The DoJ said Boeing violated a 2021 deferred prosecution agreement. This deal was reached after 346 people died in two 737 Max crashes in 2018 and 2019.
The DPA was due to expire just two days after January’s Alaska Airlines blowout. In May, the Justice Department said Boeing failed to “design, implement, and enforce a compliance and ethics program.”
Sunday’s plea deal will see Boeing pay an additional $243.6 million — the same criminal penalty as in 2021. Plus, it has been ordered to invest at least $455 million in its compliance and safety program and impose an independent monitor.
The court will determine the restitution to be paid to the families of the 2018 and 2019 crash victims.
But it’s not the end of the fallout just yet.
Paul Cassell, an attorney for the families of victims of the 2018 and 2019 crashes, slammed Sunday’s plea deal and called on the judge to reject it.
“This sweetheart deal fails to recognize that because of Boeing’s conspiracy, 346 people died,” he said in a statement. “A judge can reject a plea deal that is not in the public interest, and this deceptive and generous deal is clearly not in the public interest.”
Government contracts
By pleading guilty to fraud conspiracy, Boeing will have committed a felony — jeopardizing its government contracts.
According to the company’s last annual report, 37% of its revenue came from government contracts.
They are primarily in the defense and space sectors, which have been a saving grace for Boeing as its commercial airplanes division suffered from January’s blowout. Without them, Boeing’s stock price would likely have fallen even further than the 26% it has dropped since the start of the year.
However, each government agency has been left to decide whether to continue business with Boeing. As such a valued firm, it seems unlikely to suffer much here.
In a Senate hearing about Boeing’s safety culture, Richard Blumenthal, chair of the subcommittee, said: “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.”
Then, there are other investigations that Boeing is facing.
In March, The Wall Street Journal reported that the Justice Department opened an investigation into Boeing following the Alaska Airlines blowout, in tandem with the review of the DPA.
Later that month, the FBI wrote to passengers on Alaska Airlines Flight 1282, saying, “We have identified you as a possible victim of a crime.”
Numerous passengers are also suing Boeing in relation to the blowout.
In short, Boeing’s headache looks set to continue. Regaining the trust of regulators and customers will prove difficult for its next CEO.
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