Updated January 26, 2023 at 7:41 PM ET
On Thursday, aerospace giant Boeing entered a not guilty plea to a criminal charge in an indictment in Texas federal court. The company is accused of criminal fraud related to the crashes of two of its 737 Max airplanes that killed a total of 346 people.
About a dozen relatives of some of those killed in the incidents gave emotional testimony during the three-hour indictment hearing about how they were affected by what they call “the deadliest corporate crime in U.S. history.”
They testified after Boeing’s chief aerospace safety officer, Mike Delaney, entered a not guilty plea on behalf of the plane’s manufacturer to charges of conspiracy to commit fraud. The company is accused of deceiving and misleading federal regulators about the safety of a critical automated flight control system that investigators found played a major role in causing the crashes in Indonesia in 2018 and Ethiopia in 2019.
Boeing and the Justice Department entered into a deferment agreement two years ago to settle the charge, but many of the families of the crash victims objected to the agreement, saying they were not consulted on what they have called a “secret affair.”
Under the terms of the deal, Boeing admitted to defrauding the FAA by concealing safety issues with the 737 Max, but placed much of the blame on two technical pilots who it says deceived regulators while working on certification. of the aircraft. Only one of those drivers has been prosecuted and a jury acquitted him at trial last year.
Boeing also agreed to pay $2.5 billion, including $1.7 billion in compensation to airlines that bought 737 Max planes but couldn’t use them as the plane was grounded for 20 months after the second plane crashed. . The company also agreed to pay $500 million in compensation to the families of those killed in the two Max plane crashes and pay a $243 million fine.
The deal also required Boeing to make significant changes to its safety policies and procedures, as well as corporate culture, which many insiders say has shifted in recent years from a primary focus on safety to one that critics say places profits first.
After three years the charge could be dismissed and Boeing immune from prosecution
After three years, if the aerospace giant and defense contractor had complied with the terms of the postponement of prosecution agreement, the criminal charge against Boeing would have been dismissed and the company would have been immune from further prosecution.
But last fall, US District Court Judge Reed O’Connor agreed that, under the Crime Victims’ Rights Act, relatives’ rights had been violated and should have been consulted before the DOJ and Boeing reached the final conclusion. ‘agreement. Last week, he ordered Boeing to appear on Thursday to be arraigned.
On Thursday, the families asked Judge O’Connor to impose certain conditions on Boeing as a condition of the release, including the appointment of an independent monitor to oversee Boeing’s compliance with the terms of the earlier deferment of prosecution agreement. and that the company’s compliance efforts “be made public to the greatest extent possible”.
O’Connor has not yet commented on imposing such conditions, as Boeing and the Justice Department have opposed the request. But he imposed a standard condition that Boeing commit no new crimes.
Naoise Connolly Ryan, who lost her husband Michael in the crash in Ethiopia, told the court she wanted justice for her children who had lost their father. “The settlement between Boeing and the Justice Department is not justice,” he said, asking the judge to strike out part of the settlement that gave Boeing immunity from prosecution. “We want to see real justice, and this has to be a wrongful death trial,” Ryan said.
In a statement after the indictment, Boeing said:
“We deeply regret all those who lost loved ones on Lion Air Flight 610 and Ethiopian Flight 302, and we greatly respect those who expressed their views at today’s hearing.”
The statement added that Boeing has “made broad and profound changes throughout our company and made design changes to the 737 MAX to ensure that accidents like these never happen again. We are also committed to continuing to scrupulously abide by all of our obligations under the agreement we entered into with the Justice Department two years ago.”
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Aircraft maker Boeing will be arraigned in Texas federal court Thursday on criminal charges of conspiracy to commit fraud related to the crashes of two 737 Max commercial jets in Indonesia in 2018 and Ethiopia in 2019 that killed a total of 346 people.
US District Court Judge Reed O’Connor of the Northern District of Texas ordered Boeing publicly arraigned last week on felony charges, adding that the company “has no right to waive its appearance”.
The judge also allows family members of some of those killed in the crashes to be heard in the proceeding, ruling that federal law and criminal court rules “require this court to publicly indict Boeing and permit the hearing of the representatives of victims of crime”. during or before proceedings”.
