Embattled aerospace giant Boeing faces a monumental choice: Plead guilty to a felony fraud charge for its role in past deadly plane crashes, or roll the dice on a high-profile trial against the Justice Department.

The company has until Friday to decide.

Both options are potentially fraught. Accepting a plea deal for violating the terms of a 2021 agreement with DOJ would be a black mark for one of the United States’ most important manufacturers and defense contractors, whose factories support thousands of U.S. jobs and whose political arm gives heavily to candidates of both parties.

It would bring hundreds of millions of dollars in fines and could complicate the company’s ability to continue winning contracts with the federal government.

But a trial would spark a potentially damaging discovery process, perpetuate Boeing’s ordeal in the news headlines and produce made-for-TV moments of victims’ families calling for justice. The legal process would drag out well into next year — potentially bringing an unpredictable face-off against a Trump administration DOJ.

Unlike in some past crises, Boeing has had few if any vocal defenders on Capitol Hill.

Boeing declined to comment on questions related to the decision. It has denied any wrongdoing, stating it “honored the terms of that agreement.”

The dilemma Boeing faces stems from twin crashes in 2018 and 2019 in Indonesia and Ethiopia that claimed a total of 346 lives, calamities linked to faulty flight-control software in its workhorse 737 MAX passenger jet.

In 2021, the Justice Department allowed Boeing to avoid prosecution in exchange for a fine and internal changes at the company. But in May, after a new spate of quality-control problems emerged in the MAX this year, the department told a federal judge that the company had violated the agreement.

DOJ’s most recent offer would include a fine and a requirement that the company install independent third-party inspectors. But the families of those lost in the earlier crashes have said they want to see people behind bars and a massive $24 billion fine. Critics and some industry analysts at least want a shakeup of its board.  

The department may not have the evidence to win a trial accusing Boeing of knowingly putting passengers in harm’s way for the 2018 and 2019 crashes, however. Glenn Leon, head of the fraud section of the DOJ’s Criminal Division, told family members and their lawyers on a phone call Sunday that the company couldn’t prove such charges beyond a reasonable doubt, according to a statement issued by the Clifford Law Offices, which represents some family members of the 737 MAX crash in Ethiopia. Families have said that’s for a jury to decide.

Boeing wouldn’t get away scot free if it takes the deal: The plea wouldn’t resolve or provide immunity to the company for any other conduct, including a door plug blowout in January that reignited concerns about Boeing’s quality control, according to a person familiar with ongoing deliberations about the legal parameters of the case. The person was granted anonymity in order to discuss matters that are still fluid.

Concerns about Boeing’s quality control have only mushroomed since the January incident aboard an Alaska Airlines flight over Oregon, triggering multiple probes from regulatory agencies and heightened attention from Congress, not to mention reams of bad press.

Boeing has also been in the hot seat over another quality problem: its Starliner spacecraft, which hasn’t been able to bring NASA astronauts back down to Earth from the International Space Station as the company struggles to troubleshoot leaks and other related malfunctions.

In addition, should Boeing plead guilty, it could complicate the myriad contracts the company has with the federal government.

By laws outlined by the General Services Administration, government agencies can propose debarment — which prohibits companies from doing business with the federal government for some amount of time — if an agency believes that the company is incapable of executing the work with integrity or honesty, has committed other past misconduct, or has problems of “otherwise so serious or compelling a nature that it affects a contractor’s present responsibility.”

That said, Boeing could request waivers either through the agencies or Congress — and many industry observers believe that’s the likeliest ultimate outcome.

How Boeing got here

In 2021 Boeing and the DOJ struck a deal to avoid criminal liability for the 2018 and 2019 737 MAX crashes. That deal required Boeing to create a program that would flag any hint of fraud by its employees, along with other conditions.

The conditions of that deal were set to be fulfilled in January — until the incident on board Alaska Airlines, which has revealed significant concerns with the way Boeing manufactures some of its planes, and the way the Federal Aviation Administration oversees those factory floors. Since that incident, several whistleblowers have come forward alleging systemic quality control problems as well as threats and intimidation.

In May, DOJ announced that it believed Boeing had violated the terms of the deal, and that it was considering prosecution. Now, the department has offered Boeing another chance to avoid a trial. Boeing has until Friday evening to accept or reject the deal — and DOJ is expected to give its reply by Sunday.

