Department of Justice says Boeing may be criminally liable in 737 MAX crashes

Narrator: A new car built by my company leaves somewhere traveling at 60 mph. The rear differential locks up. The car crashes and burns with everyone trapped inside. Now, should we initiate a recall? Take the number of vehicles in the field, A, multiply by the probable rate of failure, B, multiply by the average out-of-court settlement, C. A times B times C equals X. If X is less than the cost of a recall, we don't do one.

Business woman on plane: Are there a lot of these kinds of accidents?

Narrator: You wouldn't believe.

Business woman on plane: Which car company do you work for?

Narrator: A major one.

This might seem calculating and cold, but that's basically how government agencies work. It doesn't make sense to spend unlimited amounts of money to save a life, so government agencies have some sort of a dollar value on a life[1], above which where they won't bother doing interventions. For instance if it takes $15M to save a life, and that's above the DoT's estimate of $12.5M, then they won't bother. That's not to say that Boeing is in the right here, but if they were in the wrong it's not because "If X is less than the cost of a recall, we don't do one", it's because they grossly undervalued a life in their calculations.

[1] https://en.wikipedia.org/wiki/Value_of_life#United_States

Government agencies use the statistical value of a life to weigh the benefits of a regulation against the costs to the public - the same people who would benefit from the regulation. Would a new safety requirement for cars be worth it if it added $500 to the price of every new car? They might use the value of a life to help answer that question.

This is very different than the recall story, because in that scenario there is no cost to the public at all, only to the corporation. When government agencies make rules about product recalls, they do not try to balance the benefit to the public against the cost to the recalling company, that would be insane.

See the DoT's own guidance here: https://www.transportation.gov/sites/dot.gov/files/2021-03/D.... They do not at all use this figure in the same way that a profit-driven entity does.

> The benefit of preventing a fatality is measured by what is conventionally called the Value of a Statistical Life, defined as the additional cost that individuals would be willing to bear for improvements in safety (that is, reductions in risks) that, in the aggregate, reduce the expected number of fatalities by one.

The word "individuals" is very important in this definition.

>This is very different than the recall story, because in that scenario there is no cost to the public at all, only to the corporation.

...assuming they don't pass it on to the customers

That would be illegal, and "the public" is much larger than just the customers of a particular company. This is beside the point though. The government asks "would the average person be willing to pay $x to lower their chance of death by y%". The corporate executive asks "would I be willing to pay >$0 to lower their chance of death by y%". "Some of you may die, but it's a sacrifice I am willing to make."

>That would be illegal

As the other commenter has mentioned, it's passed on via higher prices in the future.

>This is beside the point though. The government asks "would the average person be willing to pay $x to lower their chance of death by y%". The corporate executive asks "would I be willing to pay >$0 to lower their chance of death by y%". "Some of you may die, but it's a sacrifice I am willing to make."

Okay, but surely you don't agree that Boeing should spend infinite amounts of money making their planes safe? For instance we don't install backup engines on the off chance that all 2 engines fail. That's all I'm trying to argue, that the cold calculation/cost benefit analysis as mentioned in the OP isn't where Boeing went wrong, it's that they they undervalued the value of a human life. This was specifically mentioned in my original comment.

What I am trying to argue is that valuing a human life accurately doesn't matter if you're weighing it against your own profits. The correct comparison is against societal benefit, profit is completely morally irrelevant.

I agree that the ceiling for how much money you could spend trying to make an airplane perfectly safe is infinite, so by definition they have to stop somewhere. However, I disagree that finding that line of where to stop has anything to do with the statistical value of a human life.

For example, imagine the Boeing CEO says "we could spend $20 billion on R&D and manufacturing of a new safety system that would on average prevent 1 crash per year, but a 737 MAX carries 200 people, at $15M per life that's only $3 billion in value, so it's obviously better for us to skip it and pass that $20 billion on to shareholders". This would be criminal, and not because their value of a life is off and they got the math a little bit wrong. It's criminal because they are consciously choosing to kill people unnecessarily.

If it is physically and financially possible to make your product safer, you do it, without any thought to how much a life is worth. If it is not possible, because you can't figure out how to solve a problem or it would be so expensive to fix that your business couldn't survive, then you sit down and think about whether it's worth selling your product at all. Are there safer alternatives available? Could a better-funded company fix the flaws you've found? If you determine that your product is important, there are no alternatives out there, and it cannot be made safer, only then do you start weighing the benefits to society against the deaths you expect to occur. I don't really think this is a financial decision involving the value of a life - if you expect your product to kill people then the expected benefits need to be so overwhelming that doing the financial math is unnecessary.

>For example, imagine the Boeing CEO says "we could spend $20 billion on R&D and manufacturing of a new safety system that would on average prevent 1 crash per year, but a 737 MAX carries 200 people, at $15M per life that's only $3 billion in value, so it's obviously better for us to skip it and pass that $20 billion on to shareholders". This would be criminal, and not because their value of a life is off and they got the math a little bit wrong. It's criminal because they are consciously choosing to kill people unnecessarily.

It is not criminal and I have no idea how anyone can think it is.

The crime is in the first paragraphs of the article:

>Boeing has violated a 2021 agreement that shielded it from criminal prosecution after two 737 Max disasters killed 346 people overseas, the Justice Department told a federal judge in a court filing Tuesday.

>According to the Justice Department, Boeing failed to "design, implement, and enforce a compliance and ethics program to prevent and detect violations of the U.S. fraud laws throughout its operations."

So to recap, they were agreed to implement internal rules that match US laws after killing a bunch of people to avoid criminal liability, _which they failed to do_.

> If it is physically and financially possible to make your product safer, you do it, without any thought to how much a life is worth.

A cursory glance at how literally any product is designed will tell you that this is not true.

All engineering is fundamentally compromise between utility functions and cost functions (where cost is monetary, or weight, or size, or poor usability, ugliness etc). There's always a balance point somewhere. It may be the cost/benefit functions to the user differ from those of the manufacturer, and again to regulators, so the product appears out-of-balance to one or the other, but a meta-balance was struck somewhere.

If every light switch was a 2-foot, 200kg cube with a titanium shell filled with monitoring electronics running on lockstepped processors, fire suppression and potting compound, and was tested individually for a year before sale, it's still not as safe as one with six grounding points (in case the first 5 fail) and triple-thick gold plating on the contacts. You have to stop somewhere.

This isn't what the parent comment is saying. Functional safety is an entire discipline. It neither results in titanium light switches nor uses "value of a human life" calculations. The scenario described by the parent would be a civil and potentially criminal liability.

I know what functional safety is. It's just not described by "you must always make all possible efforts to make things safer under all possible circumstances".

In the case of a normal light switch, for example, two cable screws rather than one per wire would be safer than one as the cables are less likely to come adrift. This would easily be affordable for the manufacturer and the buyer, and well within the abilities of the manufacturer. And yet no light switch has those.

And every aircraft manufacturer could think of something the costs $20 billion to develop and adds safety but they don't, unless the product is unsafe already The one crash a year is, to be fair, solidly in the unsafe end of the spectrum, but would they spend the same to avoid a once in 10,000 year crash and if not, what's the cut-off? There must be a cut-off or it would be impossible for any manufacturer of anything to make any profit, ever, as all spare cash must go into safety system research. And this is demonstratively not what they do.

Boeing has a slightly different problem in that they actively made something less safe and lied about it. They'd have gotten away with it but they flubbed the execution with a single point of failure, which made it easier to line up the Swiss cheese holes and the rest is history.

> It's just not described by...

Yes, I know - I think I read the parent comment as "If it is physically and financially [reasonable] to make your product safer, you do it"

This is basically what I was taught working in automotive safety.

> ... what's the cut-off? There must be a cut-off...

There's no hard $$ or other cutoff though, it's a soft cutoff that may come down to engineers and/or management arguing about what is really safer.

