US: Boeing gets ‘sweetheart deal’ on fraud charges, victim families angry

The US Department of Justice (DoJ) is preparing to charge Boeing with fraud in connection to two fatal crashes five years ago. However, it is reportedly considering offering the aerospace giant a plea deal.

This news has infuriated the families of the passengers who died in the tragic accidents involving Lion Air flight 610 and Ethiopian Airlines flight 302, which claimed a total of 346 lives.

According to various reports, Boeing has until the end of the week to decide whether to accept the plea deal and avoid going to trial.

Outrage over proposed plea deal terms

The proposed plea deal terms, as revealed to the families of the victims, include Boeing paying a fine, facing a three-year probation period, and working under a corporate monitor. The details of the deal were shared with the families during a conference call on Sunday, which led to a wave of anger and frustration.

As reported by Bloomberg , attorneys representing the relatives accused the federal government of negotiating “another sweetheart plea deal” with Boeing.

“The memory of 346 innocents killed by Boeing demands more justice than this,” said Paul Cassell, who represents the families of 15 crash victims.

Erin Applebaum, another attorney acting for relatives of those lost, called the proposal “shameful” and stated that it “completely fails to mention or recognize the dignity” of the victims.

Applebaum also mentioned that the families would appeal to a judge and the wider public to reject this deal , arguing that if another Boeing crash occurs, the DOJ will have to face their own lack of accountability.

Controversial deal faces scrutiny

The 737 Max crashes in October 2018 and March 2019 led to the global grounding of the jet for almost two years. In 2021, Boeing and the DOJ reached a controversial deferred-prosecution agreement that shielded the company from criminal conspiracy charges related to fraud.

However, earlier this year, Boeing came under intense scrutiny after a brand-new 737 Max jet experienced an emergency landing due to a cabin panel blowing off mid-flight. This incident prompted the DOJ to declare that Boeing had breached the 2021 agreement.

The plea deal offered to Boeing now, described by Sanjiv Singh, counsel for 16 families of crash victims, as a “sweetheart deal,” suggests that Boeing should be independently monitored by the DOJ rather than appointing its own corporate monitor.

“I am stunned that the department deflected our demand and fell back on ‘oh it’s policy,’” Singh said, as quoted by The Guardian .

Cassell labeled the agreement as a “no-accountability-deal” and emphasized that it fails to acknowledge that Boeing’s actions led to the deaths of 346 people.

“The deal will not acknowledge, in any way, that Boeing’s crime killed 346 people,” Cassell said. “It also appears to rest on the idea that Boeing did not harm any victim.”

Implications for Boeing and future prospects

Boeing continues to navigate the crisis triggered by January’s cabin blowout. Reuters reported that Boeing has agreed to acquire Spirit AeroSystems, a key supplier, in a deal valued at over $4 billion.

A guilty plea to criminal charges would be a major low point in Boeing’s long history. The potential plea deal raises concerns about Boeing’s ability to get US government contracts. This is especially important as the company’s defense division is vital to offsetting losses in its commercial airplane business.

The plea deal talks began after the DOJ found Boeing violated the 2021 agreement. Boeing failed to set up a proper system to prevent and detect fraud.

The January fuselage panel blowout on a Boeing jet operated by Alaska Airlines exposed major manufacturing and quality issues. Investigations found missing bolts securing a door plug. This revealed multiple lapses and led to several investigations by lawmakers and the DOJ.

This incident has significantly impacted Boeing, with its shares plummeting by about a third this year and a projected cash burn of $8 billion in the first half of 2024 due to production slowdowns.

Due to quality issues, the FAA has limited 737 Max production. They also require Boeing to create a plan to fix these problems. Meanwhile, Boeing is looking for a new CEO as Dave Calhoun plans to step down later this year.

In 2021, Boeing paid a fine and admitted to deceiving the FAA about a flight control system tied to the crashes. The company promised to improve safety and report to the DOJ. The government agreed to drop the charges after three years. However, the recent blowout incident has made the DOJ reconsider the deal, putting Boeing’s future in doubt.