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Judge rejects Boeing's ( BA ) plea deal over diversity provision
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Victims' families had called plea deal a 'sweetheart'
agreement
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Boeing ( BA ) faces potential renegotiation or appeal of plea
deal
(Adds details on plea deal, judge's ruling and judge's
background throughout)
By Mike Spector, Allison Lampert and David Shepardson
Dec 5 (Reuters) - A U.S. judge on Thursday rejected
Boeing's ( BA ) agreement to plead guilty to fraud in the wake of two
fatal 737 MAX crashes, faulting a diversity and inclusion
provision in the deal.
Boeing ( BA ) did not immediately comment. The U.S. Department of
Justice, which brokered the plea bargain with Boeing ( BA ), is
reviewing the opinion, a spokesperson said. Boeing ( BA ) and the DOJ's
options could include appealing the judge's rejection of the
plea deal or presenting a renegotiated agreement for court
approval.
U.S. District Judge Reed O'Connor in Fort Worth, Texas, who
has a record of ruling in favor of conservative causes, seized
on a single sentence in the plea agreement mentioning the DOJ's
diversity policy regarding the selection of an independent
monitor to audit the planemaker's compliance practices. He had
asked both Boeing ( BA ) and prosecutors to further brief him on it in
October.
Boeing ( BA ) and the DOJ now have 30 days to update the
court on how they plan to proceed in the case, O'Connor ruled.
Judges weighing plea deals typically do not upend them over
issues that the parties to the agreement have not disputed. In
the rare cases that they do, it is usually because the judge
wants to impose a different punishment than prosecutors have
agreed to.
The plea bargain also "marginalizes" the judge in the
selection and oversight of the independent monitor, and forbids
imposing a probation condition requiring Boeing ( BA ) to comply with
the monitor's anti-fraud recommendations, O'Connor said in his
decision. He said the agreement was "not in the public
interest."
Relatives of the victims of the two 737 MAX crashes, which
occurred in 2018 and 2019 and killed 346 people, have called the
plea agreement a "sweetheart" deal that failed to adequately
hold Boeing ( BA ) accountable for the deaths of their loved ones.
The two plane crashes occurred in Indonesia and Ethiopia
over a five-month period. The families had briefly referenced
the DOJ diversity and inclusion policy in court filings opposing
the plea agreement, but did not detail concerns about it.
"Judge O'Connor's emphatic rejection of the plea deal is an
important victory" for the victims' families, said Paul Cassell,
a lawyer representing them.
"Judge O'Connor has recognized that this was a cozy deal
between" the government and Boeing ( BA ) "that failed to focus on the
overriding concerns: holding Boeing ( BA ) accountable for its deadly
crime and ensuring that nothing like this happens again in the
future," Cassell said.
Cassell said he hoped the decision would result in the
agreement being renegotiated to specifically address the
passengers and crew who perished in the plane crashes.
An accepted plea deal would have branded Boeing ( BA ) a convicted
felon for conspiring to defraud the U.S. Federal Aviation
Administration about problematic software affecting the flight
control systems in the planes that crashed.
Boeing ( BA ) had agreed to pay a fine of up to $487.2 million and
spend $455 million to improve safety and compliance practices
over three years of court-supervised probation as part of the
deal.
Victims' relatives want Boeing ( BA ) and its executives charged
with crimes holding them responsible for the deaths of their
loved ones and any evidence of wrongdoing presented in a public
trial. They have also argued Boeing ( BA ) should have to pay up to
$24.78 billion in connection with the crashes.
In May, the DOJ found Boeing ( BA ) had violated the terms of a
2021 agreement that had shielded it from prosecution over the
crashes. Prosecutors then decided to criminally charge Boeing ( BA )
and negotiate the current plea deal.
The decision followed a Jan. 5 in-flight blowout of a door
panel on an Alaska Airlines jet that exposed ongoing
safety and quality issues at Boeing ( BA ).
The judge's objections largely centered on the government's
diversity and inclusion policy covering the selection of the
independent monitor to oversee Boeing ( BA ) for three years.
Such policies are commonly known as diversity, equity and
inclusion, or DEI. DEI policies have become a flashpoint in
America's culture wars, which refer to conflicts between liberal
and conservative values.
Supporters contend the policies combat unconscious bias,
inequity and discrimination in hiring while opponents argue they
focus on characteristics such as race and gender at the expense
of core job qualifications.
"The plea agreement requires the parties to consider race
when hiring the independent monitor," O'Connor wrote in his
decision. "In 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."
O'Connor, appointed to the federal bench in 2007 by
Republican then-President George W. Bush, has gained prominence
for rulings favoring conservative litigants challenging
government policies, including finding Obamacare
unconstitutional in a decision the U.S. Supreme Court later
reversed.
He also previously invalidated a Biden administration
attempt to deter schools from discriminating against students
based on gender identity or sexual orientation.