Boeing is pushing to withdraw guilty plea agreement
Summary
The aerospace company is seeking the Justice Department’s support to scale back a deal it reached during the final months of the Biden administration.
Boeing is seeking to withdraw an earlier agreement to plead guilty in a long-running criminal case that blamed the company for deceiving regulators before two deadly crashes of 737 MAX jets, according to people familiar with the matter.
The aerospace giant is seeking more lenient treatment from the Justice Department, which under the Trump administration is reviewing numerous pending criminal cases that haven’t yet gone to trial or been approved by courts. Boeing nearly sealed its fate last year, agreeing in July to plead guilty to defrauding the Federal Aviation Administration. But a federal judge in Texas rejected the proposed deal in December, pushing the resolution beyond the Biden administration.
Now Boeing stands to benefit from fresh eyes at Trump’s Justice Department, which is inclined to at least modify parts of the agreement, some of the people said. Allowing Boeing to rescind its plea agreement, or lightening the company’s punishment, would mark one of the most prominent examples of the Trump administration’s lighter-touch approach to some white-collar enforcement.
The two sides are still negotiating how to propose changes to the deal, expected by April 11, to U.S. District Judge Reed O’Connor, who oversees the case. One possible change under discussion: whether Boeing can forgo hiring an outside monitor to ensure its compliance with the law, the people said.
Boeing and the Justice Department declined to comment.
Boeing’s guilty plea agreement during the Biden administration followed an earlier settlement that put it on corporate probation for three years. Days before its probation was set to expire, a door panel blew off a 737 MAX operated by Alaska Airlines. The incident spurred fresh scrutiny of Boeing’s manufacturing process and a new investigation by the Justice Department.
Prosecutors declared that Boeing had violated the terms of its probation, including by failing to address reports about employees falsifying compliance with some required inspections at its South Carolina plant.
Boeing initially argued against the department’s finding. Pleading guilty would saddle the company with the baggage of a corporate felony. Boeing might need, for instance, waivers from the Defense Department to avoid being suspended or barred as a defense contractor. The company recently beat out Lockheed Martin and won a contract to build a new F-47 jet fighter for the Pentagon.
But Boeing did eventually agree to plead guilty as part of a Biden-era deal that required it to pay an additional $243 million fine, spend $455 million to improve its compliance, quality and safety programs, and hire an outside compliance monitor.
As part of its new talks with the Justice Department, Boeing isn’t trying to walk back its commitment to spend roughly $400 million on safety and compliance improvements, one of the people said.
O’Connor, a George W. Bush appointee, rejected the earlier deal because it mentioned diversity considerations in the government’s process for selecting a monitor, which would oversee Boeing’s legal compliance in the future.
His comments preceded the Trump administration’s own fight to eliminate diversity, equity and inclusion policies inside of government and at many large corporations and law firms.
Prosecutors said at the time that they pick monitors solely based on merit from the “broadest possible pool of qualified candidates."
O’Connor has said Boeing’s crime “may properly be considered the deadliest corporate crime in U.S. history." Nothing in his earlier ruling contemplated tearing up the guilty plea altogether or not hiring an independent monitor. It is unclear how he would react to a sharp pivot by Boeing and the Justice Department. The judge has made room for the considerations of the family members of 346 people killed in the two 737 MAX crashes.
O’Connor ruled the family members have rights in the case as representatives of crime victims. The families have wanted the company to be subject to sterner punishment, saying Boeing should have to admit to having caused the deaths of the passengers on the flights, which were operated by Ethiopian Airlines and Lion Air.
“Corporate criminals like Boeing should not be permitted to escape the truth or the consequences of their actions," the families wrote in a court filing last summer.
Write to Dave Michaels at dave.michaels@wsj.com and Emily Glazer at Emily.Glazer@wsj.com
