US said to seek Boeing guilty plea to avoid trial in 737 Max crashes

The Justice Department told victims’ families that it would propose a nearly $244 million fine and three years of company oversight to settle a fraud charge.

By Niraj Chokshi / The New York Times

The Justice Department plans to allow Boeing to avoid a criminal trial if it agrees to plead guilty to a fraud charge stemming from two fatal crashes of its 737 Max more than five years ago, according to two lawyers for families of the crash victims.

Federal officials shared details of the offer on a call with the families Sunday afternoon before bringing the deal to Boeing, according to the lawyers, Paul G. Cassell and Mark Lindquist.

The terms include a nearly $244 million fine, a new investment in safety improvements, three years of scrutiny from an external monitor and a meeting between Boeing’s board and the victims’ families, said Cassell, a University of Utah law professor.

The Justice Department did not immediately respond to a request for comment, while Boeing declined to comment.

Cassell, who represents more than a dozen of the families, said that he and the families found the deal “outrageous” and that it fell far short of what they had sought. He described the offer as a “sweetheart plea deal” because it would not force Boeing to admit fault in the deaths of the 346 people in the crashes in Indonesia and Ethiopia in late 2018 and early 2019.

“The families will strenuously object to this plea deal,” Cassell said in a statement. “The memory of 346 innocents killed by Boeing demands more justice than this.”

The Justice Department said it had planned to notify Boeing of its offer after the call, Cassell said.

The terms reportedly being offered to Boeing would update a 2021 settlement that resolved the criminal charge accusing the aerospace giant of a conspiracy to defraud the Federal Aviation Administration. The new agreement would require Boeing to plead guilty to that charge, according to the lawyers.

The 2021 criminal charge centered on two employees accused of withholding information from the FAA about changes made to software known as MCAS, which was later implicated in the crashes.

If Boeing agrees to plead guilty to the charge, the company would also admit to a set of facts laid out in that 2021 agreement, which Cassell criticized as a “whitewashed” narrative in which Boeing escapes blame for the deaths.

Under the earlier deal, the company agreed to pay $500 million to the victims’ families. It also agreed to pay more than $1.7 billion to its customers because they could not take deliveries of the Max during a 20-month global ban on the jet.

The 2021 settlement is known as a deferred prosecution agreement, a type of deal often used in criminal cases against corporations, allowing companies to avoid charges if they do not engage in wrongdoing for a certain period.

In May, the Justice Department found Boeing had broken the agreement by failing to adequately prevent subsequent violations of U.S. fraud laws in its operations. In a statement at the time, Boeing said it believed that it had honored the terms of the earlier agreement.

The new plea deal comes just days before a July 7 deadline for the Justice Department to file criminal charges in the case. Boeing will have until the end of the week to decide whether to accept the deal, officials told the families, according to Cassell.

In weighing how to punish Boeing for the crashes, the Justice Department faced competing pressures to hold Boeing accountable for its failures without damaging the company, which plays an important role in the nation’s economy and national security.

The 2021 settlement angered the crash victims’ families, who have long argued that Boeing and its executives should face greater consequences, including a public trial. Many of those families have reached civil settlements with the company, although a handful are pursuing civil damage trials that are scheduled to begin late this year.

In 2022, a jury in Texas acquitted a former Boeing technical pilot, Mark A. Forkner, of defrauding two of the company’s customers, in the only criminal case the federal government brought against an individual connected to the crashes.

The Justice Department has also opened a criminal investigation into Boeing over a January flight, in which a panel blew off a Max jet operated by Alaska Airlines. No major injuries were reported, but the incident reignited concerns among lawmakers and the public about the quality of Boeing jets.

The company has since announced a series of changes, including expanded training, simplified plans and procedures, and better quality control when it comes to supplier parts. As part of that effort, Boeing plans to buy a troubled supplier, Spirit AeroSystems, which makes the bodies of its 737 Max and 787 Dreamliner planes.

The appointment of a federal monitor as part of the plea deal represents a possible rebuke of the FAA, which oversees Boeing. The agency had been widely criticized for failures leading up to the crashes, including giving the company too much leeway to monitor quality and safety on the government’s behalf.

The FAA has since adjusted its practices, limiting the circumstances in which it delegates its authority, and making a wide range of other changes. After the Alaska Airlines episode, the agency increased its presence at Boeing’s Max factory, limited the company’s output and imposed other restrictions on Boeing.

This article originally appeared in The New York Times.

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