Boeing has reached an agreement to plead guilty to a criminal fraud charge in connection with the tragic 737 Max accidents, as announced by the Justice Department on Sunday. This development comes after U.S. prosecutors alleged that the aerospace corporation breached a 2021 settlement that provided immunity from prosecution.
In accordance with the terms of the agreement, Boeing has
consented to the payment of a $243.6 million fine. Furthermore, an independent
compliance monitor will be appointed to supervise Boeing’s adherence to
regulations for a three-year probationary period. Additionally, Boeing is
required to invest a minimum of $455 million in compliance and safety
initiatives, as outlined in a court filing submitted by U.S. prosecutors on
Sunday. The plea agreement is subject to the approval of a federal judge before
it can be put into effect.
Boeing further consented to a meeting between the board of
directors and the families of the crash victims, as per the agreement.
The plea deal offer presented Boeing with a critical
decision: either accept the guilty plea and its associated conditions or
proceed to trial. This decision arose at a pivotal moment for the company, as
it strived to overcome its manufacturing and safety challenges, appoint a new
CEO, and finalize the acquisition of Spirit AeroSystems, a key fuselage
manufacturer.
The admission of guilt may result in the aircraft
manufacturer being labeled as a felon, potentially hindering its capacity to
conduct business with the United States government. Notably, approximately 32%
of Boeing’s substantial revenue of nearly $78 billion during the previous year
was derived from its defense, space, and security division.
“We can confirm that we have reached an agreement in
principle on terms of a resolution with the Justice Department, subject to the
memorialization and approval of specific terms,” Boeing said in a statement.
In May, the Department of Justice alleged that Boeing was in
breach of the 2021 accord. According to the terms of the deferred prosecution
agreement, Boeing consented to pay $2.5 billion, which included an initial
$243.6 million criminal penalty, restitution to airlines, and a $500 million
fund for the families of the victims.
The settlement reached In 2021 was set to expire two days
after an incident involving a nearly new 737 Max 9 operated by Alaska Airlines
on January 5th. Although the incident did not result in any major
injuries, it has generated renewed safety concerns for Boeing.
The United States government has alleged that Boeing engaged
in a conspiracy to defraud the government by providing misleading information
to regulators regarding the inclusion of a flight-control system on the Max
aircraft, which was subsequently implicated in two fatal crashes: a Lion Air
flight in October 2018 and an Ethiopian Airlines flight in March 2019.
Tragically, all 346 individuals on board these flights lost their lives.
On June 30, the U.S. prosecutors informed the victims’
family members of their intention to pursue a guilty plea agreement with
Boeing. This proposed agreement was met with criticism from the family’s
attorneys, who characterized it as a lenient and favorable arrangement for the
company.”
As counsel for the victims’ families, I intend to petition
the presiding federal judge to decline the proposed settlement and instead
schedule a public trial. This course of action will ensure a transparent and
impartial airing of all relevant facts before a jury.”