Attorney for victims' families calls plea deal with U.S. Justice Department a “sweetheart deal.”
Boeing has agreed to plead guilty to fraud to avoid going to trial in the United States on charges stemming from two fatal crashes involving its 737 Max.
Under the plea agreement, Boeing would pay a $243.6 million fine and be required to invest at least $455 million in its compliance and safety programs, the U.S. Justice Department said in a court filing Sunday.
The aerospace giant would also agree to be subject to an evaluation by an external monitor of its safety and quality procedures for three years.
“We can confirm that we have reached an agreement in principle on the terms of a resolution with the Department of Justice, subject to the formalization and approval of specific terms,” Boeing said in a statement.
The plea agreement announced Sunday relates only to Boeing’s culpability in connection with the 737 Max crashes in 2018 and 2019, not other incidents that have raised questions about the company’s safety standards, including the mid-air explosion of Alaska Airlines Flight 1282 in January.
The settlement, which requires approval from a federal judge, also covers only the Boeing corporation, not any of its current or former employees.
Boeing's guilty plea could potentially cost the company government contracts that account for about 40 percent of its revenue, since U.S. agencies can use a criminal conviction as grounds to exclude a bidder.
However, the planemaker could seek exemptions to continue doing business with the government, and it is debatable whether agencies such as the U.S. Department of Defense and NASA would be willing to give up on such a major supplier.
In 2003, the U.S. Air Force backed off a decision to suspend bidding on several Boeing units due to “serious and substantial violations of federal law” in favor of awarding the aerospace giant a $56 million satellite project.
Boeing's decision to plead guilty comes after the Justice Department said in May it had determined the company violated an earlier deferred prosecution agreement stemming from the 737 Max crashes, which killed 346 passengers and crew.
As part of the 2021 settlement, prosecutors agreed not to file charges against Boeing for misleading regulators about flaws in the 737 Max if Boeing paid a $2.5 billion settlement, including a $243.6 million fine, and promised to meet certain conditions for three years.
Under the settlement, the aircraft manufacturer admitted that it had misled the Federal Aviation Administration about its Maneuvering Characteristics Augmentation System (MCAS), a flight-stabilizing software program that was linked to both crashes.
Lawyers for some of the victims' relatives said they would ask the Texas court where the deposition will be filed to reject the settlement.
“This sweetheart deal fails to acknowledge that because of Boeing’s conspiracy, 346 people died,” Paul Cassell, a lawyer for some of the families, said in a statement.
“Through a clever legal negotiation between Boeing and the Department of Justice, the deadly consequences of Boeing’s crime are being hidden.”
