Boeing Plea Deal Brings Defense Contract Scrutiny

Boeing's controversial plea deal to settle its criminal charges over the 2018 and 2019 737 MAX crashes could theoretically mess up its many lucrative military contracts, but no one seems to seriously think it will. The U.S. military isn't supposed to deal with companies that have criminal convictions but the government can waive them. “DOD will assess the company’s remediation plans and agreement with the Department of Justice to make a determination as to what steps are necessary and appropriate to protect the federal government,” Air Force spokesman Maj. Gen Patrick Ryder told reporters. Canada is also reviewing its deal to buy P-8 Poseidons, but the process is continuing.

Boeing agreed to pay a $243.6 million fine and invest at least $455 million in "compliance and safety programs" after pleading guilty to conspiracy to defraud the U.S. To avoid criminal proceedings over the certification process for the MAX in 2021 Boeing promised to change its ways, but prosecutors alleged the company ignored the terms of that deal. Those accusations came when a door plug blew off an Alaska Airlines MAX last January, just a few days before the expiry of the three-year probation period attached to the first plea deal agreement.

The first plea deal came after the company downplayed the impact of the newly installed Maneuvering Characteristics Augmentation System (MCAS) on the aircraft's flight controls to prevent the need for a separate type certificate for the model. MCAS was found to be a factor in the crashes of an Ethiopian Airlines MAX in 2019 and a Lion Air plane in 2018, killing 346 people.

The families of the victims of the crashes launched a bitter attack against the latest agreement, calling it a "sweetheart deal" that Boeing will shrug off financially. The families were calling for a $24 billion fine against Boeing and said the arrangement announced Sunday disrespected the hundreds of victims and thousands of loved ones they left behind. Catherine Berthet, whose daughter Camille died in the Ethiopian crash, said the plea deal shows "weakness and manifest contempt for the victims' families and public interest."