Original subtitles

Captioning sponsored by CBS >> I FINALLY MET THE PUPPET

MASTERS.

THE ONES WHO HAVE BEEN COOKING THE BOOKS.

I WANTED NO PART OF THIS.

I COULD SEE MYSELF GOING TO JAIL.

I FOUND MYSELF UP AGAINST ONE OF THE MOST POWERFUL CORPORATIONS

IN THE COUNTRY.

I CAME TO BELIEVE THAT THE COMPANY MIGHT BE DOUBLE- OR EVEN

TRIPLE-BILLING FOR THESE EXPENSIVE PARTS TO THE U.S.

GOVERNMENT.

AND THIS WAS ADDING UP TO THE TUNE OF MILLIONS OF DOLLARS.

I WORKED FOR THE DEFENSE CONTRACTOR, NORTHROP, AND MY JOB

THERE WAS TO TRACK INVENTORY THAT WOUND UP IN THE B-1 BOMBER,

THE STEALTH BOMBER, AND THE F-15 FIGHTER.

SOMEBODY WAS IN MY HOUSE.

MY FAMILY WAS ASLEEP.

THEY COULD'VE DONE ANYTHING TO US.

MY NAME IS JAMES H. HOLZRICHTER, AND I'M A WHISTLEBLOWER.

>> IF YOU KNOW JIM, HE LOVES AMERICA.

AND HE BELIEVES IN RIGHT AND WRONG.

THIS WAS NOT JUST AN ORDINARY FRAUD CASE.

FRANKLY, IT AFFECTED NATIONAL SECURITY.

>> I WANTED TO GET SOME DOCUMENTS OUT, TO PROTECT MYSELF

IN CASE THEY WERE DESTROYED.

I SMUGGLED COPIES OF DOCUMENTS OUT AND BROUGHT THEM TO THE

FEDERAL AGENTS.

MY PHONES WERE TAPPED, AND EVEN MY CARS WERE TAMPERED WITH.

I CAN'T SAY WHO IT WAS.

SOMEBODY DID IT.

AND I ALMOST LOST MY LIFE.

WE WOUND UP IN A HOMELESS SHELTER.

THE ENTIRE FAMILY GOES THROUGH EVERYTHING, THE COST IS SO MUCH.

>> SEE OUR SUCCESSES AND WHEN WE HAVE MULTIMILLION-DOLLAR

SETTLEMENTS.

WHAT THEY DON'T SAY, AND FRANKLY WE DON'T TALK ABOUT A LOT, IS

THE CASES WE LOSE.

UNLESS A WHISTLEBLOWER'S PREPARED FOR THE STRESS, THEY

SHOULDN'T GET INVOLVED.

>> WHEN I WAS YOUNGER, MY FATHER SAID SOMETHING TO ME THAT I'VE

NEVER FORGOTTEN.

HE SAID, "JIMMY, WHEN IS IT EVER WRONG TO DO THE RIGHT THING?"

>> Reporter: I'M ALEX FERRER, THIS IS "WHISTLEBLOWER."

WOULD YOU BE WILLING TO SACRIFICE YOUR FAMILY'S SAFETY

TO STOP MASSIVE FRAUD ON A TOP- SECRET GOVERNMENT PROJECT?

>> WE'RE HEADING ON OVER TO THE PLACE WHERE MARY AND I WERE

LIVING WITH OUR CHILDREN WHEN THIS ALL BEGAN-- WHEN I FIRST

STARTED FINDING OUT ABOUT THINGS THAT JUST DIDN'T ADD UP.

AS WELL AS, YOU KNOW, THE HOUSE WAS BROKEN INTO.

SO YEAH, THIS IS WHERE IT ALL BEGAN.

>> Reporter: JIM HOLZRICHTER'S JOURNEY AS A WHISTLEBLOWER BEGAN

A FEW YEARS AFTER HE'D LEFT THE COAST GUARD AND STARTED HIS

DREAM JOB AT NORTHROP CORPORATION, ONE OF THE TOP

MILITARY CONTRACTORS IN THE WORLD.

>> WHERE THEY MADE THE AVIONICS FOR ALL SORTS OF HIGH TECH

AIRCRAFT.

THE F-16-- THE B-1 BOMBER-- THE B-52, THEY WERE ALSO WORKING ON

A VERY CLASSIFIED PROJECT THAT CONGRESS WOULDN'T EVEN ADMIT IT

WAS EXISTING, AND THAT WAS THE B-2 STEALTH BOMBER.

IT HADN'T MERGED WITH GRUMMAN YET, SO IT WAS JUST NORTHROP.

SO THEN I BEGAN WORKING' THERE AN ELECTRONIC TECHNICIAN.

>> Reporter: NORTHROP IS DEALING WITH SOME OF THE TOP MILITARY

SECRETS OF OUR COUNTRY.

>> YES.

>> Reporter: JIM WAS WORKING AT NORTHROP'S PLANT IN ROLLING

MEADOWS, ILLINOIS, JUST NORTH OF CHICAGO.

HIS JOB: TRACKING THE INVENTORY OF CRITICAL ELECTRONICS FOR THE

AIR FORCE'S F-15 FIGHTER, B-1 BOMBER AND THE B-2 STEALTH

BOMBER.

SO THEY CALLED THESE BLACK PROGRAMS, RIGHT?

>> UH-HUH.

>> Reporter: AND-- BECAUSE THEY'RE SO SECRET.

NOBODY REALLY HAD THE WHOLE PICTURE?

PEOPLE COULD ONLY SEE WHAT'S GOING ON HERE, BUT THEY COULDN'T

SEE WHAT'S GOING ON OVER HERE?

>> THAT'S EXACTLY WHAT HAPPENED.

>> Reporter: TELL ME ABOUT THE CULTURE THERE BECAUSE OF THAT.

>> SUSPICION.

FEAR.

THAT REALLY WAS AN UNDERLYING UNDERCURRENT.

>> Reporter: THE WORK WAS SENSITIVE AND THE SECURITY WAS

INTENSE.

>> THEY HAD THE CAMERAS ALL OVER THE PLACE TO WATCH YOU.

THE PHONES YOU KNEW WERE MONITORED IN AND OUT.

>> Reporter: THEY COULD LISTEN TO ANY PHONE CALL THAT YOU MADE

OR RECEIVED?

>> INSIDE THE COMPANY, YES.

>> Reporter: BUT JIM REVELED IN WORKING FOR THE DEFENSE

INDUSTRY.

