Chris Prentice, Mike Spector and Allison Lampert
WASHINGTON (Reuters) – U.S. prosecutors are recommending senior Justice Department officials file criminal charges against Boeing after the plane maker was found to have violated an agreement related to two fatal plane crashes, two people familiar with the matter told Reuters.
The Justice Department has until July 7 to decide whether to prosecute Boeing. The recommendations of the prosecutors handling the case have not previously been reported.
In May, officials determined that the company had violated a 2021 settlement that protected Boeing from criminal charges of conspiracy to commit fraud stemming from two fatal crashes involving the 737 MAX jet in 2018 and 2019.
Under the 2021 settlement, the Justice Department agreed not to prosecute Boeing over allegations of fraud against the Federal Aviation Administration, provided the company overhauls its compliance practices and provides regular reports. Boeing also agreed to pay $2.5 billion to settle the investigation.
Boeing declined to comment. He previously said he was “complying with the terms” of the 2021 settlement, which lasts three years and is known as a deferred prosecution agreement. Boeing told the Justice Department it disagreed with its finding that the company violated the settlement, Reuters reported this month.
A Justice Ministry spokesman declined to comment.
Both sides are discussing a possible resolution to the Justice Department investigation, and there is no guarantee officials will file charges, two sources said. They added that internal discussions within the Justice Department were ongoing and no final decisions had yet been made.
The criminal charges would deepen the unfolding crisis at Boeing, which has come under scrutiny from U.S. prosecutors, regulators and lawmakers after the panel blew up one of its planes, operated by Alaska Airlines, in mid-flight on Jan. 5, just two days before expiration of the 2021 agreement. .
The sources did not specify what criminal charges Justice Department officials are considering, but one source said they could go beyond the original fraud conspiracy charge filed in 2021.
Alternatively, rather than go after Boeing, the Justice Department could extend the 2021 agreement by a year or propose new, stricter terms, the people said.
In addition to financial penalties, the most stringent agreements usually involve the appointment of a third party to monitor the company’s compliance. The Justice Department could also require the company to admit its wrongdoing by pleading guilty.
Boeing may be willing to pay a fine and agree to be monitored, but believes a guilty plea, which typically carries more business restrictions, could cause too much damage, one of the people said. Boeing receives significant revenue from contracts with the U.S. government, including the Department of Defense, that could be in jeopardy due to a criminal conviction, one of the people said.
Relatives of victims of two fatal 737 MAX crashes have long criticized the 2021 settlement, arguing that Justice Department officials should have held the company and its executives accountable.
At a Senate hearing in June, CEO Dave Calhoun acknowledged the company’s safety shortcomings and apologized to bereaved families.
Last week, the families demanded that prosecutors seek a nearly $25 billion fine and criminal prosecution against the planemaker.