What to know about the plea deal offered Boeing in connection with 2 plane crashes

Federal prosecutors and victims’ families await Boeing to decide whether a settlement proposal should be accepted that settle a criminal fraud charge He accuses the aerospace giant of misleading regulators who approved the 737 Max jet before two of the planes crashed.

Relatives of some of the 346 people killed in the October 2018 and March 2019 crashes are outraged by the Justice Department’s plea offer. prosecutors have explained in an online meeting with the families and their lawyers on Sunday.

The families want to take Boeing to court.

“This package gives Boeing another opportunity to hide its crimes from the public,” said Ike Riffel, a California resident whose two sons died in the second 737 Max crash, said Monday. “The families are very disappointed, but we vow to fight on.”

Paul Cassell, a former federal judge who served on a number of the families of the victimscalled it a “sweetheart deal” for Boeing.

However, some lawyers involved in the case say a settlement is better than nothing.

“While I personally would have preferred a more vigorous prosecution, a guilty plea to a misdemeanor is a serious step forward” from a 2021 agreement between Boeing and the Justice Department, said Mark Lindquist, an attorney suing Boeing on behalf of passengers who survived a plane crash. eng 737 Max incident t at the beginning of this year.

The Justice Department first accused Boeing of fraud in January 2021, but agreed not to prosecute if the company paid a fine and followed other conditions for three years. Then, seven weeks ago, the department said Boeing had broken the rules the deferred prosecution agreement by failing to make changes to detect and prevent future violations of anti-fraud laws. Prosecutors have failed to disclose the alleged violations.

Below are some of the questions asked about the case.

The Justice Department wants Boeing to plead guilty to one count of fraud by misleading the Federal Aviation Administration about new flight control software for the 737 Max and how much pilots training of older 737 models to safely operate the plane. In the 2021 settlement, Boeing blamed the deception on two low-level employees, one of whom later acquitted after a trial in federal court.

The company won’t say. Lawyers for the victims’ families say the company would be crazy to turn it down.

If Boeing accepts the deal, it would plead guilty in what would likely be a very short trial. If it rejects the offer, the Justice Department has promised to take the case to trial, which would reveal more details about Boeing’s actions as it asked the FAA to certify the Max.

Yes. The request and punishment outlined by the Justice Department, including a $244 million fine and the appointment of a monitor to oversee the deal, would be filed in U.S. District Court in Fort Worth, Texas. If Judge Reed O’Connor If he accepts the agreement, he will no longer be able to change the terms approved by Boeing and the plaintiffs.

If the judge rejects the settlement, Boeing and the Justice Department can try to negotiate a new agreement or go to court.

“The families will certainly appeal to Judge Reed O’Connor and ask him to deny the request if Boeing accepts it,” said Robert Clifford, another attorney for the families of the Lion Air and Ethiopian Airlines crashes.

It would strengthen the position of victims’ families who have not yet settled their ongoing lawsuits against the company. It is less clear whether survivors and heirs who have already accepted settlements will be able to file new claims.

It would only resolve the fraud charges filed after the two fatal crashes, which occurred off the coast from Indonesia And in Ethiopia.

The Department of Justice has launched a new investigation after a panel covered an unused emergency exit blown away a 737 Max during an Alaska Airlines flight in January; the FBI told passengers on that flight, they could be victims of a crime. The National Transportation Safety Board and the Federal Aviation Administration are conducting separate investigations into the blowout and Boeing’s manufacturing quality.

Boeing announced Monday that it will pay $4.7 billion to Acquire Spirit AeroSystemsthat makes fuselages for the 737 Max, in an all-stock transaction. Fitch Ratings said the deal should help Boeing better manage the pace of 737 Max production and will not have an impact on the company’s credit rating in the near term, although Boeing will assume about $3.6 billion of Spirit’s debt.

Boeing once owned Spirit and believes that bringing the supplier back in-house will improve quality and reduce safety concerns about his planes.

Manufacturing errors from suppliers can make their way into finished products. Alaska Airlines’ blowout occurred after bolts were not reinstalled following a repair job at Boeing — workers had to repair rivets that were damaged when Spirit’s fuselage arrived — according to a preliminary report by the NTSB.

A criminal conviction can jeopardize a company’s position as a federal contractor, and Boeing is a major one. The company builds planes for the Department of Defense and built a space capsule for NASA.

Joseph Facciponti, director of the compliance and enforcement program at New York University Law School, said the request could be written so that a Boeing subsidiary pleads guilty, allowing the rest of the company to avoid delisting. In many cases, however, agencies have the authority to prevent companies from being delisted.

“I don’t think the government wants to lose the ability to contract with Boeing, so government agencies always have the option to allow a company convicted of such a crime to continue doing business with them,” Facciponti said.

The Boeing case could also have implications for the Justice Department’s approach to entering into deferred prosecution agreements with other companies or individuals.

Peter Reilly, law professor at Texas A&M University, which has written about such agreements, also known as DPAs, says federal prosecutors have increasingly used them in recent years to settle serious charges against companies while avoiding the costs and uncertain outcomes of a trial.

A milestone was the 2015 deal with General Motors over allegations that the automaker broke the law by hiding a deadly problem with ignition switches in small cars, he said.

Congress passed DPAs as part of the Speedy Trial Act of 1974 to expedite cases involving low-level offenses and first-time offenders, Reilly said. He believes the Boeing DPA was particularly weak and that Congress should crack down on its use.

“People realize, wow, this is what happens when Boeing admits to a very serious crime and 346 people die?” Reilly said.

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Cathy Bussewitz in New York contributed to this report.