Boeing Tentatively Settles For $615M

Boeing 727 jet with Boeing logo
AP / CBS
Moving to settle lingering issues involving its ethical conduct, Boeing Co. announced a tentative agreement with the government Monday that calls for it to pay $615 million to end a three-year Justice Department investigation into reported defense contracting scandals.

While agreeing to the largest financial penalty ever imposed on a military contractor, Boeing will not face criminal charges or have to admit wrongdoing under the settlement. It also avoids having the matters aired in court.

The two sides said the company agreed to pay $565 million to resolve potential civil claims and what was described as a "monetary penalty" of $50 million, along with accepting responsibility for its employees' conduct and making additional commitments regarding compliance with ethics rules.

Chicago-based Boeing has been under investigation for allegedly improperly obtaining thousands of pages of secret documents from Lockheed in the late 1990s, using some of them to help win a competition for government rocket-launching business, and separately for recruiting former Air Force official Darleen Druyun while she was still overseeing contracts involving prospective Boeing deals. The government stripped Boeing of about $1 billion worth of rocket launches for its improper use of the Lockheed documents.

Prosecutors agreed not to pursue Boeing or its executives as long as the company and its senior executives do not commit federal crimes during the next two years. If crimes are committed and Boeing fails to report the misconduct, the company may be prosecuted or assessed an additional $10 million penalty for the recruitment of Druyun.