> Boeing has a slightly different problem in that they actively made something less safe and lied about it.

Yes I agree, for Boeing it is different, reading about their management's intention destruction of positive safety culture is sickening.

> For instance we don't install backup engines on the off chance that all 2 engines fail.

We used to. https://en.m.wikipedia.org/wiki/ETOPS

> That would be illegal

What do you mean it would be illegal? Obviously the corporation prices in all the expected future recalls into their prices. Yes they won't charge you for the recall, but the future costumers will pay higher prices if in the corporation's calculation the chance of recalls (or the cost of doing them) is increased.

> > That would be illegal

> What do you mean it would be illegal? Obviously the corporation prices in all the expected future recalls into their prices. Yes they won't charge you for the recall, but the future costumers will pay higher prices if in the corporation's calculation the chance of recalls (or the cost of doing them) is increased.

Why oh why do I have to read this on HN again and again? The price of a good does not primarily depend on the cost to make it. So no Boeing can't easily raise their future prices to account for the cost of saving lifes, because there are competitors.

> because there are competitors

Unfortunately, in Boeing's case there aren't very many competitors.

Ok? Does that change the legality of what I described? I don't think so. And that is what I talked about. Raising their prices to cover the recall would not be illegal. Maybe it would be bad business for them, maybe not. I haven't said anything about that.

> Why oh why do I have to read this on HN again and again?

This is unnecessarily confrontational.

[dead]

They could make products or services more expensive but then manufacturers with many recalls would end up being prohibitively expensive.

Each person can just choose individually a different manufacturer from the many options, one being "none at all". But you only get one government, it takes a majority to choose, and once chosen you're bound to its directions. So not the same thing at all.

If they could have charged more for the car they already would have. A recall only affecting one make or model won't have a large effect on the profit-maximizing price of the car because the value proposition of the car hasn't changed (or got worse because of perceived unreliability). The cost would then be born by the company and not the consumer.

Competition is the antidote to passing it on, which is why regulatory intervention against concentration is critical. Left to it's own devices, competition disappears in capitalism.

We were taught as part of our CS curriculum that "often, the refusal to assign a dollar value to a human life results in it being terribly undervalued."

There is no such reluctance to do this in law. I think in philosophy classes, professors feel shy about acknowledging the humdrum reality of insurance, the tax code, and our regulatory bodies continuously assigning dollar values to human lives. It feels good and makes you look like a better person to say things like "the value of a single human life cannot be expressed in money terms." Perhaps this is the case, and what the companies and the governmental bodies are really valuing is the economically meaningful activity associated with a person and not the totality of their person.

Babies are worth a lot of money even at a low imputed earning potential just because they have so much life to live.

Put some CEOs in jail and you won't need to do all those multiplications.

There’s always a risk calculus that seems cold to an outside observer.

The issue with Boeing and the MAX is that they sort of used the designation of the plane to for lack of a better term, avoid some of the risk calculations.

With the early issues, a pretty cut and dry type training program would have likely prevented catastrophic incidents. They shaved pennys and set many dollars (and hundreds of people) on fire.

If you run a company where low probability, high impact risks drive the operations of your products, setting trust on fire is going to have a real impact on your bottom line. You go from a trusted, admired company to target of memes about assassinated whistleblowers.

My very amateur understanding is that the MAX would have been dead on arrival if it required recertification. It was a marginal bump in fuel efficiency that still lagged behind Aerobus, so their only real marketing strategy was not having to recertify.

Basically either it didn’t require recertification or it wasn’t worth making. I suspect somewhere along the line they realized that wasn’t practical and they either shipped a shoddy project and maybe burned a pile of money or they gave up and definitely burned a smaller but still sizable pile of money.

Probably also some worry that if they didn’t have a competitive smaller plane, they’d lose market share and there’d be even less interest in their next plane.

...Actually it doesn't matter how relatively uncompetitive it would have been in the face of Airbus. Their (Airbus's) waitlist is so bloody long, you'd still have looked longingly at Boeing anyway.

Despite that, they made a coscious decision to deceive airlines, pilots, and their regulators. All to "maximize shareholder value".

That's what's criminal.

Exactly. End of the day, poor governance from product inception to execution to operation.

[dead]

The problem with this type of thinking is that it often assumes externalized costs, and even at that, what price do you put on “I don’t want to use car of brand X because the car maker is doing sus things and people speaking out about it are dying.” ?

Take for instance the recent train derailments. Are the costs of cleanup n>0 if the company can get their lawyers to successfully argue they don’t need to pay it? For the company it’s n=0 but for society it is n>0.

Doing the maths is simpler when you can disregard many factors and leave only the ones that affect your bottom line.

The difference is that the government agency actions do not cause deaths (it merely prevents death from independent causes), whereas "major car manufacturer" kills people with their faulty rear differential.

In practice, there's a difference between a hypothetical probabilistic death rate, and real people / news stories.

And what self-respecting congressman, senator, or president didn't have a pet CEO or three of any said major automotive cartel at the time sponsoring them? If they didn't, they're not doing it right.

Government agencies in the form of rescue/emergency response organisations frequently spend huge sums of money to try to rescue indidivuals.

The US Coast Guard explicitly stated that they "do not associate cost with saving a life" following that fateful Billionaires game of chicken with extreme water pressure.

No it's because they grossly underestimated the importance of brand trust and reputation

Or: they had an accurate estimate for the importance of brand trust and reputation over the short term, and they've had that short term outlook for a long time. Perhaps since 1997.

This is from the book Fight Club https://www.goodreads.com/quotes/691547-wherever-i-m-going-i...

More accurately, this is a quote from the Fight Club movie

It is in the book. The book came first.

Honestly this quote is one of Chuck Palahniuk's best dialogues. Recommend checking out his other work like 'Rant.'

https://en.wikipedia.org/wiki/Ford_Pinto#Fuel_system_fires,_...

> A new car built by my company ...

While I think I get your point, I also believe that the background is very important. If your company applied standard engineering procedures, that's critically different from building a new product and actively hiding the differences with respect to the last one.

Like Toyota's car with a “simulated stick shift”? https://www.caranddriver.com/news/a45754176/toyota-manual-ev...

> The prototype was convincing even when we tried to fool it. De-clutching leaves the car coasting, and selecting lower gears increases the regenerative braking, simulating the feeling of engine braking. When downshifting, it's possible to rev match by blipping the accelerator in the brief moment when the clutch is fully depressed. The penalty for letting the clutch up too abruptly when selecting a low gear is a bump of shift shock—momentarily over-revving the electric motors—and a similar lack of finesse when trying to pull away without sufficient revs results in a virtual stall.

Sure, simulating the stall characteristics of an aeroplane is several orders of magnitude worse than simulating the stall characteristics of a car, but… still.

99.9% of cars with cvts pretend to switch gear instead of just acting like a CVT.

What's your source on this? My 2014 Outback does not pretend to shift gears, is it part of the 0.1%?

I watch a lot of car reviews for fun and they all comment on cvt behavior. The only recent car I've heard of that actually acts like a cvt is the mitsubishi mirage (maybe all mitsus? I don't really see any reviews of them). Then there's the new impreza that sometimes acts like a cvt and sometimes fakes gear shifts.

Apparently they used to behave to cvts but people hated that so they switched to faking gears. Maybe your car predates that, I don't know what year they started doing that non-sense.

My 2021 Forrester absolutely pretends to shift gears, wonder what's different

It doesn't sound like Toyota is trying to hide anything, they are preparing to sell something they think people want.

