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. Instead, they plan to offer Boeing a deferred prosecution agreement, which will require the aircraft manufacturer to install an independent federal monitor to oversee safety and quality issues.
Boeing’s chief executive, Dave Calhoun, faced the families of plane crash victims before a Senate hearing this week. The Justice Department had accused Boeing of failing to set up and maintain a program to detect and prevent violations of U.S. anti-fraud laws, leading to a violation of the previous settlement agreement. This violation allowed the Justice Department to consider filing criminal charges against the company.
However, after internal discussions, the department officials have decided that prosecuting Boeing would be too legally risky. Instead, they see appointing an independent watchdog as a more efficient way to ensure that Boeing improves safety, manufacturing, and quality control procedures. The government is expected to extend the settlement offer to Boeing by the end of the month, with the terms still subject to change.
Avoiding criminal prosecution would be a relief for Boeing, its customers, employees, and shareholders, as such lawsuits have led companies to file for bankruptcy in the past. The case of Arthur Andersen, a once prominent U.S. accounting firm that collapsed after being federally convicted of obstruction of justice for its involvement in the 2001 Enron scandal, serves as a reminder of the potential devastation a prosecution could bring to a company critical to the U.S. aviation industry.