Boeing agreed Sunday to plead guilty to a felony charge of conspiracy to defraud the federal government over two fatal 737 Max crashes in 2018 and 2019, late-night court documents revealed.
Under the settlement with the department, described in part in court documents, Boeing also agreed to pay a $487.2 million fine, the maximum allowed by law, and to invest at least $455 million over the next three years to strengthen its compliance and safety programs.
The company will be placed on three years of probation supervised by the U.S. District Court for the Northern District of Texas. As part of the probation, the Department of Justice will appoint an independent compliance monitor to ensure safety measures are implemented and followed and to submit annual reports to the government. If the company violates the terms, it will face additional penalties. The company’s board of directors will also be required to meet with the families of the accident victims.
Boeing’s decision to plead guilty is significant because the company has never been convicted of a federal felony in decades. In its complaint, the Justice Department described the conspiracy to defraud the federal government as “the most serious and readily provable crime.”
Sunday’s settlement comes after Boeing violated a 2021 agreement with the Justice Department to implement significant safety changes after two fatal crashes, which the Justice Department has made a priority under the Biden administration to ensure that companies like Boeing comply with such agreements.
The department and Boeing filed a joint lawsuit on Sunday night, notifying the district court that they had reached an agreement in principle. A formal agreement is expected to be filed in the next week or so. The court will then set a hearing for the company to formally plead guilty. The victims’ families will have the opportunity to speak at that hearing.
Relatives of the victims, who were briefed on the agreement a week ago, said it didn’t go far enough. Attorney Paul G. Cassell, who is representing more than a dozen family members, said the families wanted an admission of responsibility for the deaths of 346 people killed in crashes of Boeing’s troubled 737 Max planes in Indonesia and Ethiopia in late 2018 and early 2019. They wanted tougher punishment for the company and its executives, including court cases.
The Justice Department acknowledged the families’ position in a court filing on Sunday. In a separate filing, the families objected to the settlement, saying they “intend to argue that the Boeing plea agreement unfairly granted Boeing concessions never available to other criminal defendants and that it does not hold Boeing responsible for the deaths of 346 people.”
Casell said the government’s agreement with Boeing was “clearly not in the public interest.”
“This sweet deal fails to acknowledge that Boeing’s conspiracy resulted in the deaths of 346 people,” Cassell said. “The deadly consequences of Boeing’s crimes have been covered up by Boeing and the Department of Justice’s slick lawyering.”
Boeing’s guilty plea doesn’t grant immunity to its employees or executives, nor does it shield the company from potential charges arising from other investigations, including the Jan. 5 Alaska Airlines incident in which a panel blew off a Boeing 737 Max plane shortly after taking off from Portland, Oregon. No one was seriously injured in the incident, but it could have been catastrophic if it had occurred a few minutes later, when the plane was at cruising altitude and flight attendants and passengers were moving about the cabin.
A Boeing spokesman confirmed the company had reached an agreement with the Justice Department but declined to comment further.
The agreement updates a 2021 deferred prosecution agreement reached in the final days of the Trump administration that allowed Boeing to avoid criminal prosecution in the two fatal crashes. The company has already paid $500 million in restitution to the victims’ families and $243.6 million in fines.
Boeing’s 2021 settlement required the company to refrain from wrongdoing for three years. The Justice Department said in May that Boeing breached the agreement by failing to “design, implement and enforce” an ethics and compliance program into its operations to prevent and detect violations of U.S. fraud laws.
As part of the 2021 settlement, the Justice Department said Boeing would only have to pay an additional $243.6 million if it was in violation. But a judge will ultimately decide whether the 2021 payment is included in the total penalty, said a Justice Department official, who spoke about the agreement on condition of anonymity. The judge will also decide how much additional restitution should be paid at the time of sentencing.
The 2021 indictment focuses on two Boeing employees accused of concealing information from the Federal Aviation Administration about changes Boeing made to flight-control software that were linked to both crashes.
Under the settlement, Boeing paid more than $1.7 billion to customers who lost deliveries of the 737 Max during the 20-month global grounding of the planes, in addition to fines and compensation to victims’ families.
In total, Boeing has spent about $20 billion because of the crashes, including fines, payments to families, compensation to airlines and other costs associated with the FAA’s nearly two-year grounding of the 737 Max.
The Justice Department faces conflicting pressures over how to punish Boeing, already in hot water with the company as America’s largest exporter and a major employer among the government’s major defense contractors. In 2023, nearly 40% of the company’s revenue came from U.S. government contracts.
Court documents released Sunday did not include full details of the settlement, but Boeing is expected to get assurances from the government that the felony convictions will not interfere with government contracts, reducing the impact of the charges on the company’s operations, said Mark Lindquist, a lawyer for families of Max 8 crash victims who now represents passengers on Alaska Airlines flights. He said those waivers are unrelated to the plea agreement.
“While many of us would have preferred a stronger prosecution, the guilty plea to a felony is a significant step toward accountability,” Lindquist said.
