Why no one at Boeing will be jailed for 737 Max crashes criminal fraud

EXPLAINED

The guilty plea, which first requires judicial approval, would brand Boeing a convicted felon

Boeing’s logo on the side of a Boeing 737 MAX during the Farnborough International Airshow (Photo: John Keeble/Getty)

By Christian Oliver

July 8, 2024 

Despite Boeing agreeing to plead guilty to a criminal fraud conspiracy charge over two deadly 737 Max crashes, it appears almost certain no one within the company will face any jail time.

The US Justice Department said on Sunday night that it had reached a plea deal with the aircraft manufacturer over a crash in Indonesia in 2018 and another in Ethiopia in 2019. The crashes killed 346 people in total and prompted the families of victims to demand justice for the deaths, and for Boeing to ultimately face prosecution.

Following a years-long legal saga, the government determined the company violated an agreement that had protected it from prosecution and had sought to deceive regulators who approved its aeroplane and pilot-training requirements.

Prosecutors alleged that Boeing had committed conspiracy to defraud the US government by misleading regulators about a flight-control system implicated in the two crashes.

The Department of Justice reached a settlement with Boeing in January 2021 and agreed it would not prosecute as long as the company complied with certain conditions for three years. But prosecutors last month said Boeing had breached those terms.

Workers recover debris at the scene of the Ethiopian Airlines Boeing Max plane crash on March 11, 2019 (Photo: Mulugeta Ayene/AP)

What is the deal between Boeing and the Department of Justice?

The guilty plea first requires judicial approval.

Boeing will then have to pay a criminal fine of $243.6m (£190m). It will also be forced to agree to an independent monitor to oversee operations and spend at least $455m ($355m) on its compliance and safety programmes.

The planemaker had been offered the option of instead facing a trial on the felony criminal charge of conspiracy to defraud the US, but opted to take the guilty plea.

The deal does not give Boeing immunity for other incidents, including, among others, a panel blowing off mid-flight on a Max jetliner in January earlier this year.

But notably for the families of the 346 victims, the deal does not cover any current or former Boeing officials, only the corporation – meaning it is highly unlikely anyone will face jail time.

“This sweetheart deal fails to recognize that because of Boeing’s conspiracy, 346 people died. Through crafty lawyering between Boeing and DOJ, the deadly consequences of Boeing’s crime are being hidden,” a lawyer for some of the families, Paul Cassell, said.

Why will no Boeing official face jail time?

Collen Clark, founder and lawyer at Schmidt & Clark LLP, in Washington DC, told i that it was “important to understand that the plea deal is with the corporation of Boeing, not any individual within the company.”

He explained that legal proceedings would be directed at the company as a whole rather than any specific person.

“The plea deal covers only wrongdoing by Boeing before the crashes. It does not give Boeing immunity for other incidents,” he noted.

Mr Clark added that “the nature of corporate law often makes it difficult to hold individuals accountable”.

“In many cases, decisions within a corporation are made collectively, and it can be challenging to pinpoint responsibility on a single individual,” he explained. “This is especially true in large corporations like Boeing, where decisions are made at various levels of management.”

Samya Stumo’s mother, Nadia Milleron, has campaigned for justice together with the relatives of many other Boeing victims (Photo: Olivier Douliery/AFP)

The attorney also highlighted that the specific plea deal between Boeing and the Department of Justice was “designed to avoid a trial”.

“Boeing has agreed to plead guilty to a criminal fraud charge and pay a fine. This means that the company has accepted responsibility for its actions and is willing to pay a penalty,” he said, noting that this would not necessarily translate into jail time for any individuals.

“In essence, while the plea deal holds Boeing accountable for its actions, it does not necessarily mean that individuals within the company will face jail time. This is due to the nature of corporate law and the specifics of the plea deal itself.

“It’s a complex issue with many nuances,” he added, “and it’s a prime example of the challenges in holding corporations accountable in the legal system.”

‘Compelling national interest’ in letting Boeing continue

The criminal conviction for Boeing may not only harm its commercial sales but also its status as a federal contractor.

