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Southwest Airlines / Boeing 737 MAX-8, St. Louis, Mo., May 30, 2018.

DOJ Threatens Boeing for Violating 2021 Agreement

May 16, 2024
Federal prosecutors may charge the aircraft manufacturer for failing to manage the 737 MAX program reliably, citing a “deferred prosecution” deal reached following the two deadly events in 2018-19.

The January 5 incident in which a 737 MAX door panel failed during an Alaska Airlines flight has put Boeing Co. under threat of prosecution for violating terms of a 2021 “deferred prosecution” agreement with the U.S. Dept. of Justice. The agreement – concerning Boeing’s liability for withholding evidence relevant to two 737 MAX jet crashes and the deaths of 346 people in 2018 and 2019 – is the substance of a DOJ filing to a federal court in Fort Worth, Tex., this week.

Whether Boeing will be prosecuted for violating the agreement will be determined by DOJ later this summer, according to the government. It claims Boeing also could be prosecuted for the charges that led to that settlement. Or the company could be held in probation beyond the scope of the original settlement.

“The Government is determining how it will proceed in this matter,” the Justice Department stated to the court.

Boeing’s 737 MAX manufacturing activities have been under oversight by the Federal Aviation Administration since the January event. And the company is assembling its best-selling aircraft at a reduced rate in its effort to restore reliability to its business, though that is affecting its revenue as fewer aircraft are delivered.

The link between the earlier 737 MAX problems and the current issue is the 2021 agreement, which kept Boeing from being prosecuted for fraud on evidence that the DOJ claims to have but has never produced as evidence.

The two crashes grounded the 737 MAX program for 20 months, until December 2020. The U.S. government was set to prosecute Boeing for fraud based on whistleblowers’ evidence that the manufacturer failed to properly disclose its knowledge of the defects of the original 737 MAX Maneuvering Characteristics Augmentation System (a flight control program) that prevented flight crews from controlling the aircraft and preventing the crashes.

The DOJ and Boeing reached a $2.5-billion settlement in January 2021 to avoid prosecution, an agreement that included a three-year period of probation for Boeing to maintain a clear record on reporting maintenance and safety records.

The agreement also hit Boeing with a $243.6 million fine and directed it to establish a $500-million fund to compensate crash victims, and to compensate airlines for losses worth about $1.8 billion due to the 737 MAX program grounding.

The three-year probation period was close to concluding when the Alaska Airlines incident happened on January 5.

The National Transportation Safety Board investigation into that incident revealed that four bolts meant to secure the door panel were missing, apparently removed by Boeing workers during the final assembly of the aircraft prior to its delivery to the airline last October.

Boeing told federal investigators it had no documentation to explain the missing bolts – seemingly violating the 2021 agreement.

“We believe that we have honored the terms of that agreement, and look forward to the opportunity to respond to the Department on this issue,” according to a Boeing statement.

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