Prosecutors recommend Justice Dept. charge Boeing over 737 Max crashes, sources say

Federal prosecutors are recommending to senior Justice Department officials that Boeing face criminal charges for failing to meet the terms of a 2021 agreement that would have shielded it from prosecution in connection with crashes in 2018 and 2019 that killed 346 people, according to two people familiar with the discussions.

Criminal charges are only one of several options the department is considering and no final decision has been made, one of the sources said. The sources spoke on the condition of anonymity to discuss private deliberations.

News of the recommendation was first reported Sunday by Reuters. Boeing declined to comment.

A lawyer representing families of those who died in the October 2018 crash of a Lion Air jet in Indonesia and an Ethiopian Airlines flight in Addis Ababa five months later, said they have not received word from prosecutors about how they intend to proceed.

“The families hope the report is true, and, if so, the families hope that the recommendation of the career prosecutors will be followed by the department leadership,” said Paul G. Cassell, the lawyer, who is a professor at the University of Utah College of Law and former federal judge. “Criminal prosecution is certainly appropriate here, since Boeing has already had a chance to escape prosecution and failed to honor its obligations.”

The Justice Department in May said Boeing had violated terms of a 2021 “deferred prosecution agreement” that would have allowed the company to avoid criminal prosecution in exchange for meeting a number of conditions.

Since that announcement, prosecutors have been weighing how to move forward. While criminal charges are a possibility, the government has other options including reaching a settlement under a new deferred agreement, levying additional fines and imposing other conditions, including requiring an independent monitor to ensure that Boeing meets is obligations. Independent oversight of the company was not part of the 2021 agreement. Prosecutors also could opt for a trial. The department faces a July 7 deadline for how it will proceed.

The content of discussions between the government and Boeing over the outcome has not been disclosed.

In the 2021 agreement, Boeing acknowledged that two of its technical pilots misled federal regulators about a software system blamed for the crashes and paid $2.5 billion in penalties, $500 million of which went to the families of those whose loved ones died.

Boeing also agreed to strengthen internal systems to detect and report fraud. If the company met the terms of the deal, it would not be criminally prosecuted. The deal expired just two days after a door panel of an Alaska Airlines 737 jet blew out in midflight in January, which triggered another criminal investigation by the government that remains ongoing.

Crash victims’ families were shocked and angered by prosecutors’ decision to allow Boeing to avoid criminal prosecution in 2021. Because they were not considered crime victims at the time prosecutors and Boeing negotiated the deal, they were not consulted, and many learned the news from media reports. But relatives later sued and won the right to have families considered crime victims.

The designation meant that prosecutors were required to seek their input on significant actions related to the case. The Justice Department has held several meetings with family members, the most recent last month in which family members expressed their opinions about how prosecutors should proceed.

In a letter sent to the Justice Department earlier this month, relatives of crash victims said Boeing should face $25 billion in additional fines and the Justice Department should pursue “aggressive criminal prosecution of the Boeing Company.” In addition, they said company executives who were at Boeing at the time of the crashes, including former chief executive Dennis Muilenburg, should be prosecuted.

“While plea bargaining often occurs in other less serious and weaker cases, in this case, any further concessions to Boeing would be entirely gratuitous and inappropriate,” the families said.

Last week, Boeing’s chief executive David Calhoun appeared before members of the Senate’s Permanent Subcommittee on Investigations in a contentious hearing at which he was blasted for accepting more than $32 million in pay despite Boeing’s performance during his tenure.

Just hours before Calhoun’s appearance, the subcommittee released new accounts from whistleblowers who said that Boeing had lost track of hundreds of substandard aircraft parts and had pushed to eliminate quality inspectors just months after the Lion Air crash in Indonesia.

“Our culture is far from perfect,” Calhoun told lawmakers, “but we are taking action and making progress.”