The Justice Department announced on Tuesday that Boeing has breached a 2021 prosecution agreement that protected it from charges relating to two deadly 737 Max crashes in 2018 and 2019. The agreement, which allowed Boeing to avoid criminal prosecution, was violated due to Boeing’s failure to implement a compliance and ethics program to prevent violations of U.S. fraud laws. This means that Boeing is now open to criminal prosecution, although it is unclear whether prosecutors will choose to pursue charges at this time.
Boeing’s violation of the agreement could potentially lead to a charge of conspiracy to defraud the U.S., which the company had avoided with the initial deal. As part of the settlement, Boeing had agreed to pay $2.5 billion to settle allegations that it concealed information from the Federal Aviation Administration about the operation of its 737 Max following the crashes that resulted in the deaths of 346 people. Boeing will have 30 days to respond to the decision, and prosecutors will announce by July 7 whether they intend to move forward with charges.
In response to the announcement, Boeing has stated that it believes it honored the terms of the agreement and looks forward to the opportunity to respond. The aerospace company played a key role in the investigation into the crashes, which focused on the Maneuvering Characteristics Augmentation System, a flight stabilizing part of the 737 Max that was added without the knowledge of pilots or airlines. Boeing admitted to deceiving the FAA about this part and related information, leading to the grounding of its 737 Max planes for 20 months.
The total amount of the settlement reached by Boeing as part of the agreement is $2.5 billion. This includes $1.77 billion in compensation payments to Boeing’s 737 Max airline customers, the establishment of a $500 million crash-victim beneficiary fund, and a $243.6 million criminal monetary penalty. The first crash occurred in 2018 off the coast of Indonesia, resulting in the deaths of all 189 passengers and crew members on board. The second crash took place in 2019 after a departure from Ejere, Ethiopia, leading to the deaths of all 157 passengers and crew members. Investigations into the crashes highlighted Boeing’s lack of transparency with the FAA regarding the 737 Max’s operation and led to significant changes in the company’s practices.
As the situation continues to develop, it remains to be seen whether prosecutors will ultimately move forward with charges against Boeing for its breach of the 2021 agreement. The aerospace company’s handling of the 737 Max crashes has been closely scrutinized, and the outcome of this latest development could have significant implications for the future of the company. Stay tuned for further updates on this breaking news story.
