Boeing Pleads Guilty to Fraud Charge Over 737 Max
In a significant development, Boeing, the American aerospace giant, has agreed to plead guilty to a fraud charge related to misleading U.S. regulators. The issue revolves around the approval of the 737 Max jetliner, two of which crashed, leading to the tragic loss of 346 lives. The plea agreement was submitted by the Justice Department and filed in federal district court in Texas.
Details of the Plea Agreement
The finalized version of the agreement indicates that Boeing admitted to having made an agreement “by dishonest means” to defraud the Federal Aviation Administration (FAA) group that evaluated the 737 Max. This deception resulted in the FAA having “incomplete and inaccurate information” about the plane’s flight-control software and the amount of training pilots would need for it, according to the plea agreement.
It is now up to U.S. District Judge Reed O’Connor to either accept the agreement and the sentence worked out between Boeing and prosecutors or reject it. The latter scenario would likely lead to new negotiations between the company and the Justice Department.
Penalties and Compliance Measures
The deal includes the following stipulations:
- Appointment of an independent compliance monitor
- Three years of probation
- A $243.6 million fine
- A requirement for Boeing to invest at least $455 million in its compliance, quality, and safety programs
Boeing issued a statement saying the company “will continue to work transparently with our regulators as we take significant actions across Boeing to further strengthen” those programs.
Criticisms of the Plea Deal
The plea deal has not been received well by all parties. Paul Cassell, a lawyer for families of victims of the 737 Max crashes who wanted Boeing to face trial, criticized the agreement. He plans to file a strong objection to what he termed as the “preferential and sweetheart treatment” Boeing is receiving.
Background of the 737 Max Crashes
Boeing was accused of misleading the FAA about aspects of the Max before the agency certified the plane for flight. The new software system, called MCAS, could turn the plane’s nose down without input from pilots if a sensor detected that the plane might go into an aerodynamic stall. This led to crashes in Indonesia in 2018 and Ethiopia in 2019 when pilots were unable to regain control after a faulty reading from the sensor pushed the nose down.
Future Implications
The plea agreement does not address Boeing’s status as a major Pentagon and NASA contractor, nor does it resolve other matters, potentially including litigation related to the Alaska Airlines blowout.
Some relatives of the passengers plan to ask the judge to reject the plea deal, desiring a full trial, a harsher penalty for Boeing, and charges for current and former Boeing executives. If the judge approves the deal, it would apply to the criminal charge stemming from the 737 Max crashes.
Judge O’Connor will give lawyers for the families seven days to file legal motions opposing the plea deal. Boeing and the Justice Department will have 14 days to respond, and the families will get five days to reply to the filings by the company and the government.
