US Justice Department Reaches Deal with Boeing Over 737 Max Crashes

In a saga that has captivated the world of air travel for years, the U.S. Justice Department has reached a historic deal with Boeing that essentially clears the aerospace titan of criminal liability for its management of the 737 Max – the plane that was at the center of two fatal crashes that killed 346 individuals.

The crashes, one off the coast of Indonesia in 2018 and one in Ethiopia in 2019, raised simple questions regarding the safety of the 737 Max and the transparency of Boeing with federal regulators. Following broad public scrutiny, investigations uncovered that Boeing did not notify the Federal Aviation Administration (FAA) regarding complete details of the critical flight control software MCAS – a system that keeps an aircraft’s nose pointed downwards in certain flight conditions.

A Controversial Deal

The new deal, termed an “agreement in principle,” will cost Boeing to pay or invest more than $1.1 billion, with an extra $445 million to the victims of the crash families. The Justice Department, on its part, will withdraw the criminal fraud charge, in effect precluding Boeing from being convicted.

For the company, it’s not just about cash – it’s about being able to keep doing business as a federal contractor. A criminal conviction would almost certainly have barred Boeing from future government contracts, which are an important source of income.

The Justice Department spokesperson called the settlement a thoughtful balance of law, fact, and reality-based consequences. “Nothing will ever restore to the victims their losses, but this settlement holds Boeing financially accountable, closes the books and provides compensation for the families, and makes a difference for the safety of future air passengers,” the spokesperson said.

A Divided Reaction

The reaction of victim families has been very emotionally charged and universally polarized. Some perceive the accord as a gesture of accountability, but others have condemned it as an exit strategy for one of America’s biggest corporate crooks.

Paul Cassell, lawyer for several of the families of the victims, called the agreement “unprecedented and clearly wrong” for what he characterized as the “deadliest corporate crime in U.S. history.” He indicated that the families plan to sue the agreement in court.

Javier de Luis, who witnessed a sister die in the Ethiopia crash, was angry and outraged. He condemned the Justice Department for shirking its responsibility to provide true justice and predicts the pact will have a devastating impact. “The message that’s being sent to business owners all across this country is, don’t bother going to the hassle of making your product safe for your consumers. If you manage to kill them, pay a fine and go on about your day.”

The Scandal’s Origin

Essentially, the scandal entails Boeing not notifying regulators, airlines, and pilots MCAS – the later crash-involving flight control system when it chose not to. Unlike past models, the 737 Max had this new software included, but pilots did not receive any training regarding it and were not even notified of its inclusion in many instances.

MCAS depended on a single sensor to figure out if the plane would stall. In both accidents, the sensor provided false information, and the software continued to push the nose of the plane down repeatedly. The pilots could not control it, and both planes crash-landed in a most appalling manner.

Following the second crash in March 2019, all 737 Max fleets were grounded by international aviation regulators. It spent almost two years on the ground while Boeing overhauled MCAS to be controlled by a computer with data from two sensors and provided pilots with greater authority over the system.

A History of Delays and Legal Maneuvers

The Justice Department charged Boeing in 2021 with lying to the FAA regarding MCAS and minimizing pilot training. Rather than going forward with prosecution, they settled for a deferred prosecution agreement, where Boeing agreed to pay $2.5 billion in fines and payments and to comply with anti-fraud legislation.

But federal prosecutors, however, determined in 2023 that Boeing had fallen short of its obligations under that agreement. The company didn’t make the compliance changes it had vowed to make. Because of this failure, prosecutors announced that Boeing broke the agreement and would face further legal penalties.

In July 2023, Boeing settled to plead guilty to one count of felony fraud. That plea agreement, however, stalled. In December, U.S. District Judge Reed O’Connor rejected the plea agreement because he was concerned about the process for choosing compliance monitors, particularly with regards to Boeing’s and the government’s DEI (Diversity, Equity, and Inclusion) policies.

What Happens Now?

Under the terms of the latest agreement, Boeing will have to hire an outside compliance consultant who will review the firm’s safety and quality control processes. The consultant, in addition to providing recommendations for improvements, will have the responsibility of reporting to the government.

The agreement has a contingency element and must be approved by a court of law. If it is approved, it is another installment in the long and bitter drama of the 737 Max scandal.

While Boeing itself has not made a formal statement on the agreement, it is evident that the company is keen to put the matter behind them both in terms of restoring its reputation and getting back to business as usual with government clients.

The Boeing case illustrates the intricate crossing of corporate responsibility, government regulation, and public safety. Although the deal may bring an end to some of the financial pain to the families of the victims, the emotional wounds are raw.

To Americans, this melodrama is a wake-up call to what ensues when profit, pressure, and regulation come together in high-risk sectors. Whether justice was served is something that future years will be discussing after the ink on this deal dries.