(The feature sounds stupid to me)

I've been eyeing the Ioniq 5 N which has the paddle shifting rev-limiting simulation stuff as well. Most of the reviewers really enjoy those features on a track. When coming up to a turn, the simulated RPM gives you much more contextual information than a pure electric experience does. The main point that kept coming up is the RPM levels when approaching a corner. They could tell if their speed was right in the approach based on the sound the engine was faking which is how they would drive a manual ICE car through the same track. Of course you can turn all that off and soften the suspension right back up in order to get the comfortable daily driving most folks are after. I don't think it belongs on most EV, but it certainly seems to enhance some. At least while we're still more familiar with the trappings of ICE performance vehicles.

That's the most reasonable explanation I've heard for why the N model makes "unnecessary" noise. Because as an owner of a regular Ioniq 5, I feel it's an otherwise dumb idea. The reviews I've read all just say, "makes vroom-vroom noises, yeah!" But track-time feedback, okay, I can get along with that.

(And it makes those steering wheel flappy paddles at least somewhat useful. The paddles on mine just change the regenerative braking level...which could have been done with a steering wheel button.)

I would guess that it will vanish when someone comes up with a similar feedback mechanism that is better aligned with the performance characteristics of the powertrain.

I think the technology will explode when you can download a tune from classic or cool cars and have the sound and performance map of a Ferrari or Aston Martin when you go out for a fun drive on weekends.

It’s not about max speed but enjoying the experience of driving.

It is a stretch to call the MAXes a new product, even though it turned out to require more extensive work than envisioned, but the bit about actively hiding the differences is right on point.

There’s a bigger difference between the MAX family and other versions of the 737 than there is between all the different crossovers a car company pumps out.

Boeing 737 MAX 7 is 138,699 lbs vs 737 800 @ 90,710lb vs 737 100 @ 61.994 lbs. Hell the new 737 MAX 10 is ~203,000 lb.

> Boeing 737 MAX 7 is 138,699 lbs vs 737 800 @ 90,710lb vs 737 100 @ 61.994 lbs. Hell the new 737 MAX 10 is ~203,000 lb.

No, you are confusing the empty weight of the 737-800 with the mass gross takeoff weight of the 737 max 7.

The correct comparison of MGTW is 174,200 (-800) vs 177,000 (max 7).

Similarly, the -100’s MGTW was 110,000, not 61,994. Also, the only source I can find for the max 10 is 197,900, not 203,000.

Edit: so the plane grew by 80%, not 320%

Is the size the biggest difference or the fact that the center of gravity is totally different? So much so, they created an "hidden" software program to counter the CoG difference so the pilots feel like it is in the same place they are used to?

No, CoG has approximately nothing to do with it.

The problem with the Max is aerodynamics: Civil airplanes are designed with negative aerodynamic feedback, so the nose-down torque (“pitching moment”) increases as the AoA increases. But on the Max at very high AoA this feedback torque becomes somewhat smaller due to interaction of airflow around the engines and the wing. That by itself is not a problem because the nose-down torque still exists and airframe is still stable.

There is a regulatory requirement that the amount of pilot’s control force required to maintain a given AoA must be a non-decreasing function of AoA[1]. Due to the Max’s aerodynamics, this requirement is not met.

Boeing’s MCAS was a bandaid to make the plane meet regulations by applying nose-down trim while at high AoA. The trim results in a higher yoke force, so the plane meets the requirement. A better method would have been a “stick pusher” (which have been used as stall prevention devices for over 50 years, though not on the 737) or addition ventral fins (like on the Beech 1900). But either of those would have probably required recertification

[1] The purpose of this is to reduce pilot-induced oscillations: see what happened with AA flight 587, where the lack of a similar requirement for rudder pedals and yaw led to PIO which ultimately resulted in the tail falling off an Airbus.

This is not the issue that is raising questions of criminal liability.

It’s definitely part of the issue.

Boeing was trying to pretend scaling the aircraft again and again wasn’t significant due to regulations and physics eventually disagreed.

Regardless of how one characterizes the magnitude of the changes, if the unanticipated difficulties had been handled openly, there would be no question of criminal liability. Furthermore (though it is also beside the point), physics has not ruled out the MAXes.

In addition, the door-plug issue is tied in here on account of the 2021 deferred prosecution agreement, which also followed from Boeing's duplicity over the MAX issue.

> Regardless of how one characterizes the magnitude of the changes, if the unanticipated difficulties had been handled openly, there would be no question of criminal liability

You’re skipping over the first half of my statement. If the unexpected difficulties had been handled openly they would have needed to go through more regulatory hurdles. Physics didn’t put them into some kind of catch 22 situation the aircraft could have been safe, it just couldn’t be safe while playing games with regulators. That’s where criminal liability shows up.

As far as I can tell, I'm just skipping over the issues which may be true, but are beside the point, but then, it is not clear to me which statement's first half you think I am skipping over.

The point I have been making all along is that, regardless of what led Boeing to the point of choosing to hide or misrepresent the situation, it is the choice to do so that turns this into a potentially criminal matter. With the same physical/technical problems but proper and timely disclosure of the issues during development, by far the most likely outcome would have been a delayed program delivering MAXes substantially similar (in both construction and operation) to the ones which are certified and flying today. After that, even in the unlikely event that the crashes had occurred, criminal prosecution would be unlikely, and certainly not on the basis of the facts for which it is currently being considered.

> are besides the point

Except they aren’t beside the point.

> substantially similar (in both construction and operation)

The physical aircraft would have been similar, but airlines would have spent 10’s of millions more on training which makes a real difference to them and thus sales.

Boeing could have released the aircraft on exactly the same date while complying with the spirit of relevant relations though at higher costs, but the product would have been meaningfully worse from a sales perspective. Even today regulators have allowed Boeing and the airlines to treat the 737 MAX family as much more closely related to earlier 737’s than they actually are.

All of these things are beside the point here because none of them form the basis on which criminal proceedings are being considered by the DOJ. Without the information hiding and misrepresentation, there is no basis, regardless of either the physics or the economics of the issue.

In addition, even if it is true that regulators have now allowed Boeing and the airlines to treat the 737 MAX family as much more closely related to earlier 737’s than they actually are, this is not the basis of the DOJ's investigation, either.

Criminal proceedings in the US care about motives. It would be vastly harder to bring a case like this if there weren’t incentives to ack as they did.

Regulators aren’t at issue, but trying to avoid regulatory scrutiny is. Or as is often said it’s the coverup that they get you for.

The motives were there regardless of how Boeing chose to act. It's the chosen act that is potentially criminal. The DOJ is not in any doubt as to whether or not Boeing had a motive, and it is not considering at all the question of whether regulators have now allowed Boeing and the airlines to treat the 737 MAX family as much more closely related to earlier 737’s than they actually are, regardless of any parties' motives in that regard.

A and B is false if B is false, but that doesn’t make A irrelevant.

It is not at all clear what (if anything) A and B are standing in for here, so instead of discussing them, let's go back and see what specific issue prompted our disagreement over whether it was to the point here. It was just this: "There’s a bigger difference between the MAX family and other versions of the 737 than there is between all the different crossovers a car company pumps out..." [1] (specific weight differences elided for brevity.)

I won't dispute the implicit claim that this was an important factor in Boeing running into development difficulties, but running into development difficulties is not a crime. Materially misrepresenting the state of the development process (specifically (IMHO) the magnitude of the high-AofA handling problem, rather than merely weight issues) to the FAA is a crime, and it is this, not the fact that Boeing ran into technical difficulties, that is the point of DOJ's investigation, the article, and the discussion here of it.

[1] https://news.ycombinator.com/item?id=40366126

It wasn’t developed difficulties at issue here. They inserted a system and hid what it did and where it could fail from pilots and airlines. Quite literally removing it from the manual: “elected to not describe it in the flight manual or in training materials” https://en.wikipedia.org/wiki/Maneuvering_Characteristics_Au...

So when it failed and pilots had no idea what the issue was people died. The crazy thing here is telling pilots about it could have prevented those crashes even with an absolutely identical aircraft being released.

