https://www.bloomberg.com/news/arti...robe-rare-in-u-s-for-a-planemaker-after-crash
business
Will Boeing Face U.S. Criminal Charges for 737 Max Crashes?
By
Bob Van Voris
,
Margaret Cronin Fisk
, and
Tom Schoenberg
March 20, 2019, 12:00 PM GMT+8
Boeing CEO Sees 'Endgame' for Return of the 737 Max
Boeing 737 Max Timeline
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In this article
BA
BOEING CO/THE
368.16
USD
-6.79-1.81%
7203
TOYOTA MOTOR
7,159.00
JPY
-87.00-1.20%
GM
GENERAL MOTORS C
34.68
USD
-1.44-3.97%
1183L
ROPES & GRAY LLP
Private Company
There’s little precedent for planemakers like Boeing Co. facing U.S. criminal charges over deadly crashes, though there may be risks of prosecution if the company lied to regulators about the safety of its 737 Max jets.
Federal authorities began a criminal probe of the certification process for the new 737 Max planes, after the first of two catastrophic crashes since October. Prosecutions are unusual following U.S. air disasters, where investigators tend to focus on determining the cause of a crash so it can be fixed.
“We want to encourage people to come forward and admit mistakes, free from fear of reprisal or jail,” said Kenneth Quinn, a former chief counsel of the Federal Aviation Administration who now represents airlines and aerospace companies. “The last thing the industry and FAA need is the specter of a criminal investigation hovering over an accident inquiry.”
Local residents at the crash site of Ethiopian Airlines Flight 302 on March 10.
Photographer: Jemal Countess/Getty Images
Still, authorities began a criminal probe following the crash of a Lion Air 737 Max 8 on Oct. 29 shortly after takeoff from Jakarta, according to a person who wasn’t authorized to speak about the investigation and asked not to be named. On March 10, an Ethiopian Airlines 737 Max 8 crashed near Addis Ababa. In both cases, all the passengers and crew were killed.
U.S. investigators are probably looking for any false statements or material omissions by Boeing officials, such as misrepresenting to pilots how the aircraft operated and whether there were internal documents backing that up, according to former federal prosecutors.
The government could bring fraud charges if it determines the company lied to authorities or tried to cover up concerns about the aircraft’s systems, the former prosecutors said.
“The key piece for criminal investigators will be looking for any evidence of knowledge of a defect, and how that was addressed,” said Ryan Rohlfsen, a former Justice Department prosecutor now at Ropes & Gray LLP in Chicago. “Someone did something wrong, and then covered it up, is classic evidence of fraud and criminal intent. Compare that with a routine review of technical issues that appear contemporaneously to be sorted out, where you might have mistakes -- but likely not a crime.”
Boeing’s 737 Max Crisis -- Your Questions Answered: QuickTake
Search and rescue team members carry a body recovered from the Lion Air crash site in Oct. 2018.
Photographer: Rony Zakaria/Bloomberg
For a guide to what may happen with Boeing, the past failings by automakers could prove useful.
Prosecutors filed fraud charges in criminal cases against Takata Corp. over exploding air bags, General Motors Co. for faulty ignition switches, and Toyota Motor Corp. for accidents connected to unintended acceleration. With General Motors and Toyota, the U.S. alleged the companies misled regulators about potential safety issues.
‘Deadly Defect’
GM agreed in September 2017 to pay $900 million to settle a criminal probe, admitting that it failed to disclose to regulators a defective ignition switch that had been linked to at least 124 deaths. The company was charged with wire fraud and conspiracy for its scheme to hide a “deadly safety defect” from regulators. GM entered into a deferred prosecution agreement. To date, no individuals have been prosecuted.
Toyota agreed to pay $1.2 billion in 2014 to end a criminal investigation into sticky gas pedals and shifting floor mats linked to sudden, unintended acceleration. The U.S. charged Toyota with wire fraud, alleging the company misled consumers and federal regulators about the problem. The company entered into a deferred prosecution agreement, admitting responsibility. No individuals were charged.
