Tell him NO.
Offer to press charges against him for a terrorist threat. Offer to sue the Dad for enabling such nonsense.
No way in hell should taxpayer dollars go towards a cash settlement. This was bullshit from the beginning. There was no invention whatsoever. NONE damn it. Taking parts from container A and placing them in container B (which resembled a freaking bomb) is NOT an accomplishment- unless your intent is to create the threat of a terrorist action.
Not a penny. Stand on principal, fight this. Any bureaucrat seeking to settle needs to lose their job.
Follow the Dad. That is where the real story is.