The plea deal does not exclude Boeing from selling to the government but that would be a decision for each federal agency.

Boeing is entrenched in several lucrative government contracts, including with the US Defence Department and Nasa.

While it is predominantly known for its commercial aircraft, Boeing’s defence and space unit is vital to its business. It made some $7bn (£5.5bn) in government contracts in first-quarter sales, up 6 per cent from a year ago.

It said in its annual report that US government contracts represented 37 per cent of its revenue last year – most of them with the Defence Department or Nasa.

When Boeing was last forced to pay a $615m (£479m) fine in 2006 to settle criminal and civil charges, the US Air Force cited “compelling national interest” in letting the defence giant continue competing for contracts.

'Sweetheart deal' for Boeing over deadly crashes slammed

By Associated Press

   Jul 9, 2024

Boeing will plead guilty to a criminal fraud charge stemming from two crashes of 737 Max jetliners that killed 346 people, the US Justice Department said this morning, after the government determined the company violated an agreement that had protected it from prosecution for more than three years.

Federal prosecutors gave Boeing the choice last week of entering a guilty plea and paying a fine as part of its sentence or facing a trial on the felony criminal charge of conspiracy to defraud the US.

Prosecutors accused the American aerospace giant of deceiving regulators who approved the airplane and pilot-training requirements for it.

Workers collect debris on March 12, 2019, at the scene where an Ethiopian Airlines Boeing 737 Max 8 crashed shortly after takeoff, killing all 157 on board, near Bishoftu, or Debre Zeit, south of Addis Ababa, in Ethiopia. (AP)

The plea deal, which still must receive the approval of a federal judge to take effect, calls for Boeing to pay an additional US$243.6 million ($361.65 million) fine.

That was the same amount it paid under the 2021 settlement that the Justice Department said the company breached. An independent monitor would be named to oversee Boeing's safety and quality procedures for three years. The deal also requires Boeing to invest at least US$455 million ($675.5 million) in its compliance and safety programs.

The plea deal covers only wrongdoing by Boeing before the crashes in Indonesia and in Ethiopia, which killed all 346 passengers and crew members aboard two new Max jets. It does not give Boeing immunity for other incidents, including a panel that blew off a Max jetliner during an Alaska Airlines flight over Oregon in January, a Justice Department official said.

Boeing has agreed to a plea deal with the US government. (AP)

The deal also does not cover any current or former Boeing officials, only the corporation. In a statement, Boeing confirmed it had reached the deal with the Justice Department but had no further comment.

In a filing Sunday night local time, the Justice Department said it expected to submit the written plea agreement with a US District Court in Texas by July 19. Lawyers for some of the relatives of those who died in the two crashes have said they will ask the judge to reject the agreement.

"This sweetheart deal fails to recognise that because of Boeing's conspiracy, 346 people died. Through crafty lawyering between Boeing and DOJ, the deadly consequences of Boeing's crime are being hidden," said Paul Cassell, a lawyer for some of the families.

Officials inspect an engine recovered from the crashed Lion Air jet in Jakarta, Indonesia, in November 2018. (AP)

Federal prosecutors alleged Boeing committed conspiracy to defraud the government by misleading regulators about a flight-control system that was implicated in the crashes, which took place than less five months apart.

As part of the January 2021 settlement, the Justice Department said it would not prosecute Boeing on the charge if the company complied with certain conditions for three years. Prosecutors last month alleged Boeing had breached the terms of that agreement.

US District Judge Reed O'Connor, who has overseen the case from the beginning, has criticised what he called "Boeing's egregious criminal conduct." O'Connor could accept the plea and the sentence that prosecutors offered with it or he could reject the agreement, likely leading to new negotiations between the Justice Department and Boeing.

With protesters in the audience, Boeing CEO Dave Calhoun waits to testify before the Senate Homeland Security and Governmental Affairs Subcommittee on Investigations at the Capitol in Washington, in June this year. (AP)

The case goes back to the crashes in Indonesia and in Ethiopia. The Lion Air pilots in the first crash did not know about flight-control software that could push the nose of the plane down without their input. The pilots for Ethiopian Airlines knew about it but were unable to control the plane when the software activated based on information from a faulty sensor.

