Boeing Settles Suit Over Chinooks

One of the first signs something was seriously wrong came on the eve of the Gulf War, when a brand-new Chinook helicopter lost a gear and was destroyed by the resulting fire. Luckily, no one was killed.

That accident set in motion a chain of events which on Thursday resulted in one of the biggest settlements ever against a defense contractor.

The Boeing Co., facing a trial set to begin in just over a month in Cincinnati, agreed to pay up to $54 million to settle lawsuits over faulty gears in U.S. Army helicopters that caused at least one deadly crash.

The problems with the Chinook were the subject of an Eye on America investigation by CBS News National Security Correspondent David Martin, broadcast in May of this year.

CBS News' Report
On The Chinook

Trouble With Army Choppers Part 1 of David Martin’s May 2000 investigation.

Problems Plague Chinooks Part 2 of the story.

The case was initiated by a whistle-blower, Brett Roby, who accused Boeing of installing faulty gears in at least two Army helicopters that crashed, the Justice Department said. The lawsuit alleges that Seattle-based Boeing knew the gears could develop cracks.

"I reported this because I was scared to death about these gears," says Roby, 42, of Ponte Vedre Beach, Fla.

In a statement issued Thursday, Boeing, which manufactured the Chinook for the Army, denies any wrongdoing. Roby, a former quality control officer at Speco Corp. of Springfield, the company which made the gears Boeing installed, will be paid $10.5 million under terms of the settlement. Boeing also will pay his legal fees.

The settlement also said gears installed by Boeing caused a Chinook crash in Honduras in 1988 in which five men were killed. Boeing now must reimburse the government for the cost of the lost helicopters.

Earlier this year, the Army began replacing 143 more gears suspected of being defective. The cost is estimated at $8 million, and Boeing now will have to foot that bill as well.

Roby, who was fired from Speco in 1994, sued Boeing and Speco under provisions of a Civil War-era law which allows citizens to sue over fraud against the government.

The goverment can intervene if it finds merit in such a lawsuit. The whistleblower receives a share of any damages the government recovers.

Speco settled with the government for $7.2 million in 1996 and was no longer a defendant. Roby received 23 percent - $1.7 million - of that settlement.