Jan 26, 2023
Boeing Pleads Not Guilty in Fraud Case Over 737 Max Crashes
(Bloomberg) -- Naoise Connolly Ryan told a Texas judge she’s refused any of the $500 million Boeing Co. was required to set aside to compensate families of 737 Max crash victims under a deferred prosecution agreement with the US government.
“The secret sweetheart deal is not justice,” Ryan, who’s husband Mick was killed in an Ethiopian Airlines crash in 2019, said Thursday at a federal court arraignment for the company. “I’ve refused to accept the DPA blood money for this reason. I want justice for Mick and the 346 people killed by Boeing.”
Ryan was among a handful of relatives making tearful appeals for the judge in Fort Worth, Texas, to hold the aircraft maker criminally liable. Earlier in the hearing, Boeing pleaded not guilty to deceiving US regulators about changes made to its 737 Max flight control system that led to two horrific crashes.
It was the first time the company has been forced to publicly answer to a criminal charge connected to the disasters in 2018 and 2019. Two years ago, Boeing reached a controversial deal with the government, which agreed not to bring a conspiracy charge if the company met certain conditions.
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 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.
The not-guilty plea could put the company at risk of violating the DOJ agreement, which forbade it from denying its role in hiding issues with the 737 Max flight control system from the Federal Aviation Administration. The system was faulted in the crashes of a Lion Air plane in October 2018 and an Ethiopian Air flight less than five months later.
Paul Cassell, an attorney representing the families challenging the deal, said he planned to file a motion with the judge arguing that Boeing had violated the terms of its agreement.
The arraignment was a hard-fought victory for the families, 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.
As part of their effort to unwind the deal, the families asked O’Connor to appoint a monitor to oversee Boeing’s compliance with its deferred-prosecution agreement, a request the Justice Department and attorneys for Boeing said was unnecessary and would be an unprecedented move by the court.
While the judge didn’t immediately rule on the families’ request, he questioned the DOJ’s assertion that he should deny it simply because there have been no similar arrangements in other cases. “This case is unprecedented,” O’Connor said.
While the focus of Thursday’s hearing was on whether a monitor should be appointed, Cassell said his clients also are fighting “to get Boeing and its then-leadership criminally prosecuted.” The first step will be to have the judge rescind the immunity provision of the deal with the DOJ.
During the three-hour hearing, relatives of 10 Ethiopian Air victims made emotional appeals to the judge.
Ike Riffel, who lost both of his sons, called Boeing’s non-prosecution deal “a slap in the face” to the surviving families. “We were denied our rights by this back-room deal,” he said. “Shame on you, DOJ. You did nothing to improve aircraft safety.”
One of his sons, Melvin Riffel, left behind his wife Brittney, who was seven months pregnant when he was killed. Brittney attended the arraignment with her now three-year-old daughter, Emma. “I tell people I’ll be fine, but I’m honestly not sure if I will be,” she told the judge, at times wiping away tears as she described the struggle of becoming a parent on her own.
Paul Njoroge lost his wife and three kids, the youngest of which was nine months old. “I’ll never get to know what my children would have become,” he said. As he looked over at the table of Boeing representatives and a Justice Department attorney, Njoroge said, “Have you ever paused to think of that? Did you imagine that when you were coming up with this deal?”
Read More: Boeing Faces Families Grieving From 737 Max Crashes in Court
“Boeing didn’t kill just one family member — they killed three generations of my family,” John Quindos Karanja, whose wife, daughter and three grandchildren, 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 death of 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.”
Appearing in court along with Delaney were Boeing’s chief legal officer, Brett Gerry, and chief compliance officer, Uma Amuluru. The company’s lawyers said the two executives didn’t have to attend, but wanted to hear what the families had to say.
“It was a very emotional day,” Delaney said after the hearing.
In a separate statement, the company said it was “deeply sorry to all who lost loved ones” and expressed respect for those who spoke at the hearing. “We have made broad and deep changes across our company, and made changes to the design of the 737 MAX to ensure that accidents like these never happen again. We also are committed to continuing to comply scrupulously with all of our obligations under the agreement we entered into with the Justice Department two years ago.”
(Corrects characterization of deferred prosecution agreement in fourth paragraph.)
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