The Department of Justice announced on Sunday that Boeing will plead guilty to a single count of criminal fraud for deceiving the Federal Aviation Administration. The aircraft manufacturer admitted to misleading regulators about the 737 Max’s MCAS flight control feature and the training needed to fly the aircraft equipped with the system. The MCAS was largely to blame for two crashes in 2018 and 2019, which killed 346 people. So, how did we get to this plea deal, and what will happen next?
In 2021, Boeing agreed to a settlement with the DOJ following the two 737 Max crashes. The manufacturer paid $2.5 billion and was shielded from prosecution as long as it abided by the deal’s terms for the next three years. Regulators ordered that Boeing set up a compliance and ethics program to prevent similar problems from cropping up again. The DOJ deems that the manufacturer violated the settlement agreement when systemic quality control woe came to light after a door plug blew out on an Alaska Airlines 737 Max in January.
The families of the crash victims wanted to see Boeing go to trial or be forced or face a $24.78 billion fine. Prosecutors decided to show incredible (and unsurprising) leniency. Boeing was offered the ultimatum of going to trial or pleading guilty and agreeing to another settlement, the Associated Press reports. This time, the manufacturer will pay a $243.6 million fine and invest $455 million in its compliance and safety programs. An independent monitor will be assigned to supervise those programs for the next three years.
For comparison, Boeing also had to pay a $243.6 million fine in the 2021 settlement. Then, $1.77 billion was doled out to airlines as compensation for the year and eight months that the 737 Max was grounded. Finally, $500 million was set aside in a fund for the victims’ families.
While the government wants to punish Boeing for its actions, it can’t be too heavy-handed against a crucial contractor. A significant portion of the company’s revenue comes from government contracts. For example, the company is an important NASA contractor and delivered the space agency a flawed craft after years of delays. It’s in the national interest that Boeing survives and none of its executives goes to jail. And I thought corporations were people?
Criminal law for individuals and corporations seems to exist in two different legal systems. The average corporate criminal fine is less than one percent of the corporation’s annual revenue, according to the Harvard Law Record. Boeing generated $77.8 billion in 2023, so a one-percent penalty would amount to $778 million. I don’t know a single person who would be given the same leeway if they killed 346 people.