By David Shepardson and Jasper Ward
The U.S. Justice Department said on Wednesday that Boeing Co.’s plea deal on a criminal charge related to software linked to two fatal crashes of its 737 Max jets should be accepted, after some relatives of the 346 people killed in the crashes argued for it to be rejected.
Last month, the planemaker entered into a plea agreement to plead guilty to a criminal conspiracy charge to commit fraud and pay at least $243.6 million after violating a 2021 deferred prosecution agreement. The government said the planemaker intentionally made false statements to the Federal Aviation Administration about a key program for the 737 Max.
The Justice Department said in a court filing Wednesday that the deal “is a strong and important decision that holds Boeing accountable and serves the public interest.”
The U.S. Justice Department said the decision requires Boeing to “accept the maximum statutory penalty of $487.2 million, in addition to the billions the company has already paid” in connection with the 2021 deferred prosecution agreement and previous or ongoing civil lawsuits.
The ministry rejected the families’ claim that Boeing should face much higher fines after the crashes in Indonesia in 2018 and Ethiopia in 2019 killed their relatives.
The US Justice Department said that “the government cannot prove beyond a reasonable doubt that Boeing’s fraud directly or indirectly caused the 737 Max crashes,” adding that it cannot prove beyond a reasonable doubt that the loss or gain from Boeing’s fraudulent activity exceeded $243.6 million.
Paul Cassell, an attorney for some of the families, said in a court filing last month that the $487 million fine was “insufficient — or, at the very least, based on misleading accounting and inaccurate accounting.”
Boeing did not immediately respond to a request for comment.
The Justice Department is conducting a separate criminal investigation into an emergency incident involving a door seal on an Alaska Airlines 737 Max 9 on Jan. 5, and noted that the plea deal “does not provide immunity for any other misconduct, including the Alaska Airlines incident.”
The plea agreement reached last month requires Boeing to spend $455 million to strengthen its compliance, safety and quality programs over three years of judicial oversight, the department said, and that it “will directly benefit the public by reducing the risk of recurrence of fraudulent misconduct by Boeing.” Boeing will also face oversight from an independent monitor, it said.
U.S. District Judge Reed O’Connor could also decide whether Boeing should pay damages, which could include compensation to victims’ families beyond what many have already received in settlements or as part of the $500 million to relatives under the 2021 agreement.