July 8, 2020

Boeing Refuses to Disclose Any Boeing-State Department-Clinton Foundation Email Correspondence

Chairman Tells Shareholder He’s “Comfortable” with Donations to Clinton Foundation That Could Put Boeing at Risk of Honest Services Fraud Charges

Company Offers to Continue Discussion with Free-Market Think-Tank about Increased Transparency Despite Not Releasing E-Mails

Washington, DC – Boeing Chairman and CEO W. James McNerney, Jr. was today asked to make any emails between Boeing and the U.S. State Department during the time State helped Boeing secure a Russian contract and Boeing made a contribution to the Clinton Foundation available for inspection.

The request came from a representative of the National Center for Public Policy Research, Boeing shareholder and National Center Executive Director David Almasi.

Between the shareholder meeting today and last year’s meeting, Boeing went to the U.S. Securities and Exchange Commission (SEC) to fight a shareholder proposal submitted by the National Center for Public Policy Research on Almasi’s behalf asking the company for more transparency in reporting its methodology for making charitable donations. Boeing was successful in getting the SEC to agree, in January 2015, that it would not require Boeing to place the proposal before shareholders for a vote.

Today the National Center asked McNerney to release any email correspondence Boeing officials had with the U.S. State Department, as the government’s copies of at least some of these emails may have been stored on Secretary Clinton’s private server, and then deleted.

At today’s shareholder meeting, National Center Executive Director David W. Almasi asked:

Although you have succeeded in blocking this shareholder’s request for a report on charitable giving policies, you still have the opportunity to set the record straight that every communication between Boeing and the State Department was above board. Will you release every email and communication that Boeing officials had relating to donations to the Clinton Foundation, and with the State Department?

McNerney claimed the company is “very mindful of interacting in the proper way with any charitable organization – including the Clinton Foundation,” and “we feel comfortable with the donations we made.” Yet he rebuffed Almasi’s request to voluntarily make the emails available, stating the company would do so only “if there is some regulatory or legal proceeding that we’re asked to become part of.”

“Boeing is digging itself deeper into a hole with its stubbornness. Boeing officials may have done nothing wrong, but doubling down on the ambiguity as to why they felt it best to donate to the family-run foundation of a serving public official who had helped them out begs prosecutors to investigate the possibility of honest services fraud,” said Almasi. “And refusing to release emails about it that they must have archived somewhere only heightens suspicion.”

Almasi’s full question, as prepared for delivery, is available here.

After being rebuffed at the 2014 shareholder meeting , when McNerney called Almasi’s request “beyond the pale,” Almasi and the National Center submitted a resolution demanding more transparency in the Boeing charitable-giving processes. It was meant to be included in the company’s 2015 proxy statement and voted on at today’s shareholder meeting, but Boeing fought the resolution and the Obama Administration’s Securities and Exchange Commission allowed Boeing to keep it from being considered over a technicality regarding stock ownership. The resolution, in part, read:

Shareholders request that the Board of Directors consider issuing a semiannual report on the Company website, omitting proprietary information and at reasonable cost, disclosing: the Company’s standards for choosing which organizations receive the Company’s assets in the form of charitable contributions, the business rationale, if any, for such contributions, the intended purpose of each of the charitable contributions and, if appropriate, the benefits to others of the Company’s charitable works.

The full text of the resolution is available here.

Almasi explained: “Such a report would have identified the company’s standards for making charitable donations and shown whether such transactions were indeed ethical and legal. I was very disappointed when Boeing spent shareholder resources to have its lawyers petition the SEC to block its shareholders from voting on this non-binding recommendation to management. It gives the appearance that Boeing has something to hide.”

During the shareholder meeting, Almasi reminded McNerney that there were many charities doing work in Haiti similar to what the Clinton Foundation was doing. McNerney, who earlier said the Boeing board would reexamine all shareholder resolutions after the meeting – regardless of whether they got past the no-action – also pledged to “keep engaging” with the National Center about the organization’s shareholder resolution that they fought.

