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15 July, 2024
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Boeing to plead guilty and pay $243.6M fine in 737 MAX settlement

Aerospace giant faces criminal charges over fatal crashes, critics decry plea deal as insufficient

Source: Reuters

Boeing has agreed to plead guilty to a criminal fraud conspiracy charge and pay a $243.6 million fine to settle a U.S. Justice Department probe into its involvement in two fatal crashes of the 737 MAX aircraft that resulted in the deaths of 346 people in Indonesia and Ethiopia between 2018 and 2019. The plea deal, which is subject to court approval, marks a significant legal development for Boeing, potentially branding the aerospace giant as a convicted felon.

The settlement has sparked criticism from families of the crash victims, who had hoped Boeing would face a trial and more severe financial penalties. The Justice Department's push to charge Boeing follows a separate incident in January involving an in-flight emergency that highlighted ongoing safety concerns at the company.

Facing criminal prosecution stemming from the Justice Department's findings in May that Boeing violated a 2021 settlement related to the fatal crashes. By agreeing to plead guilty, Boeing avoids a contentious trial that could have exposed internal decisions leading up to the crashes to public scrutiny. This move could also facilitate Boeing's efforts to move forward under new leadership, as it awaits approval for its planned acquisition of Spirit AeroSystems.

A Boeing spokesperson confirmed that the company had reached an "agreement in principle" with the Justice Department. As part of the deal, Boeing will commit to spending at least $455 million over the next three years to bolster safety and compliance programs. The settlement also mandates Boeing's board to engage with relatives of the crash victims. An independent monitor will oversee Boeing's compliance efforts, with annual progress reports to be filed publicly during the three-year probation period.

However, some lawyers representing crash victims' families plan to challenge the settlement in court. They argue that the proposed fine of $243.6 million is insufficient and label the deal a "slap on the wrist." Their objections cite a previous judicial statement describing Boeing's actions as possibly "the deadliest corporate crime in U.S. history."

The plea agreement centers on Boeing's misleading representations to the Federal Aviation Administration (FAA) regarding the Maneuvering Characteristics Augmentation System (MCAS) software, which was implicated in both crashes. The software was designed to automatically adjust the aircraft's angle of attack but was linked to incidents where pilots lost control of their planes.

The settlement, expected to be filed in federal court in Texas by July 19, does not shield Boeing from ongoing criminal investigations related to the January incident involving an Alaska Airlines flight or any other potential charges. It also does not protect Boeing executives from scrutiny, though individual charges are deemed unlikely due to statute of limitations constraints.

This agreement represents Boeing's second $243.6 million fine related to the fatal crashes, bringing the total penalty to the maximum allowable under law. The earlier fine was part of a 2021 $2.5 billion settlement. Despite calls from victims' families for as much as $25 billion in restitution, the Justice Department and Boeing continue to finalize the terms of the written plea agreement.

Cyprus  |  aviation  |  fraud

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