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Boeing Anticipated to Avoid Criminal Prosecution

DALLAS — The U.S. Justice Department is about to permit Boeing to forego criminal prosecution for breaking the terms of a 2021 settlement linked to the deadly 737 MAX crashes in 2018 and 2019.

This is at least according to persons familiar with the matter cited in a New York Times (NYT) report. The article notes that the DOJ intends to give Boeing another deferred prosecution agreement, one which calls for the installation of a government monitor to oversee safety reforms at the corporation.

The U.S. government is anticipated to extend its settlement offer to the planemaker before the end of the month, according to the NYT report.

While there's no official confirmation from any DOJ official, it's important to note that this is a case that involves the largest U.S. exporter; it's different from, say, a corporate fraud verdict, which can include a business ban in the state it is issued in lieu of a corporate death penalty.

The Boeing situation is a legal catch 22 on a federal level. As the government, do you want to punish Boeing to the point of it being unable to secure federal contracts in the future?

Lion Air  HS-LSH Boeing 737-9 MAX + Boeing logo. Photo: Brandon Farris/Airways

What Settlement Terms Were Violated?

Boeing acknowledged in January 2021 that two workers had misled federal aviation safety inspectors about certain aspects of the 737 MAX, but at the time it was able to avoid prosecution by entering a company probationary period.

The deal with the DOJ included a settlement for US$2.5 billion to end the company's criminal investigation into its actions leading up to the deadly crashes. The deal mandated that Boeing restructure its compliance procedures and includes financial compensation for the relatives of the victims.

However, according to a DOJ statement from May, Boeing failed to "design, implement, and enforce a compliance and ethics program" to prevent violations of US fraud laws. In short, Boeing broke its commitments made in the billion-dollar deal.

As Senator Richard Blumenthal told CNBC, "[Boeing] failed to comply with the conditions of that deferred prosecution." He further stated that the deferment was "dependent on they're complying with integrity and ethics and proper reporting," but that Boeing continued to lie to the FAA.

The senator added "the use of nonconforming parts, defective or damaged parts in airplanes, concealment and pressure agains whistleblowers," among other allegations. Having said that, Blumenthal underscored, "We need Boeing."

"The idea of a felony prosecution may be a deterrent, but in the end, we need to help Boeing succeed...The goal is not to prosecute and penalize; it is literally to help Boeing change its priorities."

Boeing, Congress and Surviving Families

On Tuesday, Boeing's CEO Dave Calhoun gave testimony before Congress, saying that the business had "learned" from its failures in the past and that the procedure for handling staff whistleblowers "works."

Despite this, lawmakers accused him of not going far enough to address a culture of retaliation. In April, Boeing whistleblowers informed the Senate that there were major production problems with the 737 Max, 787 Dreamliner, and 777 models as part of an ongoing inquiry.

As US senators questioned the Boeing CEO—a job with an open seat no one seems to want—about the company's culture, the families of those killed in the 737 MAX crashes shouted at him during the whole hearing.

The next day, the relatives requested that the Justice Department pursue a criminal investigation, including the US$25 billion punishment on the manufacturer.

Boeing has paid US$243 million in fines related to the 737 MAX crashes.

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