How and who should DoJ punish for the Boeing crashes?
Recent reports have speculated about the likelihood and severity of criminal penalties to be imposed on the Boeing Corporation and/or its officers and/or key employees. First, as a preliminary matter, Boeing’s recent failures appear[1] to be deplorable and sanctions to be justified, but the TOUGH QUESTION is “who or what (the corporation) be punished and for what?“
Criminal prosecutions primarily are taken to deter recidivism; the conviction, financial penalties and other possible impositions should relate to the illegal conduct and to defendants who were directly responsible for the violation(s).
The most frequently mentioned penalty is a criminal conviction of the company and a major corporate fine. These impositions seem to be justified. WHO WILL BE IMPACTED BY SUCH A SENTENCE?
Boeing’s once strong balance sheet has been weakened and yes, that reduction in its financial measures are attributable to the decisions, if not actions, of its Board and its Senior Executives (general term intentionally used; see fn.1). However, while mandating that capital be paid to the federal treasury may send a loud message, the most directly affected will be the employees and the innocent shareholders.
The primary wound would be the loss of dollars to be spent on the improved safety systems, to reinstall a SAFETY CULTURE, to develop new aircraft required to compete in a global market with new OEMs (especially governmental help, even older aerospace manufacturers receive such support), to attract needed employees (union demands, scarce STEM talent, replacement of departing executives, etc.).
The resulting financial fragility will detract from the value of existing shares. Culpability may be appropriately assigned to decisions of controlling organizations, but the average investor likely neither encouraged nor knew about the inexplicable PRODUCTIVITY>SAFETY philosophy.
The most destructive prosecutorial decision would be finding that Boeing violated the agreement “by failing to design, implement, and enforce a compliance and ethics program to prevent and detect violations of the U.S. fraud laws throughout its operations.” While the facts appear to prove that accusation, a FELONY CONVICTION would lead, under Federal Acquisition Regulation to a PROHIBITION against Boeing being awarded a federal contracts since it would have been convicted of a felony criminal violation within the past 24 months.
BOEING’S 2023 REVENUES FROM US GOVERNMENT CONTRACTS CONSTITUTED 49%[i] OF ITS EARNINGS. Such an imposition would necessitate the furloughing of all the employees working on government contracts. NB no investigator has pointed to this safety disaster in the government contracts.
So on whom should the Justice Department punish. Tracing the thousands of inadequate inspections, failure to inform the FAA certification organization about design issues, ignoring whistleblower complaints, inability to implement and design procedures that assured SAFETY in design/ purchasing/ implementation steps and a long list of other culpable activities would be an impossible task. Fortunately, a Federal Aviation Regulation (14 CFR § 5.25(a)(b)) has assigned an individual to be responsible to set and assure that safety is met, by stating:
a) Designation of the accountable executive. The CERTIFICATE HOLDER MUST IDENTIFY AN ACCOUNTABLE EXECUTIVE WHO, IRRESPECTIVE OF OTHER FUNCTIONS, SATISFIES THE FOLLOWING:
(1) Is the final authority over operations authorized to be conducted under the certificate holder’s certificate(s).
(2) Controls the financial resources required for the operations to be conducted under the certificate holder’s certificate(s).
(3) Controls the human resources required for the operations authorized to be conducted under the certificate holder’s certificate(s).
(4 RETAINS ULTIMATE RESPONSIBILITY FOR THE SAFETY PERFORMANCE OF THE OPERATIONS CONDUCTED UNDER THE CERTIFICATE HOLDER’S CERTIFICATE.)
(b) Responsibilities of the accountable executive. The accountable executive must accomplish the following:
(1) Ensure that the SMS is PROPERLY IMPLEMENTED AND PERFORMING IN ALL AREAS of the certificate holder’s organization.
(2) Develop and sign the safety policy of the certificate holder.
(3) Communicate the safety policy throughout the certificate holder’s organization.
(4) Regularly review the certificate holder’s safety policy to ensure it remains relevant and appropriate to the certificate holder.
(5) REGULARLY REVIEW THE SAFETY PERFORMANCE OF THE CERTIFICATE HOLDER’S ORGANIZATION AND DIRECT ACTIONS NECESSARY TO ADDRESS SUBSTANDARD SAFETY PERFORMANCE IN ACCORDANCE WITH § 5.75.
(
Holding the Accountable Executive, at the time of the Boeing failures, ACCOUNTABLE would warn
others who hold that appointment that it is not just an honorific title, but one who has the personality, skills and authority to succeed in the following behaviors:
- “the individual most responsible for EVERYONE of the EP’s list, MUST BE
- A visible point person who assures that SAFETY > PRODUCTION, that the QA/QC PARAMETERS are well designed and always faithfully executed (this should never be a target for LEAN manufacturing).
