Boeing reaches $1.1 billion settlement with DOJ to avoid prosecution
Pieces of the wreckage of an Ethiopian Airlines Boeing 737 Max 8 aircraft are piled at the crash site near Bishoftu, Ethiopia, on March 19, 2019. Boeing and the Justice Department have reached a deal to avoid prosecution in that crash and another involving a Max 8. File photo by EPA-EFE
May 23 (UPI) -- Boeing has avoided prosecution over two crashes of 737 Max planes that killed 346 people, but must pay $1.1 billion in a settlement reached with the U.S. Justice Department.
The aerospace company won't face a trial as scheduled next month, ABC News reported.
Last week, DOJ officials met with crash victims' family members, many of whom want the company to go to trial, about the agreement, according to CNBC.
The company, as part of the agreement, must pay $444.5 million for a new fund for crash victims. The eight-page agreement filed Friday was obtained by Flying magazine.
Paul Cassell, a lawyer representing some of the families, said in a statement he hopes U.S. District Judge Reed O'Connor rejects the deal.
"This kind of non-prosecution deal is unprecedented and obviously wrong for the deadliest corporate crime in U.S. history," Cassell said. "My families will object and hope to convince the court to reject it."
DOJ noted relatives of more than 110 crash victims said they support the non-prosecution agreement or "support the Department's efforts to resolve the case pre-trial more generally."
Democratic Senators Elizabeth Warren of Massachusetts and Richard Blumenthal of Connecticut sent a letter Friday to Attorney General Pam Bond urging her agency not to cut a deal and "to hold Boeing and any responsible executives accountable for their role in the 2018 Lion Air and the 2019 Ethiopian Airlines crashes, which killed a total of 346 passengers."
The DOJ said it intends to file a motion to dismiss the case once the "agreement in principle" is finalized, by no later than the end of next week.
"It is the Government's judgment that the Agreement is a fair and just resolution that serves the public interest," the DOJ said in the filing in the North District of Texas in Fort Worth. "The Agreement guarantees further accountability and substantial benefits from Boeing immediately, while avoiding the uncertainty and litigation risk presented by proceeding to trial."
In the agreement, Boeing "will admit to conspiracy to obstruct and impede the lawful operation of the Federal Aviation Administration Aircraft Evaluation Group.
Also, the aerospace company, besides the fund for victims, must pay a $487.2 million criminal fine, though $243.6 million it already paid in an earlier agreement; $444.5 million for a new fund for crash victims; and $445 million more on compliance, safety and quality programs.
On Oct. 29, 2018, the first crash in Jakarta, Indonesia, killed all 189 passengers and crew. Black box data from the Lion Air jet showed the pilots struggled to fight the plane's malfunctioning safety system from takeoff to the moment it nose-dived into the water.
In the second crash four months later on March 10, 2019, 157 people died when a Ethiopian Airlines aircraft crashed minutes after takeoff in Addis Ababa, Ethiopia.
The Maxes were grounded for nearly two years after the second crash.
In 2021 during the first Trump administration, Boeing agreed to a $2.51 billion fine to avoid prosecution.
It was set to expire two days after a door panel blew out of a nearly new 737 Max 9 operated by Alaska Airlines on Jan. 5, 2024. The aircraft left Boeing's factory without key bolts installed.
In 2024, U.S. prosecutors said Boeing violated the settlement because the company failed to set up and enforce a compliance and ethics program to detect violations of U.S. fraud laws.
Then Boeing agreed to plead guilty to criminal fraud last December. O'Connor determined the government's diversity, equity and inclusion policies was a factor in the selection of an independent compliance monitor for Boeing. The company had agreed to plead guilty to conspiracy to defraud the United States and pay a fine of at least $243 million besides that same amount paid earlier.
In 2022, a Boeing former chief technical pilot was acquitted on fraud charges tied to the Max's development.
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