US prosecutors recommend Justice Department criminally charge Boeing
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Current stock owners will loose half their value (which is a good enough punishment for this lack of oversight), the state will have access to privileged company information which will allow the prosecution of human responsibles, top executives will be sacked (and their comp reduced by half since their comp is in stocks) and maybe the company will start on good base again.
Just like the unread targets in Wells Fargo, nobody asks for the fraudulent behavior by name, but the incentives often make it inevitable.
not only the internal structure of the firm, but the legal framework in which firms operate, not to mention the cultural mythology situating it all
diffusion of responsibility as one of the defining characteristics of the modern era
In olden times, the monarch's wealth was the state's wealth, and vice-versa.
CEOs being shareholders has a similar problem, in that the only monetary punishment possible against the collective necessarily also harms those with no power to prevent the actions which were punished because it's not a democracy.
(One dollar one vote != one person one vote; also the workforce generally, not sure about Boeing in particular, have minimal to zero shares/votes).
For this reason, I favour a degree of personal responsibility for management all the way from line managers to the board… and for government officials all the way from parking inspectors to presidents.
The details of such a system to make it fair and balanced are an entire constitution, not something I'd be qualified to write, and definitely to big to fit into this comment.
Most monarchies at least pretended to separate the state and privy purses, FYI.
I'm not opposed to this. But I think our corporations should be regulated by the government, not by shareholder oversight.
After all, shareholders are essentially powerless in the current system. Each individual shareholder's power is far too dilute, many people owning shares through pension funds don't even know they're shareholders, the minority shareholders have no way to contact each other to coordinate, and it's completely normal for the likes of Apple to spend billions on secret projects and the shareholders to only find out after the fact.
Hell, Google even has three classes of shares - one with no voting rights, one with 1x voting rights, and a special class with 10x voting rights for Larry and Sergei ensuring they have a majority of the votes even without majority ownership.
If we think shareholders are supposed to be providing oversight to companies, they need vastly more power to do so.
If (and I understand this is a huge "if") this kind of action was more common, you might think twice before investing into any companies that run a serious risk of direct government interaction to protect the public.
What you are suggesting will instead lead to a downward spiral of investor confidence in investing in American companies, and letting other world powers dominate in key tech areas of strategic interest where investors have more confidence and dont have to worry about gov punishing shareholders with no voting rights by taking away their shares
These kinda ideas often seem to originate from a place of revenge or vengeance on someone folks feel is responsible (here its ‘shareholders’)
Better to just install more government oversight (instead of more regulation) improve transparency, amend whistleblower laws to prevent retaliations that boeing did, etc.
Those are much more important and useful for this country.
Imagine there are two planemakers, each has a computer system to record when they removed the door bolts. One company uses it 95% of the time while the other uses it 100% of the time.
For the market to assign a different price to those companies, shareholders have to be able to tell which is which.
Investors cannot tell. The official reports don't include anything that wasn't officially reported. People who know first-hand have insider information, and are forbidden from trading on it. Shareholders have no power to enter the assembly floor and carry out spot checks. And "independent" auditors like Accenture are even bigger clowns than Boeing themselves.
I get that the idea of self-correcting markets are very appealing. But there are a ton of situations where they don’t work or don’t fix all of the problems they cause. Those situations are under the general umbrella of market failures. This particular market failure would probably be classified as adverse selection or more general information asymmetry.
I'm saying that when a corpo breaks laws (don't follow regulations and lie about it), the fines need to substantially hit their shareholders, so that shareholders are generally aligned with following regulations and will demand additional diligence. Otherwise the game will be as it is - commercial aviation is highly regulated, but Boeing is so big that the fines don't matter to them or their owners (i.e. shareholders).
1. Punishing shareholders doesn’t sufficiently discourage corporate management. They are usually fine even if the stock price takes a hit. The fact that corporate management may not act in the best interests of shareholders is a known example of the Principal-Agent Problem.
2. Shareholders might not know that bad behavior is happening, and even if they do, we want to discourage bad behavior that regulators might not find out about, and before it happens.
3. Many investors are not actively investing, but using robo investing services like Vanguard for their 401k. That means that even if you’re technically an “investor” you’re not actively investigating companies for fraud.
In particular, just in your comment, you name the planemakers—Airbus and Boeing—and the "independent" auditors.
If there were two dozen different companies manufacturing planes, all of which were required to comply with the same regulations, and two dozen different major auditing companies, the chances of any given manufacturer getting away with this level of illegal corner-cutting for any length of time drop precipitously. At the same time, the costs of doing so rise, as it becomes much, much easier for the US government and various airlines to cut a manufacturer out of their contracts the next time they come up.
