Boeing agreed Sunday to plead guilty to a felony count of conspiracy to defraud the federal government over two deadly 737 Max crashes in 2018 and 2019, according to a late-night court hearing.
In the settlement with the Justice Department, described in part in the court filing, Boeing also agreed to pay a $487.2 million fine — the maximum allowed by law — and invest at least $455 million over the next three years to strengthen compliance and security programs.
The company will be placed on probation under the supervision of the Federal District Court for the Northern District of Texas for three years. As part of the trial period, the Department of Justice will appoint an independent compliance monitor who will ensure that safeguards are implemented and adhered to by submitting annual reports to the government. The company will face additional penalties in case of violation of any of the terms. The company’s board will also be asked to meet with the families of the crash victims.
Boeing’s decision to plead guilty is significant because the company has not been convicted of a federal felony in decades. In the filing, the department described the charge of conspiracy to defraud the federal government as “the most serious offense that can be easily proven.”
The settlement reached Sunday stems from violations of an agreement Boeing made with the Justice Department in 2021 that it would make major safety changes after the two fatal crashes. The department, during the Biden administration, has made it a priority to ensure that companies like Boeing abide by such agreements.
The department and Boeing filed a joint filing Sunday night, telling the District Court they had agreed in principle. Next week or so, the official agreement will be filed. The court will then set a hearing for the company to formally plead guilty. The families of the victims will be able to speak during this hearing.
The families of the victims, who were told a week ago of the broad outlines of the deal, had said it did not go far enough. Paul G. Cassell, a lawyer for more than a dozen families, said the families had sought an admission of liability for the deaths of 346 people killed in the crashes involving Boeing’s troubled 737 Max plane in Indonesia and Ethiopia. late 2018 and early 2019. The families had hoped for harsher consequences for the company and its executives, including a trial.
The Justice Department acknowledged the families’ position in court filings on Sunday. In a separate filing, the families said they will oppose the deal and “intend to argue that the plea agreement with Boeing unfairly makes concessions to Boeing that other defendants would never receive and fails to hold Boeing responsible for the deaths of 346 people.” “
Mr Cassell said the government’s deal with Boeing was “clearly not in the public interest”.
“This sweet deal does not recognize that because of Boeing’s conspiracy, 346 people lost their lives,” Mr. Cassell said. “Through crafty lawyers between Boeing and the DOJ, the deadly consequences of Boeing’s crime are being concealed.”
Boeing’s decision to plead guilty does not grant immunity to any employee or corporate officer. And the agreement does not protect her from charges that may arise from other investigations, including a Jan. 5 incident at Alaska Airlines in which a panel blew up a Boeing 737 Max jet shortly after the plane took off from the airport serving Portland. Although the explosion did not cause serious injuries, the incident could have been catastrophic if it had occurred a few minutes later, when the plane had reached cruising altitude and the flight attendants and passengers were moving around the cabin.
A Boeing spokesman confirmed the company had reached a settlement with the Justice Department, but declined to comment further.
The deal updates a 2021 deferred prosecution agreement reached in the final days of the Trump administration that allowed Boeing to avoid criminal charges in the two fatal crashes. The company has already paid $500 million in restitution to the families of the victims and $243.6 million in fines.
Boeing’s 2021 settlement required the company to be free of wrongdoing for a period of three years. In May, the Justice Department said Boeing violated the agreement because the company failed to “design, implement and enforce” an ethics and compliance program in its operation to prevent and detect violations of US fraud laws.
As part of the 2021 settlement, the Justice Department said Boeing would only have to pay $243.6 million more if the company was in breach. But a judge will ultimately decide whether the 2021 payment counts toward the total fine, a Justice Department official said, speaking on condition of anonymity to discuss the settlement. The judge will also decide how much additional restitution should be paid during the sentence.
The 2021 indictment focused on two Boeing employees accused of withholding information from the Federal Aviation Administration about changes Boeing had made to flight control software involved in both accidents.
Under that settlement, in addition to fines and compensation to victims’ families, Boeing paid more than $1.7 billion to its customers for not being able to take delivery of 737 Max jets during a 20-month global grounding of the jet.
In total, Boeing has spent about $20 billion because of the crashes, including fines, payments to families, compensation to airlines and other costs stemming from the FAA’s nearly two-year grounding of the 737 Max
The Justice Department has faced competing pressures over how to punish the already struggling Boeing, one of the largest U.S. exporters and a major employer among the government’s top defense contractors. In 2023, nearly 40 percent of the company’s revenue came from contracts with the US government.
Although full details of the deal were not included in a public court filing Sunday, Boeing is likely to receive assurances from the government that a felony conviction will not block its government contracts, lessening the impact of the charge on the company’s operations. he said. Mark Lindquist, an attorney for the families of the victims of the Max 8 crashes, who is now representing the passengers on the Alaska Airlines flight. Those exceptions would be independent of the plea agreement, he said.
“While many of us would prefer a harsher prosecution, pleading guilty to a felony is a serious step toward accountability,” Mr. Lindquist said.
