The U.S. Department of Justice is preparing to offer Boeing a plea deal to resolve a criminal charge of fraud following two fatal crashes of the manufacturer’s 737 Max jet.
Federal prosecutors told attorneys representing those who lost loved ones in the crashes about the deal at a meeting on Sunday, according to two of those lawyers, Paul Cassell and Mark Lindquist. The plea deal would include a $244 million fine, a three-year probation and an independent monitor appointed to oversee the company’s progress on safety and quality improvements.
Cassell described the proposal as “another sweetheart deal” that would not hold Boeing accountable for the crashes that killed more than 300 people in 2018 and 2019. The victims’ families have long felt the Justice Department has not done enough in the wake of the crashes, and said a 2021 agreement that allowed Boeing to avoid criminal charges let the company off too easily.
“The memory of 346 innocents killed by Boeing demands more justice than this,” Cassell said Sunday.
Criminal charges related to the fatal Max crashes have been on hold for the last three and a half years. The 2021 agreement, called a deferred prosecution agreement, expired in January, opening a six-month time frame for the Justice Department to determine if Boeing had complied with the terms of the deal.
In May, the Justice Department determined that Boeing had violated the terms of its agreement. That meant federal prosecutors could once again pursue criminal charges. It’s been unclear since then how the Justice Department will move forward.
The Justice Department and Boeing declined to comment Sunday.
The company has until the end of the week to accept the deal, Lindquist said.
Families’ reaction
During a two-hour meeting Sunday with the Justice Department and roughly 100 victims’ families, Cassell said they objected to parts of the deal and shared concerns with federal prosecutors. He expected the Justice Department would consider that feedback, but instead federal prosecutors told the group Sunday that they were prepared to offer the deal to Boeing as they had presented it.
That left many victims’ families feeling like the Justice Department had failed to listen to them — on Sunday and over the last several months.
If Boeing accepts the deal, the Justice Department would notify a federal district judge in Texas, where the deferred prosecution agreement was signed. Judge Reed O’Connor has to approve the deal in order for it to move forward.
Cassell said the victims’ families are prepared to file an objection.
Though the deal would require Boeing to admit to defrauding safety regulators, Cassell said it does not link Boeing’s actions to the deaths.
“The Justice Department and Boeing have cooked up a deal where they’re saying no loss was caused by Boeing,” Cassell said. “That’s why we’re going to be so strenuously objecting.”
What happened in 2021
The Justice Department charged Boeing in 2021 with defrauding federal safety regulators by failing to disclose information about a new software system on the Max planes. An error with that software — the Maneuvering Characteristics Augmentation System, or MCAS — caused two Max planes to nosedive and crash, first in Indonesia in October 2018 and then in Ethiopia in March 2019.
The ensuing agreement allowed the company to avoid criminal prosecution if it met certain conditions. Those conditions included setting up an ethics compliance program, updating its policies around safety and providing consistent reports to the Justice Department about its progress. The deferred prosecution agreement expired in January.
While the agreement was still in place, Boeing faced another safety incident when a panel blew off a 737 Max plane midflight, leaving a gaping hole in the side of the aircraft. The January blowout, which occurred on Alaska Airlines Flight 1282 out of Portland, reignited scrutiny of whether Boeing had made the promised changes to improve its safety culture following the fatal Max crashes.
Boeing has said it believes it has met its obligations under the 2021 agreement, and the company has continued to “engage transparently” with the Justice Department, according to a spokesperson.
Javier de Luis, who lost his sister in the second Max crash and was part of an expert panel convened by the Federal Aviation Administration to study Boeing’s safety culture following the crashes, said the Justice Department’s proposed penalties were “totally inadequate.”
The proposal presented Sunday is “essentially the same as those proposed under the previous DPA,” de Luis said, “which, as Alaska Air demonstrated, did nothing to increase the safety of the flying public.”
Earlier this month, before the Justice Department had determined how it would move forward, the families asked federal prosecutors to appoint an independent monitor and to fine Boeing $24.8 billion.
In 2021, as part of its agreement with the Justice Department, Boeing paid just over $2.5 billion. Most of that was compensation to airline customers that the company had already agreed to pay.
Of the total, Boeing paid $1.77 billion to airline customers, $500 million in compensation to the families who lost loved ones and $244 million as a fine to the U.S. government for the criminal conduct.
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