WASHINGTON (AP) – Defense contractor Raytheon Co. is paying a $12 million civil fine to settle federal regulators’ charges of accounting violations that masked the deteriorating finances of its commercial aircraft business from 1997 to 2001, it was announced Wednesday.

The Securities and Exchange Commission announced the final settlement with the company, which was in line with an earlier tentative agreement.

Daniel Burnham, Raytheon’s former chairman and chief executive, agreed to pay $1.2 million in fines and restitution of bonus money in a related settlement. Burnham led the company for five years until he resigned in July 2003. Aldo Servello, a former deputy chief financial officer and controller of the subsidiary, Raytheon Aircraft Co., agreed to pay $34,628.

Raytheon, Burnham and Servello neither admitted nor denied wrongdoing but did agree to refrain from future violations.

The SEC said that Raytheon “made false and misleading disclosures and used improper accounting practices that operated as a fraud.”

Raytheon, based in Waltham, Mass., is the third-largest U.S. defense contractor and the maker of Patriot, Hawk and Tomahawk missiles.

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On the Net:

Securities and Exchange Commission: http://www.sec.gov

Raytheon Co.: http://www.raytheon.com

AP-ES-06-28-06 1915EDT