The Justice Department charged Boeing in 2021 with deceiving FAA regulators about the software, which did not exist in older 737s, and about how much training pilots would need to fly the plane safely. The department agreed not to prosecute Boeing at the time, however, if the company paid a US$2.5 billion ($3.71 billion) settlement, including the US$243.6 million fine, and took steps to comply with anti-fraud laws for three years.

Boeing, which blamed two low-level employees for misleading the regulators, tried to put the crashes behind it. After grounding Max jets for 20 months, regulators let them fly again after the company reduced the power of the flight software. Max jets logged thousands of safe flights and orders from airlines picked up, increasing to about 750 in 2021, about 700 more in 2022 and nearly 1000 in 2023.

Protesters with palms painted red to resemble blood hold their hands up during the Senate hearing. (AP)

That changed in January, when a panel covering an unused emergency exit blew off a Max during the Alaska Airlines flight over Oregon.

Pilots landed the 737 Max safely and no one was seriously injured, but the incident led to closer scrutiny of the company. The US Justice Department opened a new investigation, the FBI told passengers on the Alaska plane that they might be victims of a crime and the FAA said it was stepping up oversight of Boeing.

A criminal conviction could jeopardise Boeing's status as a federal contractor, according to some legal experts. The plea announced this morning does not address that question, leaving it to each government agency whether to bar Boeing.

A door plug area of an Alaska Airlines Boeing 737 Max 9 aircraft awaiting inspection is pictured with paneling removed at the airline's facilities at Seattle-Tacoma International Airport in January. (AP)

The US Air Force cited "compelling national interest" in letting Boeing continue competing for contracts after the company paid a US$615 million ($913 million) fine in 2006 to settle criminal and civil charges, including that it used information stolen from a rival to win a space-launch contract.

The company based in Arlington, Virginia, has 170,000 employees and dozens of airline customers spanning the globe. The best customers for the 737 Max include Southwest, United, American, Alaska, Ryanair and flydubai.

But 37 per cent of its revenue last year came from US government contracts. Most of it was defence work, including military sales that Washington arranged for other countries.

A Boeing 737 MAX aircraft is shown on the assembly line. (AP)

Boeing also makes a capsule for NASA. Two astronauts will remain at the International Space Station longer than expected while Boeing and NASA engineers troubleshoot problems with the propulsion system used to maneuver the capsule.

Even some Boeing critics have worried about crippling a key defence contractor.

"We want Boeing to succeed," Richard Blumenthal, a Connecticut Democrat, said during a Senate hearing last month on what he termed the company's broken safety culture.

"Boeing needs to succeed for the sake of the jobs it provides, for the sake of local economies it supports, for the sake of the American travelling public, for the sake of our military."

Relatives of the Max crash victims have pushed for a criminal trial that might illuminate what people inside Boeing knew about deceiving the FAA. They also want the Justice Department to prosecute top Boeing officials, not just the company.

"Boeing has paid fines many a time, and it doesn't seem to make any change," said Ike Riffel of Redding, California, whose sons Melvin and Bennett died in the Ethiopian Airlines crash.

"When people start going to prison, that's when you are going to see a change."

At a recent Senate hearing, Boeing CEO David Calhoun defended the company's safety record after turning and apologising to Max crash victims' relatives seated in the rows behind him "for the grief that we have caused."

Hours before the hearing, the Senate investigations subcommittee released a 204-page report with new allegations from a whistleblower who said he worried that defective parts could be going into 737s. The whistleblower was the latest in a string of current and former Boeing employees who have raised safety concerns about the company and claimed they faced retaliation as a result.

Modi-Putin meeting: Special gestures by Russian President, Modi Reiterates "Not an Era of War"

Prime Minister Narendra Modi visits Russian President Vladimir Putin's cottage, ahead of the Indo-Russia talks. The Russian Prime Minister made special arrangements for Modi, who reiterated "Not an era of war" amid the Russia-Ukraine crisis.


