Boeing cleaned house amid its last big aviation crisis. Now its latest safety debacle is raising questions about whether the company’s overhauled lobbying team can help it withstand government scrutiny any better than an old guard that was more steeped in aviation policy.
The aerospace and defense giant is still rebuilding its lobbying operation and relationships with lawmakers after the fatal crashes of two 737 MAX 8 jets in 2018 and 2019 — twin disasters that provoked doubts about Boeing’s safety practices and the Federal Aviation Administration’s oversight.
The reshuffling of Boeing’s D.C. influence team, including more than a third of its registered federal lobbyists since 2019, will add an additional level of difficulty as the company responds to this month’s blowout of a door plug in a 737 MAX 9 over Oregon, according to seven people who have either interacted with or worked for Boeing or its top lobbyists. The seven were granted anonymity to speak freely about the company’s lobbying approach.
Some who spoke to POLITICO defended the new team. One person working in government affairs in the aviation industry noted that Ziad Ojakli, the top lobbyist who joined Boeing in 2021, did not take over a fully formed team and that the rebuilding would take time.
Much of the new registered lobbying crew, including Ojakli, has extensive backgrounds with associations or companies such as Ford rather than with airlines, plane manufacturers or the FAA. While some of these people still have “strong ties” to Congress, a large chunk of the company’s talent was lost in the recent turnover, said one former Boeing lobbyist who left the company during the purge.
“They weren’t brought in as issue experts or with ties to the committees and members of jurisdiction, but as generalists, relying on outside consultants for expertise and access,” the person said of the new team. “It’s a different model and one that could definitely leave them flat footed in a recurring crisis.”
Boeing’s new lobbying team will have to navigate tough questions from officials across the government that oversee aviation — including, in particular, the intricacies and mechanics of the company’s business practices. Understanding those agencies and their regulations, and having relationships with the people inside of them, can be beneficial when trying to influence the outcome.
“There's no doubt that you're hurt by not having … the group that’s been through this before, so this will be their first crisis,” said one lobbyist in the aviation industry, who conceded that some may have faced previous crises at other jobs. “They would benefit if they had that entire team that was there for the first grounding.”
The turnover in Boeing’s lobbying shop has been significant in the five years since the MAX 8 crashes, in which a flight-control function gone haywire killed a total of 346 people in Ethiopia and near Indonesia. Since 2019, at least ten of roughly 30 registered in-house lobbyists have left for other companies — including Boeing’s former top lobbyist, Tim Keating, who was fired in the wake of the Indonesia and Ethiopia crashes. (Keating declined to comment through an intermediary.)
The new in-house team has responded aggressively to the newest incident, a person with Boeing’s government affairs operation told POLITICO, adding that they have been in touch with offices for every member of Congress since the door failure in Portland.
“You don't restore trust through influence and access. You do it through transparency, a commitment to doing what's right, and taking action,” the person said.
Michael Friedman, a Boeing spokesperson, said in a separate statement that their focus is “on safety and on quality — and on being as transparent as possible with all of our stakeholders.”
“Our government relations team will continue to communicate transparently and effectively with government officials and policy makers as we move forward,” Friedman said.
Still, the lobbyists are working in an atmosphere in the Capitol where support for Boeing eroded during the furor over MAX 8 fatalities.
That emergency prompted regulators around the world to ground the plane for 20 months or more, despite the FAA’s initial insistence that such a drastic step was unnecessary. Boeing forced out its CEO, settled lawsuits with shareholders and victims’ families and agreed to pay $2.5 billion to resolve a criminal charge of defrauding the agency.
On the other hand, it avoided major congressionally ordered changes to the way regulators oversee the company’s safety practices.
Following this month’s door blowout, several lawmakers have again called for congressional investigations into Boeing and, in particular, the FAA’s oversight.
Sen. Maria Cantwell (D-Wash.), the chair of the Senate committee that oversees aviation, said last week that the public “deserves a comprehensive evaluation of Boeing and Spirit AeroSystems,” the Boeing contractor that had built the MAX 9’s fuselage. In a Jan. 11 letter to the FAA, she said the incident “call[s] into question Boeing’s quality control” and suggests that the “FAA’s oversight processes have not been effective in ensuring that Boeing produces airplanes that are” safe.
Meanwhile, the FAA has grounded the roughly 171-plane U.S. fleet of 737 MAX 9 jets implicated in the door panel failure, pending inspections. The National Transportation Safety Board is also investigating the incident, which left some passengers with minor injuries.
The Oregon incident is Boeing’s first major crisis in Washington under the leadership of CEO David Calhoun, who took the helm in 2020 — and without some of the other veterans who had steered the company through its worst congressional and regulatory battles.
Years before the two MAX 8 crashes, Boeing had to navigate the fallout from fires involving its 787 Dreamliner’s lithium-ion batteries, which led to a three-month grounding of the fleet worldwide in 2013.
Ojakli — a Republican whom people call “Z” — became executive vice president of government operations at Boeing in October 2021, following a career spent, in part, at the investment firm SoftBank and the auto manufacturer Ford. He also had a stint at the White House under George W. Bush as deputy assistant to the president.
Since coming aboard, three of the new team members Ojakli has hired are Ford or Federal Highway Administration alumni, according to LinkedIn profiles of the new registered lobbyists.
