The Department of Justice (DOJ) has announced that Boeing is pleading guilty to criminal fraud charges related to two Boeing 737 MAX crashes. Unfortunately this doesn’t do anything to actually hold the people at the company who are responsible for these problems accountable…
Boeing accepts 737 MAX plea deal
The biggest story in the aviation industry for the past five or so years has been what a mess Boeing is as a company. The formerly very well respected aerospace giant clearly shifted from being focused on engineering to being focused on short term profits. This finally had fatal consequences in 2018 and 2019, when two Boeing 737 MAXs had crashes, killing 346 people.
It was determined that Boeing had been deceiving regulators who approved the certification of the 737 MAX, in an effort to boost profits. Specifically, this relates to some software on the jet that didn’t exist on older models of the plane, in order to reduce the amount of training pilots would need to fly the plane safely (which was a big selling point of the 737 MAX, given the similarities to previous versions of the aircraft).
At the time, there was a call for Boeing to be held accountable for the accidents. In early 2021, the DOJ announced it wouldn’t prosecute Boeing if the company complied with certain conditions for three years. The DOJ and Boeing reached a settlement with certain conditions. However, not surprisingly, Boeing didn’t actually learn its lesson.
Several weeks ago, prosecutors alleged that Boeing violated the terms of the settlement by not making the promised changes to prevent violations of federal anti-fraud laws. Specifically, Boeing was accused of “failing to design, implement, and enforce a compliance and ethics program to prevent and detect violations of the US fraud laws throughout its operations.”
With this latest update, prosecutors gave Boeing the option of entering into a guilty plea and paying a fine, or facing a trial on the felony criminal charge of conspiracy to defraud the United States. Boeing is pleading guilty to a criminal fraud charge, and is taking the plea deal. If approved by a judge:
- Boeing will have to pay an additional $243.6 million fine, which is similar to the fine paid as part of the 2021 settlement
- The government will appoint someone to oversee Boeing’s quality and safety procedures for a period of three years
- Boeing will invest at least $455 million in its safety and compliance programs
This deal only covers the corporation, and not any Boeing officials, whether current or former. Furthermore, it only covers Boeing for any wrongdoing before the crashes, so Boeing could still face charges for other incidents, like the Alaska Boeing 737 MAX 9 incident earlier this year.
Boeing is too big to fail, be held accountable
While I suppose some accountability for Boeing is better than no accountability, I think this is still a far cry from justice for the aerospace giant. A fine of a couple of hundred million dollars hardly has any implications for the company.
Interestingly, a criminal conviction could technically jeopardize Boeing’s status as a federal contractor, and that’s a huge part of the company’s business. However, I think it’s safe to say that Boeing won’t suddenly lose its government contracts.
On the one hand, that’s fair enough, since it’s not like the government can go to another aerospace manufacturer overnight, and Boeing plays a vital role when it comes to military aerospace. On the other hand, it highlights how Boeing is truly too big to fail, and to be held accountable.
Here’s how a lawyer for some of the families of the Boeing 737 MAX crash victims describes this outcome:
“This sweetheart deal fails to recognize that because of Boeing’s conspiracy, 346 people died. Through crafty lawyering between Boeing and DOJ, the deadly consequences of Boeing’s crime are being hidden.”
Here’s how the family member of one of the Boeing 737 MAX crash victims describes this outcome:
“Boeing has paid fines many a time, and it doesn’t seem to make any change. When people start going to prison, that’s when you are going to see a change.”
Bottom line
Boeing is accepting a plea deal on the felony criminal charge of conspiracy to defraud the United States. The company faced a similar charge in 2021, and the DOJ didn’t prosecute Boeing as long as the company complied with certain conditions for three years. That didn’t happen, so now the company is being charged again.
It’s hard to feel like a fine of under $250 million really does much to move the needle and prevent similar problems in the future.
What do you make of Boeing pleading guilty to to criminal fraud charges?
Membership is free and takes no more information than commenting as a guest. Earn status points for good contributions, and see fewer ads as your status grows.