Boeing has agreed to plead guilty to fraud charges associated with two fatal crashes involving its 737 Max aircraft, avoiding a high-profile trial.
The plea deal includes a $243.6 million fine and a requirement to invest at least $455 million in compliance and safety programs, according to a court filing by the US Department of Justice (DOJ) on Sunday.
The plea agreement, which still requires approval from a federal judge, will also subject Boeing to three years of oversight by a third-party monitor who will assess the company’s safety and quality procedures. This development comes after the DOJ found that Boeing violated a previous deferred prosecution agreement related to the same crashes.
Boeing’s decision to plead guilty has sparked significant criticism from victims’ families, who argue that the deal is too lenient and fails to hold the company fully accountable for the deaths of 346 passengers and crew members in the 2018 and 2019 crashes. Paul Cassell, a lawyer for some of the families, called the agreement a “sweetheart deal” and plans to ask the court to reject it. Cassell stated, “This sweetheart deal fails to recognize that because of Boeing’s conspiracy, 346 people died. Through crafty lawyering between Boeing and DOJ, the deadly consequences of Boeing’s crime are being hidden.”
Under the terms of the plea deal, Boeing will avoid a contentious trial that could have further exposed its decision-making processes leading up to the fatal crashes. However, the company’s admission of guilt and resulting criminal record could jeopardize its ability to secure government contracts, which make up about 40% of its revenues. Boeing can seek waivers to continue doing business with government agencies like the Department of Defense and NASA.
In addition to the financial penalties, Boeing’s board is required to meet with the families of those killed in the crashes. The agreement also mandates that the company spend at least $455 million over the next three years to enhance its safety and compliance programs. A Boeing spokesperson confirmed the company’s position, stating, “We have reached an agreement in principle on terms of a resolution with the Justice Department, subject to the memorialization and approval of specific terms.”
The settlement does not shield Boeing from future investigations or charges related to other incidents, such as the January blowout of a door on an Alaska Airlines flight. This incident, which caused no injuries but forced an emergency landing, has intensified scrutiny of Boeing’s safety practices.
The DOJ offered the plea agreement to Boeing on June 30, giving the company a choice between accepting the deal or facing trial. The fraud charges focus on Boeing’s misrepresentations to the Federal Aviation Administration (FAA) about the MCAS software, which was linked to the two crashes.
While the plea deal marks a significant development in Boeing’s ongoing crisis, it does not include charges against any current or former employees.
A new CEO is set to take over later this year, and Boeing is also seeking approval for its planned acquisition of Spirit AeroSystems.
The full written plea agreement is expected to be filed in federal court in Texas by July 19.
