LOUISVILLE, Ky. (AP) – General Electric Co. has agreed to pay $11.5 million to settle a lawsuit brought by GE employees who alleged the company sold defective turbine parts, the U.S. Attorney’s office in Louisville said Friday.

The settlement said GE and two of its subcontractors admitted no wrongdoing.

The suit was filed by two GE employees at its Madisonville plant in October 2000 in federal court in Owensboro. Five more employees joined the suit in January 2002. They alleged that GE covered up defects in turbine blades and vanes during production.

“This is a big case. And it takes years and years to investigate these cases, and that’s why it’s taken so long,” said David Huber, the U.S. Attorney for Kentucky’s Western District.

Huber said the parts were made in Madisonville and were placed into jet engines in military airplanes and helicopters.

The blade and vane parts are metal air foils that force air through a jet engine, Huber said. The aircraft that would have potentially received the parts were F-16 and F-14 fighter jets and the Sea Stallion and MH-60 Blackhawk helicopters.

Under the settlement, the employees will receive about 20 percent of the amount, or $2.35 million, with the remaining balance going to the government.

“GE settled this case in order to put it behind us,” the company said in a statement Friday. “GE strongly disputes the allegations made in the lawsuit and, in agreeing to this settlement, GE denies any fault.”

Howmet Casting, a subsidiary of Pittsburgh-based Alcoa Inc., and Precision Castparts Corp. of Portland, Ore., were named as co-defendants in the suit.

The suit was filed under the False Claims Act, which allows private citizens to sue on behalf of the federal government. Under the settlement, the False Claims Act allegations were dismissed, but employees who have sued claiming retaliation by GE will be allowed to continue their legal actions.

The federal government began an investigation into the Madisonville plant in 2000. Huber said the government joined the suit after investigating the allegations and negotiated the settlement.

Huber said some employees involved the False Claims suit have filed their own personal legal actions against GE, but the government is not involved in those actions. An attorney representing some of the employees did not return a call Friday.

In one of those claims, Richard Gardner, a former supervisor at the Madisonville plant, alleged he was fired for testifying before a federal grand jury looking into allegations the plant shipped defective parts. A federal judge ordered that suit into mediation in May.

AP-ES-07-21-06 1540EDT