The US Department of Justice (DOJ) is considering a deal with Boeing that would avoid criminal prosecution of the aerospace giant but may appoint a federal supervisor to oversee company progress on safety improvements, The New York Times reported.
People familiar with the discussions told the daily that the terms of the possible alternative settlement, known as a deferred prosecution agreement, or DPA, are still subject to change.
A DOJ official involved in the case, Glenn Leon, chief of the fraud section criminal division, said in an email to a civil party lawyer that the department “has not made a decision” on the path it will take with respect to Boeing.
The DOJ is determining its next steps after concluding in May that Boeing could be prosecuted for violating a criminal settlement following two fatal 737 MAX crashes in 2018 and 2019 which claimed 346 lives.
But the Times, citing sources familiar with the discussions, reported that after substantial internal debate, Justice officials “appear to have concluded that prosecuting Boeing would be too legally risky.”
Officials also reportedly believe that the appointment of a watchdog would be “a quicker, more efficient way” to ensure safety and quality control improvements are made, the newspaper said.
Last month, the DOJ told the judge in the case it would give its decision no later than July 7.
The DOJ’s Leon emailed Paul Cassell, a lawyer for families in the criminal case against Boeing, saying the Times reporting “was simply not correct.”
The troubled planemaker had contested the department’s conclusions in mid-June, but has recognised the gravity of the safety crisis and chief executive Dave Calhoun told Congress that Boeing is “taking action and making progress.”
The GDN earlier reported that the Boeing boss was lambasted during a contentious Senate hearing for placing profits over safety, failing to protect whistleblowers, and even getting paid too much.
Republican Senator Josh Hawley accused him of trying to blame the company’s problems on the employees, when it’s actually the management’s fault. He questioned him about the aircraft manufacturer’s recent accidents and whether he was truly focused on safety in aircraft construction.
In a brutal back and forth during the hearing on Boeing’s broken safety culture, the Missouri Republican questioned Calhoun about how much money he was paid. Calhoun declined to answer directly, responding only “It’s a big number.”
Hawley cited the $32.8 million in salary that was reported by Boeing for his pay in 2023, which was a 45 per cent increase over the previous year.
“If safety is a component of your $33 million compensation package, how can you qualify for any of this?” Hawley said. “I think the truth is, Mr Calhoun, you’re not focused on safety, you’re not focused on quality, you’re not focused on transparency.”
Hawley put the blame squarely on Calhoun, saying that the man who became CEO in January 2020 had been too focused on the bottom line.
In January 2021, Justice announced an initial DPA in which Boeing agreed to pay $2.5 billion to settle fraud charges over certification of the 737 MAX.
But since early 2023, the manufacturer has experienced multiple production and quality control problems on its commercial aircraft, as well as mid-flight incidents including in January when a door plug panel flew off an Alaska Airlines 737 Max 9.
The DOJ says Boeing’s violation of several provisions of the initial agreement, including measures requiring it to bolster its internal controls to detect and deter fraud, opened the company to prosecution.
Victims’ families have called for the criminal prosecution of Boeing and its executives, and are seeking a nearly $25bn fine.
A new DPA would allow the US government to resolve Boeing’s violations without a trial.
That could serve as a victory of sorts for Boeing, a company seen as critical to the US aviation industry as well as national security.
Cassell, the families’ lawyer, warned against sealing an agreement avoiding trial.
“We hope that the department is not using its claim to have not yet made a ‘final decision’ as a ploy to gain additional time to hammer out a DPA deal with Boeing,” Cassell said in a statement.
“The first DPA deal failed. There is no reason to think a second one would be any better,” he said, adding it’s time for “moving forward with a trial and obtaining a guilty verdict against Boeing.”
Such lawsuits in the past have forced companies into filing for bankruptcy, the Times reported, and a conviction could potentially prevent Boeing from receiving government contracts.
Boeing’s defence, space and security segment generated $25bn in 2023, nearly a third of the company’s sales.
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