Not exactly true. And both the institutional shareholders and ultra-rich shareholders have the experience, resources, and connections to police corporate behavior far more tightly than they usually do...
But why should they bother policing behavior, when the maximum penalty for malfeasance has been wrist-slaps? (And similar for the banks and bond markets which large corporations rely upon.)
Vs. if the major investors knew that major corporate malfeasance could and likely would cost them $billions - they might very quickly grow more active and assertive, the Boards which they elected would not be passive rubber-stampers, and corporate executives would face regular hard scrutiny.
But all that would be real work. Vs. hiring lobbyists and schmoozing politicians, to make sure the maximum penalty is "wrist slap", is far easier.
They really don't, at least not in the case of index fund investors like Vanguard and BlackRock. Have you ever read about their operations? They run a very lean ship. The only reason you're able to invest in index funds with 0.005% fees is because they have essentially nobody on staff, at least compared with the number of companies they invest in. They definitely can't do the kind of investigation and policing you're talking about without radically changing their pricing
(and if they did do that, a competitor would come in offering to skip the inspections and go back to 0.005% fees, the money would flow there in droves, and we'd be right back where we started. The fundamental issue here is that passive investors don't care and you can't make them care.)
But that is quite different that saying that the Indexes & ETF's would for-sure sit on the sidelines if some more-active large shareholders were pushing a credible plan to force better behavior down the throats of a major corporation's C-suite. And the Indexes & EFT's backing such a measure - which effectively costs them 0.00000% to do - would likely prove the critical thumb sign from the Imperial Box.
I would be grateful if you could elaborate on this. Is this a strategy for a fund to make money that I don’t understand?
> The only reason you're able to invest in index funds with 0.005% fees is because they have essentially nobody on staff, at least compared with the number of companies they invest in. They definitely can't do the kind of investigation and policing you're talking about without radically changing their pricing
I think this is exactly what needs to happen. Why should passive investing pay off? The vast amount of 401k money that has poured into the stocks behind the S&P 500 with no strings attached has incentivized a lot of bad behavior and made just about every US citizen with a retierment account complicit. Bad corporate behavior _should_ hurt the bottom line of the owners; it _should_ cost more to invest; investors (all of us) _should_ worry about whether a mutual fund is protecting their investment by divesting from companies that engage in criminal recklessness; our government _should_ disincorporate companies that put lives at risk, especially when those companies are major defense contractors.
On a tangent, I also think monarchy results in better management of the asset that is the country than democracy. The leader is there for life, the country is his sole property and thus incentivized to improve it and views the country as his life's work. (Obviously there are plenty of exceptions.) On the other hand, democratical leaders more often than not tend to view presidency as a means to acquire wealth, lifetime immunity, power and reputation in a short amount of time. Once elected for a term, they can engage in however much legal corruption they want, they'll be gone in a few years anyways. The POTUS poses an exception in that the country itself is a monarch and a hegemon over the rest of the world. Meanwhile especially third world countries, but even developed countries like Canada and many in the Europe have presidents promising the heaven in the election season and keep being as corrupt as last president once they are elected.
Draw the parallels with Venture Capital, board directors and whatever else you want.
Obviously. The history of monarchy is full of bad heirs, succession crises and aristocratic disputes over legitimacy. Under monarchy, you don't get a say in the fact that your king is AEthelred Unraed, Tarquinus Superbus, George III, Ivan Grozny, or Leopold II. Say what you will about republican systems, they have their own issues. But monarchy, as a system, is just an absolutely miserable form of government. I wouldn't dream of trading the flawed republic that aspires to respect my rights for the caprice of a monarch. I don't know where you got your romantic ideas about monarchy from, but, my friend, read some history!
Considering how tight boeing is with the government, which scenario is more realistic? :)
Even though it will harm shareholders, they still have a responsibility in attempting to limit the behavior. (Although from the boards perspective they'll claim they can do anything as long as they're there)
Why? Just criminally charge and fine them into bankruptcy. This wipes out shareholders and lets the creditors—the government would be a big one, on account of the fine—reorganise the company and review all the books and records in a legally precedents venue.
Everyone keeps trying to invent new mechanisms for what fines and bankruptcy already do.
See the tiny fine the government handed the cellular providers for selling user data
Generally speaking, I don't think it is. If you own a significant stake, you should be worried about jailtime. It's no different than if your dog bites someone.
Fifth Amendment says no. I'm not even an American and I know that will never fly. The US is not China, which very much can and does do this.