“This, unfortunately, is a case that demonstrates that corporate fraud can kill,” U.S. District Judge William Pauley said in court when accepting the deal.
Takata pleaded guilty in February 2017 to one count of wire fraud for misleading automakers about the safety of its exploding air bags, which had been linked to at least 17 deaths. The company agreed to a $1 billion settlement, including a $25 million fine, $850 million to automakers for recalls and $125 million in compensation to accident victims.
While a criminal case against Boeing seems unlikely, “it could be a legal nightmare” for the company if it misled regulators or hid information to speed approval of the 737 Max design, said Marc Moller, who represents victims and families in air crash claims. The FAA could impose a whopping fine and victims’ families could demand large cash settlements or punitive damages, he said.
Civil Lawsuits
The criminal probe could aid civil lawsuits if plaintiffs can get hold of evidence collected by the government, said Mike Slack, a lawyer for crash victims with the Austin, Texas, firm Slack Davis Sanger.
But criminal investigations also can slow down civil litigation, particularly if witnesses invoke their fifth-amendment right against self-incrimination, said plaintiffs’ attorney Kevin Durkin, a former prosecutor who represents victims of airplane crashes.
“In any civil litigation, we gather evidence,” Durkin said. “If people are taking the 5th, it deters us in seeking the ultimate truth.”
Criminal charges have occurred after airline crashes.
In 1996, federal and state authorities investigated airline maintenance contractor SabreTech Inc. after the crash of a ValueJet plane in southern Florida. Prosecutors claimed company employees had loaded oxygen generators on the flight in violation of safety rules. The generators exploded after takeoff, causing the crash of a DC-9 and the death of all on board.
Federal prosecutors charged SabreTech and three employees, two of whom were found not guilty at trial. The third fled and remains a fugitive. SabreTech was found guilty of mishandling hazardous materials and failing to properly train its employees, though the conviction on the federal mishandling charges was reversed on appeal.
SabreTech settled state murder and manslaughter charges by pleading no contest to a charge of mishandling hazardous waste and agreeing to pay $500,000.
UP NEXT
https://markets.businessinsider.com...al-part-737-next-gen-planes-2019-9-1028561206
A vital Boeing 737 Next Gen part that attaches the plane's body to its wings is having a 'cracking issue' (BA)
Ashley Rodriguez
Sep. 29, 2019, 10:51 AM
Reuters/Sergei Karpukhin
The aircraft manufacturer Boeing has discovered a "cracking issue" in a vital part of its Boeing 737 Next Generation planes that connects the body of the aircraft to its wings, Charlie Harger at the Seattle-based KOMO News first reported.
The aircraft piece in question, known as a pickle fork, helps connect the plane's body to its wings.
Pickle forks are designed to last the life of the plane, which is usually about 90,000 or more takeoffs and landings, the publication reported. But in one instance, Boeing found cracked pickle forks in a plane that had logged about 35,000 takeoffs and landings, according to KOMO.
The Federal Aviation Administration has ordered operators of 737 NG planes to inspect the aircraft for structural cracks, according to a statement shared with Business Insider.
Boeing reported the issue to the FAA after it discovered the cracks while modifying a "heavily used aircraft," according to the statement. The company said it found similar cracks in a small number of other planes, as well.
Boeing said in a statement that it had notified operators of the issue and that the planes with cracks were "undergoing modifications." No in-service issues had been reported, the company said.
Boeing's website lists more than 100 airlines as 737 NG customers, including American Airlines, Delta Airlines, EgyptAir, RyanAir, and Southwest Airlines. The 737 NG models include 737-700, 737-800, and 737-900 aircraft.
The 737 Max is not affected by the cracking issue, the company said.
That model was grounded in March after two fatal plane crashes.
