U.S. Justice Department Finds Boeing in Breach of 2021 Criminal Prosecution Agreement

The U.S. Justice Department has declared that Boeing Co. failed to comply with the terms of a 2021 agreement that had previously shielded the aerospace giant from criminal prosecution related to the 737 MAX crashes in 2018 and 2019, which collectively resulted in the deaths of 346 people. This finding was disclosed in a recent court filing in Texas, citing deficiencies in Boeing’s implementation of a compliance and ethics program to detect and prevent violations of U.S. fraud laws.

The scrutiny of Boeing was intensified after an incident on January 5, when a panel detached from a new Boeing 737 MAX 9 jet during a flight operated by Alaska Airlines, occurring just two days before the expiration of the 2021 agreement. This event has led to potential criminal prosecution, which could result in significant financial penalties and increased oversight for Boeing, escalating the company’s ongoing corporate crisis and reputational challenges.

Despite the breach, the Justice Department noted it would consider the measures Boeing has taken to correct and remedy the violations before deciding on prosecution steps. Boeing has been directed to respond to these findings by June 13, with a decision from the Justice Department expected by July 7.

Boeing has acknowledged the Justice Department’s determination of a breach in the deferred prosecution agreement (DPA) but maintains that it has complied with the agreement’s terms. The company expressed its intention to engage transparently with the Department in its response to the findings, particularly addressing concerns raised following the incident involving Alaska Airlines Flight 1282.

This development follows a series of management changes and government investigations into Boeing’s practices, which were further highlighted during a U.S. Senate hearing in April, where a Boeing engineer testified about the company’s risky manufacturing shortcuts.

The families of the crash victims and their lawyers have long argued that Boeing violated the terms of the 2021 agreement, which required a substantial overhaul of its compliance programs. The 2021 deal, which concluded with Boeing agreeing to a $2.5 billion settlement to resolve the criminal investigation into its conduct, stipulated that the U.S. would refrain from prosecuting Boeing for conspiracy to defraud the Federal Aviation Administration (FAA) if the company adhered to the agreement’s conditions.

The current findings by the Justice Department mark a crucial step in reevaluating Boeing’s adherence to legal and ethical standards, potentially leading to a renewed legal challenge against the company.

Sources: AirGuide Business airguide.info, bing.com, reuters.com