Boeing says not guilty to fraud charge

January 27, 2023 8:32 am

The Boeing 737 Max-8 aircraft that crashed nearly four years ago. [Source: BBC]

Boeing has told a US court it was not guilty of concealing information about flight control systems on its 737 Max aircraft, which led to two crashes, killing 346 people.

Flaws in the systems were found to have led to the accidents, but Boeing avoided a trial by agreeing to pay $2.5bn (£1.8bn).

Now relatives of those who died are trying to reopen the settlement.

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They are due to confront the aircraft giant in court.

The hearing marks the first time Boeing has been forced to answer to the fraud charge in a public court after the judge hearing the case ruled that those killed in the planes were legally “crime victims” and should have been involved in settlement negotiations.

Families of those who died to say that the deal Boeing reached with the Department of Justice (DoJ) in 2021 to resolve a criminal conspiracy charge was a “sweetheart agreement” which violated their rights and allowed the company to avoid being held fully accountable.

The DoJ has defended its decision, insisting that the settlement was appropriate, because it could not prove beyond reasonable doubt that there was a direct connection between Boeing’s alleged crimes and the two crashes.

Boeing, which admitted responsibility as part of the deal, has opposed reopening the agreement, saying to do so would be “unprecedented, unworkable and inequitable”. The firm declined to comment ahead of Thursday’s hearing in Texas.

Mark Pegram, whose son Sam was working for a refugee agency when he died on the second plane that crashed, was unable to travel to Texas. But he said he was very glad the hearing was taking place.

“To us a fine and cover-up is not justice,” he said.

“It is important a precedent is set to prevent similar loss of innocent lives, and for Boeing to understand the horrific impact their misconduct has had on so many families,” he added.

In a court filing this week, the families asked the judge to appoint an independent monitor to oversee Boeing’s compliance with the deal and require public disclosure of the firm’s compliance efforts.

It is still not clear whether the legal action will ultimately lead to the deferred prosecution agreement between Boeing and the DoJ being reopened.

Such a move would be highly unusual. But according to Robert A Clifford, a Chicago lawyer representing the families in a separate civil action, it could have far-reaching consequences, including action against individuals.

“These families want the maximum penalty imposed against Boeing, and they want any immunity from prosecution that senior officials at Boeing received to be lifted,” he said.

It is nearly four years since Ethiopian Airlines flight ET302 crashed minutes after take-off from Addis Ababa to Nairobi. 157 people died when it plunged into farmland outside the Ethiopian capital in March 2019.

The accident involved a new design of aircraft – the 737 Max.

Just months earlier, an almost identical aircraft operated by the Indonesian carrier Lion Air had crashed into the Java Sea on what should have been a routine flight from Jakarta to Pangkal Pinang. 189 passengers and crew lost their lives.

It later emerged that both accidents were triggered by design flaws, in particular the use of flight control software known as MCAS.

The system was designed to assist pilots familiar with previous generations of the 737, and prevent them from needing costly extra training in order to fly the new model.

But sensor failures caused it to malfunction, and in both cases, it forced the aircraft into a catastrophic dive the pilots were unable to prevent.

Investigations in the US revealed that Boeing had not included information about the MCAS system in pilot manuals or training guidance, and had deliberately sought to downplay the impact of the system in its communications with the US regulator, the Federal Aviation Administration.

Boeing 737 Max aircraft were cleared to fly again in the US in 2020 and in the UK and EU in 2021, after being grounded in 2019 following the crashes.

In January 2021, the US charged Boeing with fraud. But the company was able to avoid going on trial, by agreeing to pay $2.5bn, including $500m to the families of those killed, and promising to tighten up its compliance procedures.

If the firm complies with the terms of the deal, the DoJ has agreed to drop the charge after three years.

This settlement – known as a deferred prosecution agreement – provoked intense anger among a number of the relatives of those who died aboard ET302.

There is no doubt that for families, including those living in the UK, the arraignment hearing itself is a major milestone.

Zipporah Kuria’s father Joseph Wathaika was killed in the crash of ET302, and she has been a vocal campaigner for Boeing to be held to account ever since.

She is in Texas for the hearing, and says her statement will be a tribute to an “incredible” man who changed many lives.

“It feels like we’re finally being seen,” she said. “It feels like the death of our loved ones, of 346 people, at least has a level of relevance now.”