Boeing (BOE, Washington National) has agreed to plead guilty to conspiring to defraud the United States government in relation to the two fatal crashes of B737-8s in 2018 and 2019, the US Department of Justice said. Subject to the approval of a federal judge, the manufacturer will pay a fine of up to USD243.6 million but avoid a criminal trial.
Under the terms of the deal, Boeing will also have to accept a government-appointed independent monitor for three years and invest USD455 million to strengthen compliance and safety programmes. The DOJ said these mandatory investments would be "historic". After pleading guilty to the charges, the manufacturer will become a felon, which will require it to seek waivers for any future contracts with the US Department of Defence and other government agencies.
The DOJ stressed in a statement that the proposed fine was the highest legally permissible. Although the total amount covered by the deal will be USD487.2 million, the DOJ will credit USD243.6 million already paid by the manufacturer as a part of the 2021 deferred prosecution agreement (DPA).
"DOJ is resolving only with the company - and providing no immunity to any individual employees, including corporate executives, for any conduct. DOJ is resolving with Boeing only for misconduct that predated the B737 MAX crashes - and not providing immunity for any other corporate conduct, including the Alaska Airlines AS1282 incident [in January 2024]," the statement said.
Boeing confirmed the plea deal but refused to comment further. The final plea deal is expected by July 19, 2024.
The plea deal was heavily criticised by representatives of the families of the victims of the two crashes, who would like to see the manufacturer face a criminal trial. The families are demanding a total of USD24.8 billion in damages and say they will ask the judge to reject the plea deal.
Boeing attempted to avoid the plea deal through the 2021 DPA, in which it agreed to pay over USD2.5 billion in return for suspending the charges and avoiding conviction. The deferral was set to expire on January 7, 2024, after which date the DOJ would move to drop the charges for good. However, the January 5 Alaska Airlines incident derailed the process, eventually leading the DOJ to conclude that Boeing had violated the terms of the 2021 DPA. The administration revived the charges in May 2024.