>> HE WAS SO HAPPY TO BE AT A REGULAR JOB, A NORMAL JOB AND

MONEY WAS COMING IN EVERY WEEK.

IT WAS GOOD.

I MEAN, IT SEEMED LIKE A GOOD-- GOOD SITUATION.

>> Reporter: JIM, HIS WIFE MARY AND THEIR FIVE KIDS- AGES THREE

TO 14 AT THE TIME- WERE LIVING A COMFORTABLE LIFE IN A RENTED

HOME IN THE SUBURBS.

AND AT SOME POINT, YOU MOVE FROM TESTING EQUIPMENT TO AUDITING

THE SYSTEMS THAT MONITOR PARTS THINGS LIKE THAT-

>> YES, PRODUCT ASSURANCE.

>> Reporter: "PRODUCT ASSURANCE": THAT'S THE

DEPARTMENT MAKING SURE THE COMPANY WAS PROPERLY BILLING FOR

THE PARTS THAT MAKE UP THE STEALTH TECHNOLOGY VITAL TO OUR

NATIONAL SECURITY.

>> I WAS FINDING DISCREPANCIES, THINGS THAT JUST DIDN'T ADD

UP.

THERE WERE CIRCUIT CARDS THAT, AS SOON AS THEY'D COME IN,

THEY'D THROW THEM OUT.

>> Reporter: JIM COULDN'T FIGURE OUT WHY NORTHROP WOULD SCRAP

PERFECTLY GOOD PARTS.

>> IT STARTED MAKING ME FEEL SOMETHING'S WRONG HERE.

THEY ALSO HAD WHAT WAS KNOWN AS AN INFLATED BILL TO MATERIALS.

PHANTOM PARTS, CHARGING FOR PARTS THAT WEREN'T IN IT,

SALVAGING PARTS-- A PART THAT HAD FAILED, THEY'D TAKE ALL THE

GOOD PARTS OUT AND REUSE THEM AND, THEN, CHARGE AGAIN FOR THEM

AS IF THEY WERE NEW.

SO NINE TO $11 MILLION WORTH OF COST OVERRUNS OR COST

OVERCHARGES TO THE CUSTOMER.

>> Reporter: AND THE CUSTOMER BEING OVERCHARGED WAS THE U.S.

GOVERNMENT.

SO YOU'RE TELLING ME THAT NORTHROP WOULD ORDER A PART.

THE PART WOULD COME IN AND THERE WOULD BE A PROBLEM WITH IT.

THEY'D SEND IT BACK TO THE VENDOR.

AND WHEN THE VENDOR SENT IT BACK REPAIRED, THE VENDOR WOULDN'T

BILL NORTHROP, BUT THE COMPUTER SYSTEM AT NORTHROP

WOULD AUTOMATICALLY BILL THE GOVERNMENT A SECOND TIME FOR THE

PART?

>> YES.

THAT'S-- >> Reporter: DID THAT EVER

HAPPEN MORE THAN TWICE?

THERE WAS TIMES WHEN THE PART WAS SENT BACK AGAIN AND THE

GOVERNMENT WAS BILLED-- >> IT HAPPENED HUNDREDS OF

TIMES.

TO THE TUNES OF MILLIONS AND MILLIONS OF DOLLARS.

>> Reporter: AND HOW EXPENSIVE WERE THESE PARTS?

>> THEY COULD GO UPWARDS OF $116,000 FOR ONE OF THEM.

>> Reporter: PER PART?

>> PER PART.

>> Reporter: JIM HAD DISCOVERED THAT IN SUPPLYING THE

ELECTRONICS FOR THE AIR FORCE'S CUTTING-EDGE AIRCRAFT, NORTHROP

WAS NOT ONLY DOUBLE- OR TRIPLE- BILLING FOR EXPENSIVE PARTS,

THEY WERE SHIFTING COSTS FROM ONE PROJECT TO ANOTHER TO

MAXIMIZE THEIR PROFITS, AND CONCEALING THOSE DISCREPANCIES

FROM THE GOVERNMENT.

AS YOU'RE FINDING THESE DISCREPANCIES, WHO ARE YOU

REPORTING THEM TO?

>> MY IMMEDIATE SUPERVISOR, EVERY ONE OF THEM.

AND THEN ADMINISTRATOR OF PRODUCT ASSURANCE COMES BY.

AND SHE STOPS AT MY DESK AND SHE STANDS THERE, "WELL, WHAT ARE

YOU DOING?" AND I TOLD HER WHAT I WAS DOING

AND SHE LOOKS LIKE SHE'S THINKING ABOUT SOMETHING.

AND THEN SHE SAYS, "WELL, I WANT YOU TO STOP NOW."

I REALIZED THAT ALL OF THE INDICATORS WERE SHOWING THAT

THERE MIGHT BE ACTUAL FRAUD.

I WANTED NO PART OF THIS.

I COULD SEE MYSELF GOING TO JAIL.

I'M THINKING, "I NEED TO START COVERING MYSELF IN CASE

SOMETHING, YOU KNOW, HAPPENS."

>> Reporter: AT THIS POINT YOU'RE THINKING, "I'M GOING TO

START KEEPING A COPY OF EVERYTHING IN CASE THINGS GO

SOUTH --" >> FOR MYSELF.

>> Reporter: "I HAVE DOCUMENTATION"?

>> YES.

[COPY MACHINE WHIRRING] SO I MADE COPIES OF THE

DOCUMENTS, BUT HOW DO YOU GET THEM OUT OF A FACILITY THAT IS A

TOP-SECRET FACILITY?

>> Reporter: JIM BEGAN TO SMUGGLE COPIES OF DOCUMENTS OUT

OF NORTHROP SO HE'D HAVE EVIDENCE OF THE PROBLEMS HE WAS

TRYING TO EXPOSE AND FIX.

>> SO WHAT I DID IS-- IS I STARTED TAPING THEM TO MY BODY.

AND I'D TAKE THEM, AND I'D PUT THEM IN MY SOCK, AND HOLD IT

AGAINST MY LEG LIKE THAT, AND THEN I COULD WALK OUT LIKE THIS.

>> Reporter: HAD YOU SPOKEN TO MARY, YOUR WIFE, ABOUT WHAT HAD

BEEN GOING ON?

>> NO.

>> Reporter: SHE DIDN'T KNOW?

>> NO, SHE DID NOT.

