Boeing and Its Connections to Washington

This article was last updated on April 16, 2022

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With Boeing finding itself on the receiving end of bad news thanks to issues related to its 737 Max 8 model and with Washington’s seeming reluctance to be among the first nations to banish these airplanes from the sky, especially considering the large number of 737 Max 8s that are flying in American airspace, I thought it would be prudent to look at a key aspect of Boeing’s business model.

According to Defense News, in 2018, Boeing was the fifth largest defense contractor in the world when measured in terms of defense revenue (2017 data) as shown here:

According to Boeing’s financial results for the fourth quarter of 2018, the company had record fourth quarter revenue of $28.3 billion ($101.1 billion on a full year basis) thanks to record commercial delivers and higher defense volumes.  Here is a table showing the company’s revenues and earnings from its Defense, Space and Security operations:

Higher revenue in the fourth quarter of 2018 was driven by increased volumes across F/A-18, satellites and weapons.  During the quarter, Boeing was awarded a contract for a joint ground system to provide tactical satellite communications for the United States Air Force, completed a successful test for the United States Air Force’s Minuteman III and unveiled the SB>1 DEFIANT helicopter to the United States Army.  In January 2019, Boeing also delivered the first two KC-46 Tankers to the United States Air Force.  It is key to note that Boeing’s order backlog at Defense, Space and Security was $57.166 billion of which 70 percent or $39.9 billion represents customers inside the United States (i.e. U.S. taxpayers).  Boeing projects that revenues for its Defense, Space and Security segment will be between $26.5 and $27.5 billion for fiscal 2019.

Now, given that Boeing is a very important part of America’s military-industrial-intelligence network, let’s look at a key aspect of Boeing’s business which receives relatively little attention.  According to Open Secrets, here is a historical look at Boeing’s contributions to political candidates by political party going back to 1990:

Boeing’s total political contributions of $4.551 million in 2018 put it in 82nd place out of 19,087 organizations.

Here is a table providing a detailed breakdown of the same data:

Here is a table showing how the political contributions were divided between the House and Senate:

Here are the top recipients of Boeing’s generosity:

Here is a list of members of the Senate Committee on Armed Services:

Here is a list of key members of the House Committee on Armed Services:

It is interesting (but not terribly shocking) to note that there is some overlap between the House and Senate recipients of Boeing’s generosity and the list of members of the Committee on Armed Services.

Lastly for this section, let’s look at which members of the House and Senate own Boeing stock:

Let’s look at Washington’s other favourite pastime, lobbying.  Here is a graphic showing how much Boeing has spent on lobbying over the past two decades:

Boeing’s lobbying expenditures of $15.12 million put it in 10th place out of 4,163 lobbying entities in 2018.

As you can see here, Boeing stands in first place among its Defense/Aerospace peers when it comes to spending on lobbying:

In 2018, Boeing had 98 lobbyists, 71 (or 72.4 percent) of which are revolvers (i.e. had government connections).  Here is a partial listing of the lobbyists that worked on Boeing’s behalf in 2018:

Here are the government agencies and government bodies that Boeing lobbied in 2018:

Here is a partial listing of issues that concerned Boeing in 2018:

Boeing was among the top ten lobbyists when it came to the Tax Cuts and Jobs Act (H.R. 1), the bill that saw the corporate income tax rate drop to 21 percent, an obvious benefit to Boeing.  That said, it is interesting to note that Boeing’s effective federal and state tax rates looked like this over the decade between 2008 and 2017:

Apparently, an effective tax rate of 8.4 percent is seen as way too high for a company that made total pretax profits of $54.865 billion over the decade. But, thanks to the tax cuts, here is what Boeing has proposed:

As you can see from this data, Boeing is one of the big players when it comes to spending money to gain influence in Washington.  Apparently, Boeing’s management is well aware that Washington is for sale and that there is an excellent chance that spending money on political candidates and lobbying will be returned many-fold to Boeing’s bottom line. 

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