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Peter Reilly on Boeing Plea Agreement as  Deferred Prosecution 2.0

Boeing victim families attended a near two-hour meeting on Sunday June 30, 2024 with Glenn Leon, the head of the Department of Justice Criminal Division’s Fraud Section and other federal prosecutors regarding the next steps the Department intends to take on the Boeing case following two crashes and other safety concerns at the aircraft manufacturer. 

Peter Reilly

The Department presented what the Boeing victim families termed a “sweetheart deal.”

“The Justice Department is preparing to offer Boeing another sweetheart plea deal,” said Paul Cassell, the attorney representing the families. “The deal will not acknowledge, in any way, that Boeing’s crime killed 346 people. It also appears to rest on the idea that Boeing did not harm any victim. The families will strenuously object to this plea deal. Judge Reed O’Connor will have to decide whether this no accountability deal is in the public interest. Indeed, he will have to decide whether to approve a federal Rule 11(c)(1)(c) deal (known as a C plea deal) that ties his hands at sentencing and prevents him from imposing any additional punishment or remedial measures. The memory of 346 innocents killed by Boeing demands more justice than this.”

(Since this article was published in the print edition dated July 8, the Department has announced its plea deal with Boeing and the victims’ families have denounced it.  

“A judge can reject a plea deal that is not in the public interest, and this deceptive and unfair deal is clearly not in the public interest,” Cassell said. “We plan to ask Judge O’Connor to use his recognized authority to reject this inappropriate plea and simply set the matter for a public trial so that all the facts surrounding the case will be aired in a fair and open forum before a jury.”

Peter Reilly, a professor at the Texas A&M College of Law, has been working with Cassell for the past couple of years representing the families. We interviewed Reilly on July 1, the day after the families met with Leon and other Justice Department prosecutors.

The Department on Sunday proposed a C deal – where the judge has to give it either a thumbs up or a thumbs down. Can’t make any changes. Hands tied on sentencing.

The Department said they are proposing a monitor in this case. The families called for a monitor. Did the Department’s proposal meet your standard?

“First of all, on the original deferred prosecution agreement, it was appalling that there was no monitor,” Reilly told Corporate Crime Reporter in an interview last week. “The Department told us yesterday – yes, there will be a monitor – monitors usually go on for three years so that is what we are going to do.”

  “Some people might say – why not four or five years? We are deciding now whether that is an issue worth fighting for.” 

“The Department made it very clear that they were going to use their usual internal guidance document to run this monitor. That guidance very clearly states that the Department checks with the company and lets the company give three possible names to be the monitor. And the Department selects one of those names. The families think this is horrific. Boeing is the wrongdoer and they get to name their monitor?”

Has the Justice Department ever picked a monitor without first consulting with the company?

“I haven’t looked closely at that. But this is an atypical case. In this case, you have an adversarial situation where you have the company against the families and the public. That’s usually not the case with these plea agreements.” 

“In this instance, the families feel that to be fair, if Boeing gets to put up three names, the families should be allowed to put up three names.” 

“The other question is – why can’t there be judicial oversight of this monitor?”

Or since it’s a criminal plea, why can’t there be a corporate probation officer?

“Good question. We are looking closely at how the monitor is going to come about. If the courts are normally involved with this, why should this be an exception? But the other thing about this plea deal, it’s going to be a C plea deal. They present the deal to the judge and the judge only gets to say – thumbs up or thumbs down.”

“If they have it in the agreement that the monitor is going to be controlled by the Department and no the families do not get to recommend three names to be the monitor, then it’s up to the judge.” 

“The Department needs to be a bit careful here. Maybe the agreement cannot be changed at all. If I were the Department, and I were to present this agreement to the judge, I would think through this carefully – how is the judge going to react to the way we have structured this monitor?” 

“Last night, the Department said that the monitor will make public an executive summary of a report once a year. Not the full report – just an executive summary.”  

“Is that typical? I don’t know. They didn’t say – this is what we typically do. They just said – this is what we decided for this case. How much transparency is there if the only thing made public is an executive summary? And should it come out more than once a year? And shouldn’t it be more than an executive summary? Those are some of the questions we are going to have to think through as a team. And does the court find that acceptable?”

At the meeting, who spoke on behalf of the government?