Perhaps the first thing to note about your latest response is that it makes no mention of the increase of weight of the MAXes over their predecessors, and yet it was specifically over the relevance of the weight change where we disagreed [1]. I have followed this story quite closely, and I haven't seen anyone citing the weight gain as being a factor in this tragedy, let alone claiming that the weight gain itself amounted to something criminal (or that Boeing was somehow hiding it, for that matter), and your summary here, by its omission of the weight issue, tacitly acknowledges its lack of relevance.

The second omission from this summary is any mention of Boeing's interaction with the FAA staff having the responsibility for certifying the MAXes as airworthy (together with the adequacy of the flight manuals and training materials), and yet, in all other accounts I have seen, Boeing misrepresented (to put it mildly) the extent to which MCAS was modifying the handling characteristics of the airplane and therefore the consequences of its failure and the need for pilots to know about it. No-one else, as far as I am aware, disputes the fact that the DOJ's investigation is centered on this dissembling (together with similar dissembling relating to the plug door incident, which is being included on account of the MAX issue being in a deferred prosecution status.) Once your account here is augmented with this missing information, it becomes clear that this pattern of dissembling is what the DOJ is investigating as a possible crime, as I have been saying all along.

Now you want to extend this disagreement by disputing my characterization of Boeing's difficulties in developing the MAXes as being, well, development difficulties! It is not clear to me what point you are trying to make by doing so, but to be clear, I am most certainly not dismissing the tragedy as merely a matter of development difficulties. On the contrary, I am saying that this became a criminal matter precisely when Boeing went beyond treating the matter as an above-the-board technical problem, and started misleading the FAA.

[1] https://news.ycombinator.com/item?id=40366126

What's the alternative? Never ship unless the risk is 0.00? (And yes I get the book reference)

This 5ypical MBA formula ignores the most important variable.

Z = brand trust

For airlines and many other things you also have to consider the case that people might switch to even worse alternatives if the cost is too high. If airlines have to raise the prices too high for added safety features, people will switch to cars which are several orders of magnitude worse in safety. So airplanes might become safer but society may be overall worse off.

Reminds me of a business consultant who recently got roasted on TikTok recently because he described his $500k job as deciding whether or not companies should recall products or just weather the class action and liability suits.

Source?

Just C is set to a high enough value, including personal penalties and imprisonment for any executives who failed to stop this decision (including the failure to setup reporting to hear about such decisions).

Is this referencing a real event or interview?

It's referencing Fight Club

Thank you.

This formula is for the statistically stupid. There is no such thing as average out-of-court settlement. One jury may find your company’s behavior as egregious and decide to drive you out of business by awarding a trillion dollar judgment. Next your business insurance drops you for being uninsurable.

1. There are long tail distributions which have a statistical mean

2. Boeign exists

If a jury awards a trillion dollar judgment, that is not a long tail distribution. It blows up the distribution as it is an asymptote.

When was the last time you heard about a jury awarding a trillion dollar settlement ? If any, fines tend to be in the low spectrum (1% a 3%) of net revenue.

Get some data and graph it. It’s long tail

You just made my point. Thank you. Good day.

oh so this is what google facebook elon musk microsoft does to collect/share user data then get slammed with affordable fines later. I surprised this quote hasnt come to mind at reading those article

[flagged]

Don't turn this into Reddit

(The reference is "Fight Club" for the uninitiated btw.)

the third rule of fight club is that it's okay to explain references to fight club on pseudonymous discussion boards, provided the explanation is furnished in parentheses

There's a button for that.

It’s comical nobody gets this reference, sir.

> Boeing has violated a 2021 agreement that shielded it from criminal prosecution after two 737 Max disasters left 346 people dead overseas

Somehow I think this phrase would have been better without the word "overseas". After all (to quote the old Depeche Mode song), people are people, no matter if they're from the US, Ethiopia or Indonesia, so the fact that it happened overseas shouldn't make a plane crash less relevant. Although, if the first crash had happened in the US, maybe the increased scrutiny would have led to the second one being avoided...

True from most PoV's. OTOH, the U.S. Department of Justice's turf generally ends at the U.S. border, so "overseas" is an important distinction here.

> OTOH, the U.S. Department of Justice's turf generally ends at the U.S. border, so "overseas" is an important distinction here

Nah, the US is extremely aggressive all over the world, to the extent I'm not sure anyone in that country understands the word jurisdiction outside of state/federal in their own context. Be it extradition of people committing crimes elsewhere/online, enforcing their own sanctions on companies in other countries, and tons of other things. Otherwise you wouldn't have Ukrainians getting extradited to the US for running torrent websites in Ukraine, Australians being extradited for running leak websites, French banks being fined for working with Iranian businesses, Colombians and Mexicans being assassinated or extradited for running drug empires in their own countries exporting to the US, kidnapping random civilians to be tortured based on their name/watch model, a law being on the books allowing the army to invade any place that held American war criminals (like the Hague and the courts there) and on and on and on.

Yes and no, and I used "generally" for good reason.

While the DoJ's often-obnoxious international behavior gets plenty of attention, the "how much does this matter to the US?" threshold for them to get involved rises sharply beyond the US border. And the legal basis for their involvement (Boeing does have lawyers, to argue the details in court) often changes, too.

OR - if a small-time, local crook is robbing US banks, how likely is the DoJ to get involved? (Hint: Answer includes "FBI".) Vs. how many small-time, local bank robbers is the DoJ chasing in Canada? Poland? Thailand?

The US also has the Alien Tort Act from 1789 [0] (one of our oldest acts) that gives Federal Courts jurisdiction in violations of law abroad.

It de facto allow foreign nationals to sue parties with sufficient ties to the US (most black money ends up in the US in some way) in Federal Courts for human rights violations committed outside the United States

We also have the Magnitsky Act that allows US sanctions on foreign politicians found to have been corrupt (and it's named after the accountant who Jamison Firestone hired to manage his Russian business and who was assassinated for his investigations into corruption and malfeasance)

There are a slew of additional laws, acts, and precedents that allow the DoJ to step in (or allow foreign nationals to push the DoJ to step in) if bad practices arise.

Unsurprisingly, both China and Russia have been very vocally opposed to both acts, as it makes laundering ill gotten gains much harder.

[0] - https://en.wikipedia.org/wiki/Alien_Tort_Statute

it was worse than just a quick assassination... he was arrested and sent to a horrible russian jail where he was tortured repeatedly and then withheld from medical treatment for a period of time until he died.

True! I was trying to keep a neutralish tone.

The distinction here seems to be going the other way: the DOJ is investigating a domestic entity over its domestic activities, even though the most serious consequences of that activity occurred overseas. If it does decide to proceed, it seems unlikely that it will have occasion to seek extradition of the major targets (or, if it did, that it could reasonably be seen as an abuse of extradition.)

Even though the crashes happened outside the US, the malicious actions around the engineering of those planes happened on US soil.

>Ukrainians getting extradited to the US for running torrent websites in Ukraine

Source?

>a law being on the books allowing the army to invade any place that held American war criminals (like the Hague and the courts there) and on and on and on.

Seems reasonable, considering they don't recognize such organizations. If they held Americans for crimes, it'd basically be kidnapping.

https://en.wikipedia.org/wiki/KickassTorrents#Arrest_of_the_...

In practical terms, America's policy is that might makes right - an attractive policy, when you've got the might.

Extradition is essentially a one-way affair: Ukrainian Artem Vaulin runs a torrent website hosted in Ukraine? Arrest and extradition at America's demand. An American like Anne Sacoolas kills someone in the UK by negligent driving? No extradition.

Anne Sacoolas is somewhat more nuanced than that, mostly because Diplomatic Immunity is a strange necessity for functional alliances.

