According to a person familiar with the situation, Boeing has formally challenged the Department of Justice’s ruling that the passenger airline giant can face charges for breaking a criminal settlement after two deadly 737 MAX crashes.
The troubled airline behemoth, which met the June 13 deadline for filing an official response, challenged the Justice Department’s assessment of its compliance with a 2021 deferred prosecution agreement.
Using unidentified sources, Bloomberg News revealed some details of Boeing’s answer late on Wednesday.
“We’ll decline to comment on any specific communications with the Justice Department, however we continue to engage transparently with the Department, as we have throughout the term of the agreement,” Boeing stated in an email to AFP.
Through a spokeswoman, the Justice Department declined to comment.
The case pertains to a deferred prosecution agreement regarding two MAX disasters that occurred in 2018 and 2019, resulting in a total of 346 fatalities. This comes at a time when Boeing is under increased scrutiny due to recent manufacturing and safety issues.
Following an incident on January 5th, when an Alaska Airlines 737 MAX was forced to make an emergency landing due to a fuselage panel blowing off mid-flight, the industry giant is once again under close scrutiny.
The event occurred not long before the three-year DPA was set to expire.
A force for transformation
At a Senate hearing on Thursday, Federal Aviation Administration Administrator Mike Whitaker brought Boeing’s problems front and centre by pledging increased oversight of the company with more inspectors and a guarantee that the agency “will continue to hold them accountable for producing and delivering safe aircraft.”
The hearing’s Democratic senator from Washington, Maria Cantwell, said to Whitaker, “We’re counting on you to be that agent of change.”
Boeing claims that it has improved safety since the MAX crashes and that it adhered to the terms of the deferred prosecution agreement, despite admitting to flaws.
The Justice Department could have taken action to remove the charges if it had been pleased with Boeing’s behaviour.
On May 14, however, the department concluded—citing several clauses—that Boeing “breached its obligations” under the agreement in a letter to US Judge Reed O’Connor.
Boeing was forced to pay $2.5 billion to resolve fraud accusations related to the 737 MAX’s certification as part of the January 2021 accord.
In order “to effectively detect and deter violations of US fraud laws,” the DOJ letter listed steps that Boeing must take, including implementing an ethics and compliance programme, strengthening internal controls, and forbidding Boeing from knowingly submitting “deliberately false, incomplete, or misleading” information regarding its compliance.
189 people lost their lives when a Lion Air MAX 8 crashed in Indonesia’s Java Sea in October 2018.
Less than six months later, in March 2019, 157 people were killed when another Ethiopian Airlines MAX 8 crashed southeast of Addis Ababa.
On May 31 of this year, relatives of those who lost loved ones in the two MAX crashes met with prosecutors.
“The families, through Clifford Law Offices, have been advocating for the DOJ to pursue legal action against Boeing instead of accepting a plea bargain,” stated a press release from the families’ legal representation.
The survivors “asked for full transparency including a criminal trial on conspiracy and other possible criminal charges against Boeing and their executives responsible for the two crashes,” stated the statement.
The CEO will provide testimony.
According to the Justice Department, a decision on the case’s course will be made by July 7.
A study into ‘Boeing’s Broken Safety Culture’ is being called, and Boeing CEO Dave Calhoun is expected to face intense questioning ahead of that during a hearing on June 18 before a different Senate committee. The panel has previously received testimony from company whistleblowers.
Boeing initiated an executive search after announcing in March that Calhoun will leave the firm as CEO at the end of 2024.
The financial burden of the company’s issues has persisted.
Following earlier projections of positive cash creation in the low single-digit billions for the year, Boeing Chief Financial Officer Brian West stated last month that the firm anticipates negative cash for the entirety of 2024.