>> I GOT MY FEELINGS FROM THE WAY HE WAS FEELING.

BECAUSE HE WAS STARTING TO FEEL LIKE HE WAS BEING FOLLOWED AND

WATCHED.

BUT I REALLY DIDN'T WANT TO KNOW TOO MUCH, BECAUSE IT DID SEEM

LIKE IT KIND OF WAS STARTING TO GET TO BE A DANGEROUS SITUATION.

AND I THOUGHT, WELL, THE MORE I KNOW, THE MORE DANGER I'M GOING

TO BE IN.

AND I GOT TO BE HERE FOR MY KIDS.

>> Reporter: FOR MONTHS, THIS CONTINUED, AND THEN ONE NIGHT

AFTER WORK, A PHONE CALL FROM A STRANGER CHANGED EVERYTHING.

>> HE GOES, "MY NAME IS RICHARD ZOTT.

AND I'M A FEDERAL AGENT FOR THE DEFENSE CRIMINAL INVESTIGATIVE

SERVICE AND I'M MAKING SOME INVESTIGATIONS AT NORTHROP AND

I'D LIKE TO TALK TO YOU."

IT WAS LIKE SOMEBODY PUNCHED ME IN THE STOMACH.

>> Reporter: JIM HOLZRICHTER WAS HOME WITH HIS FAMILY ONE NIGHT

WHEN HE RECEIVED THAT DISTURBING PHONE CALL.

>> AND NOW HERE'S SOMEONE SAYING HE'S A FEDERAL AGENT.

I DON'T KNOW WHO HE IS.

HE'S A VOICE ON THE PHONE.

IT COULD BE SOMEONE FROM NORTHROP SAYING, "LET'S CHECK

JIM TO SEE IF HE'S GOING TO RAT US OUT."

AND I COULD BE BEING SET UP.

>> Reporter: BUT THE CALLER WAS, IN FACT, AN INVESTIGATOR WITH

THE DEFENSE DEPARTMENT NAMED RICHARD ZOTT.

YOU COLD-CALLED JIM AT HOME AFTER WORK ONE DAY.

>> YES, I DID.

>> Reporter: AND YOU WERE A FEDERAL AGENT WITH WHICH--

>> THE DEPARTMENT OF DEFENSE, THE DEFENSE CRIMINAL

INVESTIGATIVE SERVICE.

AND-- THERE WAS HESITATION ON THE PHONE.

YOU COULD HEAR THE WHEELS MOVING.

>> AND HE SAYS, "I WANT TO TALK TO YOU."

AND I GO, "WELL, I CAN'T VERIFY YOUR CREDENTIALS.

YOU COULD BE A FOREIGN AGENT.

I WORK FOR A DEFENSE CONTRACTOR."

I SAYS, "I'LL TELL YOU WHAT I'LL DO.

I'M GOING TO GO INTO WORK TOMORROW AND I'LL LET THEM KNOW

THAT YOU CALLED ME."

>> SO I SAID, "YOU KNOW, JIM, YOU CAN TALK TO THEIR

ATTORNEYS.

BUT THEY WON'T REPRESENT YOU.

THEY'LL REPRESENT THE INTERESTS OF NORTHROP.

AND SO I THINK YOU AND I REALLY NEED TO TALK."

AND I TOLD HIM, YOU KNOW, "IF YOU DON'T WANT TO TALK TO ME,

THE NEXT TIME I TALK TO YOU, UNFORTUNATELY, IT-- IT MAY BE

TAKING YOU AWAY IN HANDCUFFS."

>> I SAYS, "WELL, WHAT TIME CAN YOU BE HERE TOMORROW?"

[LAUGHS] >> Reporter: THAT'S A

CONVERSATION THAT CHANGES YOUR LIFE.

>> YEAH, OH, ABSOLUTELY.

>> Reporter: AGREEING TO TALK WITH A FEDERAL AGENT, JIM

HOLZRICHTER HAD TAKEN A FATEFUL STEP-- HE WAS NOW

OFFICIALLY BLOWING THE WHISTLE ON THE ALLEGED FRAUD AT

NORTHROP.

WHAT WAS YOUR INITIAL IMPRESSION OF AGENT ZOTT?

>> OH, MY GOODNESS.

I THOUGHT THE CAVALRY HAD COME.

I THOUGHT, "WELL, NOW-- NOW TH-- HERE'S THE RIGHT PERSON

WHO CAN TAKE CARE OF THIS PROBLEM."

DID I WANT PEOPLE TO GO TO JAIL?

NO.

DID I WANT PEOPLE TO LOSE THEIR JOBS?

NO.

DID I WANT THEM TO SHUT THE COMPANY DOWN AND PUT 5,000

PEOPLE OUT OF WORK?

NO.

I JUST WANTED THE PROBLEM FIXED.

>> Reporter: HOW DID YOU BECOME INVOLVED IN THE INVESTIGATION

INTO NORTHROP THAT INVOLVED JIM HOLZRICHTER?

>> WELL, INITIALLY, AN INDIVIDUAL NAMED REX ROBINSON

CAME ON OUR RADAR, THAT HE HAD MADE SOME ALLEGATIONS INVOLVING

A CLASSIFIED PROGRAM.

AND REX SAID, "YEAH, THERE'S AN INDIVIDUAL NAMED JIM HOLZRICHTER

WHO ALSO WORKS AT NORTHROP WHO MAY HAVE SOME INFORMATION TO

CORROBORATE WHAT I'M SAYING."

>> IT WAS REX WHO HAD MENTIONED ME, JUST BECAUSE I HAD TOLD ONE

GUY THAT I WAS RIDING TO WORK WITH I-- I WAS UNCOMFORTABLE

WITH SOME THINGS I WAS SEEING GOING ON.

REX WAS WORKING IN THE SAME PROGRAM AS THE GUY WHO I DROVE

TO WORK WITH WAS.

>> REX WAS RESPONSIBLE FOR TESTING EQUIPMENT THAT THEY

WERE DEVELOPING FOR THE B-2 BOMBER.

>> IT'S THE MOST SOPHISTICATED RADAR-JAMMING TECHNOLOGY IN

THE WORLD AT THAT POINT.

>> Reporter: ATTORNEYS MICHAEL BEHN AND BRUCE HOWARD WOULD END

UP REPRESENTING REX IN HIS ALLEGATIONS AGAINST NORTHROP.

>> BUT WHAT REX SAW AND WHAT HE TOLD US WAS THEM FAKING

TESTS.