The underlying gist is that people important to the government or possessing sensitive knowledge are immune to prosecution from allies to prevent prosecution being a viable method of coercing information from government officials. Ie the US cannot charge a UK ambassador, because that ambassador may be tempted to leak secrets in exchange for leniency.

The same typically goes for family members for the same reason.

In this case Sacoolas had done undercover work for the CIA at some point, so likely had knowledge the State Department did not want leaked. Her husband was active in the CIA and likely also had similar knowledge.

The same is true in reverse. You can look up the court cases, the US has had to drop several cases due to diplomatic immunity.

There is an element of might makes right to diplomatic immunity because there is no real higher power to enforce it. If a country is willing to weather the political fallout (and reciprocal loss of diplomatic immunity), potential hostile action, and can get their hands on the perpetrator, they’re free to ignore diplomatic immunity.

In practice, diplomatic immunity is almost always respected, even when it could probably be ignored, because of onlookers. If the US ignores eg Kenya’s diplomatic immunity (who they can likely afford to piss off), it might worry the UK who the US does not want to piss off.

Diplomatic immunity is very, very rarely ignored, but is waived with some regularity. The US is particularly liberal with granting diplomatic immunity, though, and more reluctant to waive it than most countries.

There were a lot of questions about whether Sacoolas had actually had diplomatic immunity, due to not being a diplomat and not having the paperwork a normal diplomat would have. Although perhaps it's to be expected that spies' paperwork would be irregular. There was also a claim that Sacoolas had some sort of secret diplomatic immunity under a secret treaty. Some reports claimed US spies had diplomatic immunity only while on the military base, while their families had immunity even while off base, implying Sacoolas would have immunity unless she was a CIA employee. Which she was at the time, according to some reports. Or was she merely a former CIA employee? Understandably, the CIA is not in the business of confirming such matters.

I agree with you that there is nuance involved.

I would say the precise nuance is irrelevant. Whether Sacoolas had immunity in theory is unimportant - only that she had immunity in practice.

Sacoolas pleaded guilty to causing death by careless driving in 2022. She did not have diplomatic immunity.

Sort of. My understanding is that the UK decided she did not have immunity, but the US disagreed and refused to extradite her.

Then she agreed to voluntarily appear (virtually) and plead guilty, but was given a suspended sentence because the judge noted there was no way to enforce any actual punishment.

So you’re right, though it played out basically the same way it would have if she was immune. The UK was never actually able to punish her, but they do technically get to say she was found guilty.

>https://en.wikipedia.org/wiki/KickassTorrents#Arrest_of_the_...

He tried to get his case dismissed on the basis that he wasn't in the US, and that motion was dismissed by a judge[1]. The reasoning given was that even though he was situated in Ukraine, he was doing crimes in the US by abetting Americans in copyright infringement. This seems somewhat reasonable to me. If a Ukrainian was hacking American computer networks from Ukraine, should he also be immune from US prosecution?

[1] https://casetext.com/case/united-states-v-vaulin

> The reasoning given was that even though he was situated in Ukraine, he was doing crimes in the US by abetting Americans in copyright infringement. This seems somewhat reasonable to me. If a Ukrainian was hacking American computer networks from Ukraine, should he also be immune from US prosecution?

But he wasn't actively doing anything to Americans or American networks like hacking. He was hosting a website where people, including Americans, could post links, and use links to download pirated content. The fact that Americans broke their country's laws is a crime they committed, not him.

The judge's reasoning would imply that anything that happens online where Americans could access it and is criminal in the US automatically becomes a crime that happened in the US, which is crazy and total bullshit. Why isn't the US extraditing Hungarian porn actors and porn companies for showing online where Americans can see it exhibitionist porn which would be illegal in many places in the US?

It's a ridiculous case.

But you can bet that if France tries to extradite someone posting antisemitic bullshit on X related to France (e.g. about the recent desecration of the Shoah memorial), US courts will refuse extradition.

I think you need more solid examples.

> Arrest and extradition at America's demand.

Was he extradited? The article you linked to suggests not.

> Anne Sacoolas kills someone in the UK by negligent driving? No extradition. This article says: "Sacoolas admitted causing death by careless driving, which carries a maximum sentence of five years imprisonment. Justice Bobbie Cheema-Grubb said Sacoolas' actions were "not far short of deliberately dangerous driving," but she reduced the penalty because of Sacoolas' guilty plea and previous good character."

Which seems to suggest you should blame a UK judge for letting Sacoolas go free, no?

https://www.cbsnews.com/news/harry-dunn-uk-anne-sacoolas-sus...

Sacoolas went free because she fled the country immediately after the accident, while making specious claims of diplomatic immunity.

By the time it got to trial, Sacoolas was already beyond the reach of law. The only decision the judge faced was whether to further the controversy or brush it under the rug.

Artem Vaulin and friends from Kickass Torrents.

> Seems reasonable, considering they don't recognize such organizations. If they held Americans for crimes, it'd basically be kidnapping.

So if an American is detained in Germany for a crime committed there, that's kidnapping and the US can invade Germany? I'm sure you realise how delusional that is.

So you understand that there is a jurisdictional distinction between domestic and foreign. Good, so do they. That's what they're talking about.

It's still an important distinction. Your list of things doesn't seem relevant to that at all.

If the US Department of Justice thinks it has jurisdiction over Ukrainian torrent websites hosting links to American-produced media content, why wouldn't it have jurisdiction over American-produced planes killing people in Indonesia and Ethiopia from negligent design and manufacturing, both of which happened in the US?

It would and should have jurisdiction over both, you’re right.

There are these things called extradition treaties.

Which apply to crimes committed in the country asking for extradition.

E.g. Artem Vaulin didn't commit crimes in the US by running a torrent website from his home in Ukraine, yet he was extradited and sued by a court in Illinois, instead of a court in Ukraine where his alleged crimes took place.

Random guys kidnapped by the CIA didn't commit crimes in the US either.

both can be true: The US is extremely aggresive in "protecting" internal interests internationally and lax at punishing its own for international crimes.

AFAIK the plane itself is still technically US soil.

Planes are under the jurisdiction of the country of the company that operates them, not the one that manufactured them. Both 737 Max planes that crashed were foreign owned and operated.

Julian Assange would like a word with you.

Might be just a remark so people don't wonder if they missed the news about these crashes.

Maybe they meant "over seas"

I highly doubt they'd be criminal indictments. Boeing is USA's baby, can't have them losing against European Airbus, or God forbid, Chinese Comac.

Reminds me of when FAA didn't ground the Boeing, despite the fatal crashes because of that association. Instead, it was Chinese aviation authority that did, which forced every other airline to follow suit.

Most likely a fine, round up a few line workers to take the heat, a manager or two, then call it a day.

> I highly doubt they'd be criminal indictments.

This is a reference to an existing criminal indictment, for which Boeing entered into a deferred prosecution agreement in which they paid $2.5 billion in penalties and compensation and accepted various behavioral commitments, which DoJ is now saying they have breached, allowing prosecution to be recommenced.

So, no, your prediction is wrong, it is a criminal indictment.

It is kind of amazing that a corporation can get a deferred prosecution agreement based on a monetary penalty.

If I had killed someone, would I be allowed to buy my freedom?

For a corporation who doesn’t exist in reality one of the most tangible punishments possible is monetary penalties plus behavioral commitments with teeth. It’s not like they’re going to put the Boeing HQ in a prison complex or something.

Deferred prosecution saves a lot of money and time, on both sides, as well as deflects some amount of discovery. It also leaves a sword of Damocles over them that if they don’t reform everything they hoped to avoid by paying all that money comes back upon them and worse.

This feels like a pretty effective way to punish and attempt to reform a corporation. The fact Boeing is so managed by the accountants that even their lawyers can’t convince them to stop cutting corners and trying to get away with substandard work to juice EPS is baffling though. The fact literally everyone on earth knows this is the problem yet they are still appointing a new airplanes unit CEO that is an accountant doubly so. (No joke, undergrad in accounting, MBA, both marginal schools)

It would work quite well if you put the board in prison though.

