The Possible Penalties for Boeing's Crime of Concealing 737 MAX Safety Issues

As noted in earlier posts here, here, and here, I represent some of the families who lost loved ones in the crashes of two Boeing 737 MAX aircraft. This short post provides a quick update on the latest developments, as in the next few weeks the Justice Department will make important decisions about Boeing’s prosecution. My families seek aggressive prosecution of what has properly been described as the deadliest corporate crime in U.S. history.

Here’s a quick recap of the current situation: Following a criminal investigation by the Justice Department, in January 2021, Boeing admitted that it concealed safety issues with the aircraft from the FAA–and negotiated a secret deferred prosecution agreement (DPA) apparently resolving its criminal liability for its deadly conspiracy to defraud the FAA. In the DPA, Boeing committed to undertaking efforts to improve its corporate compliance with regulatory and safety obligations.

But since then, in October 2022, the district judge handling the case (Judge Reed O’Connor in the Northern District of Texas) has concluded that the 346 families who lost family members in the crashes represent “crime victims” and that their Crime Victims’ Rights Act (CVRA) rights were violated by the Department secretly negotiating the DPA.

And then last month, the Justice Department concluded that Boeing had breached its commitment in the DPA to improve safety at the company–a conclusion that seems supported by an almost daily barrage of news about safety concerns at Boeing and with its aircraft.  The Department is currently considering how to move forward with prosecuting Boeing and has asked the victims’ families for their views.

Notably, a criminal charge has already been filed against Boeing in the Fort Worth Division of the Northern District of Texas. That pending charge alleges that Boeing conspired to  defraud the FAA about safety issues associated with the 737 MAX. Under the DPA, the criminal prosecution of Boeing was deferred. But now that Boeing has breached its DPA obligations, the pending criminal charge against it needs to move forward through the ordinary criminal justice process.

Under the DPA, the Speedy Trial clock for proceeding with the conspiracy charge against Boeing was tolled until July 7, 2024.  So it seems likely that the Justice Department–and Judge O’Connor–will want to have a schedule in place for moving forward with the case before that date.

Earlier today, I sent the linked 32-page letter to the Department, outlining the position of my families as to how the Department’s prosecution of Boeing should proceed. Here are some of the opening paragraphs from the letter, which seeks aggressive prosecution of Boeing:

As explained in more detail below, Boeing’s crime produced losses in excess of $12,390,000,000, meaning the maximum possible fine is $24,780,000,000. Because Boeing’s crime is the deadliest corporate crime in U.S. history, a maximum fine of more than $24 billion is legally justified and clearly appropriate, although it might be partially suspended if funds that would otherwise be paid are devoted to appropriate quality control and safety measures. This letter explains the calculations underlying this conclusion and further sets out the families’ views more broadly on how Boeing and responsible corporate executives should be prosecuted.

In overview, as explained in greater detail in my letter to you of June 4, the families continue to believe the appropriate action now is an aggressive criminal prosecution of The Boeing Company. The Justice Department should promptly ask Judge O’Connor to schedule a date for a jury trial within seventy days of July 7, 2024—as required by the Speedy Trial Act. In requesting a quick jury trial, the Department should note the families’ right, as embodied in the Crime Victims’ Rights Act (CVRA), to proceedings free from unreasonable delay. If Boeing requests plea negotiations, the

Department should not offer Boeing any concessions. If the Department seems likely to reach a tentative agreement with Boeing on plea concessions, the families request an opportunity to exercise their right under the CVRA to confer with the Department about any possible concessions. See 18 U.S.C. § 3771(a)(5) & (9).

Once Boeing is convicted at trial (or by pleading guilty “straight up” to the pending conspiracy charge), then it should receive a sentence reflecting its guilt for the deadliest corporate crime in U.S. history. It should be fined the maximum—$24,780,000,000—with perhaps $14,000,000,000 to $22,000,0000,000 of the fine suspended on the condition that Boeing devote those suspended funds to an independent corporate monitor and related improvements in compliance and safety programs as identified below. And Boeing’s Board of Directors should be ordered to meet with the families.

The families also believe that the Department should launch criminal prosecutions of the responsible corporate officials at Boeing at the time of the two crashes, including in particular former Boeing CEO Dennis Muilenburg. Because time is of the essence to avoid any statute of limitations from running, the Department should begin these prosecutions promptly.

My letter today to DOJ follows on the heels of yesterday’s high-publicized hearing by the Senate Permanent Subcommittee on Investigations. During the hearing, Boeing’s CEO Dave Calhoun apologized to the families who lost loved one in the crashes. Calhoun was grilled by Senator Blumenthal (D-CT) and Senator Josh Hawley (R-MO). Senator Blumenthal called for prosecution of the Boeing executives who were responsible for the conspiracy, while Senator Hawley called for current CEO Calhoun’s resignation. The video of the hearing is well worth watching, as it demonstrates bipartisan concensus that something is terribly wrong at Boeing.

I hope that the Justice Department will read my letter carefully and follow the steps that I recommend. Right now, Boeing’s safety problems are harming its status as one of America’s (formerly) great companies. A criminal prosecution that sets Boeing on a new and improved course is an important reform–for Boeing to restore its reputation.

The post The Possible Penalties for Boeing’s Crime of Concealing 737 MAX Safety Issues appeared first on Reason.com.