On Sunday, June 30th, according to two sources familiar with the matter, the U.S. Department of Justice is planning to file criminal charges against Boeing for its involvement in two fatal 737 MAX plane crashes under the charge of fraud. It is said that the Department of Justice intends to request Boeing to plead guilty or face trial.
The news sources revealed that the Department of Justice plans to formally propose a guilty plea agreement to Boeing later on Sunday. This agreement includes a fine of $4.872 billion and the appointment of an independent monitor to evaluate Boeing’s safety and compliance actions over a three-year period.
However, Boeing is expected to only pay an additional fine of about $2.47 billion as part of the agreement, taking into consideration the amount the company previously paid in settlements related to the fatal accidents.
Additionally, Boeing may be required to pay compensation based on the terms of the proposal, with the specific amount to be determined at the discretion of the court. The guilty plea agreement also mandates that Boeing’s board of directors meet with representatives of the victims’ families.
Officials from the Department of Justice are planning to request a response from Boeing to the proposal before the weekend, indicating that there will be no room for negotiation.
Reuters was the first to report on the matter. Both Boeing and the U.S. Department of Justice declined to comment on Reuters’ requests for statements.
Lawyers representing the victims’ families confirmed to CNBC that Department of Justice officials, victims’ families, and their legal representatives held discussions for about two hours on Sunday regarding the proposed agreement.
It remains unclear whether Boeing will accept the guilty plea agreement. Pleading guilty could impact the company’s ability to engage in government contracts, which account for a significant portion of its revenue as a major defense contractor.
Sources stated that the Department of Justice’s proposal will require Boeing to admit to colluding to deceive the Federal Aviation Administration in the fatal plane crashes.
In 2021, Boeing admitted that two pilots had concealed the installation of a new flight control system on their planes, deceiving the Federal Aviation Administration. This system was later found to be related to the two crash incidents.
Boeing’s 737 MAX planes were involved in two fatal accidents in 2018 and 2019, resulting in the loss of all 346 lives on board. In 2021, Boeing reached a settlement agreement, paying $2.5 billion to avoid prosecution. However, the U.S. Department of Justice indicated that Boeing had violated the terms of the 2021 agreement, leading to consideration of criminal charges.
Prior to the Department of Justice pushing for Boeing’s guilty plea, another aviation incident occurred in January where an Alaska Airlines flight experienced a mid-air incident involving a new 737 Max 9 aircraft’s cabin door flying off, highlighting potential ongoing safety and quality issues within Boeing and sparking a new round of investigations.
One of the lawyers representing the victims’ families, Erin Applebaum, expressed that during a conference call with Department of Justice officials, families voiced anger over the proposed guilty plea agreement, believing that it does not hold Boeing accountable for the deadly crashes.
Applebaum stated that the families wish to see the company face more charges and harsher financial consequences, and they intend to oppose the agreement in court.
According to Applebaum, “The 737 MAX families strongly oppose the shameful private deal between Boeing and the Department of Justice.”