LIKE, FOR EXAMPLE, THE AIR FORCE WOULD COME IN--

>> AND THAT'S WHERE THEY HAD THE DUMMY TEST EQUIPMENT THAT

PRETENDED TO SHOW THAT IT WORKED.

>> AND WHAT REX SAID WAS THEY-- THEY'D HOOK IT UP SO THAT THE

LIGHTS BLINK.

AND THE-- THE NEEDLES READ WHAT THEY WERE SUPPOSED TO READ.

BUT, BASICALLY, ALL THE MACHINE DID WAS TURN ON LIGHTS AND MOVE

NEEDLES!

>> AFTER THE AIR FORCE HAD LEFT THE REVIEW, THE HEAD DEVELOPER

FOR NORTHROP SAID, "WE LIED OUR TEETH OFF, NOW WE HAVE TO MAKE

THOSE LIES COME TRUE."

AT THAT STAGE, THE GOVERNMENT GAVE THE GREEN LIGHT TO GO

FURTHER WITH THE PROJECT AND PUMPED MORE THAN $250 MILLION

TOWARDS THIS PRODUCT THAT-- DID NOT WORK.

>> TAXPAYER DOLLARS.

>> TAXPAYER DOLLARS.

>> Reporter: WHEN NORTHROP LEARNED REX HAD GONE TO THE

F.B.I., THE COMPANY BEGAN TO GIVE HIM BAD REVIEWS AND

EVENTUALLY FIRED HIM.

THAT'S WHEN REX FOUND HIS WAY TO THE ATTORNEYS AND OFFICIALLY

BECAME A WHISTLEBLOWER.

JIM, STILL WORKING AT NORTHROP, DECIDED TO JOIN FORCES WITH REX

TO BUILD A STRONGER CASE AGAINST THE COMPANY, USING BOTH OF THEIR

ALLEGATIONS.

>> THESE KIND OF LOOK FAMILIAR TO ME, DON'T THEY?

>> YEAH, DON'T THEY, YEAH-- >> YEAH--

>> THESE ARE THE ONES THAT I HAD TAPED TO MY-- STOMACH AND

BROUGHT THEM OUT, I HAD THEM STUFFED IN THERE--

>> I REMEMBER THAT, I REMEMBER THAT--

>> AND BROUGHT THEM OUT TO YOU.

>> AND I WAS SHOCKED-- I REMEMBER WHEN YOU BROUGHT THIS

OUT, IT WAS INCREDIBLE.

IT WAS LIKE A TREASURE TROVE FOR ME.

>> YEAH.

>> 'CAUSE THESE KINDS OF INVESTIGATIONS ARE SO DIFFICULT,

AND YOU BROUGHT THESE TO ME AND I REMEMBER WE WERE GOING OVER

LOOKING AT THE SCRAP RATES.

>> YEAH, I WAS-- IT'S JUST LIKE THERE'S THIS ONE RIGHT HERE.

THEY HAD ONLY BOUGHT 817, BUT THEY SCRAPPED 1,453.

SO IT WAS LIKE AN OVERCHARGE OF $119,000 JUST ON THIS ONE PART.

>> JUST THIS ONE, YEAH.

AND THE THING IS: HOW CAN YOU SCRAP ALMOST DOUBLE THE AMOUNT

THAT YOU PURCHASED?

>> Reporter: FOR THE NEXT YEAR AND A HALF, JIM CONTINUED TO

PASS ALONG TO AGENT ZOTT EVIDENCE THAT NORTHROP WAS

SYSTEMATICALLY BILKING THE GOVERNMENT OF MILLIONS OF

DOLLARS.

JIM WAS DOING THIS AT GREAT PERSONAL RISK.

>> I THINK A COUPLE TIMES WHEN YOU WERE COMING OUT, THEY

SEARCHED YOU.

>> RIGHT.

RIGHT, THEY TOOK MY SHIRT OFF ONE TIME, AND THE DAY BEFORE, I

HAD BROUGHT DOCUMENTS OUT, BUT THAT DAY, I WASN'T BRINGING

DOCUMENTS OUT.

>> THANK GOODNESS.

>> I CHANGED THE WAY THAT I WAS BRINGING THE DOCUMENTS OUT

FROM THEN ON.

I DIDN'T HAVE THEM UNDER MY SHIRT ANYMORE, I PUT THEM IN MY

SOCK.

>> Reporter: JIM NORMALLY GAVE DOCUMENTS DIRECTLY TO ZOTT.

IT WAS RARE HE BROUGHT THEM HOME, BUT ONE NIGHT BEFORE HE

WAS TO MEET WITH THE F.B.I., HE'D LEFT A STACK OF DOCUMENTS

IN A PILE, ON HIS LIVING ROOM TABLE.

>> AND SO I HAD THEM SITTING IN MY LIVING ROOM, RIGHT NEXT

TO MY TELEVISION.

AND THEN THERE'S A NIGHT LIGHT THERE, A LIGHT THAT'S OFF, I

HAD THEM SITTING THERE.

SO IT WAS ABOUT 4:30 IN THE MORNING.

AND FOR SOME REASON I WOKE UP, I DON'T KNOW IF I HEARD A NOISE OR

WHATEVER.

AND I CAME OUT INTO THE LIVING ROOM AND THE LIGHT WAS ON.

"WHAT IS THIS?" THE DOCUMENTS ARE TURNED UPSIDE

DOWN, THE LIGHTS ARE ON, THE DOOR'S OPEN.

AND-- AND IT JUST-- SOMEBODY WAS IN MY HOUSE!

I WAS SO SCARED.

ONE OF THOSE MOMENTS, AGAIN, WHERE I'M THINKING, "WHAT HAVE I

DONE TO MY FAMILY TO PUT THEM AT RISK LIKE THIS?"

SO, I CALLED RICHARD.

I GO, "SOMEBODY WAS IN MY HOUSE."

AND HE GOES, "THAT'S A PROFESSIONAL.

HE WAS THERE TO TAKE COPIES OF WHAT YOU WERE BRINGING TO THE

F.B.I."

>> Reporter: SO HE MUST HAVE HEARD YOU COMING?

>> HE SAYS, "HE HEARD YOU GET UP AND HE GOT OUT OF THERE."

>> Reporter: AND WHEN DID THE BURGLARY OCCUR?

>> THE NIGHT I GOT THEM.

