Boeing agreed on Sunday to plead guilty to conspiring to defraud the government in a case linked to crashes of its 737 Max jets in Indonesia and Ethiopia that killed 346 people — a stunning turn for the aerospace giant after the Justice Department determined that Boeing failed to live up to terms of a 2021 deal to avoid prosecution.
Prosecutors alleged that two Boeing pilots concealed key information from the Federal Aviation Administration about a new automated control system on the Max. The system was implicated in both crashes, causing uncontrollable dives.
By agreeing to plead guilty to the single felony count just before a midnight deadline Sunday, the company will avoid going to trial in the high-profile case.
The Justice Department filed documents related to the deal in federal court in Texas late Sunday night, setting up a planned hearing where family members — who have criticized the pending agreement — will be permitted to speak out. The court subsequently must decide whether to accept the plea agreement.
Boeing had already agreed to $2.5 billion in penalties and payouts in 2021. As part of the new deal, the company will pay an additional $487.2 million in penalties, agree to oversight by an independent monitor, spend at least $455 million to strengthen compliance and safety programs and be placed on supervised probation for roughly three years, according to a Justice Department official.
The agreement also included one thing crash victims’ families long sought: a meeting with Boeing’s board of directors. “This criminal conviction demonstrates the department’s commitment to holding Boeing accountable for its misconduct," the Justice Department official said.
It is rare for a company of Boeing’s stature to plead guilty to a crime, and the moment marks another low point for the already-battered reputation of the century-old aircraft manufacturer. The plea underscores the long shadow of the deadly crashes and also comes at time when Boeing is trying to restore the trust of regulators and the flying public amid a fresh safety crisis that began in January when a panel flew off the side of a newer model Max midflight.
In a statement, Boeing confirmed that it had reached an “agreement in principle in terms of a resolution with the Justice Department subject to the memorialization and approval of specific terms.”
Sunday’s court filing did not include information about waivers that Boeing, with its myriad defense and space contracts, may need to seek if its conviction triggers contracting bans by federal agencies.
Paul Cassell, attorney for the families in the case and a professor at S.J. Quinney College of Law at the University of Utah, immediately filed an objection to the agreement on their behalf.