Boeing’s Big Mea Culpa Just Dropped and It Doesn’t Look Pretty

Boeing has agreed to plead guilty to defrauding the US, essentially admitting to accusations that it violated an earlier agreement to strengthen its safety measures in the wake of two fatal Boeing 737 Max crashes in 2018 and 2019.”The parties have agreed that Boeing will plead guilty to the most serious readily provably offense,” the Justice Department said in a court filing on Sunday night.Last week, Bloomberg reported that federal prosecutors had offered Boeing the choice of either accepting the plea deal or risk facing trial.Under the plea deal, Boeing will have to pay a fine of $243.6 million. This is on top of the $243.6 million Boeing had already paid as part of the 2021 settlement it breached.Besides the fine, Boeing will be required to “invest at least $455 million in its compliance and safety programs.” In addition, the government will appoint an independent compliance monitor to oversee the company for three years.”We can confirm that we have reached an agreement in principle on terms of a resolution with the Justice Department, subject to the memorialization and approval of specific terms,” a spokesperson for Boeing told BI in a statement on Monday morning.

Paul Cassell, an attorney for 15 of the victims’ families, told BI on Monday that he has filed an objection to the plea deal.”This sweetheart deal fails to recognize that because of Boeing’s conspiracy, 346 people died,” Cassell said in a statement. “A judge can reject a plea deal that is not in the public interest, and this deceptive and generous deal is clearly not in the public interest.”Boeing had initially avoided a fraud charge related to two fatal Boeing 737 Max crashes — one near the coast of Indonesia in 2018 and another in Ethiopia in 2019 — after it struck a $2.5 billion settlement agreement with the DOJ in 2021.Notably, the 2021 agreement did not impose an independent compliance monitor on Boeing.The DOJ said in a statement then that a monitor wouldn’t be necessary because “the misconduct was neither pervasive across the organization, nor undertaken by a large number of employees, nor facilitated by senior management.”But the DOJ accused Boeing of violating the terms of the agreement in May, just months after a door plug from a Boeing 737 Max 9 blew out mid-flight.The incident, which took place in January, prompted the Federal Aviation Administration to order the grounding over 170 such planes.”The plea agreement will not provide Boeing with immunity for any other conduct, including any conduct that may be subject of any ongoing or future Government investigation of the Company,” the DOJ said in its filing on Sunday.

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