PM Modi and Russian President Vladimir Putin at the latter's residence in Novo-Ogarevo. (Photo: X/@NarendraModi)


Geeta Mohan
New Delhi, India,

UPDATED: Jul 9, 2024 

In ShortPrime Minister Narendra Modi met Russian President Vladimir Putin ahead of Indo-Russia talks.

The private meeting took place at President Putin's private cottage, as discussions concerning global economy took place.

Despite special gestures by Russian President, Prime Minister Modi reiterated. "Not an era of war."

Indian Prime Minister Narendra Modi met with Russian President Vladimir Putin at the latter's Novo-Ogaryovo residence. This private meeting, set against the backdrop of the quaint and historically rich Novo-Ogaryovo, was both a precursor to the upcoming India-Russia summit and an opportunity for the two leaders to reaffirm their countries' longstanding ties.

Diplomatic Discourse: "Not an Era of War"

Prime Minister Modi reiterated a crucial message during his discussions: "This is not an era of war," emphasising the need for a diplomatic resolution to the ongoing Russia-Ukraine conflict. This stance underscores India's commitment to peace and stability in the region, urging that solutions should emerge from dialogue rather than conflict.

Sources said, that the focus of the visit is the economic agenda (energy, trade, manufacturing, fertilizers), and ‘a solution cannot be found on the battlefield' (regarding the Russia-Ukraine war).

The agenda of Modi's visit was robust, focusing on enhancing economic cooperation across various sectors such as energy, trade, manufacturing, and fertilizers. Both leaders acknowledged that "a solution cannot be found on the battlefield," aligning their approach towards fostering economic resilience and partnership.

Praise and Personal Touches

During their informal meeting, President Putin lauded Modi's leadership and the strides India has made under his governance. The congenial atmosphere was highlighted by personal gestures, such as a ride in a golf cart and a private dinner hosted by Putin for Modi, emphasising the warmth and camaraderie between the two leaders.

This visit marks Modi's first to Russia since the Ukraine invasion, illustrating the critical nature of their discussions. With the West watching closely, the Kremlin has expressed that this visit is viewed with a sense of "jealousy," hinting at the strategic depth of the India-Russia relationship.

Novo-Ogaryovo: A Glimpse into Putin's Residence



The Novo-Ogaryovo, often called Putin's dacha, is more than just a residence- it is a symbol of Russian leadership and has been the venue for many crucial diplomatic engagements. Located in the Moscow Oblast, this site combines luxury with discretion, providing a perfect setting for high-level meetings.

Historically, Novo-Ogaryovo has been associated with Russian leaders since the Soviet era and has evolved to mirror contemporary Russian aesthetics and power. The residence is not just a home but a fortified compound, equipped to host international guests and facilitate top-level confidential discussions.

As Prime Minister Modi's visit continues, the focus will remain on strengthening the India-Russia ties and discussing regional and global developments that impact both nations. The outcomes of this visit are likely to influence the geopolitical landscape, particularly concerning China's regional sway and the broader implications for NATO and its alignment with countries like South Korea and Japan.

This significant meeting not only reaffirms the strong ties between India and Russia but also sets the stage for future collaboration in a world that is rapidly changing geopolitically and economically.

Published By:
indiatodayglobal
Published On:
Jul 9, 2024

India's Modi meets Putin on first Russia visit since Ukraine offensive

Moscow, Russia – India's newly re-elected prime minister Narendra Modi arrived in Moscow on Monday for a two-day visit that aims to balance the country's longstanding relationship with Russia while courting closer security ties with the West. The trip is Modi's first visit to Moscow since Russia invaded Ukraine in February 2022.


Issued on: 08/07/2024 

In this pool photograph distributed by the Russian state agency Sputnik, Russia's President Vladimir Putin and Indian Prime Minister Narendra Modi shake hands during an informal meeting at the Novo-Ogaryovo state residence, outside Moscow, on July 8, 2024. © Sergei Bobylyov, AFP

Prime Minister Narendra Modi flew into Moscow on Monday and warmly hugged President Vladimir Putin on a visit that treads a fine line between maintaining a longstanding relationship with Moscow and courting closer Western security ties.

