On June 21, the New York Times ran a story under the headline – Boeing Expected to Evade Criminal Charges for Violating Settlement.
The Times story left the impression that the Department would not be criminally charging Boeing for violating a 2021 agreement related to two deadly accidents that claimed the lives of 346 individuals.
Glenn Leon, head of the Justice Department’s Fraud Section, immediately shot off an email to Boeing MAX crash victims’ family members.
“The reporting was simply not correct,” Leon wrote. “The Department has not made a decision on how to proceed or whether to pursue prosecution of Boeing.”
A few hours later, the Times changed the story and the headline.
The new headline read – Boeing May Evade Criminal Charges for Violating Settlement.
“While we support the imposition of a federal monitor, it should be imposed in response to criminal charges, not as part of yet another soft-handed backroom deal with the U.S. government,” said Erin Applebaum, a law partner at Kreindler & Kreindler, which represents 34 families who lost loved ones on Boeing’s 2018 Ethiopian Airlines flight. “The Department of Justice’s unwillingness to enforce the law is barely a surprise at this point, and the 737 MAX families have lost all faith that the Department will ever truly hold Boeing to account for its crimes. It simply defies belief that the 737 MAX families would once again find out about a Boeing deferred prosecution agreement through the media rather than directly from the Department – yet another shameful example of the Department putting Boeing’s interests ahead of the victims’ rights.”
“The first iteration of the Times article reported that Boeing was not going to face criminal charges,” Applebaum told Corporate Crime Reporter in an interview on June 22. “And they were pretty certain about it. Of course, we were horrified, because for the second time now, the 737 MAX families were going to find out about a deferred agreement between the Department of Justice and Boeing through the media, rather than from the Department of Justice, like they are supposed to.”
“My first reaction was horror. And my second thought was – this couldn’t possibly be true.”
“But it’s the New York Times. And they have a fairly sterling reputation when it comes to the credibility of their reporting and so we were concerned.”
“Then throughout the day, the Times story changed – I believe it was three times. Glenn Leon, who heads the Fraud Section at the Department of Justice, emailed us saying the reporting was simply not correct. The New York Times put out a statement saying they were standing by their reporting. But they changed the headline from ‘Boeing will evade criminal charges’ to ‘Boeing may evade criminal charges.’”
“So I’m not really sure what to think at this point. I don’t think the Department has made the decision yet. I’m not sure who leaked this information to the New York Times. I do know that one of the reporters has been covering Boeing for quite a while. And one of them covers the Department of Justice. I’m just grateful right now that what we heard yesterday in the first headline is apparently not true.”
What is the status of the civil litigation in Chicago?
“Most of the civil cases have settled or they are on their way to resolving. However, there is a group that is still active. We have trials planned for November. This is going to be I believe the third attempt at trials. Every other time we have scheduled trials, the cases settled shortly before trial. We are going to try it again in November.”
“The civil cases actually interacted a bit with the deferred prosecution case over the past week. The judge in Chicago granted a motion to allow the protective order to be lifted in order to give the Justice Department some documents from the civil cases we believe are incriminating against Boeing that show they may have committed a crime besides just the conspiracy to commit fraud.”
Did the Justice Department get the documents?
“I know we have been discussing which ones to give them and gathering them. I don’t know one way or another if they have been transmitted. But time is of the essence. So if they haven’t been yet, they will be imminently. We want the Department to consider these documents prior to the decision, which is due July 7.”
Why wasn’t the protective order lifted earlier?
“We tried three times. It was denied three times already. The fact that Boeing was found in breach of the deferred prosecution agreement and the fact that the Department of Justice wrote a letter to the judge indicating that they were supportive of lifting the protective order made a difference with the judge. The judge cited the Department’s brief in making his ruling to lift the protective order.”
That doesn’t mean that these documents will ever see the light of day.
“No. They will be given to the Department of Justice. I very highly doubt that these documents will ever see the light of day unless they are inappropriately leaked.”
Wouldn’t one way to make them public is through a criminal trial?
“Correct.”