They have to actually commit a crime. And there are some things that a corporation can do that this happens - and SOX has criminal liability attached. But criminality requires stuff like intent and involvement. Often times the board is way too remote from the decision to be criminally liable by any sense of justice. It might feel good to say that but when discussing sending human beings to prison the bar should be high (even though it’s too low for many people not on a board).

But material consequences for companies are monetary and since a company’s life is money, that’s actually usually pretty compelling.

> If I had killed someone, would I be allowed to buy my freedom

In some cases this has been allowed, assuming it was not intentional. For example a neurosurgeon who accidentally hits someone in a crosswalk. The family can ask for no jail time so the surgeon can continue practicing because that's the only way the civil settlement will get paid. This depends on the victim or family's wishes, whether or not the prosecutor will approve, and what the judge thinks.

From a societal view and the victim's view it might be a better outcome to get monetary compensation.

FWIW since Boeing is too big to fail I'd love to see the US Government get rid of the current upper management and board. Put engineers back in charge and move HQ back to Seattle.

Boeing's "new" CEO is another accountant. How much do you think he really cares or even understands the engineering and process issues? And how long do you think that "care" will last once the heat dies down?

You're confusing state law and federal law here. If I murder someone and the DoJ is involved in the prosecution for homicide it means I did something like kill a federal marshal.

I'm not getting off with anything less than jail time.

That is very much not how the distinction between state and federal law works.

In general federal law does not criminalize homicide and manslaughter. It's only when it happens to specific groups or in very specific places.

So to get prosecuted by the DoJ, you'd need to kill one of those groups.

Well one of those specific places is "happened on an airplane" which seems to be the relevant one for this analogy.

For example, say you shove someone on a plane and they fall and hit their head - federal manslaughter that would likely be a candidate for deferred prosecution.

If that someone was a law abiding bicyclist or pedestrian you can expect only a wrist slap.

> If I had killed someone, would I be allowed to buy my freedom?

You mean like https://en.wikipedia.org/wiki/Dream_Team_(law) ?

> If I had killed someone, would I be allowed to buy my freedom?

One difference between an individual and a company is the former can't be guilty of a crime because of knowledge held by the hand and imputed to the person by law, but not possessed by the brain.

Which was pretty much the basis for the deferred prosecution agreement here, and why besides the monetary penalty Boeing was obligated to take steps to prevent similar frauds.

I’m going to make a wild guess that those convicted of murder is disproportionately inversely correlated with net worth, so in a sense, yes you can.

You can do the next best thing.

Get a very expensive defense team. There are too many instances of people who bought their freedom that way.

You can get plea bargains, and judges absolutely have discretion to put individuals on probation in lieu of criminal prosecution, if there is reason.

But those have their own separate issues, of course.

How much money ya got?

You're conflating criminal indictment of the corporate "person" with personal criminal indictment. The former is far more likely than the latter. No Boeing execs are going to prison because America is selectively extremely corrupt while pretending not to be.

If they need a head on a pike to get the rest of the world to trust them enough again to keep competing with Airbus then maybe they will find that rule of law still makes sense.

So if members of the C-suite seeing jail time is what is best for the company going forward — surely they will line up and fall on the sword.

The Cult of Shareholder Value, oddly, stops just prior to that point.

I agree with your premise but your first sentence contradicts your last one.

I think there will be criminal indictments, but the punishment will be monetary and will not damage the company long term.

It would be really hard to put anyone in jail anyway, there's too much diluted responsibility.

Plus major defence contractor.

Doesn’t matter how many they kill with their negligence it’ll just be a slap on wrist

Because the EU never started a (criminal) lawsuit against a US company?

In this hypothetical situation, would the US would be extraditing American Boeing executives to Europe?

I think you're overestimating Europe here.

We have a mutual extradition treaty, and since the us frequently desires the extradition of high profile cases it’s not impossible that his could happen.

The biggest problem would be the absence of an European criminal law pertaining to companies.

https://eur-lex.europa.eu/EN/legal-content/summary/agreement...

It is amazing to me how much grief could have been avoided if Boeing had committed to the 757 instead of the 737. Almost every operator who is using large 737s is using ramps and lift buses to access the aircraft, obviating the need to fill a large aircraft from a short staircase. Training pilots once to use 757s would have been a small expense compared to the risk that the entire Boeing brand is destroyed. And, the 757 could probably have stayed competitive with Airbus.

Was all this craziness due to some business magazine article about Southwest Airlines doing so well because they only had one major type of aircraft?

Some of Boeing's large customers would only commit to buying 737s if the update did not require training or updating the type rating. The 737 was originally so low to the ground to enable it to use air stairs and operate at airports without jet bridges (most airports at the time of its introduction). Not sure anyone could predict engine efficiency would require engines so much larger they wouldn't really fit on the 737.

Not that this matters much since they ended the 757 in 2004.

We can't really know what would have happened but it is possible introducing a telescoping landing gear system to let the 757 MAX sit higher off the ground would have avoided all of these problems. The engines could have remained at their actual design location meaning no need for MCAS. The failure mode would be failure to retract landing gear if the telescoping system failed... rather than uncommanded pitch changes. A simpler failure mode with less risk.

None of this would have helped with Boeing's current problem (and a problem that plagued the 787 too): splitting off bits of the company and massive outsourcing to screw labor as hard as possible.

Folks don't seem to remember the 787 was a huge fiasco because Boeing outsourced so much of that aircraft and their vendors were unable to deliver parts on the required timelines, at the required quality, or in the required quantity. Boeing ended up having to buy a bunch of them to bring work back in-house to rescue the program.

Spirit Aerosystems was just the same strategy: outsource construction of the airframe (!!) by spinning off that department as a separate company so they could easily squeeze their now-vendor which would by design turn around and squeeze the employees. Kick them out of the Boeing retirement plan, cut benefits and pay, etc. Is anyone surprised Spirit filled positions with the cheapest bodies they could find? Think about the whole door fiasco: the ticket filed by Boeing QA was initially closed by the Spirit people basically doing nothing and hoping QA would just close the ticket without checking. That behavior didn't raise any alarms within Boeing indicating it was normal behavior by that point.

“… splitting off bits of the company and massive outsourcing to screw labor as hard as possible.”

I think that’s the key point. I don’t think Boeing could have built _any_ aircraft successfully with that business strategy and culture. If not MCAS, it would have been something else.

Southwest and Ryanair, two of the biggest airlines in the world, are exclusively 737. It allows them to keep maintenance and flight crew costs low, and they were the primary forces insisting on Boeing improving a design which is beyond its limits. They'll kick the can down the road for as long as they can.

Did Southwest sell off all the 717s when they bought AirTran? I haven't flown SWA in a long time.

According to Wikipedia:

> Southwest integrated AirTran's fleet of Boeing 737-700 series aircraft into Southwest Airlines brand and livery, and the Boeing 717 fleet was then leased out to Delta Air Lines starting in mid-2013

Same as Alaska Airlines getting rid of the A320s they got by acquiring Virgin America. (Although they're in the same predicament again by acquiring Hawaiian).

I'm sure they considered it. Can a '57 fit in every airport (runway length, gate size, or base altitude) that a '37 can? What about engines? Would any engine maker have been able to deliver revamped '57 engines when they have been mostly focusing on other models?

criminally liable, but not enough for jail time? Then it's not a criminal liability, but a cost of doing business.

Companies cannot go to jail for crimes, its not an available sanction.

board members and executives can and should. shareholder equity should be zero'd (or at least devalued if the shareholder had a significant impact on votes, whatever that means.)

so should any vp, second line and even front line managers if they collaborated.

whistleblowers should get government protection. not sure which government, though.

