Airline industry

Boeing will plead guilty to criminal fraud over 737 Max crashes, justice department says

Author: Editors Desk Source: The Guardian
July 8, 2024 at 08:20
Boeing will plead guilty to a criminal fraud charge, after a deal with the US department of justice. Photograph: Elaine Thompson/AP
Boeing will plead guilty to a criminal fraud charge, after a deal with the US department of justice. Photograph: Elaine Thompson/AP

The deal, which still requires the approval of a federal judge, will see the company pay a fine of almost $250m and invest at least $455m in improving safety

Boeing will plead guilty to a criminal fraud charge stemming from two deadly crashes of 737 Max jetliners, after the government determined the company violated an agreement that had protected it from prosecution for more than three years, the US the government said in court filing late on Sunday.

Federal prosecutors gave Boeing the choice this week of entering a guilty plea and paying a fine as part of its sentence, or facing a trial on the felony criminal charge of conspiracy to defraud the US.

The plea deal, which still must receive the approval of a federal judge to take effect, calls for Boeing to pay an additional $243.6m fine, according to a justice department (DOJ) document filed in federal court in Texas.

Boeing has also agreed to invest at least $455m over the next three years to strengthen its safety and compliance programs, the DOJ said. The department will appoint a third-party monitor to oversee the firm’s compliance. The monitor will have to publicly file with the court annual reports on the company’s progress.A guilty plea potentially threatens the company’s ability to secure lucrative government contracts with the likes of the US defence department and Nasa, although it could seek waivers. Boeing became exposed to criminal prosecution after the justice department in May found the company violated a 2021 settlement involving the fatal crashes.

Prosecutors accused the American aerospace giant of deceiving regulators who approved the airplane and pilot-training requirements for it.

The plea deal however spares Boeing a contentious trial that could have exposed to even greater public scrutiny many of the company’s decisions leading up to the fatal Max plane crashes. It would also make it easier for the company, which will have a new CEO later this year, to move forward as it seeks approval for its planned acquisition of Spirit AeroSystems.

Boeing confirmed to the New York Times and Reuters that the company reached an agreement with the justice department, but declined to comment further.

The plea deal covers only wrongdoing by Boeing before the crashes, which killed all 346 passengers and crew members aboard two new Max jets. It does not give Boeing immunity for other incidents, including a panel that blew off a Max jetliner during an Alaska Airlines flight in January, a justice department official said.

The deal also does not cover any current or former Boeing officials, only the corporation.

Federal prosecutors alleged Boeing committed conspiracy to defraud the government by misleading regulators about a flight-control system that was implicated in the crashes, which happened in Indonesia in October 2018 and in Ethiopia less than five months later.

The company’s guilty plea will be entered in US district court in Texas. The judge overseeing the case, who has criticised what he called “Boeing’s egregious criminal conduct”, could accept the plea and the punishment that prosecutors offered with it or he could reject the agreement, likely leading to new negotiations between the justice department and Boeing.

Relatives of the people who died in the crashes were briefed on the plea offer a week ago and at the time said they would ask the judge to reject it.

The Associated Press and Reuters contributed to this report

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