US government asks Boeing to plead guilty in ‘sweetheart deal’, say sources

The US Justice Department (DOJ) is pushing Boeing to plead guilty to criminal fraud in connection with two deadly plane crashes involving its 737 Max jetliners, sources familiar with the matter have revealed.

Boeing will have until the end of the coming week to accept or reject the plea offer, which imposes a financial penalty on the manufacturer. The agreement, according to those familiar with the matter, also requires the manufacturer to allow an independent monitor to oversee its compliance with anti-fraud laws for a period of three years.

The DOJ decided to push forward with the charge after accusing Boeing of violating a 2021 settlement agreement related to the fatal crashes.

The crash involving Indonesia’s Lion Air occurred in October 2018, followed by an Ethiopian Airlines flight in March 2019.

The earlier settlement was reached after the company acknowledged it had misled air-safety regulators about the 737 Max. The company blamed two relatively low-level employees for the fraud, paid a $244 million (€227 million) fine, and pledged to put in place a fresh compliance system to prevent further fraud.

Relatives of victims who died accuse Boeing of “gaslighting”

In May of this year, the DOJ accused Boeing of not respecting the deal, claiming that it had failed to “design, implement, and enforce a compliance and ethics program to prevent and detect violations of the US fraud laws throughout its operations”.

The DOJ told relatives of some of the 346 people who died in the crashes about the recent plea offer during a video meeting.

The family members, who want Boeing to face a criminal trial and to pay a $24.8 billion (€23 billion) fine, reacted angrily. One said prosecutors were gaslighting the families. Another shouted at them for several minutes when given a chance to speak.

“We are upset. They should just prosecute,” said Massachusetts resident Nadia Milleron, whose 24-year-old daughter, Samya Stumo, died in the second of two 737 Max crashes. “This is just a reworking of letting Boeing off the hook.”

Those with knowledge of the matter say the DOJ plans to take Boeing to trial if the firm refuses to plead guilty, although both parties have declined to comment.

Call for judge to decide on sentences

The plea deal would take away the ability of US District Judge Reed O’Connor to increase Boeing’s sentence for a conviction, and some of the families plan to ask the Texas judge to reject the deal if Boeing agrees to it.

“The underlying outrageous piece of this deal is that it doesn’t acknowledge that Boeing’s crime killed 346 people,” said Paul Cassell, one of the lawyers for victims’ families. “Boeing is not going to be held accountable for that, and they are not going to admit that that happened.”

Sanjiv Singh, a lawyer for 16 families who lost relatives in the October 2018 Lion Air crash off Indonesia, called the plea offer “extremely disappointing.” The terms, he said, “read to me like a sweetheart deal.”

Boeing has large contracts with the Pentagon and NASA, which some legal experts say could be jeopardised if Boeing is convicted. On the other hand, federal agencies can give waivers to companies that are convicted of felonies to keep them eligible for government contracts. Lawyers for the crash victims’ families expect that would be done for Boeing.

The DOJ has also given no indication of moving to prosecute any current or former Boeing executives, another long-sought demand of the families.

It is unclear what impact a plea deal might have on other investigations into Boeing, including those following the blowout of a door plug from the side of a Boeing Max 9 during an Alaska Airlines flight in January.

Meanwhile on Monday, Boeing announced plans to acquire aerospace supplier Spirit AeroSystems for $4.7 billion (€4.4 billion), a move designed to improve safety.

“By reintegrating Spirit, we can fully align our commercial production systems, including our Safety and Quality Management Systems, and our workforce to the same priorities, incentives and outcomes – centred on safety and quality,” said Boeing’s CEO Dave Calhoun.

Spirit manufactured the fuselage involved in the door plug blowout in January.