“Glenn Leon, who heads the Fraud Section at the Department of Justice. At the beginning, Leon introduced Marshall Miller who is with the Criminal Division. He only spoke for a few minutes.”

Did the Department show you a copy of the agreement?

“Not yet. They told us the outline of the agreement. And that’s why we are holding back a bit. We haven’t been able to dive into the weeds about the exact terms of this agreement. Boeing has one week to accept it. I’m sure they will accept it. And once they accept it, I’m assuming they will make the agreement available to the families.”

“The way the terms were outlined to us, we strongly oppose it. But it’s hard for us to come down with a firm position, we’ll have to first read the agreement.” 

When is the hearing before Judge O’Connor in Ft. Worth?

“That’s up in the air. I’ve looked at scores of these deferred prosecution agreements and they are generally bullet proof. In the General Motors case, 174 people died from faulty ignition switches. And they gave a deferred prosecution agreement and that was the end of the story.”

“But in the Boeing case, there was Paul Cassell. And he said – wait a minute, we have a Crime Victims Rights Act. We can try to reopen this agreement based on that. And we have come a long way based on the fact that the Department didn’t properly conform to the law.”

“I just want to underscore how unusual it is to get to this place where we are. The questions you are asking now – I don’t know of other situations where it has come to this point. We are in uncharted territory.”

“There was a Foreign Corrupt Practices Act case from March 2023. Ericsson, a  telecommunications company headquartered in Stockholm, Sweden, pled guilty and paid a criminal penalty of more than $206 million after breaching a 2019 deferred prosecution agreement.”

“The Department said that Ericsson breached the agreement by violating the agreement’s cooperation and disclosure provisions.” 

“There are other cases where there have been breaches of the agreement and the Department comes back and tells the company – okay, we will give you more time to fulfill your obligations or we’ll give you a new deferred prosecution agreement.”

The families asked for an independent monitor and a $24 billion fine. They also asked for prosecution of the executives and of Boeing itself on more serious charges – including manslaughter. What did Leon say about that?

“Glenn Leon said that they don’t think they can prove manslaughter against Boeing in court.”

In the civil cases against Boeing in Chicago, the Justice Department asked that the protective order be lifted so that they could see these incriminating documents against Boeing. Do you know whether the Department actually received those documents?

“I do know that the court did order that civil case information could be given over to the Department. There were a lot of people who wanted that evidence to go to the Department. I’m sure the Department got the information. When the court acted in Chicago two weeks ago, I’m sure it got before the Department.”

Did Glenn Leon talk about those documents at all?

“No. He keeps saying – we want to see all the evidence. But he never talks about what they reviewed, their assessment of it. He never talks about that. He says – we are going to look at everything carefully and then take a position.” 

What did he say about bringing criminal charges against higher ranking executives?

“He says – we have looked at this thoughtfully and carefully. He says it’s got to be a federal law and we are not convinced we can make those charges stick. He says – we are going to bring charges that we think we can adequately prove in court.”

“But our position is – the deferred prosecution agreement happened in January 2021. And they only had so much information at that time. There has been so much more information that has come out since then.” 

“The House of Representatives did an investigation. The Senate did an investigation. There were independent investigations coming from both countries where the planes crashed. Reporters have been doing investigations. Whistleblowers have been coming out. The Federal Aviation Administration has been investigating, the National Transportation Safety Board did an investigation.” 

“With all of this information that has come to light in the last three years, surely there must be enough to charge higher ups. And then there is the information from the civil cases in Chicago.”

“But the Department’s position is – we look at everything that you give to us and we make the determination on whether to charge and we don’t think we can successfully prosecute higher ups in court.”

Will the families challenge the plea deal in court?

“Yes absolutely. The families will challenge it in court. The families are strongly opposed to the agreement. They look at this like DPA 2.0. Their position is – they want a prosecution both of the company and of higher up individuals within the company. Yes, they will strongly oppose this plea deal.”

“I imagine there will be a hearing and that family members will be able to plea their case to the judge. When Boeing faced arraignment a couple of years ago before the judge, the judge let each family member go before the court and tell the judge how the case impacted them. I would assume that when this plea deal goes before the judge, a similar process will occur.” 

How many family members spoke at the meeting with the Justice Department?