Is that the key reason why Boeing wants to avoid a trial – either in the civil case or a criminal case?
“I can’t speak for Boeing, but if I were Boeing’s lawyer, I certainly would not want incriminating documents to be made public. In fact, on Monday Boeing argued in court that if the Justice Department wants to see documents, they can subpoena them.”
Have you seen these documents?
“Yes. I’m on the plaintiffs executive committee for the civil cases. Many of them are deposition transcripts or documents marked highly confidential or highly sensitive. They are very privileged. I can’t even talk about what is in them. But we will see if the Department considers them as part of its evaluation.”
Paul Cassell is representing the families in the Crime Victims’ Rights Act case. What’s your involvement in that case?
“I’m on a team of attorneys who worked on the deferred prosecution agreement motion. I’ve been working with Professor Cassell since we began challenging the deferred prosecution agreement.”
What is the status of that case?
“On July 7, the Department of Justice has a deadline to tell Judge O’Connor what they want to do about the pending criminal charge against Boeing. They have a couple of options. They can extend the current deferred prosecution agreement. They can impose a new deferred prosecution agreement or a non prosecution agreement. They can move to dismiss the criminal charge. Or they can move forward with a criminal prosecution on the subject of the original agreement, which was a conspiracy to defraud the FAA.”
“They are also permitted to move forward on other criminal acts that were committed during the time of the conspiracy. That’s why we want the Justice Department to see these incriminating documents. We want to make sure that the Department moves forward with the prosecution. If they were to decide to do anything else, we would consider that to be a loss to the families.”
There were two meetings with the Department. You were in the room for both of them?
“Yes. One at the end of April and one at the end of May. I was there for both of them. They were long all day meetings. They are exhausting. The Department of Justice didn’t give us a lot of information when it comes to what they are thinking. They want to hear from the families about the next steps they should take. For a lot of the families, it feels like a box ticking exercise because they are required to do it under the Crime Victims’ Rights Act. It’s not something they are doing out of the kindness of their hearts.”
“We get no information from the Department during these meetings. It’s family members expressing very passionately why they feel Boeing should be held responsible. I would call it more of a listening session than a conferral. By the end of the day, everybody is fatigued, everybody is tired, it’s emotionally draining. But it is something families feel like they have to do and we are there to support them in that effort.”
The Department did promise at those meetings that the families would be the first to know when they made a decision as to how to move forward?
“Yes. And as part of the Crime Victims’ Rights Act, they are obligated to notify the families as to any major case decision. And I do think they feel badly about what happened the first time around. At that time, the Department did not consider the families to be crime victims so the families were not notified about the deferred prosecution agreement. And that was the genesis of the entire dispute. We were saying – the family members are victims and they should have been notified and consulted.”
“Even if the Department moves to dismiss the charge, Judge O’Connor still has the power to say – no, I’m not accepting the dismissal.”
“We’re expecting the Department will write an email notifying the families as to their decision.”
We are in an election year and the families are demanding a criminal prosecution. You would think there is a lot of political pressure on the Department to do the right thing.
“It would not matter in this case if it were a Democratic or Republican administration. As Americans, nobody wants to see Boeing fail or go bankrupt. They are a great American company. They hold up a lot of the economy. They make our military airplanes. There is a duopoly globally on commercial jets. Half the commercial jets in the world are made by Boeing. Nobody wants Boeing to fail.”
“And Boeing is a government contractor. If they are convicted of a felony, they lose their government contracts. There are ways to exempt Boeing from debarment. But it’s a big black mark on their record if they are convicted of a felony.”
There are debarment waivers. They could be criminally prosecuted without fear of going bankrupt.
“Professor Cassell last week proposed a $25 billion penalty on Boeing. That would be a big hit to their bottom line. For that reason, we indicated that we would be okay for much of that fine being earmarked for safety improvements, rather than just being paid to the government. But nobody wants to see Boeing go bankrupt. And for that reason, the Department has given Boeing soft handed treatment.”
[For the complete q/a format Interview with Erin Applebaum, see 38 Corporate Crime Reporter 27(13), July 1, 2024 print edition only.]