Both.

The bureaucrats don't make the Sovereign Immunity call, that goes up the food chain I suspect to the Secretary level. The bureaucrats don't want to have go hat-in-hand and explain to the Secretary why they need SI in the first place. That would be a tough conversation... "you knew about this guy when?!?!"

Put themselves on the spot, or put a few airmen on the spot? I think you know the answer.

Also my previous post was in reference to applicants suing the FAA for making them take a 709... in that case, the FAA didn't (yet) know about the DPE's behavior therefore SI is reasonable... can't just let every ambulance chaser use the federal treasury as his personal piggy bank.

But in the event of an accident AFTER the FAA knew about this... that would be one of those times where they might actually waive SI and allow lawsuits to proceed.

Would have been nice if they had supervised this guy to prevent this from happening but honestly, if people were buying checkride outcomes they might actually suck as pilots, and innocent pax might die. So I'm Ok with evaluating their credentials.