The visit is Modi's first since Russia launched its campaign in Ukraine and since he was returned to power last month as leader of the world's most populous country.

After meeting Moscow's Indian community, Modi had an informal meeting with Putin at his residence at Novo-Ogaryovo outside Moscow, where the leaders drank tea on a terrace, rode in a golf cart together and visited stables.

The Indian leader told Putin it was a "moment of joy" to visit and thanked him for planning "that we chit-chat here this evening".

"Looking forward to our talks tomorrow as well, which will surely go a long way in further cementing the bonds of friendship between India and Russia," Modi later wrote on X, posting a photo of the leaders hugging.

Moscow remains a key supplier of cut-price oil and weapons to India, but the Kremlin's isolation from the West and blooming friendship with Beijing have impacted its time-honoured partnership with New Delhi.

Western powers have in recent years also cultivated ties with India as a bulwark against China and its growing influence in the Asia-Pacific, while pressuring it to distance itself from Russia.

Modi last visited Russia in 2019 and hosted Putin in New Delhi two years later, weeks before Russia began its offensive against Ukraine.

India has shied away from explicit condemnation of Russia ever since and has abstained on United Nations resolutions censuring Moscow.

But Russia's fight with Ukraine has also had a human cost for India.

Read moreIndia's Modi lands in Russia for first visit since Ukraine war

New Delhi said in February that it was pushing the Kremlin to send back some of its citizens who had signed up for "support jobs" with the Russian military, following reports some were killed after being forced to fight in Ukraine.

The United States on Monday urged Modi to make clear in his talks with Putin that "any resolution to the conflict in Ukraine must... be one that respects the UN Charter with respect to Ukraine's territorial integrity".

Moscow's deepening ties with China have also been a cause for concern.

Washington and the European Union accuse China of selling components and equipment that have strengthened Russia's military industry -- allegations that Beijing denies.

China and India are intense rivals competing for strategic influence across South Asia.

India is part of the so-called Quad grouping with the US, Japan and Australia that positions itself against China's growing assertiveness in the Asia-Pacific region.
Oil and arms

New Delhi and the Kremlin have maintained a close relationship since the Cold War, and Russia was for a long time India's largest arms supplier.

But Ukraine has stretched Russia's arms supplies thin, forcing India to eye other sources for weapons -- including by growing its own defence industry.

Russia's share of Indian imports of arms has shrunk considerably in recent years, according to the Stockholm International Peace Research Institute.

At the same time, India has become a major buyer of Russian oil, providing a much-needed export market for Moscow after it was cut off from traditional buyers in Europe.

That has drastically reshaped energy ties, with India saving itself billions of dollars while bolstering Moscow's war coffers.

India's month-on-month imports of Russian crude "increased by eight percent in May, to the highest levels since July 2023", according to commodity tracking data compiled by the Centre for Research on Energy and Clean Air.

But this has also resulted in India's trade deficit with Russia rising to a little over $57 billion in the past financial year.

From Russia, Modi will travel to Vienna for the first visit to the Austrian capital by an Indian leader since Indira Gandhi in 1983.

(AFP)

PISSING OFF PUTIN

US reveals NATO summit plans to provide Ukraine with 'bridge to membership'

Allies gathering in Washington, DC will announce robust new measures of support for Ukraine, says President Biden's aide Michael Carpenter, hoping it will prepare Kiev "to plug and play with the rest of the alliance."

BABA UMAR
TRT

People walk inside of the Walter E. Washington Convention Center, which has been decorated with signage in preparation for the NATO Summit, Monday, July 8, 2024. 

 / Photo: AP

Washington DC — NATO allies in Washington DC summit will announce new security pledges to Ukraine including creating a new military command in Germany that will help Kiev develop its future force before Ukraine is integrated into the trans-Atlantic military alliance, a senior US official has revealed.

