Boeing to plead guilty to conspiracy fraud charge

Planemaker agrees to pay $487.2 million fine and invest at least $455 million over the next three years to strengthen its compliance and safety programs

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Boeing's multitude of legal and safety problems have slowed deliveries. (PHOTO: Shutterstock)

Aviation Festival AFA 728 x 90Boeing has agreed to plead guilty to a felony charge of conspiring to defraud the US federal government over two fatal crashes of the 737 MAX in 2018 and 2019, according to a late-night court filing on Sunday US time.Boeing also agreed to pay a $487.2 million fine — the maximum allowed by law — and invest at least $455 million over the next three years to strengthen its compliance and safety programs, according to news reports. The deal offered to Boeing was derided as a “sweetheart deal” by families of the victims of the crashes.

A guilty plea could hurt Boeing when it tries to secure government contracts in the US, but can also seek a waiver for those deals. Much like the biggest banks in the US during the 2008 financial crisis, Boeing is unlikely to suffer too much because of its importance to the US defence industry, the US space industry and of course it’s global footprint in commercial aviation. The plea keeps Boeing from facing a trial in which it would have faced intense scrutiny over its safety lapses.

Boeing told Asian Aviation: “We can confirm that we have reached an agreement in principle on terms of a resolution with the Justice Department, subject to the memorialisation and approval of specific terms.”

Families who lost loved ones in two Boeing 737 MAX crashes quickly filed in that same court an objection to the deal. The families’ notice indicated that “the plea deal with Boeing unfairly makes concessions to Boeing that other criminal defendants would never receive and fails to hold Boeing accountable for the deaths of 346 persons. … As a result, the generous plea agreement rests on deceptive and offensive premises,” according to the objection filed in federal district court in Texas after the DOJ filed Boeing’s plea with the court.

The issue of whether to accept the plea agreement and Boeing’s guilty plea now rests with Judge O’Connor who is overseeing the criminal matter. Families from around the world are intending to travel to an anticipated court hearing to argue against the deal.

“This sweetheart deal fails to recognise 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,” said Paul Cassell, attorney for the families in this case and professor of the S.J. Quinney College of Law at the University of Utah. “A judge can reject a plea deal that is not in the public interest, and this deceptive and unfair deal is clearly not in the public interest. We plan to ask Judge O’Connor to use his recognised authority to reject this inappropriate plea and simply set the matter for a public trial, so that all the facts surrounding the case will be aired in a fair and open forum before a jury.”

“The families are highly disappointed that the DOJ fails to account for the two crashes,” said Robert A. Clifford, founder and senior partner at Clifford Law Offices and Lead Counsel for the families in the civil litigation pending in federal district court in Chicago. “Much more evidence has been presented over the last five years that demonstrates that the culture of Boeing putting profits over safety hasn’t changed. This plea agreement only furthers that skewed corporate objective. The families will continue to fight for justice and safety for the flying public in the names of their deceased loved ones who gave the ultimate sacrifice.”

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