Boeing will plead guilty to a criminal fraud charge related to two fatal crashes involving its 737 Max jetliners, the U.S. Department of Justice (DOJ) announced late Sunday.
The crashes in Indonesia and Ethiopia, which killed 346 people, prompted federal prosecutors to accuse Boeing of deceiving regulators about the safety of the aircraft and its pilot-training requirements. This decision follows the determination that Boeing breached an agreement that had protected it from prosecution for over three years.
Plea Deal and Financial Penalties
Federal prosecutors offered Boeing a choice: enter a guilty plea with a fine or face trial on a felony conspiracy charge. The plea deal includes a $243.6 million fine, matching a previous penalty paid under a 2021 settlement, and mandates the appointment of an independent monitor to oversee Boeing's safety and quality procedures for three years. Additionally, Boeing must invest $455 million in its compliance and safety programs.
Implications of the Plea Deal
This agreement, still pending approval from a federal judge, addresses Boeing's actions before the crashes but does not provide immunity for other incidents. A DOJ official stated that this deal does not cover incidents like the panel that detached from a Max jetliner during an Alaska Airlines flight in January.
Boeing acknowledged the deal in a statement but did not comment further. The DOJ plans to submit the written plea agreement to a U.S. District Court in Texas by July 19, although some relatives of the crash victims have indicated they will request the judge to reject it.
Criticism and Legal Challenges
The plea deal has faced criticism from victims' families. Paul Cassell, representing some families, described it as a "sweetheart deal" that fails to hold Boeing fully accountable for the deaths caused by its conspiracy. Federal prosecutors allege that Boeing's misleading of regulators about a faulty flight-control system, implicated in the crashes, constitutes a conspiracy to defraud the government.
Boeing's Legal and Operational History
In 2021, the DOJ charged Boeing with deceiving the Federal Aviation Administration (FAA) about the flight-control software, which was not present in older 737 models, and downplaying the training needed for pilots. At the time, Boeing avoided prosecution by agreeing to a $2.5 billion settlement and compliance measures.
The 737 Max jets were grounded for 20 months after the crashes but resumed service following software updates and additional safety measures. However, the January incident involving Alaska Airlines has reignited scrutiny.
Potential Impact on Boeing's Federal Contracts
A criminal conviction could affect Boeing's status as a federal contractor, although this is not directly addressed in the plea deal. Historically, Boeing has retained its contractor status despite previous legal troubles, such as a $615 million fine in 2006.
Safety Concerns and Industry Impact
Despite concerns about Boeing's safety practices, some critics and industry stakeholders emphasize the importance of the company's success for economic and national security reasons. Senator Richard Blumenthal noted the need for Boeing's success for job creation, local economies, and national defense.
Calls for Accountability
Relatives of the crash victims are advocating for a criminal trial to uncover what Boeing officials knew about the fraud. Ike Riffel, who lost his sons in the Ethiopian Airlines crash, emphasized the need for harsher penalties, including prison sentences for responsible individuals, to enforce meaningful changes.
Boeing CEO David Calhoun recently apologized to the victims' families during a Senate hearing, where he defended the company's safety record. The hearing followed a Senate report alleging that defective parts might still be used in 737s, adding to ongoing safety concerns and whistleblower allegations against Boeing.
