Boeing has agreed to plead guilty to a criminal fraud charge related to the crashes of two 737 Max jetliners, which resulted in the deaths of 346 people, the Justice Department announced on Sunday. This decision comes after federal authorities found that Boeing breached an agreement that had shielded it from prosecution for over three years.
Federal prosecutors presented Boeing with the choice of either entering a guilty plea and paying a fine or facing a trial for a conspiracy to defraud the United States. The American aerospace company is accused of deceiving regulators who approved the airplane and its pilot-training requirements.
The plea deal, which requires the approval of a federal judge, stipulates that Boeing pay an additional $243.6 million fine. This is the same amount it paid under a 2021 settlement, which the Justice Department claims Boeing violated. An independent monitor will be appointed to oversee Boeing’s safety and quality procedures for the next three years. Additionally, Boeing must invest at least $455 million in its compliance and safety programs.
The agreement covers misconduct by Boeing prior to the crashes in Indonesia and Ethiopia, which resulted in the deaths of all 346 passengers and crew members aboard two new Max jets. However, it does not provide immunity for other incidents, including a panel that detached from a Max jetliner during an Alaska Airlines flight over Oregon in January.
This plea deal only pertains to Boeing as a corporation and does not include any current or former Boeing officials. In a statement, Boeing confirmed reaching the deal with the Justice Department but did not provide further comment.
The Justice Department intends to submit the written plea agreement to a U.S. District Court in Texas by July 19. Lawyers representing some of the relatives of the crash victims have expressed their intention to ask the judge to reject the deal.
“This sweetheart deal fails to recognize that 346 people died because of Boeing’s conspiracy,” said Paul Cassell, a lawyer representing some of the families.
Federal prosecutors accused Boeing of conspiring to defraud the government by misleading regulators about a flight-control system implicated in the crashes, which occurred less than five months apart.
In January 2021, the Justice Department charged Boeing with deceiving FAA regulators about the flight-control software and the necessary pilot training. At that time, Boeing agreed to pay a $2.5 billion settlement, which included the $243.6 million fine, and to comply with anti-fraud laws for three years to avoid prosecution.
Boeing, attributing the fault to two low-level employees, sought to move past the crashes. Max jets were grounded for 20 months but were allowed to fly again after the flight software was modified. Successful flights and renewed orders from airlines followed, increasing annually.
However, the January incident involving an Alaska Airlines flight led to increased scrutiny and a new investigation by the Justice Department. The FAA also announced stepped-up oversight of Boeing.
A criminal conviction could jeopardize Boeing’s status as a federal contractor. However, the current plea does not address this, leaving it to individual government agencies to decide on Boeing’s participation.
Boeing, headquartered in Arlington, Virginia, employs 170,000 people and has numerous airline clients worldwide. Its significant customers for the 737 Max include Southwest, United, American, Alaska, Ryanair, and flydubai. In 2022, 37% of Boeing’s revenue came from U.S. government contracts, primarily defense-related.
Relatives of the Max crash victims have advocated for a criminal trial to expose internal knowledge within Boeing about the deception. They also urge the prosecution of top Boeing officials.
“Boeing has paid fines many times, and it doesn’t seem to make any change,” said Ike Riffel, whose sons died in the Ethiopian Airlines crash. “When people start going to prison, that’s when you are going to see a change.”
During a Senate hearing, Boeing CEO David Calhoun apologized to the families of the Max crash victims, acknowledging the grief caused by the company. This came after a Senate investigations subcommittee released a report containing new allegations from a whistleblower who raised concerns about defective parts potentially being used in 737s. This whistleblower is among several others who have expressed safety concerns and claimed they faced retaliation.
Koenig reported from Dallas. Richer reported from Boston.