Key Points:
- The U.S. Department of Justice (DOJ) has not decided whether to prosecute Boeing for violating a 2021 settlement related to 737 MAX crashes.
- Boeing allegedly violated the DPA, which protected it from criminal prosecution over the crashes.
- DOJ and Boeing have not commented; conflicting reports from the New York Times and DOJ.
- The original agreement required Boeing to pay $2.5 billion and overhaul compliance practices.
According to an email seen by Reuters, the U.S. Department of Justice (DOJ) has yet to decide whether to prosecute Boeing (BA.N) for allegedly violating the terms of a 2021 settlement linked to two fatal 737 MAX crashes in 2018 and 2019. Glenn Leon, chief of the DOJ’s fraud section, communicated this to lawyers representing the victims’ families, stating, “The department has not made a decision on how to proceed or whether to pursue prosecution of Boeing.”
Both the Justice Department and Boeing declined to comment on the matter. In May, the DOJ claimed Boeing breached the 2021 deferred prosecution agreement (DPA), which had shielded the company from criminal prosecution over the crashes that killed 346 people. The DPA required Boeing to revamp its compliance practices, a mandate Boeing asserts it has met.
Earlier on Friday, the New York Times reported, citing anonymous sources, that the DOJ was expected to allow Boeing to avoid criminal prosecution for violating the DPA. However, Leon’s email contradicted this: “The reporting was simply not correct.” Subsequently, the Times updated its story to indicate that the DOJ is “considering allowing” Boeing to avoid prosecution. A Times spokeswoman maintained confidence in the accuracy of their reporting.
The DOJ’s determination in May that Boeing violated the DPA stemmed from an incident on January 5, 2023, when a panel blew off a new Alaska Airlines (ALK.N) Boeing 737 MAX 9 jet. This incident, just two days before the DPA expired, highlighted ongoing safety and quality issues at Boeing. As part of the original agreement in January 2021, Boeing agreed to pay $2.5 billion to resolve a criminal investigation into its conduct surrounding the crashes, which included $243.6 million in fines, $1.77 billion in compensation to airline customers, and $500 million to a crash-victim beneficiaries fund.
Boeing recently informed the government that it did not violate the agreement. Federal prosecutors have until July 7 to decide whether to proceed with a criminal case, negotiate a plea deal, or extend the DPA for another year. The DOJ’s decision is highly anticipated, especially by the victims’ families, who have criticized the original deal for failing to hold Boeing accountable. This week, they urged prosecutors to impose a nearly $25 billion fine and pursue criminal charges against the planemaker.
The victims’ families argue that Boeing’s actions and the DOJ’s leniency have denied them justice. The outcome of this decision will significantly impact Boeing’s future operations and the overall approach to corporate accountability in the aviation industry.
