Boeing Bothered by Lobbyist Who Helped Failed Ex-Im Nominee

Updated on
  • Murphy’s Washington firm has done work for rival Airbus
  • Boosting bank’s lending authority is top issue for Boeing

President Donald Trump’s nominee to head the export credit agency nicknamed the "Bank of Boeing" had the assistance of a lobbyist with ties to European planemaker Airbus SE to guide him through a contentious nomination process that resulted Tuesday in his rejection by the Senate Banking Committee.

That relationship has troubled Boeing Co., the U.S. Export-Import Bank’s biggest customer. In addition to reservations about the nominee, Scott Garrett -- a vocal critic of the bank -- the company said it is concerned about his connections with a lobbying firm that has done work for Boeing’s chief rival.

Scott Garrett

Photographer: Zach Gibson/Bloomberg

Democrats on the panel opposed Garrett as did two Republicans -- Mike Rounds of South Dakota and Tim Scott of South Carolina. Scott’s state is home to a plant where Boeing assembles some of its 787 Dreamliners.

Garrett, a former New Jersey congressman, had received help throughout the nomination process from Dan Murphy, a lobbyist for a high-powered Washington firm that counts Airbus among its clients. Murphy held several coaching sessions with Garrett, said a person familiar with the matter, including preparations for what turned into a heated appearance in November before the Banking Committee.

Besides the work Murphy’s firm has done for Boeing’s arch-rival, Boeing questions how Murphy can work for a nominee who has opposed the bank, after he represented the National Association of Manufacturers in 2015 on an effort to reauthorize the bank.

BGR Group

“Only in Washington can you be for the bank and American manufacturers, then be against the bank and work for Airbus,” said Gordon Johndroe, vice president of communications for Boeing’s government operations.

Murphy is a principal at BGR Group, a prominent Washington lobbying shop, and is listed repeatedly in lobbying disclosures along with others at his firm as representing Airbus. However, company spokeswoman Mary Anne Greczyn said he’s not on Airbus’s account and said that the French aerospace company “has no part whatsoever in the Ex-Im activities at BGR.”

Murphy declined to comment. Raj Shah, a White House spokesman speaking on Garrett’s behalf, said he was just one of the nominees that Murphy helped.

“Dan Murphy has deep experience in public policy issues and the confirmation process,” Shah said. “He has volunteered his time and expertise to the presidential transition, in support of three Cabinet secretaries and several other Senate-confirmed officials. We greatly appreciate his support for the Trump administration.”

Third in Revenue

Airbus has been a client of BGR for five years and paid it $180,000 through the first three quarters of 2017, Bloomberg Government data show. BGR, which was co-founded by former Mississippi Governor and Republican National Committee Chairman Haley Barbour, ranked third in overall lobbying revenue for the third quarter of 2017 with revenue of $6 million.

The Ex-Im bank, which was created during the Great Depression, helps foreign companies buy U.S. products when private banks won’t provide financing. Some of its biggest beneficiaries include manufacturing and aerospace companies such as Boeing and General Electric Co., as well as big banks, like JPMorgan Chase & Co., that help finance deals.

Dubbed the “Bank of Boeing” for the backing it has given to aircraft purchases by airlines unable to tap conventional credit markets, the Ex-Im bank has been blocked from providing loan guarantees of more than $10 million because it has lacked a quorum since 2015.

Murphy is an Indiana native who has a long relationship with Vice President Mike Pence. He has served in three presidential transitions and two presidential administrations -- one at the White House and one as chief of staff of the Department of Housing and Urban Development -- and focuses on financial services and housing, according to BGR’s website. He did “extensive work on the legislatively historic re-authorization of the United States Export-Import Bank in 2015,” it says.

Five Other Nominees

Nominations for five others Ex-Im positions moved forward: Kimberly Reed to be the first vice president of the bank; former GOP congressman Spencer Bachus, Judith Pryor and Claudia Slacik to be board members, and Mark Greenblatt to be inspector general.

The Aerospace Industries Association applauded the approvals of the board nominations, which means the bank will now be fully functional, as well as the rejection of Garrett. In a statement, the association said that “Garrett is not the leader that the Ex-Im Bank needs and that American manufacturers deserved.”

While it’s rare to see big business try to sink a Republican nominee, Garrett’s repeated calls to shut down the Ex-Im bank during his seven terms in Congress have drawn plenty of critics. Some of the nation’s biggest companies, including Boeing and GE, have opposed him, as well as big business groups including the National Association of Manufacturers and the U.S. Chamber of Commerce. Garrett had said he would support the bank if confirmed.

Garrett, a founding member of the Tea Party-aligned House Freedom Caucus, has become another example of the divisions that slowed GOP legislative progress this year on Capitol Hill.

Rounds’s position on Garrett triggered a rebuke from the Tea Party-aligned FreedomWorks group.

“The Export-Import Bank mostly benefits Boeing and a small handful of other multinational corporations at taxpayer expense,” Jason Pye, the vice president of legislative affairs, said in a statement. “The bank is in need of major reform, and former Congressman Scott Garrett is a perfect pick to limit its cronyism dramatically. This decision is fairly simple. You support Garrett, or you support the swamp.”

— With assistance by Laura Litvan

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