Summary
- Boeing’s sketchy handling of the 737 MAX series is putting its deferred prosecution agreement under scrutiny.
- Families of crash victims are pushing for a DOJ violation after recent 737 MAX incidents.
- The DOJ is expected to announce by May 28 whether Boeing violated its deferred prosecution agreement.
Boeing has built an impressive image of superb engineering and safety standards for many years. But a series of accidents and controversies have shaken that image (perhaps reminiscent to Volkswagen’s car emissions scandal of 2015). Boeing had hoped to have put the Lion Air Flight 610 and Ethiopian Airlines Flight 302 crashes 5 years ago behind it, but more allegations and incidents with its Boeing 737 MAX series are threatening to bring the cases back.
The Boeing 737 MAX was meant to be another example of Boeing engineering. However, the giant took shortcuts and failed to ensure its jet was thoroughly safe, with deadly consequences. Boeing signed a deferred prosecution agreement in January 2021, but now, with that agreement about to expire, the DOJ is mulling whether Boeing violated it. The DOJ will announce its decision on May 28.
A deferred prosecution agreement
According to MoloLamken, a deferred prosecution agreement (or DPA) is basically an unofficial form of pardon for companies. The terms of DPAs vary. Some agreements may require the defendant to admit wrongdoing, pay compensation, or take stipulated actions to prevent future wrongdoing. DPAs are not the same as a plea bargain or a sentence of probation.
“Under a DPA, the government will bring charges against a defendant but agrees not to move forward on those charges. In exchange, the defendant agrees to abide by certain requirements or conditions. If the defendant satisfies its end of the bargain, the government agrees to drop the charges. But if the defendant reneges and violates the conditions of the DPA, the government can move forward with the prosecution.” – MoloLamken
In January 2021, the US Department of Justice (DOJ) announced Boeing was entering into a deferred prosecution agreement to resolve the criminal charge related to “conspiracy to defraud the Federal Aviation Administration’s Aircraft Evaluation Group (FAA AEG) in connection with the FAA AEG’s evaluation of Boeing’s 737 MAX airplane.” Boeing agreed to pay over $2.5 billion.
The DPA included a criminal penalty of $243.6 million, compensation to Boeing’s 737 MAX airline customers of $1.77 billion, and $500 million to compensate the heirs, relatives, and legal beneficiaries of the 346 people who perished in the Boeing 737 Max crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302. As part of the agreement, the DOJ agreed to defer criminal prosecution for three years for the conspiracy charge.
Photo: Michael Vi | Shutterstock
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Has Boeing violated the deferred prosecution agreement?
“The families have argued that Boeing violated a 2021 deal with prosecutors to overhaul its compliance program following the crashes, which killed 346 people. Federal prosecutors had agreed to ask a judge to dismiss a criminal charge against Boeing so long as it complied with the deal’s terms over a three-year period.” – Reuters
An Alaskan Airways flight recently had a mid-air blowout of a door plug off a Boeing 737 MAX 9 in January. This was almost three years to the day since Boeing was charged with conspiring to defraud the United States. Unluckily for Boeing, this happened only two days before the 2021 agreement expired.
The DOJ opened a criminal investigation in response to the Alaska Airlines incident. But now ABC News reports that families are demanding why the Alaska Airlines accident hasn’t resulted in the DOJ tearing up the deferred prosecution agreement. Essentially, they are arguing that this demonstrates that Boeing has violated the terms of its probation.
“And then there was more” seems an apt one-liner to describe Boeing’s series of unfortunate events. Yet another recent development and headache for Boeing came a few days ago when an attorney reportedly found the missing emergency slide that detached and fell from a Delta Air Lines 767-300ER.
Meanwhile, the Society of Professional Engineering Employees in Aerospace (SPEEA) has alleged Boeing retaliated against engineers who insisted on reevaluating previous engineering work related to the Boeing 777 and 787 programs. According to ABC News, whistleblowers are alleging that Boeing still took shortcuts that compromised safety. Boeing has denied these allegations.
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A DOJ decision by May 28
According to ABC News, reporting on an email sent to the attorneys, the US Department of Justice has announced it will decide by May 28 if Boeing has violated its probation deal. Justice Department Fraud Section chief Glenn Leon sent the email on May 2 outlining the upcoming timeline.
“The agreement gives U.S. officials six months from the deal’s Jan. 7 expiration — or until July 7 — to decide whether to prosecute Boeing on a charge that the company conspired to defraud the Federal Aviation Administration or pursue other alternatives to dismissing the case.” – Reuters
Photo: First Class Photography | Shutterstock
This comes before the July 7 deadline (when the DPA or sort of probation period expires). Before that point in time, prosecutors must decide whether to file a motion to withdraw criminal charges against Boeing or whether the whole agreement should be torn up. Another option is extending the deferred prosecution agreement, which prolongs Boeing’s probation. Consequently, lawyers are working quickly before the case against Boeing could be dismissed in a few months.