Read more: The complete history of the 737 Max, Boeing's promising yet problematic workhorse jet
https://www.reuters.com/article/us-...t-were-used-on-military-jet-wsj-idUSKBN1WE0FR
Boeing omitted safeguards on 737 MAX that were used on military jet: WSJ
2 Min Read
FILE PHOTO: Grounded Boeing 737 MAX aircraft are seen parked in an aerial photo at Boeing Field in Seattle, Washington, U.S. July 1, 2019. REUTERS/Lindsey Wasson/File Photo
(Reuters) - Boeing Co (BA.N) engineers working on the 737 MAX passenger plane’s flight-control system omitted safeguards included in an earlier version of the system used on a military tanker jet, The Wall Street Journal reported on Sunday, citing people familiar with the matter.
The engineers who created the Maneuvering Characteristics Augmentation System (MCAS) flight-control system more than a decade ago for the military refueling plane designed the system to rely on inputs from multiple sensors and with limited power to move aircraft's nose, the Journal said on.wsj.com/2mOypqT.
The newspaper cited one person familiar with the design saying this approach was taken in order to guard against the system acting erroneously or causing a pilot to lose control.
In contrast, the version of MCAS on the 737 MAX passenger plane relied on input from just one of two sensors which measure the angle at which the plane’s nose is flying, the newspaper said.
Boeing’s expected software fix for its 737 MAX planes will make its MCAS more like the one used on the tanker jet, the Journal said.
Boeing did not immediately respond to Reuters’ request for comment outside regular business hours.
Boeing has previously said that erroneous sensor data fed to the MCAS system was a common link in a chain of events leading to the fatal crashes of a Lion Air 737 MAX airliner in Indonesia in October 2018 and an Ethiopian Airlines 737 MAX in March 2019 which killed all 346 people aboard the two aircraft.
Reporting by Bhargav Acharya in Bengaluru; editing by Jason Neely and Marguerita Choy
Our Standards:The Thomson Reuters Trust Principles.
business
Will Boeing Face U.S. Criminal Charges for 737 Max Crashes?
By
Bob Van Voris
,
Margaret Cronin Fisk
, and
Tom Schoenberg
March 20, 2019, 12:00 PM GMT+8
- Charges possible if company lied about safety risks of 737 Max
- Auto industry prosecution agreements may offer guide to case
Boeing CEO Sees 'Endgame' for Return of the 737 Max
Boeing 737 Max Timeline
LISTEN TO ARTICLE
5:44
SHARE THIS ARTICLE
Share
Tweet
Post
In this article
BA
BOEING CO/THE
368.16
USD
-6.79-1.81%
7203
TOYOTA MOTOR
7,159.00
JPY
-87.00-1.20%
GM
GENERAL MOTORS C
34.68
USD
-1.44-3.97%
1183L
ROPES & GRAY LLP
Private Company
There’s little precedent for planemakers like Boeing Co. facing U.S. criminal charges over deadly crashes, though there may be risks of prosecution if the company lied to regulators about the safety of its 737 Max jets.
Federal authorities began a criminal probe of the certification process for the new 737 Max planes, after the first of two catastrophic crashes since October. Prosecutions are unusual following U.S. air disasters, where investigators tend to focus on determining the cause of a crash so it can be fixed.
“We want to encourage people to come forward and admit mistakes, free from fear of reprisal or jail,” said Kenneth Quinn, a former chief counsel of the Federal Aviation Administration who now represents airlines and aerospace companies. “The last thing the industry and FAA need is the specter of a criminal investigation hovering over an accident inquiry.”
Local residents at the crash site of Ethiopian Airlines Flight 302 on March 10.
Photographer: Jemal Countess/Getty Images
Still, authorities began a criminal probe following the crash of a Lion Air 737 Max 8 on Oct. 29 shortly after takeoff from Jakarta, according to a person who wasn’t authorized to speak about the investigation and asked not to be named. On March 10, an Ethiopian Airlines 737 Max 8 crashed near Addis Ababa. In both cases, all the passengers and crew were killed.
U.S. investigators are probably looking for any false statements or material omissions by Boeing officials, such as misrepresenting to pilots how the aircraft operated and whether there were internal documents backing that up, according to former federal prosecutors.
The government could bring fraud charges if it determines the company lied to authorities or tried to cover up concerns about the aircraft’s systems, the former prosecutors said.
