TOPSHOT - A person walks past a Boeing 737 MAX 8 for United Airlines parked at Renton Municipal Airport adjacent to Boeing's factory in Renton, Washington, on January 25, 2024. Alaska Airlines said Thursday it expects a $150 million hit from the Boei …
A federal judge in Texas has rejected a plea agreement from Boeing related to a criminal fraud conspiracy charge connected to a Justice Department investigation into two deadly crashes of 737 Max Jetliners.
Judge Reed O'Connor in the Northern District of Texas expressed concern over the agreement's use of diversity, equity and inclusion polices to guide the hiring of independent compliance monitors.
"While the Government assures the Court that the Government will consider all possible monitors (i.e., all backgrounds, etc.) but will choose a monitor solely based on merit and talent, the Court is skeptical of this assertion," O'Connor wrote.
The order states Boeing and the government's use of DEI directly undermines ethics and anti-fraud efforts and goes against the public interest.
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The court was also concerned with the government's ability to hire an independent monitor and ensure compliance.
Under the rejected plea deal, Boeing would have been required to keep the compliance monitor or risk violation of their probation. It did not, however, require them to comply with any anti-fraud recommendations made.
"The Government has monitored Boeing for three years now," O'Connor said. "It is not clear what all Boeing has done to breach the Deferred Prosecution Agreement."
The court said it needed to play a more involved role in the monitor's reporting and cited concerns from victims that a DPA violation occurred on an Alaska Airlines flight when a door fell off of a 737 Max.
O'Connor said if Boeing breached the agreement, then the "government's attempt to ensure compliance has failed."
The sides were given 30 days to provide an update to the court.
The criminal case relates to two 737 MAX jetliner crashes in Indonesia and Ethiopia in 2018 and 2019 in which 346 people were killed, leading to demands from the victims' families for Boeing to face prosecution.
Federal prosecutors had offered Boeing the option of entering a guilty plea and paying a fine or going to trial on the felony criminal charge of conspiracy to defraud the Federal Aviation Administration over a software feature linked to the fatal crashes.
The plane manufacturer was fined $243.6 million as part of the agreement.
The Alaska Airlines flight happened just two days before the expiration of the 2021 deferred prosecution agreement that had protected Boeing from prosecution over the deadly crashes in Indonesia and Ethiopia.