Boeing admits lying about crash and will pay $244 million fine - families of victims demand $25 billion

Boeing is prepared to admit guilt in a criminal case involving the 737 MAX passenger planes. The manufacturer faces a fine of $244 million for misleading air safety regulators before two fatal plane crashes that killed 346 people.

According to one of the charges, in a fraudulent conspiracy, the company could face a second fine of $244 million and spend $455 million over the next three years on safety improvements. Boeing is also required to conduct independent monitoring for three years to confirm improvements. The court still needs to approve the guilty plea agreement.

The admission of guilt creates business problems for Boeing. Companies convicted of serious crimes can lose work as defense contractors. Boeing is expected to seek immunity from this consequence. According to federal data, last year the company received contracts worth $22.8 billion from the Department of Defense. Boeing and the Department of Defense are negotiating on this issue.

The guilty plea agreement does not meet the demands of the crash victims' families. They had asked federal prosecutors to seek a fine of approximately $25 billion, to pursue Boeing in court without concessions, and to bring other charges against the company and executives they believe are responsible for the crashes. Representatives of the Department of Justice informed the families that they faced various legal obstacles, including statutes of limitations and lack of evidence to support alternative charges, such as involuntary manslaughter.

"Families intend to assert that the guilty plea agreement with Boeing unfairly gives Boeing concessions that other criminal defendants would never receive, and does not hold Boeing accountable for the deaths of 346 people," said the lawyer in a statement.

Lawyers for some of the families of victims also stated that they plan to pressure Judge Reid O'Connor, who is handling the case, to reject the deal. In a separate court filing, they quoted a statement from O'Connor's February 2023 ruling:

"Boeing's crime can rightly be considered the deadliest corporate crime in U.S. history."

The company faces a three-year probation period under court supervision, during which it could face additional fines if it fails to comply with the conditions. The decision was disclosed in a statement from the Department of Justice in federal court in Fort Worth, Texas. The prosecution has asked the court to schedule a hearing on the guilty plea agreement for July.

In the fatal crashes in 2018 and 2019, pilots were unable to regain control after the aircraft nose was forced down due to repeated faulty activations of the flight control system. Under the 2021 agreement, Boeing paid a fine of $243.6 million and $500 million in compensation to families of the deceased passengers. At that time, Boeing avoided monitoring.

Boeing is still facing civil lawsuits over the crashes. It took responsibility for the deaths of passengers killed in the second 737 MAX crash, the Ethiopian Airlines flight. Boeing is facing lawsuits from families of those killed in the Lion Air crash in 2018, although Boeing has settled most of the lawsuits.

The agreement announced on Sunday does not grant immunity to individual employees or executives of Boeing, and does not prevent the company from facing charges related to other incidents, including the Alaska Airlines door plug accident in January 2024.

Sources: WSJ, Reuters