“A number of them. We indicated to Glenn Leon – let us know about the deal. We can hop on quickly. So it was hastily put together. There were probably ten or fifteen family members who spoke at the meeting yesterday.” 

“The CVRA says that family members have a right to be conferred with. Case law is being built out now as to what it means to confer with families. Yesterday, the Department of Justice said – we want to confer with you now. They used the term confer. But in fact, what they did was say – we have a deal and this is what it is.”

“It was over a two hour meeting. We gave them all sorts of ideas of how we thought the plea deal could be improved. And yet at the very end of the meeting, Glenn Leon said – we are going to call Boeing now and tell them – this is the deal.” 

“Family members rightfully said – wait a minute. We have been talking for two hours. The deal is settled? Why even have this conversation? This was not a conferral. This was just you informing us about a deal you already have put together. Why are we having this conversation?”

What were some of the family suggestions?

“Change the deal. Bring other charges.  Other charges are warranted here. You have a plea deal for one fraud charge against the company. There should be additional charges against both Boeing and higher up executives. That was one thing.”

“The families really took issue with the fact that Boeing chooses three names and the Justice Department picks one of them. People said – how on earth can that be? These are the wrongdoers. They get to select who their monitor is? That’s going to end up being a monitor who is a do nothing monitor. If you have a monitor who is handpicked by Boeing, a monitor that Boeing knows will go lightly on them, the families rightfully became alarmed.”

“We haven’t seen the actual deal. But when Glenn Leon indicated there will be a monitor and we will do it the way we have always done it, the families said – the way you always do it is to have the accused pick three people.” 

“So those were some of the suggestions over the course of the two hour phone call. And at the end of it, Glenn Leon says – this is the deal and we just wanted to inform you of it. And we’re about to call Boeing.”

Was there discussion about the fine?

“We wrote a memo arguing for a $24 billion fine. And they come up with a plea deal with a $244 million fine. There’s obviously a huge disparity.” 

The families proposed a monitor – an MIT lecturer – Javier de Luis.

“When Leon says – we are going to conform to our internal guidance, that suggests that they are not going to meet our demands for an independent monitor.” 

“The interesting thing about a C plea deal, it’s thumbs up or thumbs down. If we go in there and say – we have read over the agreement and we don’t like the way they are doing the agreement, the judge might say – this is a huge, complicated problem and my hands are tied. I have to give a thumbs up or a thumbs down. Sure, as a judge – I see your point and if I were writing an agreement, I would write it differently as to the monitor. But, all in all, it’s not bad, I’m going to give it a thumbs up.”

“To us, that’s the problem with a C plea deal. We think the families should be able to have a seat at the table to figure this out. The CVRA gives rights to the families. The CVRA means nothing if the Department says – this is how the monitor is going to be, end of story.”

“The CVRA only makes sense if they say – this is a plea agreement we have put together and this is how we are thinking of doing the monitor. And then the families come back and say – no that’s outrageous. If you let the companies pick three people, we should be able to pick three people. There is no give and take whatsoever.” 

“The way this process is rolling along, with the C plea agreement, the Justice Department gets to the prosecutor, the judge and the jury.” 

“I’ve said that with deferred prosecution agreements. And now I can say that for C plea agreements. The judge has to give a thumbs up or a thumbs down. Most judges figure that the Department knows what it’s doing and sure, I’m going to sign off on this.”

“This plea agreement has many of the failings of a deferred prosecution agreement. The Department is in DPA mode. This is deferred prosecution agreement 2.0. The fact they are presenting it as a C plea deal speaks to how they have run everything with this case – to keep the families out of conferring with how this is going to be resolved.” 

“Every step of the way it has been – this is going to be done the way the Department wants it to be done.”

“It’s clear he is not going to tweak the deal. We were in the meeting for two hours and then he said – okay I’m going to call Boeing about the deal we drafted.” 

“Did he listen to us as he crafted the deal? I’d have to look at the deal itself to see if he listened to anything we said. Maybe he did listen to some of our ideas.  But if the deal is like the outline of what he said yesterday, that suggests that this is just DPA 2.0.”

[For the complete q/a format Interview with Peter Reilly, 38 Corporate Crime Reporter 28, July 8, 2024, print edition only.]

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