The Federal Government vs. Imaginary Business Felons

Juries aren’t impressed with the Justice Department’s attempts to criminalize plane crashes and chicken prices

By Holman W. Jenkins, Jr..

"March wasn’t a good month for federal prosecutors trying to hold alleged business malefactors accountable in criminal cases we’ve previously discussed in this column.

Predictably, Boeing’s former chief technical pilot was acquitted in the Boeing 737 MAX disaster, after even the Justice Department specified he wasn’t to blame for crashes of the new jet that killed 346.

Four counts of wire fraud, the entirety of the case that failed to impress a jury, were related to his distribution of training materials that didn’t prepare pilots to cope with a design defect about which the Boeing employee, Mark Forkner, hadn’t been informed. If he or anybody had known about the defect’s catastrophic potential, the solution would not have been more training anyway—it would have been to fix the problem.

When GM faced unexplained airbag failures in its Chevy Cobalt, an outside investigator was recruited who supplied a complete and sufficient explanation for why GM’s normally excellent system for identifying defects failed in the case of the Cobalt (because an engineer had improperly changed a part without assigning a new part number).

No such revelation has ever emerged in the Boeing case. A place to start might be the engineers who made a last-minute change to a software system known as MCAS. They or other engineers then submitted a final “system safety assessment” to the FAA that described how the system operated only before the change and not after.

The most detailed account may be a recent book by the Bloomberg reporter Peter Robison, who locates the problem in the eternal nimbus of big-business greed. But Boeing had every incentive to avoid a screw-up that would prove hugely destructive of sales and profits. Without a harder-headed and meticulous explanation, how can anyone know the problem won’t recur? Well, for one thing, Boeing would have been out of business long ago if it hadn’t created systems to vet the safety implications of design changes. Why did these systems fail in the case of the 737 MAX? “No one appears to have fully considered the human factor . . .,” Mr. Robison trails off tautologically. It’s hard to escape a feeling that, in the case of America’s premier aircraft maker, nobody really wants the answer.

Meanwhile, federal prosecutors this week, for the second time, produced a hung jury in a misbegotten attempt to convict 10 chicken industry executives for fixing prices of birds destined for fast-food outlets and grocery chains. Despite a frowny face from the judge, Justice immediately announced plans for a third try, albeit after dropping charges against five of the executives.

One chicken processor, Pilgrim’s Pride, has pleaded guilty to corporate charges. Another, Tyson Foods, is cooperating with the feds. And yet the government apparently still can’t scrounge enough evidence to convince a jury of its charges against individuals. It produced only two witnesses and both seem to have been duds.

The case was badly researched from the start. Rushed out by the Trump administration as the 2020 election approached, the original indictment named two players, one with 17% of the market and another with 0.6%—i.e., a duo that didn’t control significantly more of the market than one of the companies did by itself.

It was downhill from there. Defendants multiplied, but a Yale economist testified with data that actual pricing betrayed no evidence of manipulation. He also explained that, because buyers like Walmart and KFC bargain with multiple suppliers and quote their bids to each other, producers have good reason to share pricing information to the extent necessary to keep buyers honest.

As I pointed out two years ago, cost pressures in the chicken business are up close and personal, unlike most ag sectors, where products are traded on impersonal exchanges. The feds merely glommed on to private lawsuits the industry has long flung around in its brass-knuckles bargaining, and yet scant has been any evidence that the end result is anything but a highly competitive chicken market for consumers.

Do I need to add the chicken case was the brainchild of Trump antitrust chief Makan Delrahim, who also gave us the failed attempt to break up a media deal involving CNN? Suing “big chicken” was at least popular with pro-Trump chicken farmers in key Southern states. Mr. Delrahim also tried to link it to the then-raging pandemic even though the alleged criminal behavior took place long before Covid.

Since Nixon’s day, antitrust chiefs have been expected to make a good show of not being water carriers for the presidents who appointed them. On the shoulders of Biden appointee Jonathan Kanter, who has presided over two failed chicken cases and is under White House pressure to bring more such cases blaming business for high prices, falls now a choice of whether to reinstate this healthy tradition."