Boeing Accepts A Plea Deal To Avoid A Criminal Trial Over 737 Max Crashes, Justice Department Says

Boeing will plead guilty to a criminal fraud charge resulting from two 737 Max plane disasters that killed 346 people, the Justice Department announced late Sunday, after the government found the firm broke an agreement that had shielded it from prosecution for more than three years.

Last week, federal prosecutors gave Boeing the option of pleading guilty and paying a fine as part of its penalty or going to trial on the felony criminal allegation of conspiracy to defraud the United States.

Prosecutors accused the American aerospace firm of misleading regulators who authorized the jet and its pilot training standards.

Boeing | AP News Image

Boeing Accepts A Plea Deal To Avoid A Criminal Trial Over 737 Max Crashes, Justice Department Says

The plea agreement, which must still be approved by a federal judge before it takes effect, requires Boeing to pay an additional $243.6 million punishment. That was the same amount it paid under the 2021 settlement, which the Justice Department claimed the business violated. An impartial monitor would be appointed to oversee Boeing’s safety and quality practices for three years. The agreement also compels Boeing to invest at least $455 million in its compliance and safety initiatives.

The plea deal mainly addresses Boeing’s violation prior to the crashes in Indonesia and Ethiopia, which killed all 346 passengers and crew members onboard two new Max jets. A Justice Department official stated that it does not provide Boeing with immunity for prior events, such as a panel that flew off a Max aircraft during an Alaska Airlines flight over Oregon in January.

The agreement also does not cover any current or past Boeing executives, only the company. Boeing stated in a statement that it had struck an agreement with the Justice Department but declined to disclose further.

According to a filing made Sunday night, the Justice Department expects to present the written plea deal to a U.S. District Court in Texas by July 19. Lawyers for some of the relatives of those killed in the two crashes have stated that they will seek the judge to reject the arrangement.

“This sweetheart deal ignores the fact that 346 people died as a result of Boeing’s conspiracy.” “The deadly consequences of Boeing’s crime are being hidden through crafty lawyering between Boeing and the DOJ,” said Paul Cassell, a lawyer for some of the families.

Federal prosecutors accused Boeing of conspiring to deceive the government by deceiving authorities about a flight-control system involved in the crashes, which occurred less than five months apart.

As part of the January 2021 deal, the Justice Department agreed not to prosecute Boeing for the charge if the firm met specific conditions for three years. Last month, prosecutors accused Boeing of violating the conditions of that deal.

U.S. District Judge Reed O’Connor, who has handled the case since its inception, has denounced what he calls “Boeing’s egregious criminal conduct.” O’Connor could accept the plea and the punishment provided by prosecutors, or he could reject the accord, which would likely result in additional negotiations between the Justice Department and Boeing.

The case dates back to the crashes in Indonesia and Ethiopia. The Lion Air pilots in the first crash were unaware of flight-control software that might automatically lower the plane’s nose. Ethiopian Airlines pilots were aware of the situation, but were unable to manage the plane when the software activated due to information from a defective sensor.

In 2021, the Justice Department sued Boeing with tricking FAA regulators about the software, which did not present on older 737s, and how much training pilots would require to fly the plane safely. The department agreed not to prosecute Boeing at the time in exchange for the corporation paying a $2.5 billion settlement, including the $243.6 million fine, and taking three years to comply with anti-fraud regulations.

Boeing, which accused two low-level employees for misleading authorities, attempted to put the crashes behind it. when grounding Max aircraft for 20 months, regulators allowed them to fly again when the manufacturer decreased the strength of their flying software. Max jets completed thousands of safe flights, and airline orders increased, reaching approximately 750 in 2021, 700 more in 2022, and over 1,000 in 2023.

This changed in January, when an unused emergency escape panel burst off an Alaska Airlines Max during a flight over Oregon.

Pilots safely landed the 737 Max, and no one was seriously wounded, but the incident prompted more scrutiny of the corporation. The Justice Department launched a fresh investigation, the FBI informed passengers on the Alaska flight that they could be victims of a crime, and the FAA said that it was increasing oversight of Boeing.

According to some legal experts, a criminal conviction might undermine Boeing’s eligibility for federal contracts. The plea announced on Sunday does not address that issue, leaving it up to each federal agency to decide whether to exclude Boeing.

The Air Force claimed a “compelling national interest” in allowing Boeing to compete for contracts after the corporation paid a $615 million fine in 2006 to settle criminal and civil allegations, including using stolen information from a competitor to win a space-launch contract.

The corporation, headquartered in Arlington, Virginia, has 170,000 workers and dozens of airline customers throughout the world. Southwest, United, American, Alaska, Ryanair, and flydubai are among the most loyal 737 Max customers.

However, 37% of its revenue last year came from US federal contracts. The majority of it was defense work, including military sales that Washington organized for other countries.

Boeing also manufactures a capsule for NASA. Two astronauts will stay aboard the International Space Station for longer than expected while Boeing and NASA engineers work to resolve issues with the capsule’s propulsion system.

Even some Boeing detractors are concerned about harming a critical defense contractor.

“We want Boeing to succeed,” said Richard Blumenthal, a Connecticut Democrat, at a Senate hearing last month on the company’s allegedly dysfunctional safety culture. “Boeing needs to succeed for the sake of the jobs it provides, for the sake of local economies it supports, for the sake of the American traveling public, for the sake of our military.”

Boeing | AP News Image

Boeing Accepts A Plea Deal To Avoid A Criminal Trial Over 737 Max Crashes, Justice Department Says

Relatives of the Max crash victims have called for a criminal prosecution to uncover what Boeing employees knew about tricking the FAA. They also want the Justice Department to prosecute key Boeing personnel, rather than merely the business.

“Boeing has paid fines numerous times, and it doesn’t appear to make any difference,” said Ike Riffel of Redding, California, whose sons Melvin and Bennett died in the Ethiopian Airlines tragedy. “When people start going to prison, that’s when you are going to see a change.”

At a recent Senate session, Boeing CEO David Calhoun defended the company’s safety record before turning and apologizing to relatives of Max accident victims seated in the rows behind him “for the grief that we have caused.”

Hours before the hearing, the Senate investigations subcommittee issued a 204-page report containing new charges from a whistleblower who expressed concern that defective parts could be used in 737s. The whistleblower is the latest in a long line of current and former Boeing employees who have voiced safety concerns about the firm and claimed retaliation as a result.

SOURCE – AP