(New York) Boeing has “reached an agreement” with the US Department of Justice (DoJ) to avoid an embarrassing trial, with a more uncertain outcome, in the criminal case related to the two 737 MAX plane crashes in 2018 and 2019, which killed 346 people.
“We have reached an agreement in principle on the terms of a resolution with the Department of Justice,” Boeing told AFP in a statement on Monday.
The plea deal came as prosecutors concluded that the U.S. aerospace giant violated an earlier agreement over the crashes involving Lion Air and Ethiopian Airlines Boeing 737 MAX planes in Indonesia and Ethiopia.
This so-called deferred prosecution agreement (DPA), dating from 2021, required it to improve its compliance and ethics program after these two air disasters.
But last January, Boeing was plunged back into crisis when an Alaska Airlines 737 MAX had to make an emergency landing after a fuselage panel detached in mid-flight.
The American giant received a proposal last week from the DoJ, which had promised to return “no later than July 7” to federal judge Reed O’Connor, who is handling the case for a Texas court.
Documents filed in court Sunday indicate that the company has agreed to plead guilty to “conspiracy to defraud the United States” in the certification of the 737 MAX.
“The offer made to Boeing by the DoJ is to plead guilty to an ongoing criminal charge (filed in 2021) for conspiracy to defraud the FAA (Federal Aviation Administration), the American aviation regulator, explained to AFP last week Paul Cassell, professor of law at the University of Utah and lawyer for families in this criminal aspect.
The families of the victims of the two plane crashes said they were “very disappointed” and are asking the court to reject the agreement at a future hearing.
This “generous plea agreement is based on misleading and offensive premises,” according to the motion filed by their lawyers.
“Much more evidence has been presented over the past five years that Boeing’s profit-over-safety culture has not changed. This settlement only reinforces that skewed corporate objective,” one of the attorneys, Robert A. Clifford, said in a statement.
Immunity from prosecution
In 2021, the aeronautics giant admitted that it had committed fraud during the certification of the 737 MAX 8, involved in the two fatal accidents. All 737 MAXs were grounded for twenty months in the United States and around the world after these crashes.
The deal required Boeing to pay a $2.5 billion fine in exchange for immunity from criminal prosecution. It was subject to a three-year probationary period that expires this year.
But audits and investigations launched after the January 5 incident identified non-compliance issues and gaps in the group’s quality control.
Under the agreement with the DoJ, Boeing will be fined $243.6 million and must invest a minimum of $455 million in “compliance and safety programs,” while compensation for the families will be determined by the court.
These investments within the group will be supervised by an independent controller appointed by the government for a three-year term.
Finally, the company’s board of directors will have to meet with the victims’ families.
“It’s more attractive to the DoJ to get the certainty of a plea deal than to go to trial,” Tracy Brammeier of the Clifford law firm told AFP last week.
For John Coffee, a professor at Columbia University, an out-of-court settlement has the advantage for both parties of “avoiding a humiliating defeat and being quick.” But in this case, “the general public often comes out the worse for wear,” he noted in a blog post last week.
In addition to the difficulties arising from a criminal trial, a conviction could also have deprived the aircraft manufacturer of lucrative government and military contracts, which generated a third of its turnover in 2023.