Boeing Accepts Plea Deal to Avoid Criminal Trial Over 737 Max Crashes, No Immunity for Other Incidents

Federal prosecutors gave Boeing the choice last week to either enter a guilty plea and pay a fine or face a trial.

A Boeing 737 Max jet prepares to land at Boeing Field following a test flight in Seattle on Sept. 30, 2020. Elaine Thompson/AP Photo

Boeing will plead guilty to a criminal charge of defrauding the U.S. government over the deadly 2018 and 2019 737 Max crashes that killed 346 people, the U.S. Department of Justice (DOJ) said in a July 7 filing.

The DOJ first charged Boeing with defrauding the U.S. government on Jan. 7, 2021, after two crashes of its 737 Max 8 airplane. In a deferred prosecution agreement, the DOJ gave the company three years, until Jan. 7, 2024, to comply with new safety obligations in order to avoid charges.

On Jan. 5, just two days before the deferred prosecution agreement would have expired, an Alaska Airlines door panel on a Boeing 737 Max 9 blew off midair. The DOJ ruled on May 14 that the incident put Boeing in violation of the 2021 deal and said it would announce by July 7 how to proceed. Boeing denied breaching the agreement.

Prosecutors gave Boeing the choice last week to plead guilty and pay a fine or face a trial on felony charges of defrauding the U.S. government and the Federal Aviation Administration (FAA) by hiding the Maneuvering Characteristics Augmentation System (MCAS) from federal regulators before the 737 Max crashes.

A federal judge must approve the plea deal for it to take effect. The deal calls for Boeing to pay an additional $243.6 million fine, the same penalty that it paid in 2021 as part of the original prosecution agreement. At that time, Boeing paid a total of $2.5 billion to avoid criminal prosecution, which included $500 million for the families of the 737 Max crash victims.

Boeing will also have to invest at least $455 million in safety and compliance programs and undergo three years of independent monitoring of its safety and quality control.

No Immunity for Other Incidents

The new plea deal will shield Boeing only from any wrongdoing before the 737 Max crashes in 2018 and 2019, but it does not give it immunity for any other incidents, including the Alaska Airlines incident, a DOJ official said.

The plea deal covers only the corporation, not any current or former Boeing employees. Boeing, in a statement, said it had reached the deal with the DOJ but had no further comment.

In its court filing on July 7, the DOJ said it expected to submit the written plea agreement to a Texas U.S. District Court by July 19. However, lawyers for some of the families of the 737 Max crash victims have said they will urge the judge to reject the plea agreement.

All 346 passengers and crew members of Lion Air Flight 610 in 2018 and Ethiopian Airlines Flight 302 in 2019 perished after Boeing’s then-unknown flight control software, the MCAS, caused both planes to stall midair, leading them to crash into the ground.

“This sweetheart deal fails to recognize that because of Boeing’s conspiracy, 346 people died. Through crafty lawyering between Boeing and DOJ, the deadly consequences of Boeing’s crime are being hidden,” Paul Cassell, a lawyer who represents some of the families in the criminal case against Boeing, said.

Boeing’s original charges of defrauding the U.S. government came after the DOJ accused the company of hiding its MCAS flight control software from the FAA, airlines, and pilots. This led to the two deadly crashes, which occurred less than five months apart on two newly manufactured 737 Max 8 planes.

The judge overseeing the case from the outset, U.S. District Judge Reed O‘Connor, has criticized the company’s actions as “egregious criminal conduct.” Judge O’Connor could accept the DOJ’s plea deal and proposed sentencing, or he could reject the agreement. A rejection would likely require new negotiations between the DOJ and Boeing.

737 Max Flight Control Software

Boeing developed the 737 Max with larger engines that are higher off the ground and further forward on the wings, causing the plane’s nose to push up during ascent.

To counteract this effect, Boeing designed the software to automatically engage and lower the nose if an angle-of-attack sensor tells the computer that the plane is at the wrong ascent angle.