About a dozen relatives of the crash victims have notified the court that they intend to be heard, including Naoise Connolly Ryan of Ireland, whose husband Michael, 39, was killed in the Ethiopian Airlines 737 Max plane crash on 10 March 2019. That tragic event happened less than five months after the Oct. 29, 2018 crash of a Lion Air 737 Max jet in Indonesia.
Investigators blame both crashes in part on a faulty automated flight control system that acted on erroneous information from a single sensor to repeatedly force the planes into uncontrollable dives. Federal prosecutors accused Boeing of deceiving the FAA about the system, “withholding material information” when the regulatory agency was certifying the 737 Max.
“Misleading statements, half-truths and omissions reported by Boeing employees to the FAA have hampered the government’s ability to ensure the safety of the flying public,” prosecutors said in announcing a deferment of prosecution agreement to settle the charge prosecution in January 2021, giving Boeing immunity from further prosecution if the company complied with the terms of the agreement.
Relatives of those killed in the crashes oppose Boeing’s deal
But many of the relatives of those killed in the 737 Max crashes have vocally opposed the deal.
“It was a lovers affair. It wasn’t justice,” Ryan told NPR last year. “And by giving this immunity, basically, the decision makers weren’t held to account.”
Michael Stumo and Nadia Milleron of Massachusetts, parents of Samya Rose Stumo, 24, who also died in the Ethiopian crash, also showed up to speak in court Thursday; and Paul Njoroge, a Kenyan living in Toronto at the time of the Ethiopian incident, which killed his wife, three children and mother-in-law.
Stumo has also previously criticized the deferred prosecution deal, calling it “a Boeing protection deal.” He previously told NPR, “It wasn’t justice. And by granting this immunity, basically, decision makers weren’t being held accountable. No one is being held accountable…” adding that the Justice Department “is letting scammers go l ‘hook.”
In a brief filed in court Wednesday, relatives of the crash victims say the defendant, Boeing, “committed the deadliest corporate crime in U.S. history,” arguing the court has already ruled that, “In summary, but for Boeing conspiracy to defraud the FAA, 346 people would not have lost their lives in the accidents”.
They will urge the judge to require Boeing to cooperate with an independent corporate monitor who will assess Boeing’s compliance with the terms of a deferred prosecution agreement the company entered into with the US Department of Justice two years ago to avoid prosecution penalties.
“Only an independent monitor — the proverbial second set of eyes — can begin to restore confidence in Boeing and ensure the safety of the community,” the families wrote in their court filing.
Under the terms of the settlement, Boeing admitted to defrauding the FAA by concealing safety issues with the 737 Max and agreed to pay $2.5 billion in fines and compensation to the airlines and relatives of crash victims.
The settlement also required Boeing to make significant changes to its safety policies and procedures, as well as the corporate culture within the company, which according to many insiders has shifted in recent years from a priority focus on safety to one that critics say puts profits first. .
Boeing CEO says he feels grief for families
After three years, if the aerospace giant and defense contractor had complied with the terms of the deferred prosecution agreement, the criminal charge against Boeing would have been dropped and the company would have been immune from further prosecution.
The families of those killed in the incidents petitioned the court to have the deal revoked, arguing that under the Crime Victims’ Rights Act they should have been consulted and assisted in the settlement. The Justice Department initially objected, arguing that it was the FAA, a regulatory agency that oversees aircraft certification, that was defrauded by Boeing, not the people killed in the crashes and their survivors.
Judge O’Connor sided with the families this fall, ruling that they are legally victims of crime and that their rights have been violated under the Crime Victims’ Rights Act, and that they should have been consulted. But he still hasn’t agreed to reopen the deferred prosecution agreement.
Representatives for Boeing on Wednesday declined NPR’s request for comment, with a spokesperson sending an email saying, “We have nothing to share at this time.”
When asked about the indictment and the families allowed to speak in an interview on CNBC Wednesday morning, Boeing CEO David Calhoun said, “My reaction to the families is always the same, nothing but heartbreak.”
He said their views were “a good reminder … of how important safety is to all of us. Any hearing they want to give those views is fine with me.”
But Calhoun declined to say how the company would sue.