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Boeing Greased Its Landing in South Carolina

Say one thing for the Boeing Co.: The aerospace giant understands how to play the political game.

Chicago-based Boeing wasted little time ingratiating itself into South Carolina’s government power structure when it began considering the state for an aircraft assembly plant more than three years ago.

In fact, the company began doling out campaign contributions even before legislators met in a rare, special session in October 2009, when Boeing was approved for the first part of the biggest corporate-welfare package offered to a single company in more than two decades.

What Boeing hasn’t been so keen on is revealing what South Carolina taxpayers are getting in return for their “investment” in the company’s 787 Dreamliner facility.

Attempts to question a top Boeing South Carolina executive, Marco Cavazzoni, last week in Columbia were rebuffed, with Cavazzoni referring questions to Candy Eslinger, Boeing’s South Carolina spokeswoman.

“I’m sorry but I don’t have time right now,” Cavazzoni said when questioned by The Nerve. “Call Candy Eslinger; Candy Eslinger will get you whatever you need.”

As has been the case numerous times over the past two-and-a-half years, Eslinger did not respond to inquiries from The Nerve.

“This is Boeing’s typical way of doing business,” said Bob Williams, founder and senior fellow at The Freedom Foundation, a free-market think tank based in Washington state, where Boeing was headquartered until 2001.

And just as Boeing has been loath to turn over information, states that strike incentives deals with the corporation have been only too happy to deny public access to information, just as has happened in South Carolina, he added.

“Boeing tried to prevent us from public records by declaring ‘trade secrets,’ etc., and used many delaying tactics,” Williams said in an email to The Nerve. “We had to go to court and fight Boeing and the state for the documents.”

Public records show that Boeing is an extremely profitable company that understands how to work the system.

Conservative estimates are that South Carolina lawmakers gave Boeing more than $500 million in incentives, with some published reports putting that figure as high as $900 million.

This for a company that earned $4 billion last year, and nearly $23 billion since 2003, the year the Dreamliner was first conceptualized.

And on Wednesday morning, Boeing announced that it earned $923 million during the first quarter of2012, a 58 percent increase from a year ago.

The company isn’t afraid to throw around a little cash here and there, records show.

Over the past 30 months, Boeing has spent at least $88,735 on lobbyists in South Carolina, according to State Ethics Commission records.

The company has also given at least $35,000 to politicians, candidates, political action committees, political parties and caucus committees, records show.

Among those who have received money from the company or its political action committee: Gov. Nikki Haley, former Senate President Pro Tem and current Lt. Gov. Glenn McConnell, and Senate Finance Chairman Hugh Leatherman, R-Florence.

Boeing has also given money to the Palmetto Leadership Council, a political action committee tied to House Speaker Bobby Harrell, R-Charleston; and the South Carolina Republican Party.

The company made its first contributions in South Carolina more than a month before the October 2009 special session, doling out $2,000 each to the House Republican Caucus Committee, the House Democratic Caucus Committee, the Senate Republican Caucus Committee and the House Democratic Caucus Committee, according to State Ethics Commission records.

Boeing has since given at least $12,000 more to the caucus committees, including $5,000 to the House Republican Caucus Committee.

Boeing has made liberal use of lobbyists since it began eyeing South Carolina. Currently, it has five State House lobbyists listed as being under contract, including Bob Coble, the former mayor of Columbia.

No lobbying expenses are listed yet for 2012, but the company’s reported lobbying expenses have risen each year since 2009, from $19,898 to $32,719 in 2010 to $36,421 last year.

Among ways Boeing’s lobbying expenditure appears to be paying off: Last month, the House and Senate passed a concurrent resolution urging the state’s congressional delegation to support legislation reauthorizing the operating charter of the U.S. Export-Import Bank.

Known as Ex-Im, the bank provides federally backed loans and loan guarantees to overseas buyers of American-made products who face difficulty obtaining private financing.

Among the biggest beneficiaries of Ex-Im? Boeing.

Over the past two years, the Ex-Im Bank has issued $25 billion in loan guarantees, and nearly $17 billion has gone to subsidize Boeing sales, according to one report.

And the company has managed to spread its tentacles in other ways, as well.

Perhaps most significantly, Cavazzoni was named chairman of the S.C. Research Authority by Haley in 2011.

SCRA is a state-created and state-controlled technology and real estate development and management company charged with developing South Carolina’s knowledge economy.

SCRA does not receive direct state appropriations, but Research Authority affiliate SC Launch receives $6 million annually from the state in the form of contributions that are 100 percent deductible against state income taxes.

The Nerve last year filed an S.C. Freedom of Information Act request to try and determine what due diligence the Governor’s Office used in choosing the Boeing executive for the SCRA post.

Despite asking for all records related to the appointment of Cavazzoni to head SCRA’s 24-member board of trustees, the Governor’s Office turned up just three short emails, along with a copy of Cavazzoni’s application.

None of the emails was from or to Haley. There were also none from Cavazzoni.

There’s no doubt that Boeing is treated as an economic development equivalent of a rock star by state officials.

Haley made Boeing a focal point of her most recent State of the State address and recognized the company’s general counsel during her speech.

Boeing’s also gotten involved in the recreational side of South Carolina life. Last year, it was announced the aircraft manufacturer had agreed to become a “local sponsor” for the RBC Heritage golf tournament on Hilton Head Island.

As part of the five-year sponsorship deal, Boeing pays more than $1 million annually.

In exchange, the tournament is referred to locally as the "the RBC Heritage presented by Boeing," while nationally and during television coverage it is referred to as the "RBC Heritage."

Reach Dietrich at (803) 779-5022 ext. 110, or kevin@thenerve.org.

Series SCRA Lobbying Legislation Incentives General Assembly Economic Development Corporate Welfare Accountability Transparency