U.S. prosecutors have recommended that senior Justice Department officials bring criminal charges against Boeing after determining the company violated a settlement related to two fatal 737 MAX crashes, according to sources familiar with the matter. The Justice Department faces a July 7 deadline to decide whether to prosecute the aerospace giant. This recommendation follows a May determination that Boeing breached a 2021 agreement, which shielded the company from a criminal charge of conspiracy to commit fraud connected to the 2018 and 2019 crashes.
Under the 2021 agreement, Boeing avoided prosecution by agreeing to overhaul its compliance practices and submit regular reports. The company also paid $2.5 billion to settle the investigation. While Boeing has asserted that it has honored the terms of the settlement, the Justice Department contends otherwise. Discussions between the two parties are ongoing, and it remains uncertain whether the DOJ will proceed with charges.
If criminal charges are pursued, it would exacerbate the existing crisis at Boeing, which has been under intense scrutiny from prosecutors, regulators, and lawmakers. This scrutiny intensified after a panel detached from one of its jets operated by Alaska Airlines mid-flight on January 5, just before the 2021 settlement expired.
The specific charges under consideration have not been disclosed, but they could extend beyond the original 2021 fraud conspiracy charge. Alternatively, the DOJ could choose to extend the 2021 settlement by a year or propose stricter terms. These terms might include additional financial penalties, the installation of a third-party compliance monitor, or requiring Boeing to admit wrongdoing through a guilty plea. Such a plea could jeopardize Boeing’s significant revenue from U.S. government contracts, particularly with the Defense Department.
Boeing might agree to a penalty and a monitor but believes a guilty plea, which typically involves additional business restrictions, would be too damaging. This stance is informed by the potential impact on its government contracts and overall business operations.
Relatives of the victims of the 737 MAX crashes have criticized the 2021 agreement, arguing that Boeing and its executives should have faced prosecution. At a Senate hearing in June, Boeing CEO Dave Calhoun acknowledged the company’s safety shortcomings and apologized to the families affected by the crashes. Recently, the families have urged prosecutors to impose a nearly $25 billion fine on Boeing and proceed with criminal charges.
As the Justice Department continues its deliberations, the potential outcomes include criminal charges, an extension of the settlement, or new settlement terms. The decision will significantly impact Boeing’s legal and business landscape, particularly its relationship with U.S. government agencies.
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