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Boeing committed ‘the deadliest corporate crime in US history’ and should be fined $24 billion, victims’ families say

<i>Jose Luis Magana/AP via CNN Newsource</i><br/>Family members of the crash victims of the Boeing 737 MAX crash in Ethiopia hold photographs during a news conference on Capitol Hill.
Jose Luis Magana/AP via CNN Newsource
Family members of the crash victims of the Boeing 737 MAX crash in Ethiopia hold photographs during a news conference on Capitol Hill.

By Jordan Valinsky, CNN

New York (CNN) — Families that lost loved ones in two Boeing 737 Max crashes said on Wednesday that the company committed the “deadliest corporate crime in US history” and asked the Justice Department to fine the company the maximum $24 billion it could face in a criminal trial.

The families wrote to the Department of Justice asking for the fine as the US government considers criminal prosecution of Boeing. The Justice Department said last month that Boeing’s recent string of safety lapses and mishaps constituted a violation of its 2021 agreement that allowed the company to avoid charges for 737 Max crashes in Indonesia in October 2018 and in Ethiopia in March 2019 that killed 346 people.

The “appropriate action now is an aggressive criminal prosecution” against Boeing including a quick jury trial and “criminal prosecutions of the responsible corporate officials,” including former CEO Dennis Muilenburg, the families’ attorney wrote.

“Because time is of the essence to avoid any statute of limitations from running (out), the Department should begin these prosecutions promptly,” they wrote in the 32-page letter, which was sent by Paul Cassell, an attorney representing the families.

The letter also asks the Justice Department for an independent corporate monitor to oversee Boeing’s safety measures and to direct it in its efforts to improve its quality.

Boeing did not immediately respond to CNN’s request for comment.

In May, the Department of Justice notified Boeing that it had breached terms of its 2021 agreement following a January incident in which a door plug blew off an Alaska Airlines flight shortly after takeoff in January.

The Justice Department said in its letter that it has not yet determined how it will proceed and Boeing had the opportunity to respond to its breach of the agreement – and steps it has taken to remediate the situation – by last week. The DOJ said it will let the court know by July 7 how it will proceed.

Boeing, in a previous statement, said it has upheld its end of the bargain.

“We believe that we have honored the terms of that agreement, and look forward to the opportunity to respond to the Department on this issue,” the company said. “As we do so, we will engage with the Department with the utmost transparency, as we have throughout the entire term of the agreement.”

On Tuesday, current Boeing CEO Dave Calhoun testified before both Republican and Democratic senators. He apologized to families of victims of the two 737 Max crashes that took place before he became CEO and admitted that Boeing is “far from perfect.” He also acknowledged that the company has a lot of work to do to regain public trust.

The 2021 deferred prosecution agreement that Boeing reached with the Justice Department was harshly criticized by the family members and some members of Congress at that time. Boeing agreed to pay $2.5 billion, but most of that money – $1.77 billion – was paid to the airlines that owned the grounded planes, money that Boeing had already agreed to pay. It also agreed to set up a $500 million fund to compensate family members, which it had also already agreed to do in the face of lawsuits, and it would have paid a $244 million fine to the federal government.

The $24 billion, as significant as it would be, would still be less than the $31.9 billion in core operating losses it has reported since the second crash of the plane in 2019 resulted in a 20-month grounding of its best-selling jet.

Boeing has identified more than $20 billion in direct costs from that grounding, and that doesn’t count the tens of billions in lost sales revenue and increased interest costs as its debt soared to cover its losses. Nor does it include the costs incurred since the January 5 Alaska Airlines incident in which a door plug blew off a 737 Max and the FAA put limits on its rate of production due to new questions about the safety and quality of its planes.

–CNN’s Evan Perez contributed to this report.

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