“The key piece for criminal investigators will be looking for any evidence of knowledge of a defect, and how that was addressed,” said Ryan Rohlfsen, a former Justice Department prosecutor now at Ropes & Gray LLP in Chicago. “Someone did something wrong, and then covered it up, is classic evidence of fraud and criminal intent. Compare that with a routine review of technical issues that appear contemporaneously to be sorted out, where you might have mistakes -- but likely not a crime.”
Boeing’s 737 Max Crisis -- Your Questions Answered: QuickTake
Search and rescue team members carry a body recovered from the Lion Air crash site in Oct. 2018.
Photographer: Rony Zakaria/Bloomberg
For a guide to what may happen with Boeing, the past failings by automakers could prove useful.
Prosecutors filed fraud charges in criminal cases against Takata Corp. over exploding air bags, General Motors Co. for faulty ignition switches, and Toyota Motor Corp. for accidents connected to unintended acceleration. With General Motors and Toyota, the U.S. alleged the companies misled regulators about potential safety issues.
‘Deadly Defect’
GM agreed in September 2017 to pay $900 million to settle a criminal probe, admitting that it failed to disclose to regulators a defective ignition switch that had been linked to at least 124 deaths. The company was charged with wire fraud and conspiracy for its scheme to hide a “deadly safety defect” from regulators. GM entered into a deferred prosecution agreement. To date, no individuals have been prosecuted.
Toyota agreed to pay $1.2 billion in 2014 to end a criminal investigation into sticky gas pedals and shifting floor mats linked to sudden, unintended acceleration. The U.S. charged Toyota with wire fraud, alleging the company misled consumers and federal regulators about the problem. The company entered into a deferred prosecution agreement, admitting responsibility. No individuals were charged.
“This, unfortunately, is a case that demonstrates that corporate fraud can kill,” U.S. District Judge William Pauley said in court when accepting the deal.
Takata pleaded guilty in February 2017 to one count of wire fraud for misleading automakers about the safety of its exploding air bags, which had been linked to at least 17 deaths. The company agreed to a $1 billion settlement, including a $25 million fine, $850 million to automakers for recalls and $125 million in compensation to accident victims.
While a criminal case against Boeing seems unlikely, “it could be a legal nightmare” for the company if it misled regulators or hid information to speed approval of the 737 Max design, said Marc Moller, who represents victims and families in air crash claims. The FAA could impose a whopping fine and victims’ families could demand large cash settlements or punitive damages, he said.
Civil Lawsuits
The criminal probe could aid civil lawsuits if plaintiffs can get hold of evidence collected by the government, said Mike Slack, a lawyer for crash victims with the Austin, Texas, firm Slack Davis Sanger.
But criminal investigations also can slow down civil litigation, particularly if witnesses invoke their fifth-amendment right against self-incrimination, said plaintiffs’ attorney Kevin Durkin, a former prosecutor who represents victims of airplane crashes.
“In any civil litigation, we gather evidence,” Durkin said. “If people are taking the 5th, it deters us in seeking the ultimate truth.”
Criminal charges have occurred after airline crashes.
In 1996, federal and state authorities investigated airline maintenance contractor SabreTech Inc. after the crash of a ValueJet plane in southern Florida. Prosecutors claimed company employees had loaded oxygen generators on the flight in violation of safety rules. The generators exploded after takeoff, causing the crash of a DC-9 and the death of all on board.
Federal prosecutors charged SabreTech and three employees, two of whom were found not guilty at trial. The third fled and remains a fugitive. SabreTech was found guilty of mishandling hazardous materials and failing to properly train its employees, though the conviction on the federal mishandling charges was reversed on appeal.
SabreTech settled state murder and manslaughter charges by pleading no contest to a charge of mishandling hazardous waste and agreeing to pay $500,000.