It's not actually necessary either! There's plenty of scope for fines and compliance orders. Heck, the US government could even ban them as a supplier, putting them out of business .. if there was another plane company in the US.
The whole fiasco is the fault of wrongly approving the creation of a US plane monopoly in the merger with McDonnell-Douglas.
"No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation."
Final clause.
(this is why unrelated sub-clauses should be numbered, not just appended with semicolons)
They can be fined into bankruptcy and effective non-existence, the executives can go to jail, but no, Boeing can't be seized because we have rule of law.
Edit: I'm pretty sure if a company started selling cocaine in the US, something would happen to seize and stop that company.
That only follows to the extent that there isn't currently a law saying that a corporation can be seized due to massive malfeasance. If we passed a law providing for that as a punishment (or if there's already one on the books that fits, that you and I just aren't aware of) in clearly defined circumstances (or as clearly defined as such things ever are), then there would be no problem; it's not like there's a Constitutional right to never lose your corporation.
Powers of expropriation are the stuff of Communist dictatorships. "We don't do that here."
...as we have both just been saying...
> and any such law, would, thankfully, be unconstitutional.
[Citation needed]
If the government can liquidate assets used in a crime, then if "Boeing" commits crimes, it follows that the government should be able to liquidate Boeing, because the entire company is an asset, and the ones committing the crimes are, in any meaningful sense, the people in charge of Boeing. Using that asset. To commit the crimes.
Given that, it seems to be a pretty huge stretch to claim that seizing such a company, and operating it (especially temporarily) for the public benefit, in order to both deny access to the fruits of the crime to its perpetrators, and prevent further such crimes, would be unconstitutional. It would also be massively less wasteful and destructive to the economy and the lives of the many innocent people working there to simply change out the criminal leadership for government-appointed caretakers rather than sell it all off.
Again: I'm not saying there are any laws on the books that would permit this. I just think the idea that it is prohibited by the Constitution is utterly unsupported and, at best, an extraordinary claim.
The combination of the Fifth Amendment takings clause and the Eighth Amendment excessive fines clause. The government can fine Boeing what we would consider a lot of money (perhaps even into the billions), but expropriation isn't permitted in the United States. If they want the rest of the company they can eminent domain it but that involves paying the shareholders market value (after decades of litigation).
Not that either, for a company as large as Boeing, because of the Eighth Amendment excessive fines clause.
I 100% agree about numbering them.
There's obviously no scape goat in Boeing. IT's systemically corrupt, which means Americans will happily try to make it look like that's normal and reasonable and "the best we can do". If not outright find the most dull, corrupt white guy and hold him up as a paragon of the perfect saint.
Correction - a lot of rich and powerful crooks,
Do you care about "Elevance Health" - they larger than Boeing according to the fortune 500 list (20 vs 52 in 2024) - but I hadn't even heard of them until I looked up the list just now. I have no clue what the company is up to (health informs my guess, but it is a guess). Companies like them can continue to do whatever and voters won't care.
It'll take much much worse than a couple more crashes for the Boeing issue to eclipse all those things to become an issue people actually change their voting over.
If a plane full of Americans falls out of the sky and kills everyone on board, and it turns out to be because of negligence at Boeing, and it happens close to an election, that will definitely be used against any incumbent politician who could be portrayed as responsible.
Politicians want to avoid a scenario like that. But it does require several things to line up for that scenario to unfold, so they have no incentive to care beyond what is necessary to prevent it.
those may not be your side of the issue but it is clear a lot of voters care and are voting opposite of you.
Like 240 decades.
Unfortunately, Americans and the peoples of many democratic countries have given up on verifying if their elected officials are actually doing what they say they are, so taking a ~~bribe~~ campaign contribution and lying about it is a medium-high gain and low risk activity.
As a bonus, you can then use those contributions to market yourself and your lies to the same voters even harder!
Can you name someone whose been scapegoated for 200+ deaths recently?
This is what you get in a society in which money is the only thing that matters. This is a stupid idea to even write here let alone build a society upon.
Boeing would be huge news, and would be in much worse trouble, if there was a flamboyant bad guy to hold people's attention. Being dull is an important quality for corporate leadership for exactly this reason.
This is part of a larger degradation of rules-based order. Companies do not fear regulators and certainly have no moral or ethical qualms about violating established rules. Ignoring rules is now an expected part of business. It is rewarded. We champion "disrupter" leaders who openly defy authorities and tear apart established norms of behavior. That needs to change. Shareholders need to stop rewarding such activity.
And how, exactly, do you expect that to work? Shareholders are going to pay attention to what's profitable, and basically nothing else.
