US prosecutors advise criminal charges against Boeing for settlement violation
What's the story
US prosecutors have suggested to senior Justice Department officials, that criminal charges should be filed against Boeing. This recommendation follows findings that the aircraft manufacturer had violated a settlement agreement, related to two fatal crashes in 2018 and 2019. The Justice Department has until July 7 to decide whether to prosecute the company, a decision not previously reported.
Violation
Boeing allegedly breached 2021 settlement
In May, it was determined that Boeing breached a 2021 deal that protected the company from a criminal charge of conspiracy to commit fraud. This charge stemmed from two fatal crashes involving the 737 MAX jet in 2018 and 2019. Despite recent developments, Boeing has declined to comment but previously stated it has "honored the terms" of the settlement.
Disagreement
Boeing disputes settlement violation allegations
Boeing has informed the Justice Department that it disagrees with the determination that it violated the settlement. Discussions are currently ongoing between both parties regarding a potential resolution to the Justice Department's investigation. However, there is no guarantee that officials will proceed with charges, as internal deliberations within the Justice Department are still in progress and no final decisions have been made.
Implications
Potential consequences of criminal charges
Criminal charges could exacerbate an ongoing crisis at Boeing, which has been under intense scrutiny following a mid-flight incident involving one of its planes operated by Alaska Airlines on January 5. The sources did not specify the potential criminal charges but indicated they could extend beyond the original 2021 fraud conspiracy charge. A guilty plea could lead to additional business restrictions and jeopardize Boeing's significant revenue from contracts with the US government, including the Defense Department.
Advocacy
Victims's families demand justice
Relatives of the victims from the two fatal 737 MAX crashes have criticized the 2021 agreement, arguing that Justice Department officials should have prosecuted Boeing and its executives. Last week, these families urged prosecutors to seek a nearly $25 billion fine against Boeing and proceed with criminal prosecution. In a Senate hearing in June, CEO Dave Calhoun acknowledged the company's safety shortcomings and apologized to the families who lost loved ones.
Options
Possible outcomes of Justice Department's investigation
The Justice Department officials are considering various options, which could extend beyond the 2021 fraud conspiracy charge. They could potentially extend the 2021 settlement by a year or propose new, stricter terms. The strictest settlements generally involve installing a third party to monitor a firm's compliance, and can force the company to admit its wrongdoing by pleading guilty.