Ojakli took the job around four months after Keating’s sudden ouster from his long-time role as head of Boeing’s lobbying shop. He began remaking Boeing’s government affairs operation, including overhauling its roster of lobbyists.
The company has terminated relationships with at least nine outside shops since 2020, according to federal disclosures. Sam Geduldig, one of the lobbyists who had helped Boeing through the 2019 MAX 8 hearings, said his firm was fired on Christmas Eve.
“There are very few people that were in the trenches on the MAX 8 that are still there,” said a second former Boeing lobbyist who was granted anonymity to preserve ongoing relationships. The lobbyist added that losing Keating and his “strategic” mind was a blow to the company.
Indeed, some lobbyists said Ojakli and his new team have yet to rebuild the same kind of relationships with lawmakers that helped guide Boeing through the earlier MAX crisis.
Boeing doesn’t have an outright bad relationship with people on Capitol Hill, said one Senate aide, who was granted anonymity to discuss sensitive issues. But the relations have at times been complicated by the long history of back-and-forth between the company and lawmakers on hearings and legislation, including those that predate the current team at Boeing.
Boeing’s role as a major employer affects the company's relationships with Congress, for good and for ill, the aide said. Its money and jobs have boosted the economies of many states over the years. But the company has also moved facilities in the past, taking those jobs and economic benefits with it — decisions that still sting.
In 2022, the company announced it would move its main headquarters from Chicago to Arlington, Virginia, placing the company closer to the lawmakers and regulators that govern it. The decision to move from his home state miffed Senate Majority Whip Dick Durbin, one of the chamber’s most powerful Democrats.
“Senator Durbin was very disappointed in Boeing’s decision,” said Maddie Carlos, a Durbin spokesperson. “And we let them know about it. We have since worked to ensure that Boeing continues to expand operations and jobs in and around Illinois.”
Many of Boeing’s former lobbyists went to rival defense contractor Raytheon (now known as RTX), including Jeff Shockey, who is now RTX’s top lobbyist. Keating, the former Boeing top lobbyist, signed RTX as a client when he started at a lobbying firm.
Regarding its new team’s level of aviation expertise, the Boeing government affairs person said Boeing has aerospace experts across the entire company, and said the new additions to its lobbying team bring experience with the FAA’s parent, the Department of Transportation.
And not everybody thinks aviation expertise is that critical for the top lobbying role. It’s more important for someone in a job like Ojakli’s to know how government works, said Bruce Andrews, a former Commerce Department deputy secretary who worked with Ojakli at Ford and SoftBank.
Andrews, now the chief government affairs officer at Intel, worked with Ojakli at Ford during the auto bailouts in the 2000s. The two were a part of the team tasked with handling the fallout from news reports focusing on the fact that the Big Three auto companies’ CEOs had taken private planes to the Washington area to testify about their need for federal aid. The blowback was surprising to the team, Andrews said.
Ojakli, who led the hearing preparation, “went into battle mode,” Andrews said. The team ultimately asked the Ford CEO at the time, Alan Mulally, to drive in a Ford from Detroit to Washington for the second set of hearings.
One of the people in aviation government affairs said Ojakli took over at Boeing at a “really difficult time,” including inheriting a team that was not “fully formed.”
“It takes a while to figure out who on the team can live through that transition — but they’re rebuilding with great people,” the person said.
Boeing is still a sprawling, blue-chip aviation and defense giant, with more than 140,000 employees, including about 30 registered in-house lobbyists in 2023 and an army of outside firms, including Squire Patton Boggs and Crossroads Strategies. Its status as one of the nation’s biggest defense contractors and the only U.S. manufacturer of passenger jumbo jets, with campuses across the country, gives it unquestioned clout despite its recent troubles.
Just last May, Sen. Lindsey Graham (R-S.C.) hailed an almost $37 billion deal between Boeing and Saudi Arabia for planes made in South Carolina, celebrating the job-creating arrangement that would supply “the best product available.”
Condemnation of then-CEO Dennis Muilenburg was bipartisan at the 2019 hearings on the MAX 8 fatalities. He was ultimately replaced with another company insider, Calhoun, a longtime member of the company’s board of directors who had served as its chairman during part of 2019.
One former Boeing employee called Calhoun a better communicator than Muilenburg, who had stumbled through the MAX 8 hearings. In particular, Muilenburg was criticized for his frequent appeals to lessons learned growing up in the Iowa heartland. The ex-employee was granted anonymity to discuss sensitive dynamics at the company.
This time, the CEO also has a chief communications officer — Brian Besanceney — with experience at the Department of State under Condoleezza Rice, at the White House under George W. Bush, and in the Senate for former Ohio Republican Rob Portman.
No matter who is in charge of Boeing’s influence shop, that can’t compensate for a product that keeps having flaws, said one lobbyist who has represented other defense contractors.
“No number of friends can withstand that,” said the lobbyist.
Oriana Pawlyk and Ursula Perano contributed to this report.
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By: Hailey Fuchs
Title: A new plane crisis tests Boeing’s revamped lobbying team
Sourced From: www.politico.com/news/2024/01/22/boeing-lobbying-congress-faa-00136704
Published Date: Mon, 22 Jan 2024 05:00:00 EST
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