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DOJ decision on reopening Boeing criminal prosecution coming this month

By Lauren Rosenblatt, The Seattle Times
Published: May 8, 2024, 4:12pm

The U.S. Justice Department expects to have a decision by the end of this month on whether it will pursue criminal claims against Boeing following two fatal 737 Max crashes.

Federal prosecutors are set to meet on May 31 with the families who lost loved ones in those crashes more than five years ago to share their decision, according to a letter sent Tuesday to those victims’ families and shared with The Seattle Times.

At the daylong meeting, federal prosecutors and the victims’ families will discuss a deferred prosecution agreement Boeing entered into in 2021 that allowed the company to avoid criminal charges if it met certain conditions for the next three years. Boeing faced a single fraud charge after failing to disclose information about a new software system that was largely to blame for the two crashes, killing 346 people in 2018 and 2019.

That agreement expired in January — days after a panel blew off a Boeing 737 Max 9 plane, reigniting scrutiny of the airplane manufacturer and casting doubt on whether the company had followed through on its promises made following the fatal Max crashes.

The panel blowout didn’t spark the Justice Department’s meeting with victims’ families, nor did recent congressional hearings, whistleblower testimony or investigations from the Federal Aviation Administration. The timeline was set back in 2021 as part of the deferred prosecution agreement.

But recent events could factor into federal prosecutors’ decision about what comes next.

This week, another FAA probe may have reopened the question of Boeing’s compliance with the agreement. On Monday, the FAA said it was investigating Boeing’s 787 Dreamliner after the company disclosed employees had falsified inspection records.

It’s not clear when that occurred — or if it fell in the three-year window of the deferred prosecution agreement — but the new investigation could draw attention to one prong of the agreement: Boeing agreed it would not deliberately provide to regulators any “false, incomplete or misleading information.”

The Justice Department has until July, six months after the agreement expired, to determine if Boeing has breached the agreement, or to ask for more time to make that determination. If it finds the company did not comply, it could ask a judge to reopen the criminal case that had been on hold.

As part of the 2021 agreement, Boeing and the victims’ families have 30 days to respond to the Justice Department’s decision before the parties head to court in Texas, where the deferred prosecution agreement was signed.

By May 31, “the Department expects to have made a decision on whether or not Boeing breached the deferred prosecution agreement,” the Justice Department wrote in the Tuesday letter to victims’ families. “The Department would therefore like to confer with you about that decision and potential next steps, and to hear your input and views on the same.”

What comes next?

After the two deadly Max crashes, the Justice Department charged Boeing with one criminal count of fraud for intentionally misleading regulators from the FAA when the company was seeking certification for the 737 Max planes.

Boeing engineers failed to disclose some information about a new software system in the Max planes, according to federal prosecutors. Later, an error in that system — the Maneuvering Characteristics Augmentation System, or MCAS — caused two planes to nosedive shortly after takeoff, killing 346 people.

In the 2021 deferred prosecution agreement, Boeing agreed to pay $2.5 billion, as well as to review and update its policies around safety and compliance with federal regulators. It agreed to set up an ethics and compliance program meant to prevent any violations of U.S. fraud law and to provide consistent reports to the Justice Department about its progress.

Of the total penalty, roughly $243 million was paid to the U.S. government for criminal conduct and $500 million to the victims’ families. The rest was compensation to Boeing’s airline customers that the company had already agreed to pay.

The agreement listed several conditions that would be considered a breach of the agreement, including failure by Boeing to implement a compliance program or to cooperate with federal regulators. Boeing would also be considered in breach of its agreement if it committed a felony or if it provided “deliberately false, incomplete or misleading information.”

That line could connect the criminal claim with the FAA’s recent probe into the 787 Dreamliner. In response to questions about the falsified records, the FBI, the investigative arm of the Justice Department, declined to confirm or deny the existence of an investigation.

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The FBI did open a criminal investigation following the panel blowout in January, according to a letter sent to passengers on board Alaska Airlines Flight 1282.

Boeing declined to comment on Tuesday.

The Justice Department has been reluctant to share what information it is looking at to determine if Boeing complied with the deferred prosecution agreement, according to attorneys representing the families of victims from the Max crashes.

In 2022, federal prosecutors said in a court filing that the agreement is “now two-thirds of the way through its life span, and most of the obligations it imposes on Boeing are now fully or substantially met.”

But, in April and again in the Tuesday letter, the Justice Department told attorneys representing victims’ families they had not yet determined what they would do next. The May 31 meeting in Washington, D.C., could provide a long-awaited answer for families that have been asking for more to hold Boeing accountable.