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Boeing could have a corporate monitor amid DoJ talks to settle potential charges

Jun 29, 2024

Boeing Co. is in talks with the US Justice Department to resolve potential charges stemming from two fatal crashes of its 737 Max jetliners, according to people familiar with the negotiations.

The settlement could be announced as soon as next week and is expected to include imposing a corporate monitor on the world’s second-largest planemaker, according to the people, who asked not to be identified disclosing confidential discussions. DOJ prosecutors want to bring charges against Boeing, but it isn’t clear if the company will agree to plead guilty, the people said.

The talks center on the 2021 deferred-prosecution agreement struck between Boeing and the DOJ in the waning days of the Trump Administration, after two crashes that killed 346 people. Some family members of the victims have urged the government to file criminal charges, which could help them bring lawsuits against the company.

A resolution of the government’s case would represent a step forward for Boeing as it addresses quality lapses in its factories and tougher scrutiny from regulators, lawmakers and customers. If a deal is reached, the crisis is far from over. The US continues to investigate the in-flight blowout of a fuselage panel on an Alaska Airlines 737 Max 9 jet in January, and a grand jury in Seattle could bring additional charges.

A Boeing spokesman declined to comment, as did the DOJ. 

Boeing’s executive suite is in turmoil as its board searches for a new chief executive officer. The company’s finances are also showing the strain of a slowdown in production in the aftermath of the accident, as it works to bolster quality and retrain workers under close supervision by the Federal Aviation Administration. The company has warned it is on pace to burn through about $8 billion in cash during the first half of 2024.

Federal prosecutors appeared to go easy on Boeing when they allowed the company to avoid charges for deceiving the Federal Aviation Administration over changes made to its 737 Max jet, which resulted in the two crashes. 

The department reached the deferred-prosecution agreement with the company that included a $243 million penalty, but cleared Boeing’s senior executives of any responsibility for the disasters, the second of which occurred after Boeing’s chief executive officer at the time assured the public that the plane was safe. 

As part of the 2021 deal, Boeing pledged to improve its internal compliance and control structure, but the government didn’t call for an outside monitor. 

Some families of crash victims asked the DOJ earlier this month to fine Boeing almost $25 billion, saying the company committed “the deadliest corporate crime in US history.” One of their attorneys suggested in a letter to the department that $14 billion to $22 billion could be suspended if the planemaker devotes those funds to an independent corporate monitor and improvements to its safety programs.

Justice Department officials told families during a meeting in May that neither current nor former company executives were likely to be prosecuted, as the five-year deadline for bringing criminal charges would likely doom any prosecution effort.

The department’s decision also could have been tempered by its previous efforts to bring charges.

Prosecutors charged a technical pilot, Mark Forkner, in 2021 with misleading FAA over material in the pilot manuals. However, Forkner was acquitted following a brief jury trial.

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