DOJ charges Boeing with criminal conspiracy, fines it $2.5B

The Department of Justice (DOJ) announced Thursday that it filed a criminal charge against Boeing over allegations that it hid information from investigators probing the high-profile crashes of the company’s 737 Max aircraft.

The DOJ said the charge was being filed as part of a deferred prosecution agreement that will also see Boeing pay more than $2.5 billion in fines.

The charge of “conspiracy to defraud the United States” specifically stemmed from allegations that employees concealed details from Federal Aviation Administration (FAA) regulators in its investigation of two crashes between October 2018 and March 2019 that killed 346 people.

 “The tragic crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302 exposed fraudulent and deceptive conduct by employees of one of the world’s leading commercial airplane manufacturers,” acting Assistant Attorney General David P. Burns said in the announcement. “Boeing’s employees chose the path of profit over candor by concealing material information from the FAA concerning the operation of its 737 Max airplane and engaging in an effort to cover up their deception.

“This resolution holds Boeing accountable for its employees’ criminal misconduct, addresses the financial impact to Boeing’s airline customers, and hopefully provides some measure of compensation to the crash-victims’ families and beneficiaries.”   

Boeing’s fine consists of a $243 million criminal penalty, $500 million to people who lost relatives in the crash and $1.77 billion to global airlines affected by subsequent groundings of the aircrafts.

The investigation stemmed from two crashes, one in October 2018 off the Indonesian coast and another in Ethiopia. The FAA probe found that both crashes were in part caused by Maneuvering Characteristics Augmentation System (MCAS) software that was installed on the planes after new, heavier engines were placed on them and caused the aircraft’s nose to point too steeply upward at times.

Incorrect data from a faulty sensor caused the software to malfunction and forced the jet in each crash to point its nose too far down. Prosecutors said Boeing failed to inform the FAA about the MCAS software issues.

The issues with the MCAS software have been public since October 2019, when documents released by the House Transportation and Infrastructure Committee showed Mark Forkner, the chief technical pilot for the aircraft, told another pilot that the system was “running rampant” during a simulation.

The documents also revealed that Forkner told FAA investigators that the MCAS software was safe and that other employees also expressed concerns about the 737 Max’s safety.

Boeing has recoded the MCAS software since the crashes and in November received the FAA’s green light for the 737 Max to reenter commercial service.

Boeing President and CEO David Calhoun said the deferred prosecution agreement was the “right thing to do” and acknowledged that his firm’s wrongdoing.

“I firmly believe that entering into this resolution is the right thing for us to do—a step that appropriately acknowledges how we fell short of our values and expectations,” he said in a statement. “This resolution is a serious reminder to all of us of how critical our obligation of transparency to regulators is, and the consequences that our company can face if any one of us falls short of those expectations.”