THIS-- >> Reporter: SO SOMEBODY EITHER

TAPPED YOUR PHONE-- >> THE PHONE WAS--

>> Reporter: --OR HAD ACCESS TO SOMEBODY ELSE WHO KNEW THAT YOU

WERE GOING TO HAVE THE DOCUMENTS THAT DAY?

>> YES.

>> Reporter: IN THE COURSE OF THE INVESTIGATION AGENT ZOTT

ALERTED JIM THAT HE HAD FOUND WIRE TAPS ON REX ROBINSON'S

PHONES.

JIM WAS RISKING A LOT TO HELP YOU WITH YOUR INVESTIGATION.

>> I THINK JIM WAS RISKING MORE THAN MANY PEOPLE I'VE EVER

WORKED WITH YEAH.

I WAS VERY CONCERNED ABOUT HIS SAFETY.

ONCE HIS COVER WAS BLOWN, THEN I WAS EVEN MORE CONCERNED.

>> Reporter: AND THAT'S EXACTLY WHAT DID HAPPEN WHEN AN

ASSISTANT U.S. ATTORNEY, WORKING WITH ZOTT, MADE THE

MISTAKE OF CALLING JIM DIRECTLY ON HIS WORK PHONE.

>> THE U.S. ATTORNEY FROM THE DIRKSEN FEDERAL BUILDING CALLS

ME AT MY PHONE, AT MY DESK, INSIDE ONE OF THE MOST SECURE

FACILITIES ON THE FACE OF THE PLANET.

>> Reporter: YOUR PHONE THAT'S BEING MONITORED BY NORTHROP?

>> UH-HUH.

HE GOES, "HEY JIM, IT'S THE U.S.

ATTORNEY.

I WAS WONDERING ABOUT THAT WIRE I ASKED YOU TO WEAR.

YOU UP FOR THAT?" AND I GO--

"WHO IS THIS?

I THINK YOU HAVE THE WRONG NUMBER!"

AND I HANG UP AND I'M GOING, "NO, NO..."

>> Reporter: AT THAT POINT, YOU REALIZE?

>> I'M DONE.

>> Reporter: NORTHROP COULD NOT FIRE JIM OUTRIGHT, BUT THE

COMPANY COULD MAKE HIS LIFE MISERABLE.

AND NOW, HE BEGAN BRINGING HIS PROBLEMS HOME.

>> HE WOULD COME HOME AND TELL ME HOW HE WAS BEING TREATED,

EVEN BY HIS WORKMATES GETTING UP AND WALKING AWAY FROM THE LUNCH

TABLE-- IT SEEMED SO UNFAIR.

>> PEOPLE THAT I HAD EATEN LUNCH WITH FOR FIVE YEARS, AND NONE OF

THEM SAID A WORD.

THEY JUST ALL PICKED UP THEIR TRAYS AND WENT TO ANOTHER TABLE

AND LEFT ME SITTING THERE.

>> I FELT LIKE ALL ALONG HE WAS DOING THE RIGHT THING.

AND WHY WERE THEY TREATING HIM SO BADLY?

WHY WEREN'T THEY WORKING WITH HIM?

WHY WEREN'T THEY CORRECTING THE PROBLEM?

>> PEOPLE'D SEE ME COMING' DOWN THE HALL AND THEY'D TURN AROUND

AND GO THE OTHER WAY.

I WAS A PARIAH.

>> Reporter: AND HE HAD REASON TO FEAR IT COULD GET WORSE.

>> I HAD A FEDERAL AGENT TELL ME ONE OF HIS WHISTLEBLOWERS

HAD JUST BEEN MURDERED.

>> Reporter: I'M ALEX FERRER.

THIS IS "WHISTLEBLOWER."

>> YOU'RE TRYING TO MAKE THE BEST POSSIBLE CHOICE IN AMONGST

A BATCH OF BAD ONES, BUT THERE ARE REPERCUSSIONS TO THAT.

>> Reporter: JIM'S WHISTLEBLOWER CASE AGAINST NORTHROP WAS STILL

UNDERWAY, BUT A YEAR AND A HALF AFTER HE FIRST NOTICED PROBLEMS

AT THE COMPANY, HE'D FINALLY BEEN FORCED TO LEAVE.

AND HOW DID IT FINALLY END, YOUR EMPLOYMENT WITH NORTHROP?

>> THERE WAS A MEETING THAT WAS BEING HELD UP AT THE LAWYERS'

OFFICE.

THEIR LAWYERS WANTED TO WANTED TO TALK TO ME ABOUT THE

INVESTIGATION.

THEY ASKED ME, YOU KNOW, "WHAT DOES THIS CASE INVOLVE?"

I SAYS, "EVERYTHING I'VE ALREADY DIVULGED INTERNALLY."

>> Reporter: THE COMPANY KNEW HE WAS PART OF A DEFENSE DEPARTMENT

INVESTIGATION ALLEGING MASSIVE FRAUD.

>> THEIR CORPORATE ATTORNEY SAYS, "WELL, AS YOU KNOW, THERE

ARE LAWS IN PLACE THAT WE CAN'T RETALIATE AGAINST YOU BECAUSE

YOU'RE A WHISTLEBLOWER," HE SAYS, "BUT YOU CAN UNDERSTAND

OUR POSITION.

WE DON'T WANT TO LEAVE THE WOLF LOOSE AMONGST THE SHEEP."

>> Reporter: [LAUGHS] YOU'RE THE WOLF AND THEY'RE THE

SHEEP?

>> RIGHT.

THAT'S WHAT I WAS-- I WAS-- THAT'S EXACTLY WHAT I WAS

THINKING.

I GO, "WHAT?

I'M THE WOLF?

OKAY..."

>> Reporter: BUT THE STRESS OF BLOWING THE WHISTLE HAD BECOME

TOO MUCH FOR JIM.

>> I LEFT THAT MEETING AND I WAS HAVING CHEST PAINS SO BAD, I

THOUGHT I WAS HAVING A HEART ATTACK.

>> Reporter: TURNED OUT IT WASN'T?

>> IT WASN'T.

I WENT TO THE HOSPITAL AND THEY DID ALL SORTS OF TESTS.

MY DOCTOR CAME IN AND SHE PUT ME ON A SHORT-TERM MEDICAL LEAVE

FOR SITUATIONAL ANXIETY.

>> Reporter: AND YOU NEVER WENT BACK?

>> I NEVER WENT BACK.

