The Justice Department has reached a deal with Boeing that will allow the airplane giant to avoid criminal prosecution for allegedly misleading U.S. regulators about the 737 Max jetliner before two of the planes crashed and killed 346 people, according to court papers filed Friday.
Under the “agreement in principle,” which still needs to be finalized, Boeing would pay or invest more than $1.1 billion, including an additional $445 million for the crash victims’ families, the Justice Department said.
In return, the department has agreed to dismiss the fraud charge against Boeing, allowing the manufacturer to avoid a possible criminal conviction that could have jeopardized the company’s status as a federal contractor, according to experts.
“Ultimately, in applying the facts, the law, and Department policy, we are confident that this resolution is the most just outcome with practical benefits,” a Justice Department spokesperson said in a statement.
“Nothing will diminish the victims’ losses, but this resolution holds Boeing financially accountable, provides finality and compensation for the families and makes an impact for the safety of future air travelers.”
Boeing on Friday declined to comment.
Some relatives of the passengers who died in the crashes, which took place off the coast of Indonesia and in Ethiopia less than five months apart in 2018 and 2019, have been pushing for a public trial, the prosecution of former company officials, and more severe financial punishment for Boeing. The Justice Department noted that the victims’ families had mixed views on the proposed deal.
“This kind of non-prosecution deal is unprecedented and obviously wrong for the deadliest corporate crime in U.S. history,” said Paul Cassell, an attorney for many of the families in the long-running case. “My families will object and hope to convince the court to reject it.”
Javier de Luis, whose sister, Graziella, died in the Ethiopia crash, said the Justice Department is walking away “from any pretense to seek justice for the victims of the 737Max crashes.”
“The message sent by this action to companies around the country is, don’t worry about making your products safe for your customers,” he said in a statement. “Even if you kill them, just pay a small fine and move on.”
Boeing was accused of misleading the Federal Aviation Administration about aspects of the Max before the agency certified the plane for flight. Boeing did not tell airlines and pilots about a new software system, called MCAS, that could turn the plane’s nose down without input from pilots if a sensor detected that the plane might go into an aerodynamic stall.
The Max planes crashed after a faulty reading from the sensor pushed the nose down and pilots were unable to regain control. After the second crash, Max jets were grounded worldwide until the company redesigned MCAS to make it less powerful and to use signals from two sensors, not just one.
The Justice Department charged Boeing in 2021 with deceiving FAA regulators about the software, which did not exist in older 737s, and about how much training pilots would need to fly the plane safely. The department agreed not to prosecute Boeing at the time, however, if the company paid a $2.5 billion settlement, including the $243.6 million fine, and took steps to comply with anti-fraud laws for three years.
Federal prosecutors, however, last year said Boeing violated the terms of the 2021 agreement by failing to make promised changes to detect and prevent violations of federal anti-fraud laws. Boeing agreed last July to plead guilty to the felony fraud charge instead of enduring a potentially lengthy public trial.
But in December, U.S. District Judge Reed O’Connor in Fort Worth rejected the plea deal. The judge said the diversity, inclusion and equity, or DEI, policies in the government and at Boeing could result in race being a factor in picking a monitor to oversee Boeing’s compliance with the agreement.
The plea deal had called for an independent monitor to be named to oversee Boeing’s safety and quality procedures for three years. Under the agreement announced Friday, Boeing must retain an “independent compliance consultant” who will make recommendations for “further improvement” and report back to the government, according to court papers.