> board members and executives can and should.

If they individually committed crimes and that can be proven beyond a reasonable doubt, sure.

Of course, by DoJ’s own description of why they approved the deferred prosecution agreeement, that's absolutely not the case with the 737 Max charges.

How can the company commit crimes without its decision-makers committing crimes? This double-standard we have is ridiculous. Every 1% increase in stock price is always attributed entirely to the wunderkind CEO and he therefore deserves tens of millions in bonuses every year, but a criminally negligent company kills people and suddenly the CEO has nothing to do with it? They are acting as the chief executive of the criminal corporation. Those fuckers should be thrown in jail. "Oh but then our favorite Harvard MBA Graduate with a transcript full of Gentleman's Cs who's the grandson of the previous billionaire CEO wouldn't want to be CEO!! Who would want the job!?" -- fucking GOOD. They get paid 300 times more than line workers, and we're worried about how the job might not be cushy enough to attract our favorite nepo-babies? Maybe the most lucrative jobs in the entire world should only be attractive to people who are actually competent at making sure the company is operating well and not literally murdering innocent people!?

> How can the company commit crimes without its decision-makers committing crimes?

Very easily. Companies as aggregates of people beyond just the decision makers can both do actions and have knowledge that the decisionmakers do not, and knowledge and action tend to be important in the definition of crimes.

But not in statutory crimes. Such as statutory rape - you not knowing doesn't absolve you, as the legislation mandates that it is on you to check (within reasonable bounds).

There is a saying "high risk, high reward." This makes sense.

The problem with modern C-suite culture is that it's no risk, all reward. This does not make sense, and seems unsustainable in the long term.

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> shareholder equity should be zero'd

This is what criminal convictions with large fines do. The Board members and executives then get to spend years in shareholder lawsuits. If those suits turn up evidence of individual criminality, prosecution is on the table.

> Companies cannot go to jail for crimes

Seems like they really should. No business activities, commerce or services for the period of incarceration; the company effectively freezes or ceases to exist.

It would naturally be as life-destroying to the company and its relationships with business partners, customers, employees and those who rely on it as it is to the average joe.

Сorporations can face serious consequences for illegal activities. And these consequences can completely destroy them

Companies are expressed through and by people, and yes I ignore the "limited liability" bs since it should not shield you from criminal behaviour.

Limited liability has nothing to do with this. Individuals can go to jail for crimes, to the extent they individually have committed them, but because corporations are aggregates and not individuals, it is possible for them to be guilty of crime when no individual would. On the facts alleged in the 737 Max charges, if any individuals would be guilty at all, they wouldn’t be the executives or shareholders you seem to be lusting for, but two test pilots (and its not clear they would be, only that they personally had the knowledge whose imputation to Boeing combined with corporate representations to the federal government made Boeing guilty.)

> I ignore the "limited liability" bs since it should not shield you from criminal behaviour.

It doesn't. That's not what "limited liability" is for.

> Limited liability is a legal status in which a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a corporation, company or joint venture. If a company that provides limited liability to its investors is sued, then the claimants are generally entitled to collect only against the assets of the company, not the assets of its shareholders or other investors. A shareholder in a corporation or limited liability company is not personally liable for any of the debts of the company, other than for the amount already invested in the company and for any unpaid amount on the shares in the company, if any, except under special and rare circumstances permitting "piercing the corporate veil." The same is true for the members of a limited liability partnership and the limited partners in a limited partnership. By contrast, sole proprietors and partners in general partnerships are each liable for all the debts of the business (unlimited liability).

https://en.wikipedia.org/wiki/Limited_liability

(emphasis mine)

And it doesn't, but the criminal behaviour then needs to be a personal one, not just like (and not saying this is the case) systemic issues at the company, regulatory oversight clearly insufficient or not preventative, no one person really specifically at fault through malicious action or reckless negligence so ehhh blame the CEO.

So the owner of Boeing should be held personally liable? Okay, cool, except Boeing is a publicly traded company which means that the 'owner' is countless individual shareholders around the world, many of which are in turn other companies, whose owners are in turn things like pension funds.

So if you have a pension, should we be locking you up 'cause it was partially invested in Boeing?

Alternatively, you can have a specifically named role which is to be held liable? But then as far as the 'company' is concerned it's still just cost of doing business.

There's only three viable ultimate sanctions for a corporate entity: financial, being split up, and the death penalty.

Who said anything about owners? _Management_ should be held accountable.

An explicitly cited reason DoJ approved the deferred prosecution agreement was that, on the basis of the facts available, management was not collectively, even, much less individually aware of the facts imputed to Boeing based on the knowledge of lower-level employees which were necessay to be guilty of the crime.

The thing is, this sets up a moral hazard where it’s advantageous not to know, not to keep close tabs, and tight control over your supply chain. If there were potentially harsh penalties for allowing this to happen, regardless of knowledge, I think you’d see much better controls put in place, and the incentive would be to keep safety critical operations kept in-house, where they can be better monitored, rather than spun out to make the return on capital look better to public markets.

> The thing is, this sets up a moral hazard where it’s advantageous not to know

No, they would be better off if they had known what the pilots were doing and stopped the fraud rather than allowing it.

> If there were potentially harsh penalties for allowing this to happen, regardless of knowledge, I think you’d see much better controls put in place, and the incentive would be to keep safety critical operations kept in-house, where they can be better monitored, rather than spun out to make the return on capital look better to public markets.

If you made inaccurate reports to governments a strict liability crime with a harsh pubishment not requiring intent, recklessness,or negligence, I think that would actually be a bad thing and lead people to actively avoid any activity or field of business that might require reporting to the government.

But, in any case, the fraud offenses at issue ARE NOT strict liability crimes now, so people without the requisite knowledge and intent cannot be guilty of them.

Thanks for the thoughtful response. I was admittedly thinking more about their quality problems due to their spinning out big chunks of their manufacturing, and the general failures of management, rather than specifically the MAX problems and the fraud in question, so my comment was somewhat off-topic. But in general, it seems that they’re encouraged to not look too closely at parts of their business that are acting in risky ways, and if that’s the case, perhaps we should change the incentives to try to fix that. I don’t know what that would look like, there are obviously limits to how much someone can know about what’s going on 6 layers below in the org chart. But making them liable would certainly be an incentive. I think people would still take the job, given how much is typically on offer.

"Limited liability" is specifically about not passing consequences through to owners (normally in the context of financial liability), and that's the language the OP used.

If the stockholders didn't make the decision to defraud the FAA, then why would they be on the hook for this?

Not that i disagree, but the corporation also has a way of diffusing responsibility to thousands of individuals, each making a small piece of the total decisions that led to an outcome. It's impossible, in theory, to pin a particular individual with absolute certainty, that they'r totally and 100% responsible for said outcome.

Of course, i am in the camp of changing the regulation such that outcomes that would be considered gross neglegence leading to loss of life is layed on the management, regardless of whether the decision is diffused or not. Aka, they hold the statutory responsibility, and is criminally liable - that's the price of being in management. They would get the tools as management to put in place preventative measures, which can be used to cover their ass.

Management gets paid money to make money make more money, but that does not include implying they need to break law/walk on the other's people's bodies to do so.

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which is one of the many reasons why corporations should not be counted as people and allowed a political voice.

If corporations weren't counted as people, they couldn't be held criminally liable when, viewed as a single entity, they had the requisite combination of knowledge ans action to be guilty of a crime, but where none of the constituent individuals considered alone did.

a corporation being held criminally liable holds about as much as a wet paper bag. It is an accounting issue; the cost of doing business. Absolute worst case scenario for the business: it folds. "Oh well, killed people; guess we need to make a new company." There is a lack of _personal_ accountability.

