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Boeing pleads not guilty to misleading feds about 737 Max safety

Relatives of victims aboard Lion Air Flight 610 and Ethiopian Airlines Flight 302 claim federal prosecutors failed to inform them of a criminal investigation and settlement with the airplane manufacturer.

FORT WORTH, Texas (CN) — Boeing pleaded not guilty to a federal conspiracy charge Thursday regarding flight control software for the 737 Max that resulted in two crashes that killed 346 people, throwing in doubt a $2.5 billion settlement it reached with the Trump administration in 2021.

Chief safety officer Mike Delaney entered the plea on behalf of the Chicago-based aerospace manufacturer in Fort Worth, Texas, federal court. The plea comes one week after U.S. District Judge Reed O’Connor ordered the public arraignment after concluding the victims of Lion Air Flight 610 and Ethiopian Airlines Flight 302 are “crime victims” under federal law.

The 737 Max was grounded on March 13, 2019, after the crashes and returned to service on Nov. 18, 2020, after significant changes were made to the Maneuvering Characteristics Augmentation System. The software was designed to pushed the nose of the airplane down to prevent stall and was allegedly introduced on the 737 Max to account for larger, fuel efficient LEAP1-B engines that require a higher mounting on the wing that changed the aircraft’s center of gravity.

The charge of conspiracy to defraud the U.S. alleges Boeing deceived the Federal Aviation Administration about the flight control system while the 737 Max was being certified.

Under the deferred prosecution agreement with the Justice Department under former President Donald Trump, Boeing agreed to pay a criminal penalty of $243.6 million plus $1.77 billion in compensation for airline customers and $500 million for a crash victim fund.

The families of the crash victims claim they were not consulted regarding the federal investigation or the settlement and are asking O’Connor to appoint an independent monitor to enforce Boeing’s compliance with the settlement. The families also want the judge to order public disclosure of Boeing’s compliance efforts and to impose a condition that Boeing commit no new crimes.

Prosecutors and U.S. Attorney General Merrick Garland have since apologized to the families for not informing them of the settlement before it was made public.

The families claim in a statement filed with the court Wednesday that Boeing has “skated through this process without the standard procedures being followed” and blame both prosecutors and Boeing.

“The Department [of Justice] and Boeing have contrived through the covertly crafted DPA to essentially sweep away any real accountability,” the 46-page filing states. “Boeing is an admitted corporate felon whose crime killed hundreds of innocent passengers and crew in two deadly crashes. A third would be horrific.”

The only person to be charged in the fallout of the 737 Max crashes was former Boeing chief test pilot Mark Forkner, of Keller, Texas. A Fort Worth federal jury acquitted him of four counts of wire fraud last March after prosecutors failed to convince jurors that Forkner lied to the FAA and airlines during the evaluation period of the Max variant.

Shares of Boeing traded unchanged at $212.68 on Thursday afternoon, one day after reporting a fourth quarter loss of $663 million that it blamed on rising production costs and lingering issues with supply chains. The company’s earnings call Wednesday did not mention Thursday’s arraignment in Texas.

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