Summary
- Boeing has finalized a plea agreement with the Department of Justice (DOJ), agreeing to pay a fine after the latter had found that the company violated its deferred prosecution agreement (DPA).
- Since Boeing was credited with already paying a $243.6 million fine, the $487.2 million penalty related to the violation of the DPA, was cut in half to $243.6 million.
- The Court will also be able to determine whether and how restitution much the 737 MAX crashes victims’ families should receive.
The United States, represented by the Department of Justice (DOJ), and Boeing have finalized their plea agreement after the DOJ had found that the aircraft manufacturer violated its deferred prosecution agreement (DPA).
Consistent with the previously agreed conditions
In a court filing on July 24, Boeing and the DOJ asked the US District Court for the Northern District of Texas, the Fort Worth Division, to accept the plea agreement, which would be consistent with the US Government’s standard practice.
Boeing agreed to the plea deal after the DOJ had found that the aircraft manufacturer violated the DPA that was finalized after the two fatal Boeing 737 MAX crashes in October 2018 and March 2019, with the agreement being signed in January 2021.
Photo: Unaccompanied Media | Shutterstock
Nevertheless, according to the DOJ, Boeing breached the terms of the DPA “by failing to sufficiently design, implement, and enforce a compliance and ethics program to prevent and detect violations of U.S. fraud laws throughout its operations.”
In a statement to Simple Flying on May 15, Boeing said that it had believed it honored the terms of the agreement and the company was looking forward to responding to the DOJ’s allegations.
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$487.2 million fine reduced by previously paid penalty
As the case progressed, Boeing agreed to plead guilty to the most serious readily provable offense, the court filing read. The charge was that the company conspired to defraud the US, specifically the lawful function of the Federal Aviation Administration (FAA) Aircraft Evaluation Group (FAA AEG).
While the US government will not charge Boeing with any other criminal offense related to the violation of the DPA, “the plea agreement will not provide Boeing with immunity for any other conduct, including any conduct that may be the subject of any ongoing or future Government investigation of the Company.”
Photo: Thiago B Trevisan | Shutterstock
As a result, the DOJ and Boeing agreed that it would pay a $487.2 million fine. However, the two parties recommended to the court that the plane maker would be credited $243.6 million that was previously paid by Boeing when the DPA was finalized, resulting in a $243.6 million fine associated with the plea deal.
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Restitution for the victims’ families
In addition to the fine, the plea agreement read that restitution was discretionary and not mandatory. As a result, the Court will have to decide whether and how much was owed to the victims’ families, “whom the Court previously determined were directly and proximately harmed by Boeing’s conduct […].”
During the two fatal crashes aboard the Lion Air and Ethiopian Airlines 737 MAX 8 aircraft, 346 people lost their lives, with no survivors from either accident. Previously, the families’ counselor asked the Court to impose a $24.78 billion fine since Boeing had allegedly committed the “deadliest corporate crime in US history.”
Photo: Marco Menezes | Shutterstock
Furthermore, Boeing agreed to serve a three-year probation. This included a condition that the US government would select independent compliance monitor who would prepare a confidential annual report for US lawmakers, filing an executive summary of that report on a public forum.
Another condition was that the aircraft manufacturer would invest at least $455 million into its compliance, quality, and safety programs during the three-year period, which represented an increase of around 75% compared to the sum that the company had planned to invest in these processes in 2024.
The probation’s last provision was that the company’s Board of Directors would meet the victims’ families within four months after Boeing was sentenced.
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