After two plane crashes killed 346 people, a US$2.5 billion deal that allowed Boeing to avoid criminal prosecution have failed to resolve questions about the safety of the aerospace giant’s planes.
Federal prosecutors now accuse the company of failing to meet the terms of the 2021 deal. Boeing agreed plead guilty to one count of criminal fraud in a new deal with the Department of Justice. The department expects to present the detailed plea agreement on Friday, but says it may need “a few more days.”
Corporate behavior experts say whether the new agreement has a more lasting impact on safety than the previous agreement may depend on how much power is placed in the hands of an independent monitor appointed to oversee Boeing for three years. Prosecutors appointed such a monitor a condition of the court settlement, which also requires Boeing to pay a new fine of US$243.6 million.
“Their real concern is protecting against the loss of future life in future accidents, and that’s something the monitor could have more of an impact on than simply the amount of the fine,” said John Coffee, a law professor at Columbia University who studies corporate business. governance and white-collar crime.
The final appeal and sentencing will be filed in U.S. District Court in Fort Worth, Texas. The filing will provide a more accurate description of how the compliance monitor will be chosen and the scope of the monitor’s functions. The government already appears to have given up on a plan that would give Boeing the biggest role when choosing a guard dog.
families of some of the passengers who died in the crashes said they planned to oppose the deal. They want a trial, not a plea deal, and say Boeing should pay a fine of US$24 billion. Paul Cassell, a lawyer for the families, said relatives of the crash victims should have the right to propose a monitor for the judge to appoint.
The Justice Department initially planned to select a monitor from a list of three nominees submitted by Boeing and would ask the company for more names if necessary, according to participants in a June 30 briefing department officials gave to passengers’ families and their families. lawyers.
The deal that Boeing agreed to “in principle” a week later said the Justice Department would search for candidates through a public job posting on its website and then select one “with feedback from Boeing.” The precise extent of the company’s role was unclear.
Once the department and Boeing decide on the choice, prosecutors will brief U.S. District Judge Reed O’Connor. If he does not object within 10 days, the consultation will take place. The person chosen would need to meet “specific qualifications” set forth in the posting and in the department’s guidelines for selecting monitors in criminal cases, according to the document.
The monitor will oversee Boeing’s compliance with the plea agreement during a three-year probationary period, during which the employee will write “a confidential annual report to the government” and present an executive summary to the court.
The use of monitors as part of plea agreements with companies convicted of crimes reflects the reluctance of prosecutors to issue indictments and take cases to trial.
Brandon Garrett, a Duke University law professor who follows criminal cases involving companies, said prosecutors have long feared that a criminal charge could destroy a large publicly traded company, so they tend to favor out-of-court settlements in the most serious cases. That changed, he said, after the 2008 financial crisis, and the concern became that companies were being treated as “too big to arrest,” a phrase Garrett used in the title of his book. 2014 book.
The effectiveness of plea agreements and deferred prosecution agreements that allow defendants – such as Boeing in 2021 – to avoid criminal liability has been questioned.
“Especially when there were companies being repeatedly sued, something needs to change — maybe these companies really should have criminal records,” Garrett said. “That’s when we started to see…more big cases where companies would be convicted.”
Nadia Milleron, whose 24-year-old daughter Samya Stumo died in the second of two fatal 737 Max crashes, said Boeing’s lawsuit settlement is much better than the settlement reached three and a half years ago. In January 2021, the Justice Department agreed not to prosecute the company for conspiring to defraud the US government, a charge based on allegations that Boeing misled regulators who approved the 737 Max nearly a decade ago.
Still, Milleron and relatives of other crash victims want a trial that could reveal more details about discussions within Boeing that led to the crashes, which occurred in 2018, and even afterward. In Indonesia and 2019 in Ethiopia.
It seemed likely that the Justice Department would permanently drop the 2021 charge until January of this year, when a panel covering an unused emergency exit blew up a Max jet during an attack. Alaska Airlines flight. The Federal Aviation Administration has increased its oversight, and the agency’s head said manufacturing problems at Boeing “It doesn’t seem to be being resolved.”
The Justice Department defends its decision to seek a plea deal by saying it includes the most severe punishment possible under the charge facing Boeing.
“We should be asking whether these processes are working and what can be done to make them more effective,” Garrett said. He suggested the judge could take an active role in monitoring Boeing to ensure the company complies with the new agreement after violating the old one.
Coffee, the Columbia law professor, said the key to knowing whether the settlement will deter Boeing from future violations will be a strong, independent monitor.
“Companies are afraid of a free agent going through their files,” he said. “On the other hand, if there isn’t some ability for the monitor to go directly to the court and say ‘They’re not complying with the terms of the agreement,’ you have an ineffective monitor.”
In one notorious case, prosecutors blocked a New York federal judge from releasing a monitor’s reports on HSBC, a London-based bank that entered into a deferred prosecution agreement over allegations it failed to stop a drug cartel. Mexican money launderer.
“I’m not saying we shouldn’t have deferred prosecution agreements, but they tend to be negotiated to strongly serve the interests of the defendant,” he said.
The judge in the Boeing case indicated that after the Justice Department presents the details of the plea agreement, it will give victims’ families seven days to file objections. The government and Boeing will then have 14 days to respond.
The Justice Department’s January 2021 decision not to prosecute Boeing came in the final days of the Trump administration. In 2022 and 2023, federal prosecutions against companies increased modestly under the Biden administration, according to data from the U.S. Sentencing Commission.
“We’re in an election year, so we’ll see how this Justice Department focus plays out after the November elections and whether the focus on corporate crime remains the same,” said Kya Henley, a former public defender. in Maryland, who now represents businesses and individuals in white-collar cases. “Everyone can set their agenda.”
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Koenig reported from Dallas. Cathy Bussewitz in New York contributed to this report.
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