Boeing is set to admit guilt to a criminal fraud charge related to the two fatal crashes involving 737 Max jetliners. The Justice Department disclosed that Boeing violated an agreement that shielded it from prosecution for over three years.
Federal prosecutors presented Boeing with a choice this week: either plead guilty and pay a fine as part of the sentence or face a trial on the felony charge of conspiracy to defraud the United States.
The prosecutors accused Boeing of misleading regulators who approved the aircraft and its pilot-training requirements.
The plea deal, pending approval from a federal judge, entails Boeing paying an additional $243.6 million fine, the same amount it paid under the breached 2021 settlement. An independent monitor will oversee Boeing’s safety and quality procedures for three years.
The plea deal only addresses Boeing’s misconduct before the crashes that claimed the lives of all 346 individuals on the two Max jets. It does not grant immunity to Boeing for other incidents, such as a panel detaching from a Max jetliner during an Alaska Airlines flight in January.
The plea deal also excludes any current or former Boeing officials, focusing solely on the corporation.
In a court filing on Sunday, the Justice Department stated that it anticipates submitting the written plea agreement to the court by July 19.
Federal prosecutors alleged that Boeing engaged in a conspiracy to defraud the government by withholding information about a flight-control system implicated in the crashes in Indonesia and Ethiopia.
As part of the settlement in January 2021, the Justice Department agreed not to prosecute Boeing if the company adhered to specific conditions for three years. Last month, prosecutors claimed Boeing had violated the terms of the agreement.
Boeing’s guilty plea will be made in U.S. District Court in Texas. The judge overseeing the case, who previously criticized what he called “Boeing’s egregious criminal conduct,” can either accept the plea and the proposed sentence or reject the agreement, leading to potential renegotiations between the Justice Department and Boeing.
Relatives of the crash victims were briefed on the plea offer last week and expressed a desire for the judge to reject it.
If Boeing receives a criminal conviction, it could impact the company’s status as a federal contractor. Boeing is a significant contractor for the Defense Department and NASA.
The case dates back to the crashes in Indonesia and Ethiopia, where the flight-control software was a key factor. In the aftermath, Boeing grounded the Max jets for 20 months and implemented modifications before allowing them to resume flights.
Boeing employees have raised safety concerns, with some alleging retaliation for doing so. The Justice Department has launched a new investigation following an incident involving a panel detachment from a Max during an Alaska Airlines flight.
Boeing’s criminal conviction could prompt government agencies to decide whether to exclude the company from future contracts. While Boeing has paid substantial fines in the past, this guilty plea raises questions about the company’s future as a federal contractor.
Boeing has faced previous criminal charges and settlements but has been able to continue competing for contracts due to its importance in defense work. The outcome of the current plea deal remains uncertain.
The families of the crash victims advocate for a criminal trial to shed light on Boeing’s actions and urge accountability for company executives responsible for the lapses in safety protocols.
At a recent Senate hearing, Boeing’s CEO expressed regret for the tragedies and defended the company’s safety record. However, new allegations from whistleblowers continue to cast doubt on Boeing’s practices and may impact its standing as a federal contractor.
Koenig reported from Dallas. Richer reported from Boston.