"Allies will stand up a new NATO military command in Germany that will leverage NATO's institutional strengths to coordinate training and equipping and help Ukraine developments future force," Ambassador Michael Carpenter, Senior Advisor for Europe at the National Security Council, told media at the US State Department on Monday.

The United States is hosting the 2024 NATO Summit in Washington, DC from July 9-11. President Joe Biden's special adviser, who was providing an overview of events, said the new command will leverage the bloc's institutional strengths to coordinate training and equipping and help Ukraine developments future force.

"Allies will also announce a pledge of security assistance to Ukraine. That will include up to 40 billion euro [$43.3B] in support over the next year. In addition, NATO will appoint a civilian senior representative in Kiev to act as a focal point for NATO engagement with Ukrainian authorities," he said.

Regarding what NATO allies will say about Ukraine's membership path in the summit declaration, Carpenter, said "The language will be clear and forceful."

The summit declaration "will recognise Ukraine's vital ongoing reform efforts and demonstrate allied support for Ukraine on its path to NATO membership."

Carpenter argued that Ukraine is making progress despite dire predictions, citing $61 billion in US support, $50 billion in loan agreed in recent G-7 summit and 20 bilateral security agreements that he said will help sustain Ukraine's future force.

"And that will be that bridge to membership… Ukraine will be fully ready one day to plug and play with the rest of the alliance," he added.

Biden is hosting 38 heads of delegations in the American capital for a historic summit to celebrate 75th anniversary of the NATO's founding.

That includes the leaders of 31 NATO allies, as well as NATO partners including Ukraine, Japan, New Zealand, the Republic of Korea, Australia, and the European Union.


Defence burden sharing


Regarding a 2006 NATO commitment that agreed each member country would commit a minimum of 2 percent of its GDP to defence spending, Carpenter said NATO allies are making significant investments in their defence and deterrence capabilities, especially since Biden administration took office.


"When the Biden administration took office, only nine allies were spending at least 2 percent of GDP on defence. Today, a record 23 allies are at or above the minimum level of 2 percent of GDP for defence spending, more than twice as many as in 2021, and nearly eight times higher than when allies first set this benchmark nearly a decade ago," he said.


Cumulative spending, or defence spending for European allies is also collectively exceeding the 2 percent spending mark for the first time, he said, "and these numbers are going to continue to improve."


He said the United States and allies will also announce new steps to strengthen Ukraine's air defences, "to help Ukraine continue to defend themselves and hopefully prevent the types of brutal attacks like the one that we just witnessed on the children's hospital."


"Together, the Washington summit will send a strong signal to [Russian President Vladimir] Putin that if he thinks he can outlast the coalition of countries supporting Ukraine, he's dead wrong," the Biden adviser said.


Asked if there is a concern among the NATO members regarding possible administration change and ex-US president Donald Trump's unwillingness to cooperate with NATO as much as Biden current administration is, he said "there is broad bipartisan support for NATO and for Ukraine."


"We expect that to continue."


Ambassador Carpenter also discussed meetings in Ankara with Turkish officials earlier this month on NATO, Ukraine, Middle East, and bilateral cooperation counterterrorism issues, hailing Ankara's significant role in the bloc.

"Obviously Türkiye is a critical ally. They [Türkiye] sit at a very important juncture, both in terms of the Eastern Med, in terms of the South Caucasus, in terms of the Black Sea. What Türkiye has done with the Montreux Convention has been very important in terms of limiting Russian warships in the Black Sea. It's an important ally, and obviously we need to continue to have that conversation with our Turkish friends about this range of issues," he said.


Meanwhile, Turkish President Recep Tayyip Erdogan will be attending the three-day summit, with Türkiye's Communications Directorate saying that "views will be exchanged on the organisation's endeavors regarding deterrence and defence in the face of challenges and risks to the Alliance's geography, as well as the situation in Ukraine and assistance for that country."


Terrorism, one of the main threats to the alliance, will also be discussed, it added.

SOURCE: TRT WORLD

Baba Umar
Baba Umar is an Executive Producer with TRT World