Boeing Co (NYSE:BA) has reached a $2.5 billion settlement agreement for a criminal charge for defrauding the US government after it concealed information’s regarding the Boeing 737 Max. The 737 Max is the ill-fated plane model that was involved in two fatal accidents killing 346 people.
The company signed a deferred prosecution agreement in the Northern District of Texas on Thursday. On the other hand, the Department of justice is ready to dismiss the charge against the planemaker if Boeing cooperates with authorities. This includes availing former and current company officials to testify.
Boeing deceived regulators about 737 Max
David Burns, the Department of Justice’s Criminal Division’s acting assistant attorney general said that the tragic crashes of Ethiopian Airlines Flight 302 and Lion Air Flight 610 exposed the deceptive and fraudulent conduct of employees of a leading commercial airplane manufacturer. The settlement comes after almost two years of investigation into the Max 737 which crashed twice within five months. The crashes devastated that company’s reputation for engineering expertise. Boeing’s admission is highly uncharacteristic and stands in contrast to years of airline accident probes. Although for years aircraft designs have been linked to being contributors to accidents, it has been rare for such issues to be due to intentional deception from company officials.
In a message to employees, Boeing CEO Dave Calhoun said that the entering of the settlement is the right thing to do for the company and a statement that demonstrates how the company fell short of its values and expectations. He added that the resolution is a reminder to the Boeing staff on how important the obligation of transparency to regulators is.
Deferred prosecution Settlement criticized
However, the settlement has not been received well by all parties. Robert Clifford who is the attorney of the relatives of crash victims said that the settlement agreement was an insult to the victims. He said that the pact doesn’t have a bearing on pending civil litigations. He added that the allegations in the agreement represent a small part of the company’s wrongdoing.