Yahoo Finance Boeing should face criminal charges, say US prosecutors – reports
Boeing is reportedly facing the potential prospect of criminal charges after US prosecutors reportedly told the Department of Justice (DoJ) that the US manufacturer had violated a settlement related to two fatal crashes of the 737 Max plane.
The DoJ’s leaders have until 7 July to decide whether it intends to file criminal charges against Boeing, after prosecutors on the case recommended them, according to Reuters and CBS News.
The DoJ last month told a federal court in Texas that Boeing had violated the terms of a 2021 settlement in which it agreed to pay $2.5bn (£2bn) in penalties and compensation to airline customers and families of those who died in two fatal crashes. Boeing failed to “design, implement, and enforce a compliance and ethics programme to prevent and detect violations of the US fraud laws throughout its operations”, according to the court filing.
Related: Families of Boeing crash victims demand prosecution for ‘deadliest corporate crime in US history’
New criminal charges would be the latest round of recriminations from the two crashes. A total of 346 passengers died in the Boeing 737 Max crashes of flights by Indonesia’s Lion Air and Ethiopian Airlines in late 2018 and early 2019.
The crashes prompted the greatest crisis in the company’s history, forcing the worldwide grounding of Boeing’s bestselling 737 Max for nearly two years.
The crashes were caused by a new design that – unbeknownst to pilots – dipped the nose of the planes automatically to compensate for shifting larger engines forwards. The system, known as manoeuvring characteristics augmentation system (MCAS), left the planes vulnerable if a single sensor failed.
The deferred prosecution agreement protected the company from a fraud charge related to its alleged concealment of information from aviation regulators over how the system worked. At the time of the settlement, the DoJ said “Boeing’s employees chose the path of profit over candour”.
The agreement was meant to end in January, which would have removed one element of uncertainty for the company. It faces renewed scrutiny of its safety record after an incident two days before the settlement expired when a door panel blew out of an Alaska Airlines plane in mid-air.
Reuters reported that the final decision to go ahead with new charges has not been made. One source said Boeing could face new charges that go beyond the original 2021 fraud conspiracy charge. Under the terms of the settlement the DoJ also has the option of extending it by a year or proposing new, stricter terms.
The New York Times previously reported that Boeing could avoid criminal prosecution.
New charges would also cast a shadow over the last months in post of the chief executive, Dave Calhoun, who will retire later this year after a term dominated by the aftermath of the crashes. In testimony to the US Senate last week, Calhoun acknowledged that “something went wrong” at the company after whistleblowers allegedly faced retaliation for raising concerns about safety problems in factories.
Boeing declined to comment.
