This image from video provided by Elizabeth Le shows passengers near the damage site on Alaska Airlines Boeing 737 Max 9, Flight 1282, which was forced to return to Portland International Airport on Friday, Jan. 5, 2024. (Photo: Elizabeth Le)
Boeing Co confirmed on Monday it had reached a settlement with the US Department of Justice over two deadly 737 MAX crashes, with the company set to plead guilty to fraud charges, according to court documents.
The agreement comes after prosecutors concluded that Boeing ignored previous settlements over crashes that killed 346 people in Ethiopia and Indonesia more than five years ago.
In a statement, Boeing said it had “reached an agreement in principle with the Department of Justice on terms of a settlement.”
Relatives of the crash victims immediately challenged the settlement, arguing that it “offered unjust concessions to Boeing that other criminal defendants would never receive.”
Catherine Berthet, who lost her daughter Camille in the 2019 Ethiopian Airlines 737 Max 8 crash, said the agreement reflected “weakness and blatant contempt for the victims’ families and the public interest.”
Court documents filed Sunday in Texas said the company agreed to plead guilty to “conspiracy to defraud the United States” during the certification of the MAX jets.
The plea deal allows Boeing to avoid a criminal trial and instead agree to a set of terms, including a new $243.6 million fine.
The company will also be required to invest at least $455 million in “compliance and safety programs.”
These reforms at the company will be overseen by an independent monitor appointed by the government for a three-year term.
The company’s board of directors will also be required to meet with the families of the accident victims.
The high-profile agreement follows a Justice Department investigation in May that found Boeing violated a deferred prosecution agreement (DPA) it entered into in 2021 following the MAX crashes and failed to improve its compliance and ethics programs.
The victim’s family plans to ask the court to reject the plea agreement at a future hearing.
“The generous plea agreement is based on a deceptive and offensive premise,” the defense wrote in an objection filed Sunday.
In a statement released by the lawyers, Berthe added that the agreement shows the Justice Department’s “tone deafness” despite the alarming increase in caseloads.
The original DPA was announced in January 2021 following allegations that Boeing knowingly misled U.S. aviation regulators.
The agreement required Boeing to avoid criminal prosecution in exchange for paying $2.5 billion in fines and damages.
The three-year trial period was due to end this year.
But Boeing was again thrown into crisis mode in January after an Alaska Airlines 737 Max was forced to make an emergency landing after a fuselage panel ruptured mid-flight.
The incident sparked a new wave of scrutiny of Boeing’s manufacturing and safety practices, with U.S. regulators and Congress launching formal investigations.
In a May 14 letter to the court overseeing the MAX case, Justice Department officials said Boeing had ignored its obligations under the DPA by “failed to design, implement and enforce a compliance and ethics program to prevent and detect violations of U.S. fraud laws throughout its business activities.”
The conclusion opens the company to possible prosecution, but Boeing initially maintained it had not violated the 2021 agreement.
Representatives from the Department of Justice explained the proposed plea deal to the families in late June, and the company was told it had until July 5 to accept the offer or face potentially damaging litigation.
Meanwhile, Boeing faced new negative news on Monday when the Federal Aviation Administration announced that more than 2,600 737 jets needed to be inspected because passenger oxygen masks may not work in an emergency.
