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Embattled aerospace giant Boeing has agreed to plead guilty to criminal charges that it conspired to defraud federal regulators prior to two deadly crashes involving its aircraft.
The plea deal will require Boeing to pay an additional $243.6 million fine connected to Lion Air Flight 610 and Ethiopian Airlines Flight 302, two fatal crashes that resulted in the deaths of the more than 300 people on board the flights caused at least partially by improperly disclosed autopilot control features.
Boeing will also be subject to an independent compliance monitor selected by the government for three years, and will have invest at least $455 million into its compliance and safety programs, the Department of Justice said said in a court filing late Sunday. That represents a 75% increase in its compliance spend compared with last fiscal year.
Families of the crash victims have expressed their intention to oppose the plea agreement, the Justice Department said. According to the terms of the proposed agreement, Boeing’s board of directors will meet with the victims’ families.
Boeing had agreed to pay more than $2.5 billion in January 2021 to settle charges that it defrauded the FAA’s Aircraft Evaluation Group about the aircraft’s Maneuvering Characteristics Augmentation System, which impacted the flight control system of the Boeing 737 Max.
Boeing stock was up almost 1% in pre-market trading on Monday, following news of the deal.
The new agreement comes after the DOJ accused Boeing of violating the terms of a 2021 settlement agreement that required the Virginia-based airplane maker to tighten up its compliance and ethics program.
But after a door plug blew out mid-flight on a Boeing 737 Max 9 plane in January, bringing with it another barrage of regulatory scrutiny, and complaints from multiple whistleblowers, questions about the safety of Boeing aircraft — and the 2021 agreement — were brought to the fore once again.
Sen. Richard Blumenthal of Connecticut said at outgoing Boeing CEO David Calhoun’s Senate hearing last month that he thought there was “overwhelming evidence” that the plea agreement had been violated and that he thought “prosecution should be pursued” because the door plug blowout suggested Boeing had not been making the internal reforms it had promised.
The new plea deal doesn’t give Boeing immunity for any other criminal cases or investigations it’s facing. The DOJ plans to file the written agreement with the court by July 19.