Hold executives criminally liable. Fine companies, sure, but if people die from gross negligence or due to processes endorsed by leadership, that should end with prison time as a warning to others. Don't let them say they didn't know and that the decisions were spread out over people and time. The buck stops with leadership -- that is, ostensibly, why they make the big bucks. If they couldn't know due to spread out decision making then they set up and perpetuated the wrong system.

Until a few C-Level people go to Prison for a terribly long time, nothing will improve.

Firing them with their bonuses and golden parachutes won't help at all

Alternate approach that doesn’t involve sending people to jail just to make an example of them:

Make up a new position with equal authority as the CEO, but their only charter is safety and compliance. Lift the corporate veil specifically for that role (and only that role) so that they are personally liable for the performance in their role and the safety of the company’s products.

Require that companies halt sales and production if this role is unfilled.

In a free market, no sane human would accept that job unless there was a (legitimately) extremely small risk that they would ever be personally liable.

CEOs need incentive structures like this in order to change their priorities/behaviors.

Sending CEOs to jail is the brute force approach.

There are always people willing to risk jail time for a high-enough payoff. They're called career criminals and the role would attract them in droves.

The only way honest people would take it is if they outranked the CEO on safety matters.

we need laws like Europe where they can charge significant percentages of global revenue (not sure how much at least 10%, possibly 50%?) before they'll listen. It's so rare for people to be criminally charged, the only really plausible, realistic change in policy is as I stated.

Somehow another disastrous news cycle for Boeing. Any feature suggestions for my new extension that highlights MAX routes on Google Flights?

https://chromewebstore.google.com/detail/iabbdbcbohcifefhimd...

I have been intentionally avoiding Max since the Lion and Ethiopian (at least when I buy the ticket).

However, there were occasions when the airline rescheduled my flights (for many different reasons), which resulted in me being on a max flight. While I can change one of them, changes to most of them were not practical (time-wise, effort-wise, etc). So, at some point, I have to live with the fact that flying max is unavoidable. Any idea how we can practically circumvent this?

You can fly carriers that don't have any Boeing planes. JetBlue, Spirit, and Frontier don't operate any Boeing planes, as far as I know.

Avoiding all boeing planes altogether seems to be an overkill solution to me. An older version of 737 and 777 seems to be working pretty well. At least historically.

Fly airlines whose fleets are 100% Airbus?

I don't mind flying an older version of 737, though. :-)

That would probably require an active monitoring and notification system outside of the extension, maybe using a flight tracker api. It could be an added option at the purchase screen. At a minimum I may add this disclaimer here.

Fly less

I did. But unfortunately, work does not allow me to optimize this solution.

A company being criminally liable just means slightly larger fines. They aren't charging individuals. No one is going to jail over this.

Still nobody will go to prison.

TooBigToJail as they say.

The least we can do is give them a criminal record.

I wonder if they are criminally liable for murdering 2 whistleblowers as well..

Can you show us any evidence?

Yeah I'm not an investigator with any manpower or authority to go looking for evidence, doesn't mean its not out there. Suspicious enough to start looking in my opinion. The non-circumstantial evidence has to be looked for it doesn't just appear.

I'd guess not as nobody wants to be the judge (or jury member) they find themselves also criminally liable for murdering.

With only some circumstantial evidence? Almost certainly not.

Virtually all evidence presented in courts is circumstantial (including DNA, fingerprints, etc.), eyewitness testimony of the actual crime is pretty much the only thing that isn’t.

If they have anything like that then there might be the case, but so far all that is publicly known is that Boeing plausibly had a motive for wanting them dead. No sane prosecutor will try their luck with only that to go on.

So the argument is that’s it’s weak evidence, not circumstantial. Circumstantial evidence is often the strongest kind.

What circumstantial evidence is there besides motive?

None that I know of, so I don't expect anything to come of it unless there's something more the public hasn't heard about. You can't reasonably expect a murder trial with that little to go on. They don't even have homicide listed on the death certificates.

This is one of those things that "sounds good" in a headline but I will never believe it until I see it. You have to do Enron level of white collar crime to ever get prosecuted in the USA for abusing the "corporate veil" above the middle management or specific individuals who take the fall for the higher ups.

Some details: https://www.youtube.com/watch?v=PlaMQBEg-9M

I think it'll be difficult to prove in court. To actually be found guilty they'll need to prove beyond reasonable doubt that the executives knew there was problems it wasn't just ignorance or ineptness. That'll be difficult to show the jury unless they have some really good smoking gun evidence.

> I think it’ll be difficult to prove in court. To actually be found guilty they’ll need to prove beyond reasonable doubt that the executives knew there was problems

No, they won’t. For one thing, the charges aren’t personal charges against the executives, so they don’t have to prove that executives, specifically, knew anything.

The basis of the 737 Max charges that were put on hold because of the deferred prosecution agreement that DoJ has now determined that Boeing violated are addressed by DoJ here: https://www.justice.gov/opa/pr/boeing-charged-737-max-fraud-...

So, two Flight Technical Pilots and that's it?

It’s exactly for ignorance and ineptness that they should be going to prison.

>unless they have some really good smoking gun evidence

They need witnesses. Like the ones who suddenly die a lot.

And the insurance of boeing pays up the fine/money..

Monopoly busting when, Mr. Government?

I wonder if the value of life for those whistleblowers no longer around is the same...

corporations are not people. people are liable.

good

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What was the crime? Negligent manufacturing?

> What was the crime? Negligent manufacturing?

Fraud related relating to the 737 Max, plus subsequent violations of a 2021 deferred prosecution agreement (that agreement was why they hadn’t yet been prosecuted for the fraud), and the violations of the non-prosecution agreement also may have included subsequent fraud about matters which contributed to the recent door incidents.

Negligent homicide is a criminal charge brought against a person who, through criminal negligence, allows another person to die. Some jurisdictions require "gross negligence" or enhance the degree of the crime where there is "recklessness".

Fraud. Lying to federal regulators during 737Max approval. See link for a better description…

https://apnews.com/article/boeing-justice-department-737-max...

That sounds a lot harder to prove than if they were going for negligence.

> That sounds a lot harder to prove than if they were going for negligence.

Well, it was solid enough that Boeing was willing to pay $2.5 billion plus accept a bunch of behavioral controls not to settle the charges, but simply to get a deferred prosecution agreement in which, if they were really good, they wouldn’t have to face charges for it.

Lying is quite easy to prove with a few incriminating emails.

One reason why the Dutch PM uses an old Nokia phone with very limited capacity, so he needs to delete SMS messages often: https://archive.ph/q6a3l

And I don't think he emails much :)

Deleting official communications can be a violation of law in the US. Hilary should've gone to jail for it, but she didn't because she's a Clinton.

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Well, it's a WP hit piece, so it serves as well TP as far as I'm concerned - whixh I guess we need a lot of with how much crap we have to put up with today. Regardless, I don't I want my news fed to me by Bezos's empire.

Regardless, Clinton was never president, but she's afforded significantly more grace by the MSM than Trump ever has been. If this was about Clinton, WP's article would just say something to the tune of: yeah, she did it, but it's alright because she's a Clinton.

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Which have already been made public

well for one thing, simple negligence is not criminal negligence. Fraud is criminal, so it is intentionally harder to prove. and i think don't criminal negligence really applies here, but if so would have an equally high bar.

what happened also seems to fall much more squarely under fraud (e.g. lying to the FAA) than simple negligence. failing to notice that they missed steps or didn't complete paperwork would be negligent (which they probably have done), but existing criminal case is about intentionally lying about a design change and it's ramifications to game the certification process. that's really bad. way worse.

> Negligent manufacturing

Among other things. There are very strict rules in aircraft manufacturing on procedures to follow, documentation to have, etc. And Boeing have been found lacking to say the least in a number of those.

That plus all the coverups and lying around MCAS are probably enough to put a few people in jail if one had faith in the Justice department.