The Justice Department will require the aircraft manufacturer to install an independent federal monitor to oversee safety and quality issues.
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Dave Calhoun, the chief executive of Boeing, was confronted by families of plane crash victims before a Senate hearing this week.
The Justice Department is expected to allow Boeing to escape criminal prosecution for violating the terms of a 2021 settlement related to problems with the company’s 737 Max 8 model that led to two deadly plane crashes in 2018 and 2019, according to people familiar with the discussions.
Instead, the Justice Department plans to offer Boeing what is known as a deferred prosecution agreement, which is often used to impose monitoring and compliance obligations on businesses accused of financial crimes or corruption, as opposed to trying to convict the company. The agreement will stipulate that Boeing install a federal monitor to oversee safety improvements, according to the people familiar with the situation.
Federal prosecutors said in May that Boeing had violated a previous deferred prosecution agreement by failing to set up and maintain a program to detect and prevent violations of U.S. anti-fraud laws. The settlement was reached in 2021, after Boeing admitted in court that two of its employees had misled federal air safety regulators about a part that was at fault in the two crashes.
The aircraft manufacturer’s violation of that settlement allowed the Justice Department to file criminal charges. But after an intense internal debate, department officials appear to have concluded that prosecuting Boeing would be too legally risky. Officials see the appointment of an independent watchdog as a quicker, more efficient way to ensure that the troubled company improves safety, manufacturing and quality control procedures.
The government is expected to extend its settlement offer to Boeing before the end of the month. The terms are still subject to change.
A decision to forego criminal prosecution would be a win for Boeing and its customers, employees and shareholders, given that such a lawsuit has forced companies to file for bankruptcy in the past. That includes Arthur Andersen, a once storied U.S. accounting firm that collapsed after being federally convicted of obstruction of justice for its role in the 2001 Enron scandal. Its demise sent ripples through the financial system and serves as a reminder of the devastation a prosecution of Boeing could have on a company that is critical to the U.S. aviation industry.
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Source: nytimes.com