“While McNerney pledged to continue the discussion with us on the issue of increasing transparency, he maintained that he felt the company did the right thing and has no intention to make any communications between Boeing and the Clintons and the State Department available for general review. This air of mystery is exactly how a prosecution for honest services fraud might begin. As a shareholder, it concerns me that this growing scandal involving the Clintons could someday hurt my investment in Boeing,” said Almasi.

On April 22, Free Enterprise Project Director Justin Danhof likewise asked General Electric CEO Jeff Immelt to release emails between GE and the State Department because the company donated to the Clinton Foundation and Secretary of State Clinton helped GE secure a contract for a power plant in Algeria. Immelt, sounding much like Boeing’s McNerney, replied: “That’s not something we would do.”

Both the National Center for Public Policy Research and David Almasi are Boeing shareholders.

The National Center’s Free Enterprise Project is the nation’s preeminent free-market activist group focusing on corporations. In 2014, Free Enterprise Project representatives participated in 52 shareholder meetings advancing free-market ideals in the areas of health care, energy, taxes, subsidies, regulations, religious freedom, food policies, media bias, gun rights, workers rights and many other important public policy issues.

Today’s appearance at Boeing’s annual meeting of shareholders meeting marked the eleventh shareholder meeting for the National Center in 2015.

The National Center for Public Policy Research was founded in 1982. Sign up for free issue alerts here and go here to make a tax-deductible contribution to help us fight for liberty.

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Honest Services Fraud Question Annoys Boeing CEO at Shareholder Meeting

National Center’s David Almasi Asks CEO: Why Make Major Gift to Clinton Foundation During Same Timeframe as Secretary of State Clinton’s Advocacy for Boeing Products Overseas?

Donations Could Raise Questions of Honest Services Fraud, Even if Company’s Intentions Were Pure, National Center Says

Chicago, IL /Washington DC – David Almasi of the National Center for Public Policy Research made himself the most unpopular person the room at the Boeing shareholder meeting in Chicago today after he asked company chairman and CEO W. James McNerney about conflicts of interest between Boeing’s philanthropy and actions by a senior public officials, and raised the question of whether Boeing had unnecessarily exposed itself to the danger of being prosecuted for honest services fraud.

Almasi was following up on a April 13 Washington Post story by Rosalind Helderman, who reported that Boeing made a $900,000 contribution to the Clinton Foundation and a $2 million donation important to then-Secretary of State Hillary Clinton in the same timeframe that Secretary Clinton made what she called “a shameless pitch” to Russia’s state airline on Boeing’s behalf.

Almasi asked Mr. McNerney, in part (full question here),

The official purpose of our Company’s $900,000 donation to the Clinton Foundation was to build schools in Haiti. Assuming that building schools in Haiti was a key goal of this Company’s philanthropic programs in 2010, why was it so important to support this work specifically through the Clinton Foundation, and not one of the many other reputable, independent charities then working in Haiti? By donating to the Clinton Foundation within months of receiving a huge favor from the Secretary of State, did we not expose both our Company and the Secretary of State to the risk of being charged with honest services fraud?

Almasi further asked,

There is at least one lobbyist in jail right this minute for giving public employees travel and meals worth far, far less than $900,000. He claims he didn’t intend bribery; that what he did was business-as-usual. But he’s in jail now, nonetheless.

Why would we risk federal charges by making a donation to the Clinton Foundation at a time when our Company had such a clear conflict of interest? It seems reckless and unnecessary, even if it was not illegal. Are we operating under the assumption that our Company is to big to be charged with honest services fraud or bribery even as little guys go to jail for it?

If so, may I politely remind the Company of questions raised in 2003 by the National Legal and Policy Center, also regarding our interactions with government officials, which resulted in two Boeing executives, including our CFO, going to prison, the resignation of our CEO, and over a half a billion dollars in fines?

In response, Mr. McNerney, who clearly was annoyed by Almasi’s question, said he disagreed with almost everything Almasi said, and said he was “confident” Secretary Clinton “would have advocated for Caterpillar’s tractors or GE’s turbines with equal fervor… with or without these few donations.”

Mr. McNerney also said he was “highly confident that we followed the letter and the spirit of the law” despite the National Center’s “indication that you made which is that it is beyond the pale.”

