Boeing has agreed to plead guilty to criminal conspiracy to commit fraud after the United States found the company had violated a deal to reform following two deadly crashes of its 737 Max aircraft that killed 346 passengers and crew.
The plane maker has also agreed to pay a criminal fine of $243.6m (£190m), the Department of Justice (DoJ) said.
However, families of those who died on flights five years ago have criticised it as a “sweetheart deal” that allows Boeing to avoid any responsibility for their deaths.
By pleading guilty, Boeing would avoid a criminal trial — something the victims’ families had been pushing for.
The company has been in crisis over its safety record since two near-identical crashes involving its 737 Max aircraft in 2018 and 2019, which led to the aircraft being grounded globally for more than a year.
In 2021, prosecutors charged Boeing with conspiracy to defraud regulators, alleging it misled the Federal Aviation Administration (FAA) about the MCAS flight control system, which was implicated in both crashes.
The court agreed not to prosecute Boeing if the company pays a fine and fulfills enhanced monitoring and reporting obligations for three years.
But in January, just before that deadline expired, a door panel on a Boeing plane operated by Alaska Airlines exploded shortly after takeoff, forcing the plane to land.
No one was injured in the incident but it has drawn growing attention to how far Boeing has come in improving its safety and quality record.
In May, the Justice Department said it found Boeing had violated the terms of the agreement, opening the door to prosecution.
Boeing’s decision to plead guilty remains a significant stain on the company because it means the company – which is a major US government military contractor – now has a criminal record.
It is also one of the two largest manufacturers of commercial jet aircraft in the world.
It is unclear how a criminal record will affect a company’s contracting business. The government typically bars or suspends companies with criminal records from bidding, but may grant exemptions.
But Paul Cassell, a lawyer representing some of the families of those killed on flights in 2018 and 2019, said: “The memory of the 346 innocent people killed by Boeing demands more justice than this.”
In a letter to the government in June, he urged the Justice Department to fine Boeing more than $24 billion.
Ed Pierson, executive director of the Aviation Safety Foundation and a former senior executive at Boeing, said the plea was “truly disappointing” and “a poor compromise for justice.”
“Instead of holding individuals accountable, they essentially just give them a get-out-of-jail-free card,” he said.
A Boeing 737 Max operated by Indonesia’s Lion Air crashed shortly after takeoff in late October 2018, killing all 189 people on board. Just months later, an Ethiopian Airlines plane crashed, killing all 157 passengers and crew.
In the 2021 settlement, Boeing also agreed to pay $2.5 billion to resolve the matter, including a $243 million criminal fine and $500 million to a victims’ fund.
The deal has angered family members, who were not consulted on the terms, and have called on the company to go to court.
Senior officials at the Justice Department have recommended prosecution, CBS News, the BBC’s US news partner, reported in late June.
At a hearing in June, Sen. Richard Blumenthal said he believed “there was almost overwhelming evidence” that prosecution should be pursued.
Lawyers for the family members said the Justice Department was concerned that it did not have strong evidence against the company.
Mark Forkner, a former Boeing engineering pilot and the only person to face criminal charges in connection with the incident, was acquitted by a jury in 2022. His lawyers argued that he was being made a scapegoat.
Prosecutors often favor plea deals or deferred prosecution, which allow them to avoid the risk of going to trial and can give the government more power over a company than a simple conviction, said Mark Cohen, a professor emeritus at Vanderbilt University who studies corporate punishment.
“Because it is easier to get than having to go to court, it may reduce the burden on the prosecutor, but the prosecutor may also believe it is a better punishment. [because] They can impose requirements that are not typically found in sentencing guidelines,” he said.
There was little doubt that Boeing’s status as a prime government contractor played a role in determining how to proceed, he said.
“They have to think about the consequences,” he said. “You can’t take cases like this lightly.”
The MCAS issues aren’t the first time Boeing has run into legal trouble.
The airline has also paid millions of dollars in fines to the Federal Aviation Administration since 2015 to settle a series of complaints about improper manufacturing and other issues.
The company also continues to face investigations and lawsuits related to an incident on an Alaska Airlines flight in January.
