Economy, Regs, & Taxes

Boeing Is Flying Low

The world's largest aerospace company deals with Iran.

Allyne Caan · Apr. 14, 2016
Come fly the unfriendly skies

As the world’s largest aerospace company, Boeing prides itself on “support[ing] airlines and U.S. and allied government customers in 150 countries.” Unfortunately, the company has a rather loose definition of “allied.”

Boeing is in talks to sell commercial passenger airplanes to Iran — you know, that state sponsor of terrorism and avowed enemy of the U.S. and our strongest ally in the Middle East, Israel. And the company wants to use our tax dollars to make the deal happen.

It’s all the honeyed government cronyism treats that Boeing (and other multi-billion dollar companies) enjoy via a lesser-known government entity called the Export-Import Bank. In short, Ex-Im provides taxpayer-backed financing for companies and countries to buy U.S. goods — including Boeing airplanes. In fact, Boeing alone receives a whopping 30% of Ex-Im’s financing, amounting to billions of dollars each year.

Here’s the catch for Boeing, though. For any deals more than $10 million, a quorum of the Ex-Im’s five-member board must approve. Currently, only two of the five seats are filled. Barack Obama has been trying to get a nominee into the third seat for months, but so far, to no avail — thankfully.

What’s Boeing to do? Well, naturally, the corporate behemoth is pressuring Senate Banking Committee Chairman Richard Shelby (R-AL) to move on Obama’s nominee. As Fortune magazine reports, Boeing CEO Dennis Muilenburg says the company stands to lose billions unless the government finds a way to give them billions. Well, those weren’t his exact words, but close enough.

And some of those billions could help Iran buy enormous airliners that the terrorist nation could very well use to transport troops or, oh, say fly into buildings.

The Wall Street Journal reports that Iran is only too “eager to re-establish ties with Western companies after the deal to limit its nuclear program.” (Apparently Iran is also eager to break the deal and continue expanding its nuclear program, but that’s another story.)

And while Tehran has managed to seal deals with several European companies, American agreements haven’t been as forthcoming. Perhaps some American companies still have a little thing called patriotism.

Still, as the Journal notes, “A deal for Boeing planes could become the biggest signal yet that the U.S. and Iran are moving toward normalized trade relations.” Only Iran supposedly doesn’t have access to oodles of financing to buy Boeings’ planes. One might wonder what happened to the $150 billion in sanctions relief…

Boeing could very well finance its own deals or arrange for third-party financing for Iran, as The Daily Signal notes. But with a high-risk customer — like Iran — companies aren’t as quick to the financing draw.

Enter Ex-Im, which doesn’t care if it loses millions in taxpayer dollars. It seems the apple doesn’t fall very far from the tree with this government-created entity.

Still, last month, Ex-Im Bank Chairman Fred Hochberg attempted to alleviate concerns over a potential Iranian agreement, stating flatly, “We’re not stepping into Iran.”

Well, actually, Fred, you might be.

The Foreign Assistance Act may prevent Export-Import Bank funding from going to state sponsors of terrorism. But what’s a law in the hands of a lawless leader?

As Foreign Affairs Committee Chairman Ed Royce (R-CA) explained after the Republican-led House rejected his amendment to stop Ex-Im financing from funding terrorist states, “Some parts of the law … prevent Ex-Im from engaging with state sponsors of terrorism. But these commonsense prohibitions are subject to presidential waivers, and we have seen the president abuse waivers to pursue his agenda over and over again on Iran.”

Boeing can whine all it wants that politics are keeping it from accessing billions in business subsidies. But the constitutionality (or lack thereof) of subsidies aside, when the company’s frequent flyer miles say “Destination: Tehran,” they won’t receive one iota of sympathy here.

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