- DOJ may prosecute Boeing for 737 MAX violations
- Boeing disputes claims of settlement breach
- Criminal charges or extended settlement possible
Prosecutors in the United States are proposing that Boeing face criminal charges after determining that the plane manufacturer violated a settlement tied to two fatal disasters, according to two people familiar with the situation.
The United States Department of Justice (DOJ) must determine whether to prosecute Boeing by July 7. The recommendation of the prosecutors handling the case has not been disclosed before.
In May, officials found that the corporation violated a 2021 agreement protecting Boeing from criminal prosecution for conspiracy to commit fraud in connection with two fatal 737 MAX crashes in 2018 and 2019.
Under the 2021 agreement, the Justice Department agreed not to prosecute Boeing on claims that it deceived the Federal Aviation Administration as long as the firm improved its compliance practices and filed frequent reports. Boeing also agreed to pay $2.5 billion to resolve the inquiry.
Boeing has declined to respond.
It previously stated that it had “honoured the terms” of the 2021 settlement, which had three years and was referred to as a deferred prosecution agreement. According to Reuters, Boeing has informed the Justice Department that it disagrees with its decision that the firm violated the settlement agreement.
A spokeswoman for the Justice Department declined to comment.
According to the two people, the two parties are discussing a potential conclusion to the Justice Department’s inquiry, and there is no assurance that charges will be filed. Internal Justice Department considerations are ongoing, and no final judgments have been made.
Criminal charges would exacerbate an emerging problem at Boeing, which has been under increasing investigation from US prosecutors, regulators, and lawmakers since a panel blew off one of its jets operated by Alaska Airlines mid-flight on January 5, just two days before the 2021 settlement ended.
The sources did not say what criminal charges Justice Department officials are considering, but one of them said they could go beyond the original 2021 fraud conspiracy charge.
Alternatively, according to the sources, the DOJ might extend the 2021 settlement for another year instead of charging Boeing or seek new, stiffer terms.
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The most stringent settlements generally include financial penalties and a third party monitoring a company’s compliance. The DOJ may also require the corporation to admit its violation by pleading guilty.
Boeing may be willing to pay a penalty and agree to a monitor but believes a guilty plea, which usually entails extra business limitations, would be too damaging, according to one source. Boeing earns a lot of money from contracts with the US government. According to one of the individuals, the Department of Defense and a criminal conviction might jeopardize those contracts.
Relatives of those killed in the two catastrophic 737 MAX crashes have long criticized the 2021 agreement, claiming that Justice Department officials should have prosecuted the business and its executives.
At a Senate hearing in June, Chief Executive Dave Calhoun admitted the company’s safety failings and apologized to the families who lost loved ones.
Last Monday, the families urged authorities to seek a roughly $25 billion fine from the plane manufacturer and proceed with a criminal investigation.
