Families of the victims of two fatal 737 Max crashes are asking the Justice Department to seek to fine Boeing Co. nearly $25 billion, saying the company committed “the deadliest corporate crime in U.S. history.”
That amount is “legally justified and clearly appropriate,” Paul Cassell, an attorney who represents 15 victims’ families, said in a letter sent to the DOJ on Wednesday. Cassell suggested that $14 billion to $22 billion of the total amount could be suspended if Boeing devotes those funds to an independent corporate monitor and improvements to its safety programs. Cassell also said DOJ should pursue criminal prosecution of the company and that the planemaker’s board of directors should be ordered to meet with the families.
The letter comes a day after Boeing Chief Executive Officer Dave Calhoun faced a public grilling from US senators, who called on the company to fix its “broken safety culture.” Before the hearing got underway, Calhoun stood and faced the bereaved relatives assembled behind him to apologize, saying everyone at Boeing was “‘deeply sorry for your losses.”
Boeing and the DOJ didn’t immediately respond to a request for comment during a US holiday.
The US manufacturer has been under heightened scrutiny from regulators and lawmakers after a fuselage panel on a 737 Max blew off mid-flight in January. The near-catastrophe sparked a criminal investigation and prompted the DOJ to consider throwing out a deferred-prosecution agreement that was put in place after the 737 Max crashes, which killed 346 people in 2018 and 2019. That deal was set to expire just days after the accident.
The DOJ determined last month that the company had breached the 2021 agreement — a conclusion that Boeing refutes — and now has until July 7 to decide what punishment Boeing should face, if any. Possibilities include criminal charges or drawing up a new deal with additional conditions.
“Boeing needs capital to survive to begin with, working capital to support its employees,” Sheila Kahyaoglu, an aviation analyst at Jefferies LLC, said in an interview with Bloomberg Television. “They support a whole supply chain, so to fine them $25 billion does not really make sense.”
Kahyaoglu said a fine could be closer to about $1 billion, given the Alaska Airlines incident that prompted the current crisis was smaller and not a fatal accident.
In the hearing chaired by Senator Richard Blumenthal this week, the Connecticut Democrat said “the evidence is near-overwhelming to justify” prosecution by the DOJ.
Boeing’s stock price and finances have been hammered in the wake of the Jan. 5 Alaska Air accident. The shares are down by about a third this year, and the company has warned that it stands to burn through about $8 billion in cash in the first half. Boeing’s output of the all-important 737 aircraft has been capped by regulators monitoring the company’s progress toward improved production.
Calhoun has announced that he’ll step down by the end of the year, and the search is underway for a successor. He took over in early 2020 from Dennis Muilenburg and has accepted Boeing’s responsibility for the two crashes and the January accident. At the same time, he’s defended Boeing’s safety record, saying at the hearing this week that the company has made major changes to address previous shortcomings.
In the letter, the families also called on the DOJ to prosecute Boeing executives who were at the company at the time of the two crashes. Prosecutors previously indicated to the families that the five-year deadline for bringing criminal charges would likely doom any prosecution effort targeting individuals.
