It’s been said that “you get justice in the next world, in this world you get law.” Does Boeing’s $2.5 billion settlement over 737 MAX crashes bear this maxim out?
Boeing Cops A Plea — And Throws Two Ex-employees To The Wolves
Last week’s column described the design and training decisions that caused two, Boeing 737 MAX jets to crash, killing 346 people and grounding 737 MAXes worldwide.
Also last week, U.S. Department of Justice (”DOJ”) prosecutors announced a plea deal with the airline. The deal included $244 million in fines, plus nearly $2.3 billion in compensation to airline customers and families of crash victims. Boeing remains exposed to civil liability from the Federal Aviation Administration (“FAA”) and Securities and Exchange Commission (”SEC”), as well as suits on behalf of crash victims and their families.
Boeing has achieved its most important goal, however. The company has avoided prosecution for conspiracy to defraud the U.S — which threatened to disqualify Boeing from federal contracts. A near miss from a death sentence. Boeing also avoids an outside monitor, but must stay out of legal trouble for three years. Lastly, the company must comply with any ongoing investigations and beef up compliance programs.
Investigators and prosecutors, with Boeing’s blessing and support, will now train their guns on two ex-Boeing pilots. A 2016 exchange of texts between the two evidences discovery of significant problems with the aircraft and/or simulator, as well as an inability to get timely information to and from colleagues. The exchange acknowledges that information previously given the FAA was wrong.
DOJ Guidance on Evaluation of Corporate Compliance Programs
The pilots maintain their innocence. But, in agreeing to the deal, prosecutors came to the conclusion that lawbreaking within Boeing did not run further up the corporate chain. Prosecutors also gave Boeing credit for eventually cooperating with investigators and taking remedial action.
In so doing, the DOJ followed its Guidance on Evaluation of Corporate Compliance Programs.
The Guidance promises that the DOJ will go easier on companies that have tried in good faith to follow the Guidance. The unspoken flipside is the Feds’ hammering companies that have not so tried.
The Guidance represents required reading for every Audit Committee, Legal, and Compliance Department.
And What About The FAA? What About Congress?
Right now, only two Boeing ex-employees face criminal probes. Boeing shareholders will foot any future bills for civil damages.
It may be that no additional probes are warranted. Nor will many people shed tears for the shareholders.
But, the dead deserve justice.
So do Boeing customers, employees, and shareholders.
A report issued by the Democratic staff of the House Transportation Committee cast a much broader net, blaming not just Boeing as an organization but the FAA as well.
The FAA now seems ready to do to Boeing what Boeing did to its two ex-employees. Congress, meanwhile, seems disinclined to consider the role played by Congressional lobbying on behalf of contributors and large-scale employers in legislators’ districts.
Justice may lie beyond reach. When it comes to calling Washington, DC, bureaucrats and politicians to account, the law may fall short.
But finding out the truth about FAA and Congressional involvement would be nice.
The truth needs a friend.
But as Harry Truman said, “You want a friend in Washington? Get a dog.”
Republished by permission of Forbes