Boeing agrees to plead guilty in 737 MAX criminal case
Summary
The plane maker faces conviction and a $244 million fine for misleading air-safety regulators before two fatal crashes that killed 346 people.Boeing agreed to plead guilty to misleading air-safety regulators in the run-up to two deadly 737 MAX crashes, a stunning concession that would brand the world’s biggest aerospace company a felon.
Boeing will formally acknowledge guilt and accept fresh punishment over its dealings with the Federal Aviation Administration before two 737 MAX crashes that killed 346 people, according to a late Sunday court filing.
As part of a plea to one count of conspiracy to defraud the U.S., prosecutors have asked the company to pay a second $244 million criminal fine and spend $455 million over the next three years to improve its compliance and safety programs. Boeing also must hire an independent monitor for three years to oversee those improvements. A court still needs to sign off on the plea agreement.
Pleading guilty creates business challenges for Boeing. Companies with felony convictions can be suspended or barred as defense contractors. Boeing is expected to seek a waiver from that consequence. The company was awarded Defense Department contracts last year valued at $22.8 billion, according to federal data.
Also as part of the plea agreement, Boeing’s board of directors agreed to meet with victims’ family members.
The plea deal falls short of what families of the MAX crash victims had wanted. They had asked federal prosecutors to seek a fine as high as about $25 billion, prosecute Boeing at trial without concessions, and pursue other charges against the company and executives they believe are responsible for the crashes. Justice Department officials have told the families they faced various legal hurdles, including a statute of limitations and a lack of evidence to prove alternative charges such as manslaughter beyond a reasonable doubt. An earlier attempt to prosecute a Boeing employee over the allegations failed at trial.
The company faces three years of court-supervised probation during which it could face additional penalties if it fails to comply with the terms. The decision was disclosed in a filing by the Justice Department in federal court in Fort Worth, Texas. Prosecutors asked the court to schedule a hearing in July on the plea agreement.
Write to Dave Michaels at dave.michaels@wsj.com, Sharon Terlep at sharon.terlep@wsj.com and Andrew Tangel at andrew.tangel@wsj.com
