DALLAS — A federal judge on Thursday rejected a deal that would have allowed Boeing to plead guilty to a criminal conspiracy charge and pay a fine for misleading U.S. regulators about the 737 Max airliner before two of the planes crashed, killing 346 people.
U.S. District Judge Reed O’Connor of Texas said diversity, inclusion and equity, or DEI, policies in government and Boeing could make race a factor in the selection of candidates. an official charged with overseeing Boeing’s compliance with the plea agreement.
The decision creates uncertainty around criminal charges against the aerospace giant in connection with the development of its best-selling airliner.
The judge gave Boeing and the Justice Department 30 days to let him know how they planned to proceed. They could negotiate a new plea deal, or prosecutors could decide to take the company to court.
The Justice Department and Boeing had no immediate comment.
Paul Cassell, attorney for the families of passengers who died in the crashes, called the ruling an important victory for the rights of crime victims.
“Federal prosecutors and top defense attorneys can no longer make backroom deals and simply expect judges to sign off on them,” Cassell said. “Judge O’Connor recognized that this was a cozy deal between the government and Boeing that failed to focus on the major concerns: holding Boeing accountable for its deadly crime and ensuring that nothing such will not happen again in the future.”
Many relatives of passengers who died in the accidents, which occurred off the coast of Indonesia and in Ethiopia within five months of each other, have spent years calling for a public trial, prosecutions of former company executives and tougher financial sanctions against Boeing. .
The deal rejected by the judge would have allowed Boeing to plead guilty to defrauding regulators who approved pilot training requirements for the 737 Max nearly a decade ago. Prosecutors said they had no evidence to suggest Boeing’s deception played a role in the crashes.
The company and prosecutors reached a deal in July.
In his ruling, O’Connor focused on part of the agreement that called for an independent monitor to oversee Boeing’s actions to prevent violations of anti-fraud laws during three years of probation.
O’Connor said he was particularly concerned that the agreement “requires the parties to consider race when hiring the independent monitor…” consistent with the Department of Justice’s commitment in favor of diversity and inclusion.
O’Connor, a conservative appointee to the bench by President George W. Bush, questioned Justice Department and Boeing lawyers in October about the DEI’s role in selecting the comptroller. Department lawyers said monitor selection would be open to all qualified applicants and based on merit.
The judge wrote in his Thursday ruling that he was “not convinced … that the government will not choose a monitor without racial considerations.” He said DEI’s policies “only serve to undermine that trust in government and in Boeing’s ethical and anti-fraud efforts.”
O’Connor also objected that the plea agreement called for the government to choose the monitor and for the appointee to report to the Justice Department, not the court. The judge also noted that Boeing could have vetoed any of the six nominees chosen by the government.
The Justice Department first accused Boeing in January 2021 of defrauding Federal Aviation Administration regulators who approved pilot training requirements for the 737 Max.
The department simultaneously announced it would drop the charges after three years if the company stayed out of trouble and paid a $2.5 billion settlement — mostly money the company would have paid to the airline customers due to the FAA grounding of the 737 Max fleet for 20 months.
The victims’ families were outraged. Judge O’Connor ruled last year that the Justice Department violated a victims’ rights law by not telling their loved ones it was negotiating with Boeing, but said he did not the power to cancel the agreement.
The 2021 deferred prosecution agreement was set to expire in January and prosecutors were widely expected to request the case be dropped permanently. However, just days before, a door jam caused a 737 Max to blow up during an Alaska Airlines flight over Oregon.
The incident renewed concerns about manufacturing quality and safety at Boeing and subjected the company to increased scrutiny from regulators and lawmakers.
After determining that Boeing violated the terms of the 2021 settlement, the Justice Department revived its conspiracy prosecution. This led to further negotiations and a plea agreement which Judge O’Connor rejected.
Boeing agreed to plead guilty to a single count of conspiracy to commit fraud for allegedly misleading the FAA about the level of training pilots would need before flying the Max. Boeing had downplayed the importance of a new flight control system called MCAS.
Following Boeing’s incomplete information, the FAA approved minimal computer-based training in lieu of more intensive flight simulator training. Simulator training would have increased the cost of operating the Max for airlines and may have pushed some to buy planes from rival Airbus.
The plea agreement included a fine of up to $487.2 million, but would have given Boeing credit for $243.6 million in penalties paid as part of the 2021 settlement. agreement, Boeing, headquartered in Arlington, Virginia, would also invest $455 million in compliance and safety programs, and would be placed on probation and supervised by an independent monitor for three years.
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