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Boeing Enters 'New Territory' With Federal Probe, Possible Criminal Charges

Tyler Durden's Photo
by Tyler Durden
Sunday, Jun 02, 2024 - 06:00 PM

Authored by Jacob Burg via The Epoch Times (emphasis ours),

When a door panel ripped off an Alaskan Airlines flight after takeoff on Jan. 5, Boeing’s fortunes changed overnight.

(Illustration by The Epoch Times, Getty Images)

Had the company gone just two more days without an incident, it would have satisfied a settlement to avoid criminal prosecution by the Department of Justice (DOJ).

Instead, the accident triggered investigations by federal agencies and congressional hearings. The incident also renewed public scrutiny of Boeing and the 737 MAX 8 crashes in 2018 and 2019 that killed everyone on board and led to criminal charges for the company.

Boeing has since seen a significant financial fallout, reporting a $355 million loss and a near-50 percent drop in deliveries in the first quarter alone. The company also faces plummeting stock values and canceled orders from multiple airlines since the Jan. 5 incident.

The DOJ ended months of speculation on May 14 with a court filing alleging that Boeing violated its 2021 deferred prosecution agreement. The company failed to “design, implement, and enforce a compliance and ethics program to prevent and detect violations of the U.S. fraud laws.”

The DOJ will meet with the crash victims’ families on May 31 before announcing its intentions with Boeing’s case by July 7.

According to career pilots, aviation safety experts, and attorneys who spoke with The Epoch Times, how Boeing violated the agreement and the possible consequences are complicated.

To stay competitive, Boeing needed to design a new plane that could fly to destinations such as Hawaii with less fuel. The company’s competitor, Airbus, was edging out the market with new, more fuel-efficient jets.

Instead of designing a brand new plane, which would have required extensive pilot training from the airlines that buy them, raising the jet’s price, Boeing opted to release an upgraded version of its 737 jet, the 737 MAX. It has larger, more powerful engines that are installed farther forward on the plane’s wings, which causes the nose to push up higher during takeoff.

Boeing compensated with a new flight control software called Maneuvering Characteristics Augmentation System (MCAS), which automatically lowers the nose to avoid midair stalling. Federal regulators said Boeing didn’t tell the airlines or the Federal Aviation Administration (FAA) the extent of the software, how it controls the plane in the background, and how to disable it.

Planes also use angle of attack vanes, or indicators, to tell the computer whether the jet is ascending or descending at the right pitch angle. Before the 737 MAX, these indicators were wired to two sensors in case one malfunctioned during flight—because of damage from a bird strike, for instance. On the original 737 MAXs, the angle of attack indicators were wired to a single sensor, causing the flight control software to assume that the plane was in critical danger if either indicator malfunctioned.

American Airlines pilot captain Pete Gamble (L) and first officer John Konstanzer conduct a pre-flight check in the cockpit of a Boeing 737 Max jet in Grapevine, Texas, on Dec. 2, 2020. (LM Otero/AP Photo)

During the 2018 and 2019 fatal flights, the MCAS system kept pitching the nose downward with faulty angle-of-attack data, likely from a damaged angle of attack vane. Because Boeing didn’t properly disclose the software nuances and how to disable it to the airlines, the pilots took more than 10 seconds to respond. Federal guidelines expect pilots to respond to such as situation in four seconds to avoid a catastrophe.

Boeing also didn’t overhaul the flight control software until after the 2019 Ethiopian Airlines crash, which was five months after the 2018 Lion Air crash. The FAA responded by grounding all 737 MAX jets for nearly two years to ensure compliance with regulations.

The MCAS accidents were pure, 100 percent money accidents,” said Shawn Pruchnicki, aviation safety expert and assistant professor at Ohio State University’s Center for Aviation Studies.

“They killed 346 people over money and nothing else.”

Disclosing the flight control software would have forced airlines to order new training for their pilots before using the 737 MAX, thus raising the sales price.

The DOJ, the FAA, and the House Transportation Committee initiated separate investigations into the crashes. All implicated the MAX’s flight control software and Boeing’s decision to withhold this information from regulators, airlines, and pilots, which meant that pilots didn’t respond in time in both fatal 737 MAX 8 crashes.

Boeing didn’t respond to a request for comment.

How Was Boeing Charged?

The DOJ charged Boeing on Jan. 7, 2021, with conspiracy to defraud the United States, particularly the FAA’s Aircraft Evaluation Group.

The U.S. government stated that Boeing deliberately withheld details of its flight control software from the FAA and airlines. Boeing maintained that two of its 737 MAX Flight technical pilots were responsible for deceiving federal regulators about the MCAS flight control software.

The government then brokered a deferred prosecution agreement with Boeing, a form of criminal settlement in which charges can be dismissed if the defendant fulfills certain obligations within a stated timeframe.

Boeing had to accept responsibility for the acts that led to criminal charges and pay a total of $2.5 billion, which included a $243.6 million penalty and a $500 million fund to compensate the families of the 2018 and 2019 737 MAX crash victims.

However, Boeing also had to stay in compliance for three years from the day the agreement was signed, Jan. 7, 2021.

During this period, the company had to avoid committing any federal felonies, could not deny responsibility for the charges, and was required to implement a “compliance and ethics program designed, implemented, and enforced to prevent and detect violations of the U.S. fraud laws throughout its operations.”

Boeing was two days from the end of its probationary period when the Alaskan Airlines panel blew out.

An unpainted Boeing 737 MAX aircraft is parked at Renton Municipal Airport near the Boeing Renton facility in Renton, Wash., on July 1, 2019. (Lindsey Wasson/Reuters)

Alleged Violation

The DOJ’s May 14 letter states that Boeing failed to “design, implement, and enforce” the compliance and ethics program required under the terms of the settlement. However, the agency did not explicitly say whether the Alaskan Airlines incident or any others from 2024 were linked to Boeing’s lack of a compliance and ethics program.

Robert Clifford, lead attorney for the families of the 2018 and 2019 crash victims, told The Epoch Times that the DOJ hasn’t informed him or the families of the acts or incidents that led to Boeing’s breach of the agreement.

We hope to learn details of the investigation and government plans going forward,” he said.

“Obviously, the events of 2024, such as Alaska Air, have caused greater focus on Boeing’s compliance and the scrutiny of the government, but we await word on the exact details that led to the finding of [the] breach.”

The DOJ also wrote in the letter that it reserves the right to find Boeing in violation of other terms of the agreement until July 7, when it will announce how the agency intends to proceed with the case.

Possible Criminal Charges

The DOJ could pursue multiple pathways if it criminally prosecutes Boeing.

Neama Rahmani is a former federal prosecutor who once worked for the aerospace company. He told The Epoch Times that the DOJ could issue a “massive fine,” require an independent monitor to “ensure that Boeing is complying with its obligations under the agreement,” or prosecute individuals in the company, such as CEO Dave Calhoun.

Mr. Rahmani explained that going after individuals at the company requires a higher bar of proof. He said prosecutors could use a text message between high-level executives admitting to fraud, for example.

Read more here..

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