Boeing Hits Pause on Its Massive Lobbying Operation
The company lost more than a billion dollars last quarter and now has more than 30,000 workers on strike.
By David Moore and Donald Shaw, Sludge
Boeing has paused the vast majority of its spending on lobbying and is cutting back on political contributions as it faces a cash crunch amid a wide-ranging reputational crisis that has cratered the value of its shares, as well as an ongoing labor strike by more than 30,000 workers at a Seattle-area factory.
Boeing has long been one of the biggest spenders on lobbying the federal government. According to figures from OpenSecrets, Boeing has spent more than $348 million on federal lobbying since 1998, making it the third-highest corporate lobbying spender in the United States. Last year, Boeing had 112 federal lobbyists — the equivalent of one for every five members of Congress.
Last week, however, Politico reported that Boeing had paused its political spending, writing that the company “temporarily stopped paying the vast majority of its lobbying firms.”
The change has not yet been reflected in campaign finance or lobbying reports. As of the second quarter of this year, Boeing was paying 16 outside lobbying firms to represent its interests in Washington, according to disclosures filed with the U.S. Senate. Its largest contracts appear to have been with Crossroads Strategies, which earned $110,000 in the second quarter from Boeing, and communications and lobbying firm Avoq, which Boeing paid $80,000 in the quarter.
But in January, the door panel blew off a Boeing 737 MAX jet during an Alaskan Airlines flight marking yet another safety emergency for the aviation and defense contracting giant. Boeing’s mounting manufacturing issues have come after massive lobbying by the company to weaken federal safety regulations—a quality control crisis partly of its own making.
A 2019 investigation by the Seattle Times found that the safety analysis of the 737 MAX’s flight control system was conducted entirely by Boeing and that changes that Boeing made to the system that boosted its authority to push down the nose of the plane were never communicated to the Federal Aviation Administration (FAA). That system has been responsible for several nose-diving incidents with the plane, including multiple deadly crashes and a malfunction in June that sent 13 passengers to the hospital with injuries.
The strike, meanwhile, began on Sept. 13 and is now in its third week. Boeing made what it called its “best and final” offer last week for a renewed contract to striking machinist workers in the Pacific Northwest, including pay raises of up to 30 percent over four years. The International Association of Machinists and Aerospace Workers union said that the offer does not go far enough to address their concerns and wasn’t crafted in consultation with the bargaining committee, and declined to vote on it. The company has also furloughed corporate and non-striking employees, according to Politico. Even before the strike began, the company reported a loss of more than $1.4 billion in the second quarter.
“We have said all along that the Union would be available for direct talks with Boeing or, at a minimum, expected to continue mediated discussions when the company was ready,” the union said in a statement. “These direct dealing tactics are a huge mistake, damage the negotiation process, and attempt to go around and bypass your Union negotiating committee.”
PAC Donations to Key Lawmakers
Since 1981, Boeing’s PAC, which is funded by its executives and employees, has made $44.9 million in federal contributions to political campaigns, members of Congress’ leadership PACs, super PACs, “dark money” nonprofits, and party organizations, according to Federal Election Commission data. The company itself has also donated about $2.5 million to federal political groups, primarily to the Republican National Committee, Democratic National Committee, and other party groups.
The top candidate recipient of Boeing PAC’s donations is Washington Democratic Rep. Rick Larsen, the current ranking member of the House Transportation and Infrastructure Committee, which oversees civil aviation and transportation safety. Boeing’s PAC has paid Larsen’s campaigns $107,000 over the years.
Its second-largest candidate recipient is Washington Democratic Rep. Adam Smith, who is currently the ranking member of the House Armed Services Committee, which oversees Defense acquisitions and technology transfers. Boeing’s PAC has given Smith’s campaign committees $102,000.
House Transportation and Infrastructure Committee Chairman Rep. Sam Graves (R-Mo.) has received $80,000 from Boeing’s PAC. Sen. Maria Cantwell (D-Wash.), the chair of the Senate Committee on Commerce, Science, and Transportation, has received just $6,075 from Boeing’s PAC, but the company’s employees have given her campaigns more than $180,000, according to OpenSecrets.
‘Army of Lobbyists’
For more than a decade, Boeing’s influence in the Beltway has been attributed to its “army of lobbyists.” In 2023, Boeing had as many as 112 federal lobbyists working on its behalf, weighing in on issues from defense to trade to corporate taxes. The company spent $14.5 million on lobbying Congress, the FAA, the Department of Defense, the White House, and other agencies—a greater spending amount than Google’s parent company Alphabet, General Motors, Pfizer, or Lockheed Martin.
