Boeing has agreed to plead guilty to a criminal fraud conspiracy charge and pay a fine of $243.6 million, resolving a U.S. Justice Department investigation into two fatal 737 MAX crashes. The plea deal, awaiting a judge’s approval, would label Boeing a convicted felon for the crashes in Indonesia and Ethiopia that killed 346 people in 2018 and 2019. The settlement has drawn criticism from victims’ families who sought a trial and harsher financial penalties for Boeing.
The Justice Department’s pursuit of charges has exacerbated Boeing’s ongoing crisis, highlighted by a separate incident revealing continued safety and quality issues. A guilty plea could jeopardize Boeing’s ability to secure government contracts with agencies like the U.S. Defense Department and NASA, though waivers might be possible. Boeing’s exposure to criminal prosecution followed a May finding that it violated a 2021 settlement related to the fatal crashes.
Avoiding a trial spares Boeing from further public scrutiny of its decisions leading up to the crashes. The plea also aids Boeing, which will see a new CEO later this year, in its efforts to gain approval for acquiring Spirit AeroSystems. A Boeing spokesperson confirmed an agreement in principle with the Justice Department.
Under the deal, Boeing will spend at least $455 million over the next three years on safety and compliance programs. The company’s board is required to meet with relatives of those killed in the MAX crashes. An independent monitor will oversee compliance, with public progress reports, and Boeing will be on probation for three years. Some victims’ families’ lawyers plan to urge Judge Reed O’Connor to reject the deal, citing his previous statement that Boeing’s crime might be the deadliest corporate crime in U.S. history.
The plea deal was offered to Boeing on June 30, with a deadline to accept by the end of the week or face trial for conspiring to defraud the Federal Aviation Administration (FAA). The fraud involved false representations Boeing made to the FAA about the Maneuvering Characteristics Augmentation System (MCAS) software, designed to push the airplane’s nose down in specific conditions. This software was linked to the two crashes that led to the 20-month grounding of the MAX fleet, costing Boeing $20 billion. The grounding was lifted in November 2020.
The agreement does not protect Boeing from other investigations or charges related to a January incident or other conduct, nor does it shield any executives. Although charges against individuals are unlikely due to the statute of limitations, a former Boeing chief technical pilot was previously acquitted in 2022 in connection with the Boeing fraud agreement.
The penalty brings Boeing’s total fines to $243.6 million, the maximum allowed, matching the amount Boeing saved by not implementing full-flight simulator training for MAX pilots. Last month, victims’ families urged the Justice Department to seek up to $25 billion in penalties. The DOJ and Boeing are finalizing the plea agreement, expected to be filed in federal court in Texas by July 19.
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