No; the government needs to stop turning a blind eye to such activity. We need the relevant enforcement departments to be better funded, the policies to be in favor of cracking down on violations of all types, and a mandate from the highest levels not to be shy about seeking the heaviest penalties even from the biggest, most lobbyist-endowed offenders.
I agree with what you think needs to change, but I don't think anyone should be confused about corporations in the past somehow being more ethical than they are today.
Yes, that's what happens. If you leave a couple of bad apples in a barrel they off gas ethylene and spoil every apple in the barrel. You have to regularly get rid of bad apples before they spoil the bunch.
It's such a great metaphor, it's too bad it's so widely misused and misunderstood.
And no, unfortunately this is not a tinfoil hat view. There is a long history of Boeing getting away with murder already.
And there are a lot of them to charge. Start with the last two CEOs, add in the CEOs/COOs for Boeing Commercial aircraft, the test pilots, the program director(s) for the 737 Max, the engineers who designed MCAS and didn't add in any redundancy, and then move all the way down to the Spirit and Boeing employees cutting deadly corners on the production line.
“Do better” with no extra object specified means the implied subject should improve with respect to itself. Grammar only requires an extra subject in instances such as “Do better than …”.
As a further example, someone talking to me might say “spend less time arguing with randoms on the Internet and performing other pointless pontification” and an listener/reader literate in the language being used would know not to need nor expect an extra subject to be specified.
You’re claiming that capitalism is “bad” because there’s a hypothetical you imagined where there could be better outcomes?
Everything is “bad” by that standard.
Eg, “Airplanes are bad because they don’t operate based on anti-gravity warp drives! If airplanes want to shake that reputation, they need to do better!”
…do you have any reason to believe better outcomes are actually possible?
Can you show the court, on the dolly, where dspillett said it was absolutely bad?
IIRC the closest I came to that was suggesting it had a reputation for doing some bad things.
Saying something can improve is not the same as saying it is absolutely bad in all imaginable ways, unless you live in a fantasy world where there is no “meh” only perfection and anti-perfection.
> do you have any reason to believe better outcomes are actually possible?
Not much, beyond a small and rapidly diminishing supply of hope!
Capitalism is a birthday party and you're a present.
You'll notice that the capitalism detractors never advocate for greater capital management abilities. It is always to take away such ability so that they can feel less guilty about their choice in not wanting to manage capital. Can't really blame them. Managing capital truly does suck. But it is interesting nevertheless.
Capitalism allows private ownership of capital, just as (to introduce a comparison) you are allowed to have a birthday party, but you in no way have to participate. You can choose to forgo capital ownership entirely, you can hold public ownership with other people who wish to share in the ownership (e.g. co-ops), you can do just about anything you want. Even within the USA, you can find people doing all of those things.
What you probably cannot avoid is trade. I expect that this is what you really have in mind – it is oft confused with capitalism for some reason. Indeed, a human surviving in complete isolation from other humans without being able to share is an incredibly challenging feat, and, frankly, isn't realistic for anything more than a short period of time. Trade is not a feature of capitalism, though. Trade is something else, and is much more fundamental.
In reality, we all participate in capitalism. We all have to deal with this system, you can’t avoid it. It imposes its hierarchy on you from the day you are born, and getting out from under it is a lifelong endeavor. Nothing theoretical about the constant pressure coming from the top down. Maybe it’s not prescriptive of capitalism but you can’t deny it’s an emergent feature of the system, as if it’s an intended consequence. Cant really convince me at this point it’s not, sorry.
No I didn’t have trade in mind, listen to my words.
It is an emergent feature of trade. Realistically, there is always going to be someone who has something you want more than what they want from you, creating an imbalance. Trade and capitalism are not synonymous, though.
Consider the most primitive type of trade humans engage in: Sex. There is little question that the most sexually attractive "at the top" have way more power than those "at the bottom". People will fall over themselves for a chance to please the "hot girl" all while the "homely guy" doesn't even get the time of day. This is the same type of hierarchy that is featured in the larger discussion taking place here...
...Yet is not capitalism. If you do think that kind of sexual hierarchy is capitalism or a product of capitalism, you are not using a definition that aligns with any common usage. Sex appeal is not traditionally considered capital. Capitalism wasn't even invented when these human sexual dynamics came into existence.
> No I didn’t have trade in mind, listen to my words.
Your words are poorly chosen. I do my best to infer, but there is only so much to work with.
You could argue that the punishment is not harsh enough for deterrence, or not fast enough, but that's an issue with the government, not the market. Furthermore, the main reason why they are not more afraid of market repercussions is because they know the government needs them, they created a monopoly.
