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After two jetliner crashes killed 346 people,\u00a0a $2.5 billion settlement<\/a>\u00a0that let Boeing<\/a> avoid criminal prosecution failed to resolve questions about the safety of the aerospace giant\u2019s planes.<\/p>\n Federal prosecutors now accuse the company of failing to live up to terms of the 2021 settlement. Boeing has agreed\u00a0to plead guilty<\/a>\u00a0to a felony fraud charge in a new deal with the Justice Department. The department said Thursday that it expects to file the detailed plea agreement no sooner than the middle of next week.<\/p>\n Experts on corporate behavior say whether the new agreement has a more lasting impact on safety than the earlier settlement could come down to how much power is placed in the hands of an independent monitor who is assigned to oversee Boeing for three years. Prosecutors made the appointment of such a monitor\u00a0a condition<\/a>\u00a0of the plea deal, which also calls for Boeing to pay a new $243.6 million fine.<\/p>\n \u201cYour real concern is protecting against the loss of future lives in future crashes, and that is something that the monitor can have more impact on than simply the amount of the fine,\u201d said John Coffee, a law professor at Columbia University who studies corporate governance and white-collar crime.<\/p>\n The finalized plea and sentence are due to be filed in U.S. District Court in Fort Worth, Texas. The filing will give a more precise description of how the compliance monitor will be chosen and the scope of the monitor\u2019s duties. Already, the government appears to have backed away from a plan that would given Boeing\u00a0the biggest role<\/a>\u00a0in picking the watchdog.<\/p>\n Families of<\/a>\u00a0some of the passengers who died in the crashes have said they plan to oppose the agreement. They want a trial, not a plea deal, and they say Boeing should pay\u00a0a $24 billion fine<\/a>. Paul Cassell, a lawyer for the families, said the relatives of crash victims should have the right to propose a monitor for the judge to appoint.<\/p>\n The Justice Department initially planned to select a monitor from a list of three nominees submitted by Boeing, and would ask the company for more names if necessary, according to participants in a June 30 briefing that department officials gave to passengers\u2019 families and their lawyers.<\/p>\n The deal that Boeing agreed to \u201cin principle\u201d a week later said the Justice Department would seek candidates through a public job posting on its website and then select one \u201cwith feedback from Boeing.\u201d The precise extent of the company\u2019s role was left unclear.<\/p>\n Once the department and Boeing settle on a choice, prosecutors will tell U.S. District Judge Reed O\u2019Connor. If he doesn\u2019t object within 10 days, the appointment would go through. The person picked would need to meet \u201cspecific qualifications\u201d laid out in the posting and the department\u2019s guidelines on selecting monitors in criminal cases, according to the filing.<\/p>\n The monitor will oversee Boeing\u2019s compliance with the plea agreement during a three-year probation period, during which the official will write \u201ca confidential annual report for the government,\u201d and file an executive summary with the court.<\/p>\n The use of monitors as part of plea agreements with companies convicted of crimes reflects prosecutors\u2019 reluctance to issue indictments and take the cases to trial.<\/p>\n Brandon Garrett, a Duke University law professor who tracks criminal cases involving corporations, said prosecutors long worried that a criminal indictment could destroy a large, publicly traded company, so they tended to favor out-of-court settlements in the most serious cases. That changed, he said, after the financial crisis of 2008, and the concern became that companies were being treated as \u201ctoo big to jail,\u201d a phrase Garrett used in the title of his\u00a02014 book<\/a>.<\/p>\n The effectiveness of plea deals and deferred prosecution agreements that allow defendants \u2013 like Boeing in 2021 \u2013 to avoid criminal liability came into question.<\/p>\n \u201cEspecially when you had companies repeatedly getting prosecuted, something needs to change \u2014 maybe these companies really should get a criminal record,\u201d Garrett said. \u201cThat\u2019s when we started to see \u2026 more large cases where companies would be convicted.\u201d<\/p>\n Nadia Milleron, whose 24-year-old daughter, Samya Stumo, died in\u00a0the second<\/a>\u00a0of two fatal 737 Max crashes, said the Boeing plea deal is much better than the settlement reached three-and-a-half years ago. In January 2021, the Justice Department agreed not to prosecute the company for conspiring to defraud the U.S. government, a charge based on allegations that Boeing misled regulators who approved the 737 Max nearly a decade ago.<\/p>\n Still, Milleron and relatives of other crash victims want a trial that might unearth more details about discussions inside Boeing leading up to, and even after, the crashes, which occurred in 2018\u00a0in Indonesia<\/a>\u00a0and 2019 in Ethiopia.<\/p>\n It appeared likely that the Justice Department would permanently drop the 2021 charge until this January, when a panel covering an unused emergency exit blew off a Max jet during an\u00a0Alaska Airlines flight<\/a>. The Federal Aviation Administration increased its oversight, and the agency\u2019s chief said manufacturing problems at Boeing\u00a0\u201cdon\u2019t seem to be getting resolved.\u201d<\/a><\/p>\n The Justice Department defends its decision to seek a plea deal by saying that it includes the most serious punishment possible under the charge facing Boeing.<\/p>\n \u201cWe should be asking whether these prosecutions are working and what can be done to make them more effective,\u201d Garrett said. He suggested that the judge could take an active role in monitoring Boeing to make sure the company complies with the new agreement after violating the old one.<\/p>\n Coffee, the Columbia law professor, said the key to whether the deal deters Boeing from future violations will be a strong and independent monitor.<\/p>\n \u201cCompanies fear a free agent roaming around in their files,\u201d he said. \u201cOn the other hand, if there isn\u2019t some ability for the monitor to directly go to the court and say \u2018They are not living up to the terms of the agreement,\u2019 you have an ineffective monitor.\u201d<\/p>\n In one notorious case, prosecutors blocked a federal judge in New York from releasing a monitor\u2019s reports about HSBC, a London-based bank that entered a deferred prosecution agreement over allegations that it failed to prevent a Mexican drug cartel from laundering money.<\/p>\n \u201cI\u2019m not saying we shouldn\u2019t have deferred prosecution agreements, but they tend to be negotiated to be strongly in the interests of the defendant,\u201d he said.<\/p>\n The judge in the Boeing case has indicated that after the Justice Department submits details of the plea agreement, he will give relatives of the victims seven days to lodge objections. The government and Boeing then will have 14 days to respond.<\/p>\n The January 2021 decision by the Justice Department not to prosecute Boeing came in the final days of the Trump administration. In 2022 and 2023, federal prosecutions of corporations rose modestly under the Biden administration, according to figures from the U.S. Sentencing Commission.<\/p>\n \u201cWe are in an election year, so we will be looking to see how that focus by the Department of Justice plays out after the election in November and whether the focus on corporate crime remains the same,\u201d said Kya Henley, a former public defender in Maryland who now represents companies and individuals in white-collar cases. \u201cEveryone gets to set their agenda.\u201d<\/p>\n<\/div>\n\nRecommended Newsletter: <\/strong>CEO Daily provides key context for the news leaders need to know from across the world of business. Every weekday morning, more than 125,000 readers trust CEO Daily for insights about\u2013and from inside\u2013the C-suite. Subscribe Now<\/a>.<\/div>\n