Scientist Exposed Faulty Military Satellite Parts
A company's efforts to stop a scientist from revealing his
research findings about faulty electronic components the company
sold to the government for military and intelligence-gathering
satellites were the basis for a whistleblower lawsuit that Northrop
Grumman Corp. settled this week, for a record sum of $325
Today's settlement is the largest one ever paid by a defense
contractor in a "qui tam" (whistleblower) case and the second
largest settlement ever paid involving defense contractor fraud.
The suit was filed against the former TRW Inc, which was acquired
by Northrop Grumman in 2002.
The whistleblower, Robert Ferro, will be awarded $48.7 million
for his work and the work of his attorneys on the case. The False
Claims Act requires the government to reward whistleblowers 15
percent to 25 percent of the amount the government recovers as a
result of a qui tam case.
The lawsuit -- joined by the government and made public Thursday
-- alleged that TRW, which Northrop Grumman acquired in 2002, sold
to the government components known as "heterojunction bipolar
transistors," or "HBTs," that TRW knew were likely to fail in
The qui tam lawsuit says a government satellite "experienced
critical failures" while in orbit in 2001, but at that time the
government didn't know that TRW had long been aware that failures
of its components were likely.
Ferro claimed research done in 1995 demonstrated the parts would
fail if placed in satellites, but TRW didn't inform the government
of this before or after the problem occurred. Several government
programs delayed launch of their satellites to determine the cause
of the problems with the satellite in space. Those programs
eventually replaced the HBTs in their satellites.
"TRW deliberately suppressed Robert
Ferro's findings and sold the components to the government knowing
that those parts were likely to fail," said Eric R. Havian, a San
Francisco attorney whose firm, Phillips & Cohen LLP, represents
Ferro. "Even after a satellite in space experienced serious
anomalies, TRW still refused to reveal the problems found earlier
with the components and had the gall to charge the government
millions to investigate what went wrong with the satellite."
TRW also withheld from the government information about a
massive recall of cell phone equipment because they contained
similarly defective TRW HBTs just a month before the government
began to experience its own HBT failures. Instead, TRW said the
government problems were the result of a new defect that had never
been seen before.