Boeing will plead guilty to criminal fraud charges stemming from two crashes of 737 Max jetliners that killed 346 people, after the government determined the company an agreement breached That has protected the company from prosecution for more than three years, the Justice Department reported Sunday evening.
Federal prosecutors gave Boeing the choice pleaded guilty last week and paid a fine as part of the sentence, or face trial on the charge of conspiracy to defraud the United States.
Prosecutors accused the US aviation giant of misleading regulators who approved the plane and pilot training requirements.
The plea agreementwhich still needs approval from a federal judge to take effect, requires Boeing to pay an additional $243.6 million in fines. That was the same amount it paid under the 2021 settlement that the Justice Department said the company has committed an infringement. An independent monitor would be appointed to oversee Boeing’s safety and quality procedures for three years. The deal also requires Boeing to invest at least $455 million in its compliance and safety programs.
The settlement covers only Boeing’s misconduct before the crashes, which killed all 346 passengers and crew aboard two new Max jets. It does not give Boeing immunity for other incidents, including a panel that blown away a Max jet during an Alaska Airlines flight in January, a Justice Department official said.
The deal also does not involve current or former Boeing officials, only the company. Boeing confirmed in a statement that it had reached a deal with the Justice Department, but declined to comment further.
In a court filing Sunday night, the Justice Department said it expected to file the written plea agreement with the court by July 19. Lawyers for some of the families of the victims of the two crashes have said they will ask the judge to reject the agreement.
“This sweetheart deal fails to acknowledge that 346 people died because of Boeing’s conspiracy. Through devious legal practices between Boeing and the DOJ, the deadly consequences of Boeing’s crime are being concealed,” said Paul Cassell, an attorney for several of the families.
Federal prosecutors alleged that Boeing conspired to defraud the government by misleading regulators about a flight control system involved in the crashes, which occurred in Indonesia in October 2018 and in Ethiopia less than five months later.
As part of the January 2021 settlement, the Justice Department said it would not prosecute Boeing on the charges if the company adhered to certain conditions for three years. Prosecutors alleged last month that Boeing had violated the terms of that agreement.
The company will enter its guilty plea in U.S. District Court in Texas. The judge overseeing the case, who has criticized what he called “Boeing’s blatant criminal conduct,” He could accept the plea and sentence offered by prosecutors, or he could reject the plea deal, which would likely lead to new negotiations between the Justice Department and Boeing.
The case goes back to the crashes in Indonesia and Ethiopia. The Lion Air pilots in the first crash were unaware of flight control software that could push the nose of the plane down without their input. The Ethiopian Airlines pilots were aware of it but were unable to control the plane when the software was activated based on information from a faulty sensor.
The Justice Department accused Boeing in 2021 of misleading FAA regulators about the software, which did not exist on older 737s, and about how much training pilots would need to safely fly the plane. The department agreed at the time not to prosecute Boeing but only if the company paid a $2.5 billion settlement, including the $243.6 million fine, and took steps to comply with anti-fraud laws for three years.
Boeing, who blamed two low-ranking employees for misleading regulators, tried to put the crashes behind it. After Max jets were grounded for 20 months, regulators allowed them to fly again after Boeing reduced the power of the flight software. Max jets logged thousands of safe flights, and airline orders surged, to about 750 in 2021, about 700 more in 2022 and nearly 1,000 in 2023.
The Arlington, Virginia-based company has dozens of airline customers around the world. Top customers for the 737 Max include Southwest, United, American, Alaska, Ryanair and flydubai.
That changed in January, when a panel covered an unused emergency exit blown away a Max during the Alaska Airlines flight over Oregon.
Pilots landed the 737 Max safely and no one was seriously injured, but the incident led to a closer investigation into the company. The Justice Department opened a new investigation, the FBI told passengers on the plane in Alaska that they may have been the victims of a crime and the FAA said it intensify supervision from Boeing.
A criminal conviction could jeopardize Boeing’s status as a federal contractor, some legal experts say. The request announced Sunday does not address that question, leaving it up to each government agency to decide whether to ban Boeing.
The Air Force is citing a “compelling national interest” to allow Boeing to continue competing for contracts after the company paid a $615 million fine in 2006 to settle criminal and civil charges that included using information stolen from a rival to win a space launch contract.
The company has 170,000 employees and 37 percent of its revenue last year came from contracts with the U.S. government, most of it defense work, including military sales that Washington arranged for other countries.
Boeing is also making a capsule for NASA. Two astronauts are staying longer than expected on the International Space Station as Boeing and NASA engineers work out problems problems with the propulsion system used to maneuver the capsule.
Even some Boeing critics worried about the impact on a major defense contractor.
“We want Boeing to succeed,” Connecticut Democrat Richard Blumenthal said last month during a Senate hearing on what he called the company’s broken safety culture. “Boeing needs to succeed for the sake of the jobs it provides, for the sake of the local economies it supports, for the sake of the American traveling public, for the sake of our military.”
Families of the Max crash victims have called for a criminal trial that could reveal what people inside Boeing knew about misleading the FAA. They also want the Justice Department to prosecute top Boeing executives, not just the company.
“Boeing has paid fines many times before, and it doesn’t look like that’s going to change,” said Ike Riffel of Redding, California. whose sons Melvin and Bennett died in the Ethiopian Airlines crash. “When people go to prison, you see a change.”
In a recent Senate hearingBoeing CEO David Calhoun defended the company’s safety record after turning around and apologizing to the families of the Max crash victims sitting in the rows behind him “for the heartache we caused.”
Hours before the hearing, the Senate Investigation Committee released a 204 page report with new allegations from a whistleblower who said he was concerned that defective parts were being 737’sThe whistleblower was the latest in a series of current and former Boeing employees who have raised concerns about the company’s safety and allege they have faced retaliation as a result.
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Koenig reported from Dallas. Richer reported from Boston.