Tutor-Saliba Corp. has agreed  to pay $19 million to the city and county of San Francisco to settle a 2002 lawsuit that accused the contractor of fraud in connection with minority bidding requirements and inflated change orders.

Sylmar, Calif.-based Tutor-Saliba was the general contractor for seven projects totaling $620 million at San Francisco International Airport, starting in 1996. Work, which included a new terminal and two parking garages, was closed out in 2001 without claims.

In November 2002, City Attorney Dennis Herrera filed suits in U.S. District Court against Ronald Tutor, the firm’s president and CEO, and American Home Insurance Co., among others, alleging that Tutor-Saliba conspired with subcontractors to falsely claim credit under city minority business rules. Herrera charged that the contractor paid minority firms to claim they were performing work or supplying materials that Tutor-Saliba itself or nonminority firms were actually providing. The suit sought $30 million in damages and debarment of the contractor.

In 2003, Tutor-Saliba sued Herrera for defamation related to a speech in which he talked about the case. According to court records, Herrera said Tutor-Saliba “used minority front companies …to cheat legitimate minority contractors of their fair share of work.” The suit was dismissed in early 2006 under laws that protect senior officials.

In a joint statement on Feb. 23, the parties said the settlement would “put divisive issues to rest and avoid considerable future cost and expense of litigation.” Tutor-Saliba will pay the settlement in four installments, starting with $8 million by June. The pact stipulates that allegations in the lawsuit would not interfere with Tutor-Saliba’s ability to bid or contract on future public works projects.