Why Boeing may not face charges even as the US says it violated a 2021 settlement

A view of the burst tire of an Air Canada Boeing 767 plane as it makes an emergency landing at Madrid’s Barajas Airport, in Madrid, Spain, February 3, 2020. Photo by Juan Medina/Reuters

The Justice Department’s determination that Boeing violated corporate probation for misleading federal regulators does not necessarily mean federal prosecutors will revive criminal charges against the giant aircraft manufacturer.

But we should know within weeks whether Boeing will face another day in court.

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The Justice Department said in a lawsuit Tuesday that Boeing violated the terms of a 2021 settlement that allowed the company to avoid prosecution for actions that led to two fatal crashes involving the company’s 737 Max planes, more than five years ago.

Prosecutors indicated they have not yet decided what to do next. What follows is an explanation of the Justice Department’s options and other things you need to know about the case.

What is Boeing accused of?

The Justice Department says Boeing failed to comply with the terms of the settlement, which required the company to establish and maintain a program to detect and prevent violations of U.S. anti-fraud laws. Notably, the government has not said whether Boeing actually committed fraud.

Why did Boeing have a probationary period?

The crashes, which occurred in Indonesia in 2018 and Ethiopia in 2019, killed a total of 346 people. After the second, the Justice Department investigated how Boeing convinced the Federal Aviation Administration to certify the 737 Max. Prosecutors determined that Boeing committed fraud against the United States by misleading the FAA about elements of a key flight control system later implicated in the crashes.

Boeing and the Justice Department secretly negotiated a settlement — a so-called deferred prosecution agreement — in which Boeing blamed two low-level employees for the deception and agreed to pay $2.5 billion, mostly to its airline customers. In return, the government agreed to drop a single fraud charge if Boeing stayed “clean” for three years.

What role did Boeing’s current problems play?

The three-year probationary period was about to expire when a door plug on a new 737 Max blew out on Alaska Airlines Flight 1282 in January. The incident prompted new investigations into the company, including an investigation by the Department of Justice. Accident investigators determined that four bolts securing the door plug were missing after the panel was removed for work at a Boeing factory near Seattle.

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Boeing told federal officials it had no documentation of the repair. At a meeting last month with families of people killed in the Max crashes, Justice Department officials said Boeing’s lack of information could be a violation of the settlement agreement, according to two attorneys present.

The FBI told passengers on the Alaska flight that they may have been the victims of a crime.

What does Boeing say?

The Arlington, Virginia-based company disputes the Justice Department’s findings.

“We believe we have complied with the terms of that agreement and look forward to the opportunity to respond to this matter with the Department,” a Boeing spokesperson said in a statement. The company said it has always been transparent in its communications about the agreement, “including in response to (the Justice Department’s) inquiries following the Alaska Airlines 1282 accident.”

What happens now?

Boeing has until June 13 to formally respond to allegations that it violated the deferred prosecution agreement, which was filed in federal court in Fort Worth, Texas. The Justice Department said it would consider the company’s comments “in determining whether to pursue charges.”

Prosecutors said they would meet in Washington on May 31 with families of passengers killed in the two Max crashes to explain Boeing’s determination that Boeing has failed to adhere to the settlement and to seek input from family members. to acquire. Family members were angry and disappointed after a similar meeting last month.

What options do prosecutors have?

The Justice Department told U.S. District Judge Reed O’Connor — who upheld the 2021 agreement — that Boeing could be prosecuted for any crime of which the government is aware, but did not say what they might be. The department also has not disclosed the company’s alleged actions, which prosecutors say violate the 2021 settlement.

While prosecutors could again drop their original fraud charges, they could also choose to keep Boeing on probation for the 737 Max-related fraud, or ask the judge to permanently drop the charges — essentially case is ended.

It would be unusual – but not unprecedented – if the government were to call off a plea deal with the business community. Last year, Swedish telecommunications company Ericsson pleaded guilty and paid a $206 million criminal fine after violating a deferred prosecution agreement.

The Justice Department said it would notify the judge of its decision on Boeing by July 7.

Left:
A view of the burst tire of an Air Canada Boeing 767 plane as it makes an emergency landing at Madrid’s Barajas Airport, in Madrid, Spain, February 3, 2020. Photo by Juan Medina/Reuters