Boeing has reached an agreement with the US Department of Justice to plead guilty to fraud in connection with two fatal 737 MAX crashes that occurred over five years ago. This comes after prosecutors found that Boeing had violated a previous settlement related to the disasters that claimed the lives of 346 individuals in Ethiopia and Indonesia.
As part of the plea deal, Boeing will pay an additional $243.6 million on top of a previous fine of the same amount. This agreement must be approved by a federal court judge. A spokesperson for the aircraft manufacturer stated that they will work transparently with regulators to strengthen safety, quality, and compliance programs at Boeing.
Prosecutors found that Boeing had failed to improve its compliance and ethics program, breaching a deferred prosecution agreement from 2021. It was reported that Boeing did not design, implement, and enforce a compliance and ethics program to prevent and detect violations of US fraud laws throughout its operations. Boeing was said to have conspired to defraud US air traffic safety regulators during the certification of the Max 737 aircraft.
Under the terms of the plea deal, Boeing will serve three years of “organizational probation”. This includes having an independent monitor and investing at least $455 million in compliance, quality, and safety programs. The deal also requires Boeing’s board of directors to meet with the families of the crash victims from the 2018 and 2019 crashes.
Objections from Families of Crash Victims
Families of the crash victims have objected to the plea deal, claiming that it unfairly favors Boeing and makes concessions that other criminal defendants would not receive. Their legal team filed an objection stating that the plea agreement rests on deceptive and offensive premises. The families have said that they will ask the court to reject the deal.
Repercussions for Boeing
Boeing was previously under a deferred prosecution agreement in 2021, which required them to pay fines and restitution totaling $2.5 billion in exchange for immunity from criminal prosecution. However, the recent incidents involving the 737 MAX have raised new concerns about Boeing’s manufacturing and safety practices, leading to further scrutiny from regulators and Congress.
Challenges Ahead for Boeing
The conclusion by the DOJ that Boeing had violated its obligations under the DPA has put the company at risk of prosecution. Boeing initially argued that it had not breached the 2021 agreement, but the plea deal now requires them to admit guilt to fraud. The company is facing increased pressure from both regulators and the families of the crash victims as they navigate this challenging situation.
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