I HAD BEEN BLACKBALLED IN THE AEROSPACE INDUSTRY.

AND I WOULD NEVER WORK IN THAT FIELD AGAIN.

THAT WAS RATHER DISHEARTENING, BECAUSE THE TYPE OF WORK I WAS

DOING WAS WHAT I WANTED TO DO MY WHOLE LIFE, EVER SINCE I WAS A

CHILD.

I GOT A JOB MANAGING A GAS STATION IN McHENRY.

AND THEN I GOT A JOB DRIVING A BUS, PICKING UP THE ELDERLY AND

DISABLED, AND I DID THAT FOR A COUPLE YEARS BEFORE I STARTED

WORKING FULL-TIME FOR "THE TRIBUNE" AS A INDEPENDENT AGENT.

IT FIRST STARTED WITH STUFFING PAPERS AND THEN DELIVERING

NEWSPAPERS TO THE STORES ON SATURDAY AND SUNDAY.

THAT WAS A SEVEN-DAY-A-WEEK JOB, 365 DAYS A YEAR AND YOU'D WORK

FROM MIDNIGHT UNTIL NOON THE NEXT DAY, SEVEN DAYS A WEEK, AND

I WORKED FIVE YEARS WITHOUT A DAY OFF.

>> Reporter: IT QUICKLY BECAME CLEAR: HERE'S WHERE THE IMPACT

OF BLOWING THE WHISTLE-- AND THE YEARS OF BUILDING A CASE-- FELL

EQUALLY ON JIM'S WHOLE FAMILY.

>> THIS SCHOOL HERE ON MY LEFT WE'RE PASSING-- THIS IS WHERE

ALL MY CHILDREN WENT TO SCHOOL, FROM KINDERGARTEN TO EIGHTH

GRADE.

BECAUSE WE LIVED HERE, OFF AND ON, IN WONDER LAKE.

>> WE WERE RENTING A HOUSE.

THE KIDS REALLY LIKED IT THERE.

THEY WERE IN A PRETTY GOOD SCHOOL, AND-- WE WERE LIVING A

PRETTY GOOD LIFE.

>> THIS IS ALSO THE HOUSE THAT WE WERE LIVING AT WHEN IT WAS

BROKEN INTO.

AND THAT FRONT DOOR WAS OPEN, AND THEY HAD A COAT

HANGER HOLDING IT OPEN.

AND WHEN I EXPLAINED THAT TO RICHARD, HE SAYS, "WELL, THAT'S

WHAT A PROFESSIONAL WOULD DO."

>> THAT RAISED SERIOUS CONCERNS TO ME.

IT-- 'CAUSE THAT'S NOT A BURGLARY, I MEAN, YOU KNOW,

GOING SPECIFICALLY FOR THESE DOCUMENTS.

AND THE FACT THAT THE DOOR WAS LEFT OPEN TELLS ME THAT THEY

ARE-- THEY-- THEIR LEVEL OF EXPERTISE IS HIGHER THAN AN

AVERAGE BURGLAR.

>> Reporter: AGENT ZOTT SAYS HE MENTIONED THE INCIDENT TO THE

ASSISTANT U.S. ATTORNEY WORKING THE CASE, BUT HE CONSIDERED IT A

MATTER FOR LOCAL LAW ENFORCEMENT.

>> I TALKED TO MY SUPERVISORS ABOUT WITNESS PROTECTION

PROGRAM.

AND I REMEMBER I BROUGHT IT UP WITH JIM AND HE WAS NOT ENTHUSED

WITH THE IDEA OF LIVING IN THE MIDDLE OF IOWA SOMEWHERE, YOU

KNOW, UNDER AN ASSUMED IDENTITY.

>> WE STARTED LIVING IN FEAR AND SHAME TOO.

BECAUSE, YOU KNOW, ONCE HE LOST HIS JOB, YOU KNOW, WE WERE POOR.

WHEN THINGS STARTED-- I THINK ADAM WAS ONLY TWO OR THREE YEARS

OLD.

AND THEN MY OLDEST DAUGHTER, SHE WAS IN, JUST FINISHING UP JUNIOR

HIGH.

SO IT KIND OF TOOK UP THEIR WHOLE LIFE, THEIR WHOLE

CHILDHOOD REALLY.

>> Reporter: YOU ABLE TO SAVE THE HOUSE?

>> NO.

NO.

WE WERE RENTING AT THE TIME BUT WE COULDN'T AFFORD IT ANYMORE.

AND SO WE HAD TO MOVE.

BUT WE HAD NOWHERE TO MOVE.

>> Reporter: SO WHERE DO YOU END UP?

>> HOMELESS SHELTER.

SO, THIS IS THE HOMELESS SHELTER WHERE WE WERE LIVING AT AFTER WE

LEFT THE HOUSE IN WONDER LAKE.

AND WE STAYED RIGHT ACROSS FROM US, RIGHT HERE, IS WHERE THE

FIRST APARTMENT WHERE WE WERE AT.

WELL WE WERE HERE FOR TWO MONTHS UNTIL WE COULD FIND A PLACE FOR

US TO MOVE INTO.

>> THE THING THAT I ALWAYS REMEMBER THE MOST IS GRADUATING

EIGHTH GRADE AND THEN HAVING TO GO TO THE HOMELESS SHELTER RIGHT

AFTERWARDS, AND THEN EVERYBODY FOUND OUT THAT WE HAD

COCKROACHES THERE, TOO, SO EVERYBODY STAYED AWAY FROM

US.

>> Reporter: FOR YEARS, JIM WORKED WITH HIS ATTORNEYS AND

AGENT ZOTT TO BUILD THE CASE, THEY NEEDED TO PERSUADE THE

DEPARTMENT OF JUSTICE TO GO AFTER NORTHROP.

>> I'D GO DOWNTOWN TO THE LAWYER'S OFFICE TO GO THROUGH

DOCUMENTS.

THEY START FLOODING US WITH THIS PAPER SNOWSTORM.

YOU'VE EVER HEARD OF THE ADAGE OF A "NEEDLE IN A HAYSTACK?"

IT WAS, LIKE, THEY SENT US THE HAYSTACK AND KEPT ALL THE

NEEDLES.

>> Reporter: FOR ITS OWN REASONS, THE GOVERNMENT HAD

DECIDED AGAINST TAKING ON THE CASE.

