Feds Going After Boeing Again.

Photo courtesty of Boeing Corp. The Boeing 737 Max has been controversial since two of the aircraft crashed after pilots lost control.
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The IUS Justice Department has told a judge that aircraft maker Boeing has violated the terms of a previous deal to avoid prosecution for safety failings after the deadly  crashes of two Boeing 737 Max planes more than five years ago.

That means that potentially the plane maker could be subject to criminal prosecution for defrauding federal regulators.

“The Government has determined that Boeing breached its obligations” under the agreement it reached with the Justice Department in early 2021, “by failing to design, implement, and enforce a compliance and ethics program to prevent and detect violations of the U.S. fraud laws,” prosecutors wrote in a letter to Federal District Judge Reed O’Connor in Texas.

The two-page letter does not mention another more recent well-publicised incident when a door-plug panel blew off a Boeing 737 Max jet in midair in January. But that incident has sparked renewed scrutiny of Boeing’s quality control measures by federal agencies.

Boeing says it believes it has not violated the non-prosecution deal at all.

“We believe that we have honored the terms of that agreement, and look forward to the opportunity to respond to the Department on this issue,” spokeswoman Jessica Kowal said in a statement.

Boeing agreed to the deferred prosecution deal with the DOJ in January 2021 and paid $2.5 billion in fines. The plane maker had been accused of misleading regulators who approved the 737 Max.

The Max crashes — one in Indonesia in 2018 and another in Ethiopia in 2019 — killed a total of 346 people. The accidents were blamed, in part, on a new automated flight control system. That system, called MCAS, powerfully pushed the noses of those jets down repeatedly not long after takeoff, taking over control from the pilotis and leading to crashes that killed all the passengers and crew.

The DOJ agreement essentially placed Boeing under probation for three years — a term that ended just days after the midair blowout on January 5th, 2024.

Family members of the crash victims have long complained that the prosecution agreement with Boeing amounted to a sweetheart deal for the company, and have been litigating for years to get a better compensation deal.

Under the terms of the original deal Boeing agreed to pay a total criminal monetary amount of over $2.5 billion, composed of a criminal monetary penalty of $243.6 million, compensation payments to Boeing’s 737 MAX airline customers of $1.77 billion, and the establishment of a $500 million crash-victim beneficiaries fund to compensate the heirs, relatives, and legal beneficiaries of the 346 passengers who died in the Boeing 737 MAX crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302.

The lawyers representing the family members welcomed the DOJ’s announcement, and urged prosecutors to go further.

“This is an important first step toward holding Boeing accountable for the deaths of the 346 passengers and crew on the two flights,” said Paul Cassell, a former federal judge and law professor at the University of Utah who is representing the families.

“But the Justice Department needs to now follow through with effective, transparent, and vigorous prosecution of the conspiracy charge it has filed,” Cassell said.

“We hope that DOJ will continue to pursue justice for Boeing’s victims, and move forward with a prosecution against Boeing for its egregious criminal acts that resulted in the deaths of 346 innocent people,” said Erin Applebaum, a lawyer at the firm Kreindler & Kreindler who represents victims’ families.

The Justice Department could also seek to essentially extend Boeing’s probation under the prosecution agreement.

Prosecutors told the judge they are still determining how to proceed. Under the terms of the agreement, Boeing has the right to reply to the Justice Department allegations.

The Department of Justice has also scheduled another meeting to seek input from family members of those who diied in the aircraft on May 31st in Washington.

Source: NPR, Justice.gov
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