US official says no decision yet on whether to prosecute Boeing

By Mike Spector, Chris Prentice and David Shepardson

NEW YORK/WASHINGTON (Reuters) -The U.S. Justice Department has made no decision yet on whether to pursue a prosecution of planemaker Boeing for violating the terms of a 2021 settlement related to two fatal 737 MAX crashes in 2018 and 2019, a top DOJ official said in an email seen by Reuters.

Glenn Leon, chief of the Justice Department's fraud section, said in an email on Friday to lawyers representing family members of victims of the crashes: "The department has not made a decision on how to proceed or whether to pursue prosecution of Boeing."

The Justice Department and Boeing both declined comment.

In May, the Justice Department said Boeing had violated a 2021 agreement with prosecutors that shielded it from criminal prosecution over the fatal crashes. The 2021 DPA required the U.S. planemaker to overhaul its compliance practices. Boeing has said it complied with the agreement.

Earlier on Friday, the New York Times, citing anonymous sources, reported that the Justice Department "is expected to allow Boeing to escape criminal prosecution" for violating the DPA.

Leon's email said, "The reporting was simply not correct."

The Times later revised its story to say that the Justice Department is "considering allowing" Boeing to avoid criminal prosecution.

A New York Times spokeswoman, in an emailed statement sent after the story was revised, said: "We are confident in the accuracy of our reporting."

The Justice Department said in May it determined that Boeing had violated a 2021 deferred prosecution agreement that shielded the company from a criminal charge of conspiracy to commit fraud arising from the two fatal crashes in 2018 and 2019, which killed 346 people.

Boeing in January 2021 reached an agreement with the DOJ to pay $2.5 billion to resolve a criminal investigation into the company's conduct surrounding the fatal crashes.

Boeing last week told the government it did not violate the agreement. Federal prosecutors have until July 7 to inform a federal judge in Texas of their plans, which could be to proceed with a criminal case or negotiate a plea deal with Boeing. The Justice Department could also extend the deferred prosecution agreement for a year.

Boeing previously paid $2.5 billion as part of that deal, in which prosecutors agreed not to prosecute the company over a fraud conspiracy charge related to the 737 MAX's flawed design.

Justice Department officials found that Boeing violated the DPA after a panel blew off a new Alaska Airlines Boeing 737 MAX 9 jet on Jan. 5 this year, just two days before the 2021 agreement expired. The incident exposed continued safety and quality issues at Boeing.

Relatives of the victims of the two fatal 737 MAX crashes have long criticized Boeing's deal with prosecutors, contending that Justice Department officials failed to hold the company accountable. This week, they pressed prosecutors to seek a fine against the planemaker of nearly $25 billion and move forward with a criminal prosecution.

(Reporting by Mike Spector in New York, David Shepardson in Washington, Abhijith Ganapavaram in Bengaluru and Chris Prentice in New York; Editing by Anil D'Silva and Leslie Adler)