US reveals details of Boeing deal | News, Sports, Jobs

FILE – A Boeing 737 Max airplane piloted by Federal Aviation Administration (FAA) Chief Steve Dickson prepares to land at Boeing Field after a test flight Sept. 30, 2020, in Seattle. The Justice Department said Sunday, July 7, 2024, that Boeing has agreed to plead guilty to criminal fraud charges related to two fatal crashes of the 737 Max jets. (AP Photo/Elaine Thompson, File)

The Justice Department on Wednesday presented Boeing with an agreement under which the aerospace giant will plead guilty to fraud charges that it misled U.S. regulators who approved the 737 Max passenger plane before two planes crashed and killed 346 people.

The detailed plea agreement was filed in a federal district court in Texas. The U.S. company and the Justice Department reached an agreement on the guilty plea and general terms of the agreement earlier this month.

The final version stated that Boeing admitted that it had entered into the agreement through its employees. “by unfair means” deceive the Federal Aviation Administration group that evaluated the 737 Max. Because of Boeing’s deception, the FAA had “incomplete and inaccurate information” about the software that controls the plane and the amount of training the pilots would need to operate it, the guilty plea agreement states.

District Judge Reed O’Connor could accept the agreement and sentence reached between Boeing and prosecutors, or he could reject it, which would likely lead to new negotiations between the company and the Justice Department.

The agreement calls for an independent compliance monitor, three years of probation and a fine of at least $243.6 million. It also requires Boeing to invest at least $455 million. “in its compliance, quality and safety programs.”

Boeing issued a statement saying the company “We will continue to work transparently with our regulators, taking meaningful actions across Boeing to further strengthen” these programs.

Paul Cassell, a lawyer representing families of 737 Max crash victims who wanted Boeing to face trial, criticized the deal.

“The appeal is as problematic as the families feared. We will make a strong statement against the preferential and lenient treatment that Boeing is receiving.” he said.

Boeing has been accused of misleading the FAA about aspects of the Max before the agency certified the plane for flight. Boeing failed to inform airlines and pilots about a new software system, called MCAS, that could point the plane’s nose down without pilot input if a sensor detected the plane was about to enter an aerodynamic stall.

Max planes crashed in Indonesia in 2018 and Ethiopia in 2019 after a sensor error caused the plane’s nose to pitch down and the pilots were unable to regain control. After the second crash, Max planes were grounded worldwide until the company redesigned the MCAS system to be less efficient and use signals from two sensors rather than just one.

Boeing avoided prosecution in 2021 by reaching a $2.5 billion settlement with the Justice Department that included a previous $243.6 million fine. The fraud charge appeared to be permanently dismissed until January, when a panel looking into a missed exit on an Alaska Airlines flight that blew up a 737 Max, prompting renewed scrutiny of the company’s safety record.

In May of this year, prosecutors said Boeing violated the terms of a 2021 agreement by failing to make promised changes to detect and prevent violations of federal anti-fraud laws. Boeing agreed this month to plead guilty to the fraud case rather than endure a potentially lengthy public trial.

The role and authority of the monitor are seen as key provisions of the new plea agreement, according to experts in corporate governance and white-collar crime. Cassell said the families of the crash victims should have the right to suggest a monitor, who would be appointed by the judge. The agreement calls for the government to choose the monitor “based on the opinion of Boeing.”

In a filing Wednesday, the Justice Department said Boeing “took significant steps” to improve its anti-fraud compliance program from 2021, but changes “have not been fully implemented or tested to demonstrate that they will prevent or detect similar misconduct in the future.”

This is where the independent monitor comes in, “to reduce the risk of misconduct” written in the settlement.

Boeing, based in Arlington, Va., is a prime contractor for the Pentagon and NASA, and the guilty plea shouldn’t change that. Government agencies have discretion to hire companies even after a criminal conviction. The plea agreement doesn’t address that.

Some of the passengers’ relatives plan to ask a judge to throw out the settlement. They want a full trial, stiffer penalties for Boeing, and many want current and former Boeing executives charged.

If a judge approves the deal, it would address criminal charges stemming from the 737 Max crashes. It would not resolve other issues, including potential litigation related to the Alaska Airlines scandal.

Boeing can appeal any court order to pay victims’ families — the agreement leaves the issue of compensation up to a judge. The company can also appeal if the judge indirectly increases the fine beyond $243.6 million by failing to recognize that Boeing paid an identical amount under the 2021 settlement.

O’Connor will give the families’ lawyers seven days to file legal motions opposing the settlement. Boeing and the Justice Department will have 14 days to respond, and the families will have five days to respond to the company’s and the government’s motions.

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