UP NEXT
https://markets.businessinsider.com...al-part-737-next-gen-planes-2019-9-1028561206
A vital Boeing 737 Next Gen part that attaches the plane's body to its wings is having a 'cracking issue' (BA)
Ashley Rodriguez
Sep. 29, 2019, 10:51 AM
Reuters/Sergei Karpukhin
- The aircraft manufacturer Boeing has discovered cracks in a vital part of its Boeing 737 Next Generation planes that connects the body of the aircraft to its wings, the Seattle-based KOMO News first reported.
- Boeing discovered the "cracking issue" in a small number of planes, the company said in a statement.
- The Federal Aviation Administration has ordered operators to inspect the planes for structural cracks.
- Boeing's website lists more than 100 airlines as customers of 737 NG planes.
- The 737 Max, which was grounded in March after two fatal plane crashes, is not affected by this issue.
- Visit Business Insider's homepage for more stories.
The aircraft manufacturer Boeing has discovered a "cracking issue" in a vital part of its Boeing 737 Next Generation planes that connects the body of the aircraft to its wings, Charlie Harger at the Seattle-based KOMO News first reported.
The aircraft piece in question, known as a pickle fork, helps connect the plane's body to its wings.
Pickle forks are designed to last the life of the plane, which is usually about 90,000 or more takeoffs and landings, the publication reported. But in one instance, Boeing found cracked pickle forks in a plane that had logged about 35,000 takeoffs and landings, according to KOMO.
The Federal Aviation Administration has ordered operators of 737 NG planes to inspect the aircraft for structural cracks, according to a statement shared with Business Insider.
Boeing reported the issue to the FAA after it discovered the cracks while modifying a "heavily used aircraft," according to the statement. The company said it found similar cracks in a small number of other planes, as well.
Boeing said in a statement that it had notified operators of the issue and that the planes with cracks were "undergoing modifications." No in-service issues had been reported, the company said.
Boeing's website lists more than 100 airlines as 737 NG customers, including American Airlines, Delta Airlines, EgyptAir, RyanAir, and Southwest Airlines. The 737 NG models include 737-700, 737-800, and 737-900 aircraft.
The 737 Max is not affected by the cracking issue, the company said.
That model was grounded in March after two fatal plane crashes.
Read more: The complete history of the 737 Max, Boeing's promising yet problematic workhorse jet
https://www.reuters.com/article/us-...t-were-used-on-military-jet-wsj-idUSKBN1WE0FR
Boeing omitted safeguards on 737 MAX that were used on military jet: WSJ
2 Min Read
FILE PHOTO: Grounded Boeing 737 MAX aircraft are seen parked in an aerial photo at Boeing Field in Seattle, Washington, U.S. July 1, 2019. REUTERS/Lindsey Wasson/File Photo
(Reuters) - Boeing Co (BA.N) engineers working on the 737 MAX passenger plane’s flight-control system omitted safeguards included in an earlier version of the system used on a military tanker jet, The Wall Street Journal reported on Sunday, citing people familiar with the matter.
The engineers who created the Maneuvering Characteristics Augmentation System (MCAS) flight-control system more than a decade ago for the military refueling plane designed the system to rely on inputs from multiple sensors and with limited power to move aircraft's nose, the Journal said on.wsj.com/2mOypqT.
The newspaper cited one person familiar with the design saying this approach was taken in order to guard against the system acting erroneously or causing a pilot to lose control.
In contrast, the version of MCAS on the 737 MAX passenger plane relied on input from just one of two sensors which measure the angle at which the plane’s nose is flying, the newspaper said.
Boeing’s expected software fix for its 737 MAX planes will make its MCAS more like the one used on the tanker jet, the Journal said.
Boeing did not immediately respond to Reuters’ request for comment outside regular business hours.
Boeing has previously said that erroneous sensor data fed to the MCAS system was a common link in a chain of events leading to the fatal crashes of a Lion Air 737 MAX airliner in Indonesia in October 2018 and an Ethiopian Airlines 737 MAX in March 2019 which killed all 346 people aboard the two aircraft.
Reporting by Bhargav Acharya in Bengaluru; editing by Jason Neely and Marguerita Choy
Our Standards:The Thomson Reuters Trust Principles.
