Probe of FAA oversight of Boeing 737 began before 2nd crash

By Alan Levin and Peter Robison / Bloomberg News

Federal authorities began an investigation of how the Boeing Co.’s 737 MAX was certified to fly passengers before the latest crash in Ethiopia involving the new jet, according to people familiar with the probe.

The investigation was prompted by information obtained after a Lion Air 737 MAX 8 crashed shortly after takeoff from Jakarta on Oct. 29, said one person, who wasn’t authorized to speak about the investigation and asked not to be named.

The investigation has taken on new urgency after the March 10 crash of an Ethiopian Airlines 737 MAX 8 near Addis Ababa that killed 157 people. It is being conducted in part by the Transportation Department’s Inspector General’s office, which conducts both audits and criminal investigations in conjunction with the Justice Department.

Boeing shares were down 1.8 percent percent on Monday, to $372.28.

The Justice Department is in the process of gathering information about the development of the 737 MAX, including through a grand jury subpoena, according to a person familiar with the matter who wasn’t authorized to speak publicly about it. The Justice Department’s Criminal Division, which is overseeing the effort, declined to comment.

The grand jury’s involvement was earlier reported by The Wall Street Journal. Separately, a Seattle Times investigation published Sunday found that U.S. regulators delegated much of the plane’s safety assessment to Boeing and that the company in turn delivered an analysis with crucial flaws.

Both Boeing and the Transportation Department declined to comment about the investigation.

Ethiopia’s transport minister said Sunday that flight-data recorders showed “clear similarities” between the crashes of that plane and Lion Air Flight 610 last October.

The Transportation Department’s Federal Aviation Administration regulates Chicago-based Boeing and is responsible for certifying that planes can fly safely. A possible criminal investigation during an aircraft accident investigation is highly unusual. While airline accidents have at times raised criminal issues, such as after the 1996 crash of a ValuJet plane in the Florida Everglades, such cases are the exception.

FAA employees warned seven years ago that Boeing had too much sway over safety approvals of new aircraft, prompting an investigation by Transportation Department auditors who confirmed the agency hadn’t done enough to “hold Boeing accountable.”

The 2012 investigation also found that discord over Boeing’s treatment had created a “negative work environment” among FAA employees who approve new and modified aircraft designs, with many of them saying they’d faced retaliation for speaking up. Their concerns pre-dated the 737 MAX development.

In recent years, the FAA has shifted more authority over the approval of new aircraft to the manufacturer itself, even allowing Boeing to choose many of the personnel who oversee tests and vouch for safety. Just in the past few months, Congress expanded the outsourcing arrangement even further.

“It raises for me the question of whether the agency is properly funded, properly staffed and whether there has been enough independent oversight,” said Jim Hall, who was chairman of the National Transportation Safety Board from 1994 to 2001 and is now an aviation-safety consultant.

FAA has been designating authority for certification work and other tasks to employees of companies it regulates for decades, and executives at the agency believe it is necessary to keep up with the demands of industry.

The agency doesn’t have the budget to do every test, and “the use of designees is absolutely necessary,” said Steve Wallace, the former head of accident investigations at the FAA. “For the most part, it works extremely well.”

In a statement Sunday, the FAA said its “aircraft certification processes are well established and have consistently produced safe aircraft designs,” adding that the “737 MAX certification program followed the FAA’s standard certification process.”

The Ethiopian Airlines plane crashed minutes after it took off from Addis Ababa. The accident prompted most of the world to ground Boeing’s 737 MAX 8 aircraft on safety concerns, coming on the heels of the October crash off the coast of Indonesia that killed 189 people. Much of the attention focused on a flight-control system that can automatically push a plane into a catastrophic nose dive if it malfunctions and pilots don’t react properly.

Bloomberg’s Margaret Newkirk, Nizar Manek, Michael Sasso, Rita Devlin Marier, Irene García Pérez and Chris Strohm contributed to this report.