Boeing Nears Settlement on Investigations
Deal Would Cover Probes of Illegal Hiring, Dispute with Lockheed

By Renae Merle
Washington Post Staff Writer
Wednesday, April 26, 2006

Boeing Co. is nearing a settlement with federal prosecutors to resolve investigations into the illegal hiring of an Air Force official and use of a rival's proprietary documents in a competition, according to people familiar with the negotiations.

Chicago-based Boeing and federal prosecutors have generally agreed to a settlement of between $500 million and $600 million, according to one person familiar with the investigation. But civil attorneys in the Justice Department are pushing for the company to pay $750 million, said the source, who spoke on condition of anonymity because of the sensitivity of the negotiations.

"I think both sides realize the value of bringing this home," the source said. "Things are falling in place."

The settlement would cover investigations into former Boeing employees stealing documents from rival Lockheed Martin Corp. during a rocket launch competition in the mid-1990s and the illegal hiring of Air Force official Darleen A. Druyun, who oversaw billions of dollars of the company's work. Under the agreement being considered, Boeing would avoid criminal and civil charges, sources familiar with the negotiations said.

Serious negotiations between Boeing and federal prosecutors began last year but intensified recently as the government faced a possible deadline to file charges, the sources said. The nature of the negotiations was reported yesterday in the Wall Street Journal.

John Dern, a Boeing spokesman, declined to comment on the negotiations but said the "company has stayed engaged with the Justice Department and U.S. attorney's offices in a constructive way as we continue to work through the issues." A spokesman for the U.S. attorney in Alexandria declined to comment.

An agreement could come within a month, said one source, who also cautioned that the timing could change if both sides cannot agree on the amount of the settlement or if the deadline is extended.

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