Boeing pleads not guilty in fraud case surrounding 737 crashes

The families of 10 victims were set to speak in person during the hearing

Boeing pleads not guilty in fraud case surrounding 737 crashes

Boeing Co. pleaded not guilty to deceiving federal regulators about changes made to its 737 Max flight control system that led to two horrific crashes in 2018 and 2019.

The airplane manufacturing giant’s arraignment in federal court in Fort Worth, Texas, marks the first time the company has been forced to publicly answer to a criminal charge connected to the disasters. Two years ago, Boeing reached a controversial deferred prosecution agreement with the government that granted the company legal immunity.

Mike Delaney, Boeing’s chief safety officer, entered the plea Thursday on behalf of the company, telling US District Judge Reed O’Connor that Boeing stands by its admissions of fault expressed in its agreement with the Justice Department, even while it’s contesting the pending felony charge. 

The not-guilty plea could put the company at risk of violating the earlier agreement, which forbade it from denying its role in hiding issues with the 737 Max flight control system from the Federal Aviation Administration.

The arraignment Thursday was a hard-fought victory for relatives of people killed in the 737 Max crashes, who’ve spent the past year fighting to unwind the deferred prosecution agreement and have their voices heard. Lawyers for the families argue that they were blindsided by the 2021 deal and weren’t consulted on its terms. 

O’Connor sided with the relatives in October, declaring them legal crime victims and stating that they should have been part of conversations with federal prosecutors about the deal. 

“Boeing didn’t kill just one family member — they killed three generations of my family,” John Quindos Karanja, whose wife, daughter and three grandchildren died in the 2019 Ethiopian Airlines crash, said in prepared remarks filed with the court. “The Boeing Company should be held accountable. The US government and the FAA should help make the skies safe again for us and for generations to come.”

Melissa and Jessica Mairesse blamed the Ethiopian Air crash that killed their mother, Ghislaine de Claremont, on “Boeing’s crimes” and said her death was “unbearable to us.” In a statement filed in court, they said, “We want Boeing to remember our mother and the other victims and to always place human life before money.”

The families of 10 crash victims were set to speak in person during the hearing. They’re expected to tell the court about the acute emotional and financial hardships they have suffered as a result of Boeing’s behavior.

The 2021 agreement resolved a probe of Boeing’s role in crashes that killed 346 people and required the company to admit to conduct that would support a charge of conspiracy to defraud the US. The government also hit Boeing with a criminal fine of $243.6 million and placed it under Justice Department supervision for a period of three years.

In a court filing Wednesday, the victims’ families asked O’Connor to appoint a monitor to oversee Boeing’s compliance with the agreement and to ensure that Justice Department compliance reports are openly shared with the public. They also want the judge to be able to revoke the agreement if the company commits any state or federal crimes. 


Copyright Bloomberg News

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