Agencies
After two jetliner crashes killed 346 people, a $2.5 billion settlement that let Boeing avoid criminal prosecution failed to resolve questions about the safety of the aerospace giant’s planes.
Federal prosecutors now accuse the company of failing to live up to terms of the 2021 settlement. Boeing has agreed to plead guilty to a felony fraud charge in a new deal with the Justice Department. The department said Thursday that it expects to file the detailed plea agreement no sooner than the middle of next week.
Experts on corporate behavior say whether the new agreement has a more lasting impact on safety than the earlier settlement could come down to how much power is placed in the hands of an independent monitor who is assigned to oversee Boeing for three years. Prosecutors made the appointment of such a monitor a condition of the plea deal, which also calls for Boeing to pay a new $243.6 million fine.
“Your real concern is protecting against the loss of future lives in future crashes, and that is something that the monitor can have more impact on than simply the amount of the fine,” said John Coffee, a law professor at Columbia University who studies corporate governance and white-collar crime.
The finalized plea and sentence are due to be filed in U.S. District Court in Fort Worth, Texas. The filing will give a more precise description of how the compliance monitor will be chosen and the scope of the monitor’s duties. Already, the government appears to have backed away from a plan that would given Boeing the biggest role in picking the watchdog.
Families of some of the passengers who died in the crashes have said they plan to oppose the agreement. They want a trial, not a plea deal, and they say Boeing should pay a $24 billion fine. Paul Cassell, a lawyer for the families, said the relatives of crash victims should have the right to propose a monitor for the judge to appoint.
The Justice Department initially planned to select a monitor from a list of three nominees submitted by Boeing, and would ask the company for more names if necessary, according to participants in a June 30 briefing that department officials gave to passengers’ families and their lawyers.
The deal that Boeing agreed to “in principle” a week later said the Justice Department would seek candidates through a public job posting on its website and then select one “with feedback from Boeing.” The precise extent of the company’s role was left unclear.
Once the department and Boeing settle on a choice, prosecutors will tell U.S. District Judge Reed O’Connor. If he doesn’t object within 10 days, the appointment would go through. The person picked would need to meet “specific qualifications” laid out in the posting and the department’s guidelines on selecting monitors in criminal cases, according to the filing.The monitor will oversee Boeing’s compliance with the plea agreement during a three-year probation period, during which the official will write “a confidential annual report for the government,” and file an executive summary with the court.
The use of monitors as part of plea agreements with companies convicted of crimes reflects prosecutors’ reluctance to issue indictments and take the cases to trial.
Brandon Garrett, a Duke University law professor who tracks criminal cases involving corporations, said prosecutors long worried that a criminal indictment could destroy a large, publicly traded company, so they tended to favor out-of-court settlements in the most serious cases. That changed, he said, after the financial crisis of 2008, and the concern became that companies were being treated as “too big to jail,” a phrase Garrett used in the title of his 2014 book.
The effectiveness of plea deals and deferred prosecution agreements that allow defendants – like Boeing in 2021 – to avoid criminal liability came into question.
