Boeing pleads not guilty to fraud charge in 737 MAX arraignment

By Sheila Dang and David Shepardson

FORT WORTH, Texas/WASHINGTON Jan 26 (Reuters) – Boeing
Co pleaded not guilty on Thursday to a 737 MAX fraud
conspiracy felony charge after families objected to a 2021
Justice Department agreement to resolve the investigation into
the plane’s flawed design.

Boeing’s chief safety officer, Mike Delaney, entered the
not-guilty plea on behalf of the planemaker at a three-hour
hearing. A not-guilty plea is standard in deferred prosecution
agreements.

U.S. District Judge Reed O’Connor last week ordered Boeing
to appear to be arraigned after he ruled that people killed in
the two Boeing 737 MAX crashes are legally considered “crime
victims.”

The crashes in Indonesia and Ethiopia killed 346 people.
They cost Boeing more than $20 billion, led to a 20-month
grounding of the best-selling plane and prompted lawmakers to
pass sweeping legislation reforming airplane certification.

O’Connor imposed a standard condition that Boeing commit no
new crimes but did rule on other conditions sought by the
victims including a request he name an independent monitor to
oversee Boeing’s compliance; and disclose publicly as much as
possible of the substance of Boeing’s corporate compliance
efforts adopted since 2021.

O’Connor asked the Justice Department to follow up with an
answer to his question about whether there were instances of the
government pushing back on something Boeing did that “wasn’t up
to snuff.”

The Justice Department in 2021 agreed to seek dismissal of
the charge after the three-year agreement if Boeing complies
with all terms. Boeing admitted in court documents that two of
its technical pilots deceived U.S. regulators about a key flight
control system linked to both fatal crashes.

Relatives of people who were killed in the crashes spoke on
Thursday at the arraignment.

Naoise Connolly Ryan, who lost her husband in the Ethiopia
crash, said she wanted justice for her children who had lost
their father: “The deal between Boeing and the Department of
Justice is not justice.”

The relatives said in a filing that Boeing had “committed
the deadliest corporate crime in U.S. history.”

Boeing and the Justice Department oppose reopening the $2.5
billion agreement, which included $500 million in victim
compensation, a $243.6 million fine and $1.7 billion in
compensation to airlines.

Boeing in 2021 said it was accepting responsibility for
compensating families of those killed in the crashes. Lawyers
for the victims said Boeing admitted under the agreement “that
the 737 MAX had an unsafe condition, and that it will not
attempt to blame anyone else” for the crash.
(Reporting by Sheila Dang and David Shepardson; Editing by
Jonathan Oatis and Bernadette Baum)