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Why US government may still do business with Boeing, even as a felon

Lauren Rosenblatt, The Seattle Times on

Published in Business News

As Boeing continues to face the fallout from two fatal 737 Max crashes roughly five years ago, the company now meets yet another question about its future.

Could the Justice Department’s recent decision to offer Boeing a plea deal to resolve a criminal fraud charge curtail the company’s government contracts, including its billions in defense work?

Legally speaking, it’s still not clear.

The terms of the deal could provide the answer, or Boeing may separately reach agreements with individual agencies, according to Brandon Garrett, a law professor at Duke University.

Practically speaking, the plea deal is unlikely to bar Boeing from government work, according to five law professors and analysts who spoke with The Seattle Times in June.

The government depends too much on Boeing, the experts said.

 

“I very much doubt that Boeing’s federal contracting work will be interfered with at all,” said Peter Reilly, a law professor at Texas A&M who represents families who lost loved ones in the Max crashes in 2018 and 2019.

The Justice Department determined earlier this year that Boeing had violated a 2021 agreement that allowed it to avoid criminal prosecution following the Max crashes. As the deal was approaching its expiration, an Alaska Airlines Max 9 lost a panel midflight, reigniting concern that Boeing had not lived up to its promised safety and quality improvements.

On Sunday, the Justice Department said it would offer Boeing a plea deal to resolve the criminal charge, once again raising the question about what a guilty plea or fraud conviction would mean for one of the country’s largest defense contractors.

There is a statute that prevents defense contractors who have been convicted of certain felonies from winning future defense contracts, said John Coffee, a law professor at Columbia University. But, in this case, “that’s a hopeless dead end.”

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