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Boeing to Pay $2.5 Billion for Deceiving the FAA

Boeing 737 max

The U.S. Justice Department has criminally charged Boeing with conspiracy to defraud the Federal Aviation Administration (FAA) in connection with the government’s evaluation of the controversial Boeing 737 MAX aircraft. The Boeing Company of Chicago, Illinois will pay more than $2.5 billion in charges and fines for misleading the FAA before and after two fatal Boeing 737 MAX crashes that killed hundreds of people.

The $2.5 billion includes a “criminal monetary penalty” of $243.6 million, compensation to Boeing 737 MAX airline customers totaling $1.77 billion, and a $500 million beneficiaries fund to compensate the families and legal beneficiaries of the 346 passengers tragically killed in the crashes of Lion Air Flight 610 in 2018 and Ethiopian Airlines Flight 302 in 2019. This is in addition to the $100 million already set aside by Boeing to settle claims that have been brought by the families of Lion Air and Ethiopia Airlines crash victims.

Three administrators will be appointed to determine how the $500 million beneficiaries fund will be allocated among the victims’ families. The fund is in addition to whatever compensation Boeing will ultimately pay to the victims’ families in the civil lawsuits that are currently pending.

The resolution of the criminal charges announced by the Justice Department will have no bearing on the civil litigation against Boeing and other defendants, which is still ongoing, according to aviation attorneys with the law firm of Baum Hedlund Aristei & Goldman. The firm represents several families who lost loved ones in the Lion Air and Ethiopia Airlines crashes.

“Make no mistake, Boeing rushed the design and manufacture of the MAX to keep pace with competitors,” says board-certified trial attorney and senior shareholder Ronald L.M. Goldman. “We believe the charges and fines levied on Boeing are a mere slap on the wrist considering the company’s egregious conduct and we intend to continue to pursue justice on behalf of our clients in civil court to hold the company accountable.”

“MAX planes were shipped to airlines with a known flaw that made them susceptible to dangerous stalls during the early stages of flight. Boeing could have addressed the design flaw but they chose not to because it would have cost them time and money.”

“Instead, the company came up with a quick fix by installing a software system that relied on a single sensor located on the plane’s exterior. This system, which was designed to counteract the design flaw by pushing the plane’s nose down to avoid stalls, activated during the Lion Air and Ethiopian Airlines flights and was a factor in both crashes. Boeing’s misconduct was directly responsible for the design failures that caused both preventable disasters.”

Justice Department Says Boeing Misled the FAA

The deception surrounding the Boeing 737 MAX aircraft began well before the plane was sold to airlines, according to the Justice Department. Boeing started developing the 737 MAX in 2011. Before U.S. airlines could operate the new aircraft, the FAA was required to perform an evaluation and approve the airplane for commercial use.

One of the selling points for Boeing to its airline customers was that pilots moving from the prior Boeing model— the 737 NG—into the newer MAX would not need to be retrained. As part of the evaluation process, the FAA was charged with determining the required flight training for U.S. airline pilots flying the 737 MAX based on the differences between the MAX and the NG.

In 2016, two Boeing MAX Flight Technical Pilots discovered a change to an important aircraft part called the Maneuvering Characteristics Augmentation System (MCAS) which impacted the flight control system. Rather than alert the FAA, Boeing concealed this relevant information and deceived the FAA about the MCAS. As a consequence, no information about the MCAS change was included in manuals and flight training materials for Boeing’s airline customers and their pilots.

According to internal Boeing emails and communications that were turned over to the U.S. government as part of its investigation, company employees mocked the designers of the MAX as well as the FAA.

“This airplane is designed by clowns, who are in turn supervised by monkeys,” said a Boeing employee in a 2017 exchange.

In a 2018 exchange, just months before the Lion Air disaster that killed hundreds, a Boeing employee wrote: “Would you put your family on a Max simulator trained aircraft? I wouldn’t.”

“No,” the colleague responded.

In October of 2018, a Boeing 737 MAX operating as Lion Air Flight 610 crashed shortly after takeoff into the Java Sea near Indonesia, killing all 189 passengers and crew members on board. Investigators found that the MCAS activated during the flight. Because Boeing did not disclose the information concerning the MCAS, pilots were not trained or even aware of the software system that pushed the plane’s nose down.

Months later in March of 2019, a Boeing 737 MAX operating as Ethiopian Airlines Flight 302 crashed shortly after takeoff in Ethiopia killing all 157 passengers and crew members on board. As with the Lion Air crash, the MCAS activated during the flight, forcing the pilots to fight for control of the aircraft.

Three days after the 2019 ET302 crash, the U.S. grounded the 737 MAX and a worldwide grounding followed. The grounding was only recently lifted after Boeing claims to have fixed the issues, issued revised emergency procedures manuals, and required training of pilots specific to the MCAS; airlines are slowly beginning to return 737 MAX’s to their fleets.

“The bottom line here is Boeing could have and should have communicated these known issues to the FAA from the very beginning, but they didn’t,” says aviation attorney Clay Robbins III. “In trying to solve design problems, they simply created more problems, then concealed them. Hundreds of people died because Boeing chose profit over people.”

“The truly egregious thing about this deal is that Boeing executives are allowed to sidestep any real accountability on their part. Those individuals who were personally involved in the fraudulent misconduct that resulted in the certification of this unsafe aircraft will have no personal criminal or civil consequence. It’s shameful.”


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