ADMITTEDLY, IT WAS COMPLEX, AND AS ONE OF A HANDFUL OF MAJOR

DEFENSE CONTRACTORS, NORTHROP NOT ONLY HAD DEEP POCKETS, BUT

TREMENDOUS POLITICAL CLOUT.

>> IT REALLY SUCKS TO BE INVOLVED IN LITIGATION IN

GENERAL, AND TO BE IN LITIGATION AGAINST A HUGE CORPORATION CAN

BE VERY DIFFICULT, VERY TIRING, VERY STRESSFUL.

>> IT WAS HARD GROWING UP KNOWING THAT WE DIDN'T HAVE THE

SAME THINGS OTHER KIDS DID.

AND WE WEREN'T GOING TO HAVE ALL THOSE AWESOME CLOTHES THAT

EVERYBODY COMES BACK TO SCHOOL WITH, LIKE... WE WOULD GO TO

THE-- YOU KNOW, THE RESALE SHOP OR TO KMART.

AND WE'RE LIKE, "YEAH, WE GET TO HAVE OUR ONE SHIRT AND OUR ONE

PAIR OF JEANS FOR SCHOOL THIS YEAR."

LIKE, AND WE WERE SO HAPPY.

IT WAS LIKE A BLESSING TO HAVE THAT.

>> Reporter: THIS IS THE FIRST TIME THE ENTIRE FAMILY HAS

TALKED TOGETHER ABOUT WHAT THEY WENT THROUGH.

>> IT'S ONE OF THE THINGS I WANT YOU TO UNDERSTAND IS ABOUT WHAT

A WHISTLEBLOWER GOES THROUGH.

IT'S NOT SOMETHING-- HE TRAVELS THIS ROAD ALONE.

IT'S MY-- THE ENTIRE FAMILY GOES THROUGH EVERYTHING, AND IT

ALWAYS COMES BACK TO THAT QUESTION-- WOULD I DO IT AGAIN?

THE COST IS SO MUCH.

HOW DO I GIVE YOU BACK YOUR CHILDHOOD?

>> I FELT LIKE HE WAS DOING THE RIGHT THING ALL ALONG.

BUT-- AND I FEARED FOR HIM VERY MUCH.

I WAS VERY AFRAID.

>> Reporter: MARY'S FEARS WOULD BECOME ALL TOO REAL WHEN SOMEONE

TAMPERED WITH HER FAMILY'S CARS.

>> I WORKED IN THIS HIGH-TECH ENVIRONMENT.

THIS IS A TIME WHEN THE MOVIE "SILKWOOD" WAS COMING OUT.

WHAT HAPPENS TO WHISTLEBLOWERS?

THEY WIND UP IN A TRUNK.

IF SOMETHING WERE TO HAPPEN TO ME, IT WOULD BE MADE TO LOOK

LIKE AN ACCIDENT.

>> NORTHROP-- THEIR STRATEGY WAS A SCORCHED EARTH LITIGATION.

THEY TRIED TO DRAG THINGS OUT AS MUCH AS POSSIBLE.

>> Reporter: KNOWING THE WHISTLEBLOWERS DID NOT HAVE THE

BACKING OF THE GOVERNMENT, THE DEFENSE CONTRACTOR DRAGGED OUT

THE LITIGATION AND THE WHISTLEBLOWER LAWYERS WERE

FOOTING THE BILL.

>> AND THEY WOULD TRY AT THE HIGHEST LEVELS TO INFLUENCE THE

DEPARTMENT OF DEFENSE WITH WHOM THEY DEALT WITH ALL THE TIME.

AND THEY WOULD CONTEST EVERY SINGLE DOCUMENT THAT WE WANTED

TO GET.

>> Reporter: BUT FINALLY, 13 YEARS AFTER JIM'S DECISION TO

BLOW THE WHISTLE, TEN YEARS AFTER THE GOVERNMENT DECLINED TO

INTERVENE, JIM AND REX AND THEIR LAWYERS FINALLY HAD ENOUGH DIRT

TO GET THE GOVERNMENT TO TAKE ON NORTHROP.

>> IT WAS ONE OF THE FIRST, IF NOT THEFIRST CASE WHERE AFTER

THE GOVERNMENT, INITIALLY, DECLINED TO GET INVOLVED, YEARS

LATER, AFTER WE MARSHALED SOME EVIDENCE TO CONVINCE THEM IT WAS

A WORTHY CASE, THEY DECIDED TO INTERVENE WITH US.

>> Reporter: ULTIMATELY, YOU DID FIND SOME DOCUMENTS THAT WERE

PRETTY MUCH A SMOKING GUN.

>> YES, ABSOLUTELY.

WE DID HAVE DOCUMENTS, FOR EXAMPLE, WHERE THEY WERE

TRAINING THEIR OWN PEOPLE, "WE CAN'T TELL THE TRUTH."

>> "WHAT WILL THE CUSTOMER ACCEPT AS REASONS WE CAN'T TELL

THE TRUTH?" WHEN YOU HAVE SOMETHING LIKE

THAT, THAT TO ME IS PRIMA FASCIA EVIDENCE OF FRAUD,

DECEPTION.

>> Reporter: SO ARE YOU TELLING ME THAT THEY WERE TRAINING THEIR

PEOPLE TO FIND CREATIVE WAYS NOT TO TELL THE TRUTH TO THE

GOVERNMENT ABOUT WHAT WAS GOING ON UNDER THE CONTRACT?

>> THE DOCUMENTS THAT WE FOUND EVIDENCED THAT PRETTY CLEARLY.

>> WHAT FRAUD IS: FRAUD IS-- IT'S A BIG TERM SIMPLY FOR THEFT

BY DECEPTION.

>> Reporter: AND WHEN RETIRED AIR FORCE COLONEL ROGER MOSELEY

TOOK A LOOK AT THEIR EVIDENCE-- >> THE SYSTEM IS BROKEN.

>> Reporter: HE WAS LIVID.

>> THIS JUST MAKES YOU FURIOUS THAT THEY WOULD DO THIS TO US.

>> COLONEL MOSELEY WAS ONE OF OUR EXPERTS IN THE NORTHROP

CASE, AND SPECIFICALLY ON THE STEALTH SIDE.

>> I WAS THE DEPUTY DIRECTOR OF THE B-2.

IT WAS A TERRIFIC JOB, I HAD IT FOR THREE YEARS AND I THOROUGHLY

ENJOYED IT.

AND IN THE END, WE BUILT AN AIRPLANE.

AND HERE IT IS.