Nearly three in four of its lobbyists last year previously worked in government, according to records maintained by OpenSecrets, with previous stints working for congressional Republicans and Democrats as well as the Department of Defense and Department of Transportation, among other agencies. One current Boeing lobbyist, Thomas McLemore, a vice president of legislative affairs, was formerly the staff director for the House Defense Appropriations subcommittee; another lobbyist last year, Jack Schuler, the company’s director of government services and budget policy, was a former budget director for the House Armed Services Committee.
As the company has armed itself with extraordinary influence, federal lawmakers have approved a huge portion of Boeing’s income through annual defense spending bills. The company’s revenue from defense contracts reached $32.7 billion in 2023, according to figures from Defense News, a leap of 6 percent over the previous year. Pentagon contracts accounted for more than four of every ten dollars the company made last year.
As one example of its revolving door practices, Boeing in October 2021 hired Heidi Grant, the director of the Pentagon agency that reviewed foreign military sales, to lead the company’s defense, space and government services sales teams.
Boeing’s reach is extended even further by its state lobbying network, the full scope of which remains obscured by lax reporting requirements in many states. A study released in 2017, titled “How Leading U.S. Corporations Govern and Spend on State Lobbying” and prepared by the nonprofit Sustainable Investments Institute, found that from 2012-2015, Boeing spent nearly $1.3 million on lobbying in Washington State and almost $393,000 in California, two of the states with more detailed lobbying disclosures.
‘They have done nothing but cut corners’
Boeing has approved $63.7 billion in stock buybacks since 1997, More Perfect Union reported earlier this year. Company CEOs were compensated more than $453 million during that time; meanwhile, safety incidents piled up since the FAA certified the 737 MAX to fly in March 2017. During its contract fight with the company, the IAM has called for increased safety measures that “restore and grow quality control personnel and oversight of aircraft manufacturing.”
In an interview with National Public Radio earlier this year, aviation expert William McGee of the nonprofit American Economic Liberties Project flagged Boeing’s acquisition of McDonnell Douglas in the late 1990s as touching off a decline in the company’s safety practices.
“Since then, they have done nothing but cut corners, erode safety, ruin the entire corporate culture there,” McGee said. “And they've done all this in order to increase stock buybacks and increase the shareholder value, and that is not how you can run a company that does such vital life-and-death work.”
In previous years, Boeing’s public relations crises have led to an influx in spending on lobbying. The company tapped a number of revolving-door lobbyists in the years after the fatal crashes of two 737 MAX 8 jets in 2018 and 2019, and in early 2022, hired a handful of lobbyists with the bipartisan firm Crossroads Strategies to lobby on aerospace industry issues, including former Sen. John Breaux (D-La.) and Scott Brenner, a former FAA associate administrator for public affairs.
Last year, Boeing registered well-known lobbyist Steve Elmendorf, co-founder of the firm now called Avoq, to lobby on the FAA reauthorization bill, as well as Cedric Grant, the former chief of staff to House Minority Leader Hakeem Jeffries (D-N.Y.). And later in 2023, another handful of lobbyists with Squire Patton Boggs registered to lobby for Boeing on the FAA reauthorization, the national defense spending bill, and other appropriations issues under the House Transportation Committee.
Their ranks included former House Transportation Chair Bill Shuster (R-Pa.), former Rep. Jack Kingston (R-Ga.), and a pair of former Hill staffers. Yet another former Senate Appropriations Committee staffer registered to lobby for Boeing in April. All but one of the aforementioned lobbyists continued to lobby for Boeing this year.
In addition to the Aerospace Industries Association (AIA), which represents the aerospace and defense industry, Boeing pays dues to trade associations that are among the highest-spending lobbying groups at the federal level. Its latest political report, covering trade association memberships in 2023, shows Boeing belongs to the U.S. Chamber of Commerce and the Business Roundtable, as well as the National Association of Manufacturers (NAM), the General Aviation Manufacturers Association (GAMA), and dozens more, totaling millions of dollars in dues paid.
Pressure is building on Boeing to get its assembly lines moving again, with the company in need of cash flow to service its massive debt and halt its stock from tumbling into junk bond status. The company has lost about $32 billion since its planes were grounded in 2019—more than any other company in the S&P 500—and the strike is costing it an estimated $100 million to $150 million per day, analysts say.
Given its financial woes, it’s no wonder why Boeing has halted its spending on politics for the time being.