airlines pilot, has been serving as the agency’s acting administrator for more than year.

Trump floated the idea of nominating his personal pilot for the top FAA job last year, but backed down following resistance from lawmakers. 

The National Transportation Safety Board, by contrast, is a five-member board that investigates crashes and makes non-binding recommendations on how to avoid future mishaps. Trump appointed two of its five members and elevated a third – originally a Bush appointee – to chairman. The board has one vacancy.  

The NTSB is not investigating either the Ethiopian crash or the Lion Air crash. Foreign countries must request NTSB or similar European agencies to investigate.

Mike Slack, a pilot and lawyer who has represented passengers and family members in crash cases, said Trump had little choice but to ground the Max 8 and Max 9 planes. Allowing the aircraft to fly would have gambled jobs – and American lives – and raised even more questions for the administration and Boeing.  

“Is this about protecting Boeing competitively against Airbus, its primary competitor? And why would Boeing’s CEO be calling the president of the United States?” said Slack, a former NASA engineer. “That’s not good form when the background story is already that the FAA is not acting.”

Boeing’s success

Boeing has had a mixed record scoring policy wins in Washington.

The company fought hard to reauthorize the Export-Import Bank, an independent agency that provides loans to foreign companies so they can buy high-priced U.S. goods such as aircraft. Congress reauthorized the bank in 2015, despite concern from many Republicans that it used taxpayer money to benefit huge companies like Boeing that didn’t need the help. 

But while Congress reauthorized the bank, Senate Republicans have declined to confirm all of the board’s members. That has left the bank unable to sign deals valued at more than $10 million, far less than the price of the 737 MAX 8 and other Boeing planes.  

Boeing also benefited from a fight to give foreign carriers, including airlines based in Persian Gulf countries, better access to the U.S. market – an outcome that would help them sell more airplanes to their overseas customers. Domestic airlines mostly opposed the idea, arguing that state-owned air carriers brought unfair competition to U.S. skies. 

Ultimately, the U.S. Department of Transportation allowed the Gulf carriers to serve the U.S., but required more public reporting of their finances.

Boeing lost another major fight last year. When Delta Airlines sought to import jets from Montreal-based manufacturer Bombardier, Boeing objected to the International Trade Commission. The company argued that the Bombardier planes were subsidized by the Canadian government and, because of that,  represented unfair competition to their own planes. 

The Commerce Department threatened to impose tariffs that would have quadrupled the cost of the Bombardier jets.  

The Trade Commission found Bombardier planes should have cost about three times more than the ticket price because of those subsidies but also declined to rule that the planes would harm the U.S. industry, blocking the tariffs in a loss for Boeing. 

President Donald Trump addresses a meeting of the National Association of Attorneys General in the State Dining Room at the White House on March 4, 2019. (Photo: Chip Somodevilla, Getty Images)

Need to know: Boeing 737 Max: What you should know if you’re booked on a flight

FAA: ‘No basis’ to order grounding of Boeing 737 MAX 8 despite calls worldwide

Major player: DOT approval holds up against challenge from airline unions

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