The system is mostly working as it should. The malicious players were found relatively quickly, through a mix of whistleblowing and the first relatively minor accidents getting a lot of attention (fourth estate and all).
Don't get me wrong, we need to keep making things better, there's so much work to do. But if the system were not working we would just have not heard about any of this and accidents would keep happening routinely while robber barons get filthy rich (literal violent monopolists, not plain billionaires), like 100 - 150 years ago.
>> Not really, it's just bad management
I believe the argument being made is that in "early-stage" capitalism a company could not afford that type of management, as it would immediately loose the market due to "true" competition and other "quality" options being available.
I think that the current version of capitalism is "working" (very relatively), exactly because there is substantial oversight from the government and the media, and there should be more.
An open and fair marketplace generally seems to be good at improving lives at scale. But I don't understand why so many people have this idea that it is a fundamental law of nature, that if you remove government intervention it will naturally become a more open and a more fair market.
An open and fair marketplace is quite artificial and needs so much enforcement to keep alive. Futhermore, even if it is good in general, there are a huge number of exceptional emergent behaviours that are bad and require intervention.
We clearly see from history that without oversight, the economy does not become an efficient market. It consolidates into rent-seeking monopolies, often defended and expanded by violence, controlled by an elite with a self-reinforcing long-lasting hold on power. In other words, different flavours of Feudalism, not always focused on land assets.
My point was generally that the system (and specifically the current flavour of capitalism) is not fundamentally broken, it has the right shape of components and they are working roughly how they are supposed to, to balance each other. If it was broken, things would be way worse, as we have seen throughout history. But there's so much to improve.
I guess I am looking at it from a too wide lens. Sure things are working much better than they used to a century ago, such disasters were largely accepted as a normal cost of being productive, there was no system to correct them. But that's no excuse, I do agree with you, this Boeing mess was not acceptable, the system needs to do better.
So while there is some competition, the airline industry is very much controlled and regulated by government.
And here in particular there was a lot of failures in particular with the FAA allowing Boeing to self-regulate (when has that ever worked?) and then the DOJ failing to prosecute after the two deadly crashes.
It really seems like a systematic problem, not an exception to an otherwise healthy situation. Time and time again we see a lack of consequences to corporate greed when those actions are literally killing people.
You're quite correct that things are not as bad as during the robber barons era, but that is a pretty low bar. We can do much better.
In my anecdotal experience, the EU social-democratic model seems to be the most competent one right now specifically for this problem: more of these should be state-owned. Don't get me wrong, this is a crappy solution too, you are making a lot of sacrifices for it, but generally, these state-owned corporations do seem to be better at delivering critical services, and often (unintuitively) more efficiently than private ones.
My point was that this is not necessarily about "late-stage capitalism" (as I understand it), this was not a case of the open market harming society. Because indeed Boeing is a state-supported monopoly and that's the root of the issue, at least in theory capitalism abhors monopolies.
This happened because Boeing has both the duty to make the most money possible, and is protected by the government because they offer a critical service. There is something fundamentally broken in this incentive model. Either let them play in the open market and encourage competition, or make it non-profit and serve the state directly. A mix of both is a recipe for disaster.
> the engineers who designed MCAS and didn't add in any redundancy,
There is, but it's optional :))))
Validate the tests while knowing that they shouldn't. It's literally their main job, to confirm that the plane handles as it should.
https://www.seattletimes.com/business/boeing-aerospace/explo...
When your literal job is to test critical safety features, yes, you can be blamed for failing at it. Especially when people died because you knowingly failed at your job.
What's next, not blaming architects for designing an unstable building that crashes down? Not blaming a chemical factory's security inspector for OKing dumping of toxic waste into a river?
From experience with government contracts, aircraft certifications, and listening to directors speak, they will tell people whatever needs to be said to get the airplane to pass a final check to get a certification.
One exchange I overheard with some details changed: >you will get a warning light here but this is the end of the fiscal and we need to ship airplanes. It will break on landing then take one week to get the replacement part and we have the maintenance contract anyways. By then we will do the work to fix the issue before anyone else actually flies this aircraft. You can retest it before final delivery and you will also get a bonus or we have more test pilots who hate being drone pilots.
https://www.theverge.com/2021/10/14/22727244/boeing-737-max-...
Yes, this might be driven from a punishment thought of justice but it is important that there is an educational correction in the business to no longer calculate human life in terms of money which one may balance against.
"Just following orders" is not a valid excuse. Your manager being a piece of shit forcing you to skip on safety does not invalidate your guilt in skipping on safety.
