For Whistle-Blowers, Virtue May Be the Only Reward

HENDERSON, Nev. — Richard Bagley doesn't sound like someone who just hit the jackpot.

Last week, he became one of the nation's wealthiest whistle-blowers when Northrop Grumman Corp. agreed to settle a case he and the Justice Department brought against TRW Inc., and the department awarded him $27.2 million. In all, Los Angeles-based Northrop Grumman, which recently acquired TRW, agreed to pay $111.2 million to resolve claims that TRW padded bills for defense work done in the early 1990s.

Bagley's share of the settlement, 24.5%, is close to the maximum allowed under federal law. But he didn't pop any champagne when he learned that, after nine grueling years, he had finally won his case.

"If I knew what I know now, I would not do it again," he said, slouching in a tattered armchair in his one-bedroom apartment here. A quiet man with white hair and Coke-bottle glasses, he continued, "I could easily have ended up homeless."

Bagley's lonely odyssey highlights the personal sacrifice made by whistle-blowers, most of whom never see a dime for their efforts. Taking on your employer is "like being a skunk at a picnic," said Sen. Charles E. Grassley (R-Iowa). "Win or lose, you've probably ruined your reputation, and perhaps even your health."

Laid off as chief financial officer at TRW's Redondo Beach unit in 1993 -- a few years after he began raising questions internally about the unit's accounting practices -- Bagley couldn't find another job.

Married once, with no children, and single for the last few decades, Bagley survived the misfortune, albeit within financial limits.

He lived on a modest pension, restricting himself to raisin bran for breakfast and cutting out meat altogether. He bought food in bulk, sometimes 24 boxes of cereal when there was a 2-for-1 sale, and learned to freeze milk when buying three gallons at once.

"I wasn't destitute, but I came close," recalled Bagley, now 64.

Of course, he won't be destitute once the government cuts his check. After paying taxes and attorney's fees, he figures he'll pocket more than $8 million. That, though, seems to provide little comfort. "I'm very happy to have gotten the settlement but there were just too many pitfalls," he said.