The government has agreed to pay $3 million to a former agent of the Drug Enforcement Administration who sued CIA officers for illegal eavesdropping.

The proposed settlement followed a ruling by U.S. District Judge Royce Lamberth in July that CIA officials committed fraud to protect a former covert agent against the eavesdropping allegations.

The lawsuit was brought by former DEA agent Richard Horn, who says his home in Rangoon, Burma, was illegally wiretapped by the CIA in 1993. He says Arthur Brown, the former CIA station chief in Burma, and Franklin Huddle Jr., the chief of mission at the U.S. Embassy in Burma, were trying to get him transferred because they disagreed with his work with Burmese officials on the country's drug trade.

Horn sued Brown and Huddle in 1994, seeking monetary damages for violating his civil rights. The CIA itself was a defendant in the lawsuit until early this year.

Then-CIA Director George Tenet filed an affidavit asking that the case against Brown be dismissed because he was a covert agent whose identity was a state secret that must not be revealed in open court. Lamberth granted the CIA's request and threw out the case against Brown in 2004.

Lamberth found out last year that Brown's cover had been lifted in 2002, even though the CIA continued to file legal documents saying his status was covert. The judge found that the CIA intentionally misled the court and he reinstated the case against Brown.

The agreement in the case was revealed in court papers filed Tuesday night, and Lamberth will now consider whether to dismiss the suit. Under the proposed settlement, the government makes no admission as to whether the allegations in the lawsuit are true.