- A FAMILIAR FACE on the production line, who stops to ask questions and even probes when she/he perceives something which could be improved.
- A VOICE that speaks in small group meetings and reinforces the VALUE of submitting POSSIBLE RISKS to the SMS process and especially ideas that may enhance safety.
- A PERSON who intuitively understands WHEN and HOW BEST TO REWARD POSITIVE SMS behavior. Recognizes the individuals who. Even when action is not immediately adopted, the AE should make all know that the initiative is consonant with SMS.
- An EXPERIENCED professional (ideally an ENGINEER) who is familiar with the Boeing manufacturing processes, who has established trust with the Boeing ODA Unit and with the FAA office surveilling the process.
- One who knows at what the PRESSURE POINTS on the hangar floor are, in the QA/QC design office and among the design/test engineers. Time spent listening to these is a key to assuring that SAFETY CULTURE exists not just at inception points but 24/7/365.
- An INDIVIDUAL with the stature and expertise to come to the Board to report on the Good and BAD.
Proof that true Safety Culture exists will be marked when a Board member asks that the Chief Engineer and the AE to regularly attend and brief this corporate power point. This area is what is needed to return Boeing to its past allegiance to safety. Wall Street has shown the consequences of not holding SAFETY as the preeminent principle.”
One report hinted that the DOJ may name third-party expert to monitor Boeing’s compliance. Selection of one
who is able to move the company’s dismal safety culture to where it must be,
who can assure that its SMS policies, procedures and personnel become more effective
and
perhaps most importantly who identifies and appoints the ACCOUNTABLE EXECUTIVE who takes that responsibility!!!
The grief and anger felt by the families of these Boeing failures may want retribution- to inflict on Boeing the same pain that their losses inflicted on mothers, fathers, wives, husbands and all who loved these victims. Exodus’s “An eye for an eye” is not considered by most scholars to be THE standard. Here such striking back would not make those most responsible pay.
THE BEST LEGACY FROM THIS TRAGEDY IS TO ESTABLISH PRINCIPLES THAT WILL PREVENT REOCURRENCE!!!
US prosecutors recommend criminal charges against Boeing for violating settlement: report
The DOJ said last month that Boeing breached its obligations from a 2021 agreement that shielded the company from criminal prosecution from two fatal 737 MAX crashes
U.S. prosecutors have reportedly recommended that the Department of Justice (DOJ) bring criminal charges against Boeing for violating a settlement related to two fatal crashes.
The recommendation, first reported by Reuters, comes after the DOJ said last month that Boeing breached its obligations from a 2021 agreement that shielded the embattled corporation from criminal prosecution from two fatal 737 MAX crashes in 2018 and 2019 that killed 346 people.
The DOJ said Boeing broke the agreement by “FAILING TO DESIGN, IMPLEMENT AND ENFORCE A COMPLIANCE AND ETHICS PROGRAM TO PREVENT AND DETECT VIOLATIONS of the U.S. fraud laws throughout its operations.”
Under the 2021 agreement, the DOJ said it would not prosecute Boeing so long as it overhauled its compliance practices and submitted regular reports. The company also agreed TO PAY $2.5 BILLION TO SETTLE THE INVESTIGATION.
Boeing declined to comment when reached by FOX Business. The DOJ did not respond to a request for comment before publication.
The company previously told FOX Business that it had received notice from the DOJ and said they “believe that we have honored the terms.”
The DOJ has until July 7 to decide whether it will bring criminal charges against Boeing.
The report comes as the embattled company faces intense scrutiny from U.S. prosecutors, regulators, and lawmakers after a panel blew off one of its jets operated by Alaska Airlines in early January.
FOX Business’ Sarah Rumpf-Whitten and Reuters contributed to this report.
Excerpt from
US prosecutors advise DOJ to bring criminal charges against Boeing: reports
According to Reuters, one resolution that would not involve criminal charges includes a fine and a third-party being used to monitor Boeing’s compliance.
A criminal conviction against Boeing could complicate existing deals its defense segment has with the US government.
On June 19, 2024, families of some of the victims that perished in the 737 MAX crashes urged the DOJ to fine the planemaker $24 billion and move ahead with criminal prosecution.
Excerpt from
Boeing should face criminal charges, prosecutors tell DOJ: Report
“There are issues around the safety culture in Boeing. Their priorities have been focused on production and not on safety and quality,” FAA Administrator Michael Whittaker said in March. “And so, what we are really focused on now is shifting that focus from production to safety and quality.”
The FAA said its six-week audit of Boeing found “multiple instances when the companies allegedly failed to comply with manufacturing quality control requirements.”
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[1] Having been involved in similar highly publicized cases, it is inappropriate to state that Boeing is criminal without having seen the actual records. The reporting, if congruent with the facts, should support conviction/
[i] including foreign military sales (FMS) facilitated by the US government
