GE is charged with diverting dollars 40m in military aid destined for Israel and using dollars 8m designated for a test flight to bribe General Rami Dotan. The general is serving a 13-year prison sentence in Israel for skimming payments from foreign aid money for the Israeli air force, some of it involving GE jet aircraft engines.
The US Justice Department is seeking dollars 120m in damages to settle GE's allegedly false claims, which were first brought to light by the contractor's former general manager in Israel, Chester Walsh. Under the US False Claims Act, Mr Walsh has the right to share any damages settlement with the government.
The Wall Street Journal said yesterday that GE had agreed to pay dollars 70m to resolve all charges related to the Dotan scandal, and would announce its settlement with the US Justice Department on 22 July in Washington.
Bill Bunch, a spokesman for GE, would only say yesterday that settlement talks are continuing.
GE has argued that the alleged diversion of funds was the act of a single executive, Herbert Steindler. The company has fired or disciplined other employees, including Mr Walsh, for failing to inform management about his alleged dealings with General Dotan. Israeli prosecutors described Mr Steindler as General Dotan's partner.
Mr Walsh, who was joined by the US Justice Department in his case against GE last August, said he waited to reveal his information because GE was preparing a cover-up. GE has denied hiding anything from the government.Reuse content