A whole team circumventing the official process and forgetting to put back bolts they took out isn't something that can be brushed aside as "they were just pressured by management". They made a very serious mistake and all of them deserve at least a suspended sentence for it - it literally could have killed 100+ people.
A whole team of engineers designing a critical system that can crash a plane with optional redundant inputs on inputs that are known to get blocked/fail are irresponsible.
* An "everyone was doing it, and everyone knew" layer of junior employees aged 20 or so.
* An obfuscation layer, comprised of several levels of middle manager who regularly shift roles, companies and countries.
* An "I had no idea this was going on, and would have stopped it if I'd known" layer. This is the CEO and suchlike.
If the criminal behaviour comes to light, the top-layer employees pretend not to have known about it; the bottom-layer employees say (accurately) that everyone was doing it and they thought it was normal; and the middle layers split themselves between the two, relying on forgotten e-mails, miscommunications, and placing the blame on people who aren't around any more.
If it was your job to tighten the bolts and you didn't, that's one easy slam dunk coming your way. And they're right.
Any engineer with AoA failure information (which I assume in Boeing is an easily obtainable information) should have designed/reviewed/approved MCAS in a different way.
See the VW emissions case.
Documents get names and signatures for a reason.
Hell, I'm not anywhere close to aviation, just have an interest in it, and even I know that AoA sensors are prone to failure (relatively, for an aeronautics component), can easily get blocked by external stuff, and multiple crashes and accidents have happened due to that. It's nothing short of criminal negligence to design a system using only one.
That's why aviation has very strict reporting and documentation requirements, everything should be traceable. Of course Boeing failed at that too, with them being unable to say e.g. who actually worked on the famous missing bolts. Send them all to prison for egregious negligence, and maybe the other workers will start refusing to do subpar and deadly work.
If the C-level knew, they were criminally culpable. If they didn't know, they were criminally negligent.
In that kind of situation, it absolutely is a management responsibility.
Test pilots have warned about this issue, we have emails proving it. Specific people have decided to release a dangerous plane, and those are people with decision making power higher up the food chain.
Companies like to be treated like natural people when it suits them, but then when it comes to liability and accountability things conveniently don't apply.
Need to figure out how to do that without punishing the (presumably) innocent employees.
The thing is, companies are composed of people, and those people can just go to another company. Real people are composed of organs, but those organs can't just move to other bodies and commit the same crimes.
So, companies are just not people and the whole idea is stupid.
Asking for a friend.
Corporate misbehaviour can be punished by fines, jail time for execs, and revocation of their business license - probably the closest thing to jail time
I agree that "corporate jail" doesn't make much sense, at least not in a direct analog to human jail. I think the closest you could come to "jailing" a corporation would be for the government to take temporary control of it, go through it with a fine-toothed comb to eliminate the corruption and malfeasance, and operate it for the benefit of the nation as a whole for a specified period of time, then re-privatize it in some manner as long as it wasn't some kind of a natural monopoly or necessity of modern life.
You need a bulletproof judiciary, that can rule fairly on which companies are taken over and which aren't, and all sorts of checks and balances to ensure that the government can't just abuse this ability to nationalize all the things.
Even though I proposed the idea of putting companies in jail, I was doing it tongue in cheek.
Ultimately fines are probably the only way to go. But the fines must be big enough in order to ensure it's an effective deterrent. It must hurt the company enough that it cannot just be considered the cost of doing business.
If a company is fined enough that it must actually close down/declare bankruptcy, then that's probably the few eggs you need to break in order to make the omelette I guess. A bunch of presumably innocent employees might be hurt by this decision, but overall it's for the greater good.
That's goofy.
> Under the 2021 deal, the Justice Department agreed not to prosecute Boeing over allegations it defrauded the Federal Aviation Administration so long as the company overhauled its compliance practices and submitted regular reports.
So, if they want to prosecute, I'm assuming it's because Boeing didn't adequately overhaul its compliance practices or that it didn't submit regular (or truthful) reports. But what are the specifics of how they failed?
I also get frustrated reading these comments here, which are basically "Boeing bad, they only care about execs and shareholders, they ruined their engineering culture." I agree with all of that , but when the government wants to criminally charge someone or a company, they need some specifics (i.e. fraud). It's not enough to just say they had a lax culture or valued profits over safety. Again, to emphasize, not saying that's the case here, I just don't understand how folks can form an opinion on criminal prosecution without even knowing what specific charges are being proposed.
If non-Boeing tickets were an optional upgrade when booking, I’d take it.
