DALLAS (AP) 鈥� A federal judge on Thursday rejected a deal that would have let to a felony conspiracy charge and pay a fine for misleading U.S. regulators about the 737 Max jetliner before two of the planes crashed, killing 346 people.
in Texas said that diversity, inclusion and equity or in the government and at Boeing could result in race being a factor in picking an official to oversee Boeing's compliance with the agreement.
The ruling creates uncertainty around criminal prosecution of the aerospace giant in connection with the development of its .
The judge gave and the Justice Department 30 days to tell him how they plan to proceed. They could negotiate a new plea agreement, or prosecutors could move to put the company on trial.
The said it was reviewing the ruling. Boeing did not comment immediately.
Paul Cassell, an attorney for who died in the crashes, called the decision an important victory for the rights of crime victims.
鈥淣o longer can federal prosecutors and high-powered defense attorney craft backroom deals and just expect judges to approve them,鈥� Cassell said. 鈥淛udge O鈥機onnor has recognized that this was a cozy deal between the government and Boeing that failed to focus on the overriding concerns -- holding Boeing accountable for its deadly crime and ensuring that nothing like this happens again in the future.鈥�
Many relatives of the passengers who died in , which took place off the coast of Indonesia and in Ethiopia less than five months apart in 2018 and 2019, have spent years pushing for a public trial, the prosecution of former company officials, and more severe financial punishment for Boeing.
The deal the judge rejected was and would have let Boeing plead guilty to defrauding regulators who approved pilot-training requirements for nearly a decade ago. Prosecutors said they did not have evidence to argue that Boeing鈥檚 deception played a role in the crashes.
In his ruling, O鈥機onnor focused on part of the agreement that called for an independent monitor to oversee Boeing鈥檚 steps to prevent violation of anti-fraud laws during three years of probation.
O鈥機onnor expressed particular concern that the agreement 鈥渞equires the parties to consider race when hiring the independent monitor 鈥� 鈥榠n keeping with the (Justice) Department鈥檚 commitment to diversity and inclusion.鈥欌��
O鈥機onnor, a conservative appointed to the bench by President George W. Bush, in October about the role of DEI in selection of the monitor. Department lawyers said selection would be open to all qualified candidates and based on merit.
The judge wrote in Thursday鈥檚 ruling that he was 鈥渘ot convinced 鈥� the Government will not choose a monitor without race-based considerations.鈥�
鈥淚n a case of this magnitude, it is in the utmost interest of justice that the public is confident this monitor selection is done based solely on competency. The parties鈥� DEI efforts only serve to undermine this confidence in the government and Boeing鈥檚 ethics and anti-fraud efforts,鈥� he wrote.
O鈥機onnor also objected that the plea deal called for the government to and for the appointee to report to the Justice Department, not the court. The judge also noted that Boeing would have been able to veto one of six candidates chosen by the government.
Todd Haugh, a business law and ethics expert at Indiana University, could not recall any previous corporate plea deals that were rejected over DEI. He said the larger issue was how the deal took sentencing power away from the court.
鈥淭hat is a legitimate argument from which to reject a plea agreement, but this particular judge has really stood on this DEI issue,鈥� Haugh said. 鈥淚t comes through loud and clear in the order."
The ruling leaves prosecutors in a bind because they can't simply ignore a government DEI policy that goes back to 2018, he said.
Prosecutors also must weigh the risks and uncertain outcome before pushing for a trial.
Boeing negotiated the plea deal only after the Justice Department determined this year that Boeing violated a 2021 agreement that had protected it against criminal prosecution on the same fraud-conspiracy charge.
Boeing lawyers have said that if the plea deal was rejected, the company would challenge the finding that it violated the earlier agreement. Without the finding, the government has no case.
The judge helped Boeing鈥檚 position on Thursday, writing that it was not clear what the company did to violate the 2021 deal.
The Justice Department accused Boeing of defrauding regulators who approved pilot-training requirements for the 737 Max.
Acting on Boeing鈥檚 incomplete disclosures, the FAA approved minimal, computer-based training instead of more intensive training in flight simulators. Simulator training would have increased the cost for airlines to operate the Max and might have pushed some to buy planes from rival Airbus instead.
When the Justice Department announced in 2021 that it had reached a settlement and would not prosecute Boeing for fraud, families of the victims were outraged. Judge O鈥機onnor ruled last year that the Justice Department by not telling relatives that it was negotiating with Boeing, but said he had .
The 2021 deferred-prosecution agreement was due to expire in January, and it was widely expected that prosecutors would seek to permanently drop the matter. Just days before that, however, a door plug blew off a 737 Max during over Oregon.
That incident renewed concerns about manufacturing quality and safety at Boeing, and put the company under intense scrutiny by regulators and lawmakers.
The case is just one of many challenges facing Boeing, which has lost more than $23 billion since 2019 and fallen behind Airbus in selling and delivering new planes.
The company went through a strike by factory workers that shut down for seven weeks this fall, and announced that it will , about 17,000 people. Its shares have plunged about 40% in less than a year.
David Koenig, The Associated Press