Of all the regulatory bodies in the Biden administration’s arsenal, DOJ has the most power to hold Boeing accountable for subpar workmanship that’s damaging public safety, said William McGee, a senior fellow for aviation and travel at the anti-monopoly nonprofit American Economic Liberties Project.

Offering a plea deal — even a guilty one — instead of pressing forward with a trial, especially after Boeing avoided prosecution just a few years ago for faulty plane designs, sends the wrong message, said McGee.

“They’ve had the wake up call, they ignored it,” McGee told POLITICO on Monday.

The fatal 737 MAX crashes should have been a blaring signal to Boeing that it needed to clean house — and the Alaska Airlines’ event was proof that it didn’t, McGee said.

So Boeing “need[s] to be punished … in order to prevent this behavior,” he said.

Richard Aboulafia, an aerospace analyst with AeroDynamic Advisory, agreed that the latest proposal from DOJ doesn’t do enough to root out the bad behavior. He said Congress will need to do more down the line.

“If Congress wants something to change, they’re going to have to do something on their own,” Aboulafia said.

To send a message, Aboulafia said DOJ could tack on some stricter conditions before an agreement is reached, like requiring a shakeup of its board.

“I think they would have used this as leverage to make genuine management change,” Aboulafia said.

Retired Rep. Peter DeFazio (D-Ore.), who chaired the House Transportation Committee until last year, agreed with that move especially.

“There needs to be very stringent conditions. I mean, I would suggest that Justice should require that members of the board, at least some members of the board, be replaced with people who are independent of Boeing, because the board is totally captive,” DeFazio said Monday.

If the DOJ throws in such last-minute terms — some that could be the catalyst for a cultural overhaul at the beleaguered jetmaker — that could be enough for lawmakers to say the federal government has done its part to rein in Boeing. “It all depends,” DeFazio said. If there’s a way to change “the culture of the board and bring in real oversight, then perhaps it wouldn’t be necessary to legislate,” he said.

Aboulafia reiterated, however, “this doesn’t appear to be the kind of legal result that produces change.”

But Congress hasn’t exactly leapt to respond, even though many lawmakers have said they’re concerned about what’s going on at Boeing. Many have placed their faith in the FAA’s administrator, Mike Whitaker, whose agency has placed Boeing on what amounts to an improvement plan, including regular goals and metrics and increased monitoring of factory floors.

Democrats have said they want to address problems at Boeing via legislation, but have repeatedly delayed introducing a bill, and at this point one is unlikely before the election this fall. Republicans, on the other hand, have not had a cohesive message.

House Transportation Chair Sam Graves (R-Mo.) has insisted that so far, Congress shouldn’t be pulled in to legislate on an issue that the FAA seems to have under control. Graves told POLITICO last month that the FAA is “on top of it.”

Sen. Josh Hawley (R-Mo.), meanwhile, was baying for blood during a hearing with outgoing CEO David Calhoun last month, saying the company under him has had no focus on safety, quality, or transparency, instead “strip mining” Boeing for profit. But Hawley proposed no solutions of his own. (Calhoun had already said he will step down by the end of the year.)

Collateral consequences

As part of the 2021 settlement that helped Boeing avoid prosecution, the company agreed to pay a $243 million fine, pay $1.8 billion in restitution to airlines involved in the crashes, and set up a $500 million fund for families of the crash victims, along with other internal company changes.

Following its review into the matter, DOJ in May said Boeing is “subject to prosecution” because it failed to create or implement a compliance and enforcement program that would “prevent and detect violations of the U.S. fraud laws throughout its operations.”

While families of the crash victims and their lawyers accused DOJ of going easy on Boeing, former federal prosecutor Brendan Quigley surmised that the department is perhaps attempting to balance the right punishment while avoiding future ramifications that could put other Boeing employees out of a job — or even implode the company financially.

“How many people” that have nothing to do with this decision that work at Boeing “and in the surrounding communities may be out of a job?” asked Quigley, who focused on securities and commodities fraud when he worked for the Southern District of New York.

That may be “the worst case scenario that anyone at DOJ thinks about,” he said.

Quigley, now a partner at the Baker Botts law firm, gave the example of DOJ’s case against Arthur Andersen accounting firm, which was tied to the Enron accounting fraud scandal. The firm ended up shuttering in 2002 after its conviction, with more than 28,000 people losing their jobs.

While the Supreme Court reversed the decision, it was too late for the firm’s employees.