Rescue teams work at the scene of an Ethiopian Airlines plane crash near Bishoftu (also known as Debre Zeit), south of the Ethiopian capital Addis Ababa, Monday, March 11, 2019.
Mulugeta Ayene | Reuters
Boeing The company has agreed to plead guilty to criminal fraud in connection with the deadly 737 MAX crashes, a decision that marks the US aerospace giant as a felon but allows it to avoid trial while it tries to move beyond a safety and production crisis.
The agreement means Boeing faces a maximum fine of $487.2 million, but the Department of Justice has recommended that the company repay half of what it paid under a previous agreement, bringing the penalty to $243.6 million. The plea deal must be approved by a federal judge before it can take effect.
If approved, the deal could complicate Boeing’s ability to sell products to the U.S. government as a felony, though the company could seek an exemption. About 32% of Boeing’s roughly $78 billion in sales last year came from its defense, space and security division.
A Defense Department official said Monday that the Pentagon will evaluate Boeing’s remediation plan and the agreement with the Justice Department to “determine what steps are necessary and appropriate to protect the federal government.”
The plea agreement also includes appointing an independent monitor to oversee Boeing’s compliance for a three-year trial period. Boeing will be required to invest at least $455 million in compliance and safety programs, according to court documents.
Boeing also agreed to allow its board to meet with families of the crash victims.
The Justice Department announced the agreement late Sunday, months after U.S. prosecutors said the aerospace giant had violated a 2021 settlement that gave it three years of immunity from prosecution.
Just as Boeing was selecting a new CEO and acquiring the plane maker to steer the company out of a production and safety crisis, a plea deal offer forced it to choose between a guilty plea and associated conditions or proceeding to trial. Spirit AeroSystems.
“We can confirm that we have reached an agreement in principle with the Department of Justice on settlement terms, but the specific terms are subject to record keeping and approval,” Boeing said in a statement after the legal documents were filed.
The Justice Department announced in May that Boeing had violated a 2021 settlement. Under the deferred prosecution agreement, Boeing agreed to pay $2.5 billion, including a $243.6 million penalty, restitution to airlines and a $500 million fund for victims’ families.
The 2021 settlement was set to expire two days after a door panel blew off the nearly-new 737 Max 9. Alaska Airlines It happened on January 5. No one was seriously injured, but the accident posed a new safety risk for Boeing: A preliminary report from the National Transportation Safety Board found that a critical bolt securing a door panel was not attached to the plane.
The U.S. accused Boeing of conspiring to mislead regulators and deceive the government about the installation of a flight-control system on the MAX that was later found to be linked to two crashes, a Lion Air flight in October 2018 and an Ethiopian Airlines flight in March 2019. All 346 passengers and crew on both flights died.
US prosecutors told families of the crash victims on June 30 that they plan to force Boeing to plead guilty, in what the families’ lawyers have called a “sweet deal.”
Shortly after the plea agreement was filed in federal court late Sunday night, the victims’ families filed papers saying they opposed the deal, saying it “makes unjust concessions to Boeing that other criminal defendants could never get and fails to hold Boeing responsible for the deaths of 346 people.”
Paul Cassell, a lawyer for the victims’ families, said the judge should reject the settlement and “have a public trial so that all the facts surrounding this case can be presented fairly and publicly before a jury.”
The agreement requires that the corporate monitor overseeing Boeing’s probationary period remain independent, a move aimed at addressing concerns from lawyers representing victims’ families.
The lawsuit also places no cap on the compensation that Boeing can pay to the families of the victims. But lawyers say Boeing should still go to court.
“Boeing is a huge corporation,” said Erin Applebaum, one of the families’ lawyers. “No matter how many checks you write to these families, it’s not going to bring them back to life.”
