- The Washington Times - Monday, May 15, 2006

CHICAGO (AP) — Boeing Co. has reached a tentative settlement with the government that calls for it to pay $615 million to end a three-year Justice Department investigation into reported defense contracting scandals, a federal official familiar with the details of the agreement said yesterday.

While agreeing to the largest financial penalty ever imposed on a military contractor, Boeing will not face criminal charges or have to admit wrongdoing, said the official, who spoke on the condition of not being identified by name because the pact is not final.

A settlement could go a long way toward helping the company — the second-largest U.S. defense contractor behind Lockheed Martin Corp. — in its effort to distance itself from recent procurement controversies that tainted its reputation. Jim McNerney has made a settlement a top priority since taking over as chairman and chief executive officer last July.

The federal official told the Associated Press that the company pressed to complete negotiations before its annual investor conference tomorrow in St. Louis. Mr. McNerney and other executives are scheduled to discuss Boeing’s performance and outlook during that meeting.

Chicago-based Boeing has been under investigation for reputedly 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.

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