By AFP
July 24, 2024
Boeing violated the DPA "by failing to sufficiently design, implement, and enforce a compliance and ethics program to prevent and detect violations of US fraud laws throughout its operations," prosecutor said in court documents - Copyright GETTY IMAGES NORTH AMERICA/AFP Kevin Dietsch
Boeing will plead guilty to fraud as part of a deal with the US Department of Justice over two fatal 737 MAX crashes, according to a court filing Wednesday.
The agreement comes after prosecutors concluded Boeing flouted an earlier settlement addressing the disasters, in which a total of 346 people were killed in Ethiopia and Indonesia more than five years ago.
The plea deal must be approved by a federal court judge and it includes an additional $243.6 million to be paid by Boeing on top of a previous fine of the same amount.
The high-profile agreement follows the DOJ finding in May that Boeing failed to improve its compliance and ethics program, in breach of a 2021 deferred prosecution agreement (DPA) in the wake of the MAX crashes.
Boeing violated the DPA “by failing to sufficiently design, implement, and enforce a compliance and ethics program to prevent and detect violations of US fraud laws throughout its operations,” prosecutor said in court documents.
Terms of the plea deal call for Boeing to serve three years of “organizational probation”, conditions of which include having an independent monitor and investing at least $455 million on compliance, quality and safety programs, according to the filing.
Families of crash victims have objected to the deal, arguing that it “unfairly makes concessions to Boeing that other criminal defendants would never receive.”
The company’s board of directors will be required to meet the families of victims of the crashes in 2018 and 2019 under terms of the plea deal.
Families of victims have said they will ask the court to reject the plea deal.
“The generous plea agreement rests on deceptive and offensive premises,” said an objection filed by their legal team when word of the plea deal first surfaced.
The original DPA was announced in January 2021, over charges that Boeing knowingly defrauded US aviation regulators.
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.
The incident launched a new wave of scrutiny into Boeing’s manufacturing and safety practices, with formal probes initiated by US regulators and Congress.
In a May 14 letter to the court overseeing the MAX case, DOJ officials said that Boeing flouted its obligations under the DPA by “failing to design, implement, and enforce a compliance and ethics program 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 arguing it had not violated the 2021 agreement.
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