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Friday, July 19, 2024

Boeing Pleads Guilty to a Criminal Fraud Charge

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Boeing has agreed to plead guilty to a criminal fraud conspiracy charge after the US found the company violated a deal meant to reform it after two fatal crashes by its 737 Max planes that killed 346 passengers and crew.

The Department of Justice (DoJ) said the plane-maker had also agreed to pay a criminal fine of $243.6m (£190m).
However, the families of the people who died on the flights five years ago have criticised it as a “sweetheart deal” that would allow Boeing to avoid full responsibility for the deaths.

By pleading guilty, Boeing will avoid the spectacle of a criminal trial – something that victims’ families have been pressing for.

The company has been in crisis over its safety record since two near-identical crashes involving 737 Max aircraft in 2018 and 2019. It led to the global grounding of the plane for more than a year.

In 2021, prosecutors charged Boeing with one count of conspiracy to defraud regulators, alleging it had deceived the Federal Aviation Administration (FAA) about its MCAS flight control system, which was implicated in both crashes.

It agreed not to prosecute Boeing if the company paid a penalty and successfully completed a three-year period of increased monitoring and reporting.

But in January, shortly before that period was due to end, a door panel in a Boeing plane operated by Alaska Airlines blew out soon after take-off and forced the jet to land.

No-one was injured during the incident but it intensified scrutiny over how much progress Boeing had made on improving its safety and quality record.

In May, the DoJ said it had found Boeing had violated the terms of the agreement, opening up the possibility of prosecution.
Boeing’s decision to plead guilty is still a significant black mark for the firm because it means that the company – which is a prominent military contractor for the US government – now has a criminal record.
It is also one of the world’s two biggest manufacturers of commercial jets.

It is not immediately clear how the criminal record would affect the firm’s contracting business. The government typically bars or suspends firms with records from participating in bids, but can grant waivers.

However, Paul Cassell, a lawyer representing some families of people killed on the 2018 and 2019 flights, said: “The memory of 346 innocents killed by Boeing demands more justice than this.”

In a letter to the government in June, he urged the DoJ to fine Boeing more than $24bn.

Ed Pierson, executive director of Foundation for Aviation Safety and a former senior manager at Boeing, said the plea was “seriously disappointing” and “a terrible deal for justice”. (BBC)

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