Keep in mind the whole “certify your own stuff” that contributed towards the Boeing mess is a US gov plan
Sounds good, but what's to stop those responsible spinning up another company?
It used to be that companies existed to transfer value to shareholders by doing something. In the case of Boeing it was making airplanes. They build you an airplane, you pay them for it, they had a list of rules to play by in order to reduce the costs of making that plane in order to make a profit.
Boeing's incentives are to transfer as much value as humanly possible to its shareholders. They've made sure that large parts of their C-Suite, managers, executives, etc. are in on this by giving them shares.
Those people have decided they don't want to play by the rules anymore. There's little incentive for them not to. If the Biden administration gets voted out in November, most of these regulatory and law enforcement pushes you've seen here of late (Adobe, TicketMaster, etc.) are going to go away because the people in charge at companies like Boeing have participated in regulatory capture. Thus, there are no more rules.
You have to start throwing those people in prison (or worse) for the rest of their lives and make compensation in unrealized gains illegal if you want this to stop.
When we domesticated animals, we had to be very cognizant that they were not people. For example, bulls are extremely aggressive and extremely physically powerful. You can allow a person into a room with a baby in a crib. There are exceptions, and they are treated as exceptions. With bulls, you do not allow them into a room with a baby in a crib, by default or by exception. It would be considered criminally irresponsible for a person to say, this bull is an exception, I've had it for five years, it's a great friend, and based on its past behavior I'm going to keep it in the same room with my infant child. You just wouldn't do that.
We have enough experience with corporations to know that we need to start treating them less like humans and more like a species of partly domesticated but still extremely dangerous animal. Based on long experience with them, we should expect corporations to predictably lie, steal, and destroy whenever it is in their financial interest. We don't need to get rid of them (we don't have any good replacement for their role in the economy) but should structure the way we treat corporations around our knowledge of their destructive tendencies.
Our long experience with cattle has taught us ways to protect humans from their destructive tendencies while still extracting what we want from them. We keep cattle out of our residences, we castrate most of the males, and we manage intact bulls in a way that ensures human safety while allowing them to serve their necessary functions. We design fences and other management technology with their aggression and power in mind.
It is long past time to treat corporations the same way. In many small ways we have done this, but always held back by the human metaphor. Corporations are in a sense made of humans, and we feel a sense of respect towards fellow humans that we then unconsciously, and with horrible consequences, extend to the corporations they are part of. We need to consciously and decisively put that behind us. You don't have to be cynical about humans to accept that corporations are greedy and untrustworthy. That is their nature. How you square that with the nature of the humans who run them is irrelevant, as irrelevant as bovine neuroscience is to knowing that we should keep bulls out of our nurseries. We don't have to agree about humans to agree about corporations and stop giving them free reign to wreak havoc in society.
There is more to the rot in this company than just domestic customers falling out of the sky.
I would wager that there is a great deal of actual, very real misanthropy throughout the executive structure.
so much of US flight infrastructure is based around boeing and they're literally falling apart in the sky
nasa wanted competition with spacex so badly that they've pushed boeing to strand two of their astronauts in space
companies that fail due to inherent internal structural and corruption issues need to be broken down and sold off, but we can't even do that because the US is somehow reliant on it
why must we write out our own downfall through corruption with failing companies? i bet there's thousands of upstarts that would take 1/1000th the funding given to boeing for a lot of their important projects that would come up with genuinely innovative solutions to problems we never knew we had if there were actual competition in aerospace
It’s only going to get worse and in 10yrs we’ll be wondering why it’s even worse than it is in 2024 while people will still defend how necessary it is to national security to prop up a half useless megacorporation, when it’s actually harming it
Let them face risk, let the good/important parts be sold to better leaders, there’s plenty of money floating around to dump into the market to let competition take over the second there’s an opportunity for a new lively major business sector.
You want incentives for a corporations to follow rules? Ensure that there is more than one or two of them.
Owning the primary arms contractors would make it easier to shift production into shells, rather than negotiating long term deals before breaking ground to expand production capacity
Lots of countries own state arms manufacturers. Doesn’t mean the state would takeover the entire supply chain.
