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Boeing will pay $25 million to settle U.S. probe

Boeing Co. agreed Thursday to pay the U.S. government $25 million to settle claims the company did defective work on critical military refueling planes in Iraq and Afghanistan.

The settlement arose out of a whistle-blower lawsuit filed in Texas by two former Boeing workers who will now receive $2.6 million for drawing attention to the issue.

The Justice Department had investigated the Chicago-based aerospace giant for allegedly defective work on the Air Force fleet of KC-10 Extenders, which are used for in-flight refueling in the Iraq and Afghanistan war theaters.

The work was done while performing maintenance on the planes at the Boeing Aerospace Support Center in San Antonio, Texas.

The government investigation found Boeing overcharged the government for installing insulation blankets by padding the estimated hours of work and charging an excessive hourly rate for labor.

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