Boeing and US Department of Justice reach settlement over Max crashes

Families of crash victims file an objection to the deal allowing Boeing to circumvent a criminal trial by agreeing to a set of conditions

Boeing has faced intense scrutiny in the months since a door plug blew off an Alaska Airlines flight in mid-air in January, as well as a number of federal investigations. AFP

Boeing said on Monday that it had reached a deal with the US Department of Justice over two fatal 737 Max crashes, which court papers show would see the aviation giant plead guilty to fraud.

The agreement comes after prosecutors concluded Boeing flouted an earlier settlement addressing the disasters, in which 346 people were killed in Ethiopia and Indonesia more than five years ago.

“We have reached an agreement in principle on terms of a resolution with the Justice Department,” Boeing said.

Families of crash victims immediately filed an objection to the deal, saying that it “unfairly makes concessions to Boeing that other criminal defendants would never receive”.

Court papers filed in Texas on Sunday said the company had agreed to plead guilty to “conspiracy to defraud the United States” during the certification of Max aircraft.

The plea deal sees Boeing avoid a criminal trial, instead agreeing to a series of terms including a $243.6 million fine on top of the same sum already paid.

The company will also be required to make a minimum investment of $455 million in “compliance and safety programmes”.

Such changes at the firm will be overseen by an independent monitor appointed by the government for a three-year term.

The company's board of directors will also be required to meet the families of crash victims.

The high-profile agreement follows the DoJ finding in May that Boeing failed to improve its compliance and ethics programme, in breach of a 2021 deferred prosecution agreement (DPA) in the wake of the MAX crashes.

The families of victims will ask the court to reject the plea deal at an upcoming hearing.

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“The generous plea agreement rests on deceptive and offensive premises,” said the objection filed by their legal team Sunday.

The original DPA was announced in January 2021, over charges that Boeing knowingly defrauded the Federal Aviation Administration.

That agreement required Boeing to pay $2.5 billion in fines and restitution in exchange for immunity from criminal prosecution.

A three-year probationary period was set to expire this year.

But in January, Boeing was plunged back into crisis mode when a 737 Max flown by Alaska Airlines was forced to make an emergency landing after a fuselage panel blew out mid-flight.

In a May 14 letter to the US court, DoJ officials said that Boeing flouted its obligations under the DPA by “failing to design, implement, and enforce a compliance and ethics programme to prevent and detect violations of the US fraud laws throughout its operations”.

The conclusion opened up the company to possible prosecution, with Boeing initially saying it did not violate the 2021 accord.

DoJ representatives briefed families in late June on the proposed plea deal and the company was given until July 5 to accept the offer, or face trial.