Look I understand it’s not done enough thus my proposal to do so. It can be done, it should be done but it is not done widely because of $$$
Under the 2021 deal, the Justice Department agreed not to prosecute Boeing over allegations it defrauded the Federal Aviation Administration so long as the company overhauled its compliance practices and submitted regular reports. Boeing also agreed to pay $2.5 billion to settle the investigation"
The 2.5 billion sound like a bribe to me, to avoid criminal charges. And Boeing thought that was enough, but it seems they did not assume that the FAA was also serious, that they still need to "overhaul its compliance practices and submitted regular reports".
edit: we are talking about potential manslaughter in hundreds of cases here, because this is what a criminal investigation could lead to, not a fine for violating arbitary regulations
I'm not aware of it ever happening before an indictment, either. People don't always know that they're under investigation, and, even if you know that you're being investigated, many (if not most) investigations don't end with indictments -- they're quietly dropped -- so it can be quite dangerous to do what you suggest, as it makes an indictment far more likely.
Every course of action is risky if you've done something illegal and the relevant authority is aware of it.
And let’s not be under illusion that if my actions accidentally resulted in deaths of hundreds of people I would see any fresh air ever again
Also, don't fall under the spell of some absolute fairness of our current societies, of course ultra rich are treated differently than regular Joe (or ie former presidents, prime ministers, olympic gold medalists etc), at least until mass media gets in. And Boeing is a strategic military provider not only to US, more a typical 'too-big-to-fail' category.
And surely we know that society is not fair. That does not mean, we have to accept that.
Whenever they have a temblor, buildings fall down, and people die.
There’s usually one or two high-profile prosecutions, with a lot of saber-rattling, but the hubbub dies down, pretty quickly, and it happens again, the next time there’s an earthquake.
Deferred prosecution should be eliminated and if a company is too big to fail then it should be nationalized and the execs should face prosecution.
The individual members will profit and some members even more.
Also note, that I did not claim it is a bribe, but that it sounds to me like this (as a non lawyer).
Because we are talking about potential manslaughter here.
To be honest it might have been just enough, since nothing was done. If they had been serious before, they would have planned some sort of check or control as a follow up to that 2021 decision, but they didn't.
But then doors started falling from the skies and people started to have questions about what kind of shoddy plane building they were allowing.
That's when the FAA started their investigations.
Boeing got unlucky in that sense. Had it been a flight out of Africa or Asia then I suspect regulators would still be turning a blind eye.
Not even fun ones.
This is a case of American regulators putting an American company's business interests above safety. If it had been a foreign aircraft manufacturer, I doubt the FAA would have waited to ground the planes.
https://www.si.com/tennis/2023/03/29/peng-shuai-wta-principl...
https://www.thehindu.com/news/international/chinas-sacked-fo...
I don’t know what is the name for this faulty programming but it is very disturbing. I guess this is some kind of default behaviour of nationalism?
Imagine that you live in a country where everyone is corrupt and everyone lies. If you don't lie you're an idiot.
Then you read news about horrible US government failures. If the problems are so large that they cannot possibly keep lying and they openly admit to their failures, then what fucked up things still are there that they don't admit to doing? China at least manages to keep it shush. Therefore, whatever they do, shit at least doesn't hit the fan.
It's very difficult to imagine that a different society might have different standards regarding things such as transparency.
https://en.wikipedia.org/wiki/Sanlu_Group
"On 22 January 2009, Tian was sentenced to life imprisonment, while other Sanlu executives received sentences of five to fifteen years. Two other men were sentenced to death"
Changsheng Biotech Vaccine Scandal (2018): The chairwoman of Changsheng Biotech, Gao Junfang, was sentenced to 12 years in prison.
Kanghui Pharmaceutical Case (2007): The general manager, Ni Chunlin, was sentenced to life imprisonment.
Qiqihar No. 2 Pharmaceutical Case (2006): The factory director received a 7-year prison sentence.
Shanghai Hualian Pharmaceutical Case (2007): Two executives were sentenced to death (later commuted to life imprisonment).
They aren't death sentences due to messing up airplanes due to mismanagement or cost cutting, but actually poisoning people on a mass scale or knowingly making bad drugs.
It's not comparable. Those things are more like the Sackler opioid case.
A couple of hundreds dead due to bad engineering is better than outright poisoning people by substitutions or killing people on a mass scale with bad drugs.
In the Chinese cases I mentioned, the executives did not personally kill people. They only committed fraud, which put millions at risk of death when using their inferior products, which is comparable to what Boeing did.
The executives intentionally and knowingly committed fraud, which put anyone at risk when they fly in a 737 Max (millions of people per year). It was not the engineers fault. The engineers and quality inspectors concerns were ignored by management. The executives prioritized stock price over safety. I am not exaggerating when I say the executives committed fraud. That is the view of federal prosecutors.
In total 346 people died, and there would have been more deaths if the entire global fleet were not grounded for several years by international regulators. It's not just the Max. Anyone who flies in any Boeing aircraft is at risk if the company is committing fraud at this scale.