By David Shepardson
WASHINGTON (Reuters) - Texas Republican Senator Ted Cruz backed the families of passengers killed in two fatal Boeing (NYSE:BA) 737 MAX crashes and sharply criticizing the Justice Department's deferred prosecution agreement with Boeing.
The $2.5 billion Boeing deferred prosecution agreement, a type of corporate plea agreement, was reached in January 2021 near the end of former President Donald Trump's administration. It capped a 21-month government investigation into the design and development of the 737 MAX following two crashes, in Indonesia in 2018 and Ethiopia in 2019, that killed a total of 346 people.
Families of some of those killed in the two crashes asked Texas-based U.S. District Judge Reed O'Connor to declare that the deferred prosecution agreement was negotiated in violation of their rights as crime victims under federal law and determine appropriate remedies.
Cruz, who is ranking Republican on the Senate Commerce aviation subcommittee, told O'Connor in a letter made public late Monday that "Boeing engaged in criminal conduct that defrauded government regulators and left hundreds of people dead in preventable plane crashes."
Boeing and the Justice Department declined comment.
Cruz said the Justice Department's position - that the relatives of those killed were not victims under the Crime Victims Rights Act - was "simply nonsensical."
The settlement included a fine of $243.6 million, compensation to airlines of $1.77 billion and a $500 million fund for crash victims over a fraud conspiracy charge related to the plane's flawed design.
"It is likely that the crashes would never have occurred if Boeing had been honest with regulators about the problems with the Maneuvering Characteristics Augmentation System on the Boeing 737 MAX aircraft," Cruz wrote to O'Connor. "If the government did not think these people were victims, it is hard to see why it thought a half-billion dollar compensation fund was appropriate."
O'Connor set a May 3 hearing on the families request.
The Justice Department in February opposed the families' request but apologized "for not meeting and conferring with these crash victims' beneficiaries before entering into" the deferred prosecution agreement. Attorney General Merrick Garland met with some relatives on Jan. 26.
The crashes, which cost Boeing some $20 billion and led to a 20-month grounding of the plane that ended in 2020, prompted U.S. lawmakers to pass legislation reforming new airplane certification.
A Texas jury last month found a former Boeing chief technical pilot not guilty of deceiving federal regulators who approved the company's 737 MAX.