Boeing
The DOJ sent a letter to Federal District Judge Reed O’Connor in Texas on Tuesday, stating that Boeing breached its obligations, including the requirement to review, modify, and develop risk assessment procedures to comply with Federal Aviation Administration or government agency requirements.
Federal prosecutors also stated Boeing failed to “design, implement, and enforce a compliance and ethics program to prevent and detect violations of the U.S. fraud laws throughout its operations.”
The DOJ’s letter refers to the original investigation of two Boeing 737 MAX crashes that led to the global grounding of the fleet. Following its investigation, the DOJ charged Boeing with “a conspiracy to defraud” the Federal Aviation Administration’s Aircraft Evaluation Group during its review of Boeing’s 737 MAX aircraft.
Boeing Charged With Fraud After 737 MAX Crashes
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Boeing admitted as part of its 2021 DPA deal that 737 MAX Flight Technical Pilots had deceived the FAA AEG about how the Maneuvering Characteristics Augmentation System affected the flight control system. Accident investigators pointed to the irregular function of the MCAS system as a cause of both deadly accidents.
“Because of their deception, a key document published by the FAA AEG lacked information about MCAS, and in turn, airplane manuals and pilot-training materials for U.S.-based airlines lacked information about MCAS,” the DOJ stated in the notice of the agreement.
Victims’ families have criticized the deal as too lenient. Senators have also questioned it during recent Boeing whistleblower hearings.
Senator Johnson said it was a matter of Boeing accountable, adding, “This was beyond negligence. This is an overt act. And nobody has been held accountable in any way, shape, or form, financially losing their job, criminally held liable.”
Boeing ultimately agreed to pay $2.5 billion to defer prosecution. The DPA provided for 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.” The remaining funds included a criminal penalty of $243.6 million and “compensation payments to Boeing’s 737 MAX airline customers of $1.77 billion.”
Boeing Admits Facts But Pleads Not Guilty
In the original deal, Boeing acknowledged its responsibility “for the acts of its officers, directors, employees, and agents as charged” and accepted the facts and allegations presented by the DOJ as “true and accurate.”
Despite this, Boeing pled not guilty to the charges at an arraignment on January 26, 2023. The Court ordered that Boeing was “not to commit another federal, state, or local crime while on release as this case is pending.”
Families have appealed the deal under the Crime Victims’ Rights Act. The United States Court of Appeals for the Fifth Circuit published its decision against revising Boeing’s DPA on December 15, 2023. Still, it decided the court had “ongoing CVRA responsibility,” stating, “If the Government concludes, independent of court supervision, that Boeing has not complied with the DPA, the case will instead proceed to trial or to Rule 11 guilty plea resolution, both assuring CVRA victim protection.” Additionally, the court “must uphold crime victims’ statutory rights at every stage of the court’s criminal proceedings.”
Alaska Airlines Alaska Airlines Door Plug Blowout Precipitates Review
Boeing was required to adhere to the terms of its DPA deal through January 7, 2024. The Alaska Airlines door plug blowout occurred on January 5. The DOJ reopened a criminal investigation of Boeing in March.
The DOJ argues it is still in time to prosecute Boeing for a violation of the terms of the deal, and to continue investigating Boeing compliance, stating in the Tuesday letter to the court:
“Nothing in the notification to Boeing limits the Department’s ability to determine, during the remainder of the six-month evaluation period following the end of the term of the DPA, that Boeing breached any other obligations set forth in the DPA, should the facts so warrant. Nor does the government’s breach notice to Boeing limit the Department’s ability to continue investigating potential misconduct by Boeing either during the remainder of the six-month evaluation period or thereafter.”
The DOJ does not reference the Alaska Airlines door plug blowout in its Tuesday letter to the court. However, this most recent incident led to a closer review of the aerospace giant’s safety management system, with an expert review panel finding significant gaps that might constitute a breach of the requirement to ensure its policies and procedures comply with FAA requirements. Boeing also failed to supply the National Transportation Safety Board with critical work records of the repairs performed on the Alaska Airlines door plug, saying these are missing. That might also reflect a failure to comply.
Boeing Must Defend Its Actions
For its part, Boeing disagrees with the DOJ’s conclusion that it violated the DPA deal.
“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 told NPR in a statement.
Boeing must respond to the DOJ by June 13, arguing its case and detailing any actions Boeing “has taken to address and remediate the situation.”
However, Mark Lindquist, an attorney representing some of the victims’ families, told the Seattle Times he believes any Boeing argument is unlikely to sway the Justice Department.
“The deal is dead. It’s off. Now they go forward with prosecution,” Lindquist said.
Paul Cassell, a former federal judge and law professor at the University of Utah representing the victims’ families, was more cautious, describing the letter to NPR as “an important first step toward holding Boeing accountable.”
The DOJ will determine whether to prosecute Boeing for fraud “no later than July 7.”
