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Prosecutors in 737 MAX Probe Focus on Boeing Disclosures to Regulators, Customers

Scrutiny is part of broader investigation into how the jetliner was developed and certified

By Andy PasztorAndrew Tangel and Aruna Viswanatha
March 22, 2019 7:33 p.m. ET

Federal investigators are looking into whether Boeing Co. BA +1.73% provided incomplete or misleading information about the 737 MAX aircraft to U.S. air-safety regulators and customers, people familiar with the matter said.

The focus on disclosures to regulators, which hasn’t been previously reported, is part of a broader investigation into how the jetliner was developed and certified, some of these people said.

The criminal investigation, which is in early stages, began last year, weeks after a 737 MAX operated by Lion Air crashed in Indonesia on Oct. 29, according to one of these people. The same model plane, flown by Ethiopian Airlines, crashed less than five months later.

Agents with the Federal Bureau of Investigation and the Transportation Department’s inspector general’s office are working in tandem under the direction of federal prosecutors, the people familiar with the matter said. The agents involved are from offices in Seattle, Chicago and elsewhere, these people added. Boeing is based in Chicago but manufactures the 737 MAX at its facility in Renton, Wash., near Seattle.

Boeing hasn’t been accused of wrongdoing.

“The 737 MAX was certified in accordance with the identical FAA requirements and processes that have governed certification of all previous new airplanes and derivatives,” Boeing said.

The Federal Aviation Administration said previously the 737 MAX, which entered service in 2017, was approved to carry passengers as part of the agency’s “standard certification process.” It said its safety-review procedures “are well established and have consistently produced safe aircraft.”

The agency is conducting its own inquiry into how the jet model was certified and whether various agency offices properly oversaw technical analyses prepared by Boeing and submitted to the FAA, according to a person familiar with the details. A Senate Commerce subcommittee on Wednesday is expected to kick off what is likely to be a series of congressional hearings on both sides of Capitol Hill exploring these and other matters.

The Transportation Department said earlier this week its inspector general is conducting a separate administrative audit to determine precisely what actions the FAA took in approving the safety of the jet.

Some of the investigators’ questions have related to information and safety reports Boeing provided to the FAA during the agency’s certification of the aircraft, one of the people familiar with the matter said. Other subjects the investigators have asked about include the aircraft’s design, how training was devised, disclosures in pilot manuals, and whether safety was compromised in favor of business concerns, people familiar with the matter said.

Investigators have asked FAA officials about Boeing’s disclosures related to a stall-prevention system in the MAX and what was disclosed to airlines and pilots, one of these people said. The FAA offices involved with certifying the plane and approving training requirements have been told by the inspector general’s office to retain all electronic documents and email related to the 737 MAX, The Wall Street Journal has previously reported.

The Journal also previously reported that the Justice Department’s criminal division issued a grand jury subpoena to at least one person involved in the 737 MAX’s development. The broad demand for documents sought information about the aircraft, including correspondence such as email.

A prosecutor in the department’s fraud section was listed as a contact in the March 11 subpoena. Senior prosecutors in the fraud section have notched experience in major cases in recent years involving automobile giant Volkswagen AG and air bag maker Takata Corp., both manufacturers accused of misleading regulators and consumers.

The document-retention directive applies to internal FAA communications, as well as electronic communications between Boeing and the agency, people familiar with the matter said.

Agents with the FBI and DOT inspector general’s office are looking into whether there were potential irregularities in the FAA’s safety-review process for the aircraft, some of these people said.

Write to Andy Pasztor at andy.pasztor@wsj.com, Andrew Tangel at Andrew.Tangel@wsj.com and Aruna Viswanatha at Aruna.Viswanatha@wsj.com

Appeared in the March 23, 2019, print edition as ‘Inquiry Looks at Boeing’s Actions.’