Mr. McNerney concluded by saying, “I appreciate the secretary’s support overseas” and added the “commercial advocacy by people that lead our country is highly appreciated by those of us toiling in the vineyards.”

“There were people in the room suggesting Boeing executives were building kid-killing drones to pay for luxury homes in Miami, yet I think that company chairman W. James McNerney was more irate about my questioning of corporate donor strategy than he was about those questions,” said Almasi. “While not addressing the core question of why Boeing chose the Clinton Foundation at a time when Secretary Clinton was involved in ‘advocacy’ for its company, McNerney insisted there was nothing wrong with its donations to public and private Clinton priorities. Maybe it was legal, but it stinks to high heaven.”

“Mr. McNerney’s response is inadequate and should concern shareholders,” said Amy Ridenour, chairman of the National Center. “He ducked the kernel of our question, which is why Boeing would make a donation to the Clinton Foundation at a time of such a conflict of interest. Even if the company’s intentions were pure, such a move can raise legal questions.”

“A key point here is that enforcement of laws covering honest services fraud is murky. The DC Court of Appeals has even said that determining what is and is not legal in this area is ‘subtle.’ So companies and individuals can be charged — and have been — even when they genuinely believe themselves innocent,” Ridenour said.

“Mr. McNerney’s answer to the National Center focused on Secretary Clinton’s actions,” Ridenour continued. “I submit that is the incorrect focus. It should instead be on what his company did. A lobbyist was convicted of honest services fraud for giving travel, meal and tickets worth far less than $900,000 to public officials and is in prison now even though no public officials testified that they undertook actions because of the lobbyist’s gifts. So even if Secretary Clinton were to say she would have helped Boeing even without the gifts, and even if Boeing sincerely believed it had done nothing wrong — which was that lobbyist’s contention — the DOJ could still prosecute Boeing.”

“Boeing should have been aware of all of this,” added Ridenour. “During the same time period as the Boeing donations, the U.S. Supreme Court was hearing the honest services fraud case of Enron’s Jeffrey Skilling. After the court ruled in that case, the Washington Post’s Amanda Becker reported that “uncertainty remains about the [honest services] law’s meaning.” Boeing announced it won the Russian contract in May 2010; Skilling v. United States was handed down in June 2010 ; Boeing announced its gift to the Clinton Foundation in August 2010. Honest services fraud was headlining the newspapers at the very time Boeing apparently was considering a major gift to a foundation run by the husband of the sitting Secretary of State.”

“Bottom line,” continued Ridenour. “Companies should avoid gifts with obvious conflicts of interest to public officials, even if innocently intended. They not only open themselves up to possible legal inquiries, but they could give the public an impression of wrongdoing, even if none exists. Boeing’s willingness to help rebuild Haiti is commendable, but at the time of Boeing’s gift, there were many worthy charities other than the Clinton Foundation working there. In fact, Boeing had earlier contributed to Red Cross efforts in Haiti. So why donate to the one foundation led by family members of the Secretary of State at all?”

“As a side note,” Ridenour concluded, “although we are happy to see American businesses succeed, we question whether the top priority of the Secretary of State in Russia or elsewhere should be drumming up business for for-profit corporations. Isn’t that what the office of the U.S. trade representative is for? I thought the Secretary of State was in charge of such things as talking Russia out of invading Ukraine, not into buying airplanes.”

The National Center’s question for Boeing, as prepared for delivery, can be found here.

National Center Executive Director David Almasi is a Boeing shareholder.

The National Center’s Free Enterprise Project is a leading free-market corporate activist program. In 2013, Free Enterprise Project representatives attended 33 shareholder meetings advancing conservative and free-market principles in the areas of health care, energy, taxes, subsidies, regulations, religious freedom, media bias, gun rights and many more important public policy issues. The National Center has participated in 12 shareholder meetings so far in 2014.

The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from individuals, three percent from foundations, and three percent from corporations. It receives over 350,000 individual contributions a year from over 96,000 active recent contributors.

Contributions are tax-deductible and greatly appreciated.

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