Boeing has agreed to plead guilty to a criminal fraud conspiracy charge and pay a $243.6 million fine to settle a U.S. Justice Department investigation into two fatal 737 MAX crashes. The crashes in Indonesia and Ethiopia, occurring over five months in 2018 and 2019, resulted in the deaths of 346 people.
The plea agreement, which still requires a judge’s approval, will officially brand Boeing a convicted felon. This resolution has drawn criticism from victims’ families, who argue that the company should face a trial and more severe financial penalties.
The Justice Department’s decision to charge Boeing comes amidst ongoing safety and quality issues at the company, highlighted by a recent in-flight incident in January. This guilty plea could potentially jeopardize Boeing’s ability to secure government contracts with entities like the U.S. Defense Department and NASA, although waivers could be sought.
Boeing was exposed to criminal prosecution after the Justice Department determined in May that the company violated a 2021 settlement related to the crashes. The plea deal, however, spares Boeing from a contentious trial that could have further scrutinized its decisions leading up to the crashes. This move may also help the company, which will have a new CEO later this year, proceed with its planned acquisition of Spirit AeroSystems.
As part of the deal, Boeing has agreed to spend at least $455 million over the next three years to enhance safety and compliance programs. The company’s board will also meet with relatives of the crash victims. An independent monitor will oversee Boeing’s compliance and will publicly file annual progress reports. The company will be on probation during the monitor’s three-year term.
Victims’ families and their lawyers plan to urge Judge Reed O’Connor to reject the deal. In a February 2023 ruling, O’Connor described Boeing’s actions as potentially “the deadliest corporate crime in U.S. history.”
The Justice Department offered Boeing the plea agreement on June 30, giving the company a week to accept the deal or face trial on charges of conspiring to defraud the Federal Aviation Administration (FAA). The fraud involved Boeing’s false representations to the FAA about the MCAS software, which was designed to push the airplane’s nose down in certain conditions. This software was linked to the two crashes, leading to a 20-month grounding of the MAX fleet by the FAA, costing Boeing $20 billion.
A separate incident in January, involving a new Boeing 737 MAX 9 jet, exposed ongoing safety issues just before the expiration of a 2021 deferred agreement that had previously shielded Boeing from prosecution over the fatal crashes. The current plea agreement does not cover any potential investigations or charges related to the January incident or other conduct, nor does it protect individual executives from prosecution, though charges are unlikely due to the statute of limitations.
Boeing’s $243.6 million fine is the second penalty of the same amount related to the fatal crashes, bringing the total to the maximum allowed. The company paid a similar fine as part of a $2.5 billion settlement in 2021. Families of the crash victims had urged the Justice Department to seek as much as $25 billion in penalties.
The Justice Department and Boeing are working to finalize the written plea agreement and plan to file it in federal court in Texas by July 19.