They also initially developed the 737 Max to consider data from a single angle-of-attack sensor at a time. These sensors tell a plane’s computer what angle it is at during flight to prevent midair stalls.

Planes previously (and since) have utilized multiple sensors, but the FAA blamed the 2018 and 2019 crashes on Boeing’s reliance on a single sensor for its MCAS.

The DOJ blamed Boeing for withholding information on the flight control system, which was absent on older 737 jets, from FAA regulators, airlines, and pilots. During each of the two crashes, the MCAS was activated because a faulty angle-of-attack sensor on the plane mistakenly detected that the nose was at an unsafe angle.

In both of the cases, the computer pitched the nose down automatically, and pilots on both flights were unable to disable the action in time, causing catastrophic stalls.

Boeing blamed two of its flight technical pilots for withholding information on the MCAS.

In the Jan. 7, 2021, deferred prosecution deal, in order to have the criminal charge dismissed in court, Boeing had to pay a $2.5 billion criminal penalty, admit to wrongdoing, and refrain from further incidents until Jan. 7, 2024. The FAA also grounded the 737 Max for 20 months and forced Boeing to retool the MCAS software and reduce its control over the airplane. The planes have since logged thousands of safe flights, and orders on the new planes increased to nearly 1,000 in 2023.

Two days before the 2021 agreement was set to expire, the Alaska Airlines flight incident occurred, thrusting Boeing’s 737 Max back into public and regulatory scrutiny.

The FAA gave Boeing 90 days in February to submit a comprehensive safety plan, and the FBI told passengers of the Alaska 737 Max that they might be victims of a crime.

Government Contract Issues

Even if Boeing avoids a criminal trial, some legal experts have suggested that a guilty plea in a criminal conviction could jeopardize Boeing’s status as a federal contractor; 37 percent of its revenue in 2023 came from U.S. government contracts. Most of that came from defense work, including military sales for other countries arranged through Washington.

The plea deal did not address that question, leaving it to each government agency to determine whether to grant Boeing contracts.

Previously, the Air Force cited a “compelling national interest” in allowing Boeing to continue competing for contracts after the company paid a $615 million fine in 2006 to settle criminal and civil charges for stealing information from a rival to win a space-launch contract.

Based in Arlington, Virginia, Boeing has 170,000 employees nationwide. It recently developed a manned space capsule for NASA.

Starliner, which successfully launched from the Kennedy Space Center on June 5, is currently delayed in its return to Earth. This leaves the two astronauts aboard the International Space Station while Boeing and NASA officials conduct safety testing on the spacecraft, which experienced multiple leaks in its propulsion system before and after takeoff.

Some of the company’s critics have expressed concern over incapacitating Boeing, which is a key U.S. defense contractor.

“Boeing needs to succeed for the sake of the jobs it provides, for the sake of local economies it supports, for the sake of the American traveling public, for the sake of our military,” Sen. Richard Blumenthal (D-Conn.) said during a June 18 Senate hearing that included testimony from current Boeing CEO Dave Calhoun.

A company whistleblower stepped forward hours before the hearing, alleging that defective parts could be going into new 737 Max jets.

At the hearing, Mr. Calhoun defended Boeing’s safety culture after apologizing to the families of the 737 Max crash victims.

“I would like to apologize on behalf of all of our Boeing associates spread throughout the world, past and present, for your loss,” Mr. Calhoun said.

The family members have pushed for a criminal trial to potentially reveal what Boeing insiders could have known about the MCAS software and any efforts to deceive the FAA about its implementation in the 737 Max. They also want the DOJ to prosecute top Boeing officials in addition to the company itself.

Ike Riffel of Redding, California, who lost his sons Melvin and Bennett in the Ethiopian Airlines crash, said that having Boeing pay fines “doesn’t seem to make any change.”

“When people start going to prison, that’s when you are going to see a change,” he said.

The Associated Press contributed to this report.