THE B-2 BOMBER, THE FIRST STEALTH BOMBER.

A VERY IMPRESSIVE AIRPLANE, FLIES A LONG WAY, CARRIES A

LOT-- IS ALMOST INVISIBLE TO RADAR.

>> COLONEL MOSELEY SAID HAD HE KNOWN OF WHAT NORTHROP WAS

DOING, THEIR FRAUD IN OUR CASE, AT THE TIME HE WAS IN CHARGE OF

THE STEALTH PROGRAM, HE WOULD HAVE CUT NORTHROP OFF.

>> IF I HAD KNOWN THAT THIS WAS GOING ON AT THE TIME, I

GUARANTEE YOU I WOULD'VE BEEN IN ILLINOIS WITH A PACK OF LAWYERS,

AND WE WOULD'VE GONE OVER THIS.

THIS PART: "OVERCHARGE FOR PARTS."

IT WOULD'VE BEEN VERY HARD FOR THEM TO-- ONCE I KNEW THAT

SOMETHING WAS GOING ON, FOR THEM TO FAKE ME OUT.

BUT WHEN YOU FIND A SLIDE THAT SAYS, "WE CAN'T TELL THE TRUTH,"

YOU SORT OF BACK AWAY FROM BEING CONSIDERATE AND YOU REALLY WANT

TO GO AFTER THEM.

UNFORTUNATELY, AS I LOOKED MORE AND MORE INTO THE PAPERWORK, IT

WASN'T A SIMPLE ERROR.

IT WAS AN ERROR THAT WAS KNOWN TO THE MANAGEMENT AND THE

MANAGEMENT WAS TELLING THEIR EMPLOYEES, "WE'LL TAKE CARE OF

IT," AND THEY NEVER DID, AND THEY AVOIDED TAKING CARE OF IT

ON PURPOSE BECAUSE IT WAS INCREASING THEIR REVENUE AND

THEIR PROFITS.

WE GAVE THEM A COST-PLUS CONTRACT.

ALL THE MONEY YOU NEED TO DO THIS, WITHOUT RESTRICTION.

AND YET THEY STILL DO THIS KIND OF STUFF.

UNBELIEVABLE.

>> Reporter: AS JIM AND REX'S CASE AGAINST NORTHROP UNCOVERED

INCREASINGLY DAMNING EVIDENCE OF FRAUD, IN JIM'S HOUSEHOLD, THE

FAMILY REMEMBERS HOW, OVER THE YEARS, THE PARANOIA HAD STEADILY

MOUNTED.

>> I REMEMBER THE FAMILY PULLING TOGETHER DURING THE TIMES OF

UNCOMFORTABLENESS, OR WHEN WE WERE SCARED, OR SLEEPING AT THE

FOOT OF YOUR BED IN YOUR ROOM BECAUSE I WAS TOO SCARED TO

SLEEP IN MY ROOM.

>> I KNOW THAT MOM WAS-- WAS STRESSED ABOUT IT.

AND, YOU KNOW, THAT KIND OF CARRIED DOWN THE LINE, AND

ME TRYING TO KEEP ALL OF US TOGETHER TOO.

YOU KNOW?

JUST TRYING TO KEEP IT CALM AND TRYING TO KEEP IT UPBEAT, AND

NOT REALLY THINK TOO DEEPLY ABOUT IT.

BUT I-- I DID.

>> MOM WAS SAYING TO ME THE OTHER DAY AS IS THAT SHE SHOWED

ME HER JOURNAL.

SOMETHING I WAS UNAWARE THAT YOU HAD BEEN DOING, THAT SHE KEPT--

SHE WROTE DOWN THOSE FEELINGS.

>> I WROTE DOWN SOME THINGS THAT I COULD HARDLY BELIEVE WHEN I

WENT BACK AND READ THEM AGAIN, HOW PARANOID I HAD GOTTEN.

MY FIRST ENTRY ACTUALLY WAS SOMETHING JIM HAD SAID TO ME.

HE SAID, "IT'S NOT IF ANYMORE, IT'S WHEN."

"DAD KNOWS THEY'RE GOING TO KILL HIM."

WE NEED TO PREPARE OURSELVES FOR THIS.

THAT'S WHEN I SAID, "I SHOULD GET SOME INSURANCE," BECAUSE IT

WAS REAL-- IT WAS A REAL THREAT.

YEAH, BECAUSE I SAID, "WELL, IF SOMETHING HAPPENS, I GOT TO TAKE

CARE OF THESE KIDS.

WHAT AM I GOING TO DO?" BECAUSE I FIGURED IF YOU DID

DIE, THEY WOULD MAKE IT LOOK LIKE AN ACCIDENT.

>> WHEN I WOULD COME HOME FROM WORK, MY DAUGHTER WOULD PULL ALL

THE BLINDS.

AS YOU CAN SEE, THAT WINDOW RIGHT THERE IN THE CORNER,

THAT'S WHERE MY DAUGHTER USED TO PULL THE BLINDS.

SHE SAYS, "SO YOU-- SOMEBODY WOULDN'T SHOOT YOU THROUGH THE

WINDOW."

>> Reporter: YOUR 16-YEAR-OLD DAUGHTER WAS PULLING THE BLINDS

BECAUSE SHE THOUGHT SOMEBODY WAS GOING TO TAKE A SHOT AT YOU

THROUGH THE WINDOW?

>> YES.

YEAH.

>> Reporter: WHEN YOU LEARNED THIS--

>> IT BROKE MY HEART.

IT BROKE MY HEART.

AS A FATHER, YOU TRY TO KEEP YOUR FAMILY SAFE.

YOU TRY TO, YOU KNOW, KEEP THE MONSTERS AT BAY, SO TO SAY.

BUT FOR THEM TO HAVE TO GROW UP THAT WAY-- HEARTBREAKING.

>> THAT FEELING OF HELPLESSNESS...

>> Reporter: JIM WORRIED THAT HE COULDN'T PROTECT HIS FAMILY OR

HIMSELF.

AT SOME POINT, SOMEBODY DID MAKE AN ATTEMPT ON YOUR LIFE?

>> YES.

I'M DELIVERING SOME PAPERS BUT I'M GOING SLOW.

AND THE RIGHT, FRONT TIRE SHEARS OFF.

THE FRONT END OF THE CAR GOES INTO THE-- THE SHOULDER LIKE

THIS AND STOPS RATHER ABRUPTLY.

FORTUNATELY, I WAