Credits: NBC News
Boeing has agreed to plead guilty to criminal fraud related to the fatal 737 Max crashes, a decision that brands the U.S. aerospace giant as a felon but allows it to avoid a trial while it attempts to recover from safety and manufacturing crises.
Under the plea deal, Boeing will face a fine of up to $487.2 million. However, the Justice Department recommended that the court credit Boeing $243.6 million already paid under a previous agreement, effectively reducing the new fine to $243.6 million.
The agreement, if accepted by a federal judge, could complicate Boeing’s ability to sell products to the U.S. government due to its new status as a felon, although the company can seek waivers. Last year, about 32% of Boeing’s nearly $78 billion in revenue came from its defense, space, and security unit.
The Justice Department unveiled the deal late Sunday, months after U.S. prosecutors claimed that Boeing violated a 2021 settlement that had shielded it from prosecution for three years. The plea deal also includes the installation of an independent compliance monitor to oversee Boeing’s operations for three years during a probationary period. Additionally, Boeing must invest at least $455 million in compliance and safety programs.
The plea deal requires the approval of a federal judge to take effect. As part of the agreement, Boeing’s board of directors will meet with crash victims’ family members.
“We can confirm that 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,” Boeing said in a statement.
In May, the Justice Department said Boeing had violated the 2021 deferred prosecution agreement. Under that agreement, Boeing agreed to pay $2.5 billion, which included the original $243.6 million criminal fine, compensation to airlines, and a $500 million fund for victims’ family members. The 2021 settlement was set to expire two days after a door panel blew out of a nearly new 737 Max 9 operated by Alaska Airlines on January 5, causing a fresh safety crisis for Boeing. Although there were no serious injuries, the incident renewed concerns about the aircraft’s safety.
The U.S. accused Boeing of conspiracy to defraud the government by misleading regulators about the inclusion of a flight-control system on the Max that was later implicated in two crashes: a Lion Air flight in October 2018 and an Ethiopian Airlines flight in March 2019, which resulted in the deaths of all 346 people on board.
U.S. prosecutors informed victims’ family members on June 30 that they planned to seek a guilty plea from Boeing, a move family attorneys criticized as a “sweetheart deal.” Paul Cassell, a lawyer for victims’ family members, stated that he plans to ask the federal judge to reject the deal and set the matter for a public trial, allowing all facts surrounding the case to be aired before a jury.