Boeing Agrees to Felony Fraud Charge in Plea Deal, Aims to Boost Safety

Federal prosecutors have accused Boeing of not adhering to the terms of a 2021 settlement following two jetliner crashes that killed 346 people. Boeing has now agreed to plead guilty to a felony fraud charge in a new deal with the Justice Department. The detailed plea agreement is expected to be filed soon, although it may take a few more days.

Independent Monitor's Role

Experts believe the impact of the new agreement on safety will depend on the power given to an independent monitor overseeing Boeing for three years. The plea deal includes appointing this monitor and requires Boeing to pay a new USD 243.6 million fine. John Coffee, a Columbia University law professor, stated, "Your real concern is protecting against the loss of future lives in future crashes, and that is something that the monitor can have more impact on than simply the amount of the fine."

The finalised plea and sentence will be filed in US District Court in Fort Worth, Texas. This filing will detail how the compliance monitor will be chosen and their duties. Initially, the government planned to let Boeing play a significant role in selecting the monitor but has since reconsidered.

Families' Opposition

Some families of crash victims plan to oppose the agreement, seeking a trial instead of a plea deal and demanding a USD 24 billion fine for Boeing. Paul Cassell, representing these families, argued that relatives should have the right to propose a monitor for the judge to appoint.

The Justice Department initially intended to select a monitor from three nominees submitted by Boeing. However, after feedback from families and their lawyers, they decided to seek candidates through a public job posting on their website. The chosen candidate must meet specific qualifications outlined in the posting and department guidelines.

Monitor's Responsibilities

The monitor will oversee Boeing's compliance with the plea agreement during a three-year probation period. They will write an annual confidential report for the government and file an executive summary with the court. This approach reflects prosecutors' reluctance to issue indictments and take cases to trial.

Brandon Garrett, a Duke University law professor, noted that prosecutors have long worried that criminal indictments could destroy large companies. This concern led them to favour out-of-court settlements in serious cases. However, after the 2008 financial crisis, there was a shift towards holding companies accountable.

"Especially when you had companies repeatedly getting prosecuted, something needs to change — maybe these companies really should get a criminal record," Garrett said. He added that this shift led to more large cases where companies were convicted.

Previous Settlement and Current Developments

In January 2021, the Justice Department agreed not to prosecute Boeing for conspiring to defraud the US government based on allegations that Boeing misled regulators who approved the 737 Max nearly a decade ago. Nadia Milleron, whose daughter died in one of the crashes, believes the current plea deal is better than the previous settlement but still wants a trial for more transparency.

The Justice Department defends its decision by stating that it includes the most severe punishment possible under the charge facing Boeing. "We should be asking whether these prosecutions are working and what can be done to make them more effective," Garrett said.

Coffee emphasised that an independent monitor is crucial for deterring future violations by Boeing. "Companies fear a free agent roaming around in their files," he said. However, he warned that without direct access to the court, an ineffective monitor could result.

In one notable case involving HSBC, prosecutors blocked a federal judge from releasing monitors' reports about the bank's failure to prevent money laundering by a Mexican drug cartel. Coffee noted that deferred prosecution agreements often favour defendants but are sometimes necessary.

The judge in Boeing's case has indicated that after submitting details of the plea agreement, relatives of victims will have seven days to lodge objections. The government and Boeing will then have 14 days to respond.

Federal prosecutions of corporations rose modestly under President Biden's administration compared to Trump's final days when Boeing's non-prosecution decision was made in January 2021. Kya Henley, a former public defender now representing white-collar cases, remarked on how election years influence agendas: "Everyone gets to set their agenda."