Prosecutors alleged that two Boeing pilots concealed crucial information from the Federal Aviation Administration about the Max’s new autopilot system, which could cause the plane to plummet out of control and was implicated in both crashes.
By agreeing to plead guilty Just before the midnight deadline Sunday, the company pleaded guilty to a single felony count, likely avoiding a trial in the high-profile case.
The Justice Department filed paperwork on the agreement in federal court in Texas late Sunday night and scheduled a hearing at which family members who have criticized the pending agreement will be allowed to speak, after which the court must decide whether to accept the plea deal.
Boeing had already agreed to $2.5 billion in fines and payments in 2021. As part of the new agreement, the company will pay an additional $487.2 million in fines, agree to monitoring by an independent monitor, spend at least $455 million to strengthen its compliance and safety programs and undergo roughly three years of supervised probation, according to Justice Department officials.
The agreement also included a meeting with Boeing’s board of directors, something long sought by families of the crash victims.
“Today’s guilty verdict demonstrates the Department of Justice’s commitment to holding Boeing accountable for its wrongdoing,” a Justice Department official said.
It’s rare for a company as big as Boeing to admit to a crime, and the moment marks another low point for the century-old plane maker’s already tarnished reputation. The admission of guilt underscores the long shadow of the deadly crash and comes at a time when Boeing is trying to restore the trust of regulators and passengers amid a new safety crisis that began in January when a side panel of a new Max jet flew off during a flight.
Boeing confirmed in a statement that it had “reached an agreement in principle with the Department of Justice regarding a resolution, subject to the recording and approval of specific terms.”
Sunday’s court filing did not include information about exemptions the company, which holds numerous defense and space contracts, might need to apply for if Boeing is found guilty and faces a contract ban from federal agencies.
Paul Cassell, the family’s attorney in the case and a professor at the University of Utah S.J. Quinney College of Law, immediately filed an objection to the agreement on behalf of the family.
“A sophisticated lawyering exercise between Boeing and the Department of Justice has covered up the deadly consequences of Boeing’s crimes,” Cassell said.
Erin Applebaum, a partner at the law firm Kleinder & Kleinder, who has represented the family with Kassell, added: “We are extremely disappointed that the Department of Justice is moving forward with this wholly inadequate plea deal, despite the family’s vehemently opposing its terms.”
The criminal case traces its roots back to the design of the Max, an improved version of the hugely popular single-aisle 737. Boeing rushed to introduce the plane into service in the 2010s, competing with European rival Airbus, which was also launching a new jet. The automated system involved in the crash was supposed to push the plane’s nose down toward the ground, but limited With the Max now fitted with a new, larger engine, it became necessary given the circumstances.
Prosecutors said the two technical pilots concealed information from FAA regulators that the automatic system could be activated under a wider range of conditions and removed references to the system from safety reports. That meant airline pilots in the U.S. and around the world didn’t have to undergo expensive training on the new system. But it also meant pilots were more likely to fly without the proper training. I wasn’t used to that operation. The FAA office was first to learn of the system’s expanded range of operation. This happened after the initial collision, according to prosecutors.
In January 2021, the Department of Justice and Boeing announced they had entered into a deferred prosecution agreement that would allow the company to avoid criminal prosecution.
Under the three-year contract, Boeing admitted that its technical pilots misled federal regulators about the software system and was indicted on one count of fraud. One of those pilots was acquitted by a federal jury in 2022 of lying to the Federal Aviation Administration about changes to the software system. His defense publicly argued before the trial that the pilot, Mark Faulkner, was being made a scapegoat.
Boeing agreed to pay $500 million to the families of those who lost loved ones, strengthen its internal programs to detect and prevent future wrongdoing, and cooperate with future investigations and prosecutions. The agreement expired two days after an Alaska Airlines 737 fuselage door panel exploded in mid-air in January. That incident remains under criminal investigation by federal authorities.
By May, federal prosecutors determined that Boeing had violated the terms of the 2021 agreement in part by failing to create an agreed-upon compliance and ethics program.
Families of the crash victims were not consulted about the original agreement between Boeing and the Justice Department, but they successfully fought for the right to be heard in court and were briefed on the case by prosecutors this year.
John C. Coffee, a law professor and director of the Center for Corporate Governance at Columbia Law School, said building in an effective federal oversight body is important to ensure Boeing meets its obligations under the agreement.
“I have long believed that the biggest mistake of the past was [deferred prosecution agreement] “The problem is that no effective oversight mechanism was created,” he said in an email, “but the two sides will likely fight hard about what powers that mechanism should have.”
Relatives of the crash victims have been pushing prosecutors to take tougher action against the aerospace giant since the mid-air explosion earlier this year. No one was seriously injured in the accident, but multiple investigations into the disaster, including Boeing’s own, have uncovered numerous deficiencies in the company’s manufacturing and quality control systems.
A preliminary report from the National Transportation Safety Board, which is investigating the cause of the Jan. 5 crash, found that bolts securing a door panel were not replaced after being removed for repairs on another part of the plane during final assembly at a Boeing factory in Renton, Wash. Boeing’s own internal investigation found that no paperwork was kept to record the removal of that part of the plane, a violation of company policy.
The crash of a Lion Air jet in October 2018 and an Ethiopian Airlines plane five months later in March 2019 Previous accidents have been linked to design issues with the MAX, but the January explosion has been linked to a problem at Boeing’s manufacturing plant outside Seattle.
The FAA has audited the company’s production lines, launched its own investigation and demanded that the company make changes to ensure every plane leaves its factories is built to specifications. The agency took the unusual step of barring Boeing from making more 737 MAX planes. Improvements will be made monthly until regulators are satisfied that improvements have been implemented.
Boeing has faced government fraud charges before: In 2006, the company settled a space launch contract corruption case for $615 million in civil and criminal penalties. As part of the settlement, the government agreed not to pursue criminal charges against Boeing, as the company cooperated with the government’s investigation.
Boeing is seeking to regain control of its supply chain as it recovers from the current crisis, recently announcing a deal to buy Spirit AeroSystems, the supplier that makes the MAX fuselage, but the task of rebuilding the company’s reputation will fall largely in the hands of its new CEO, whose current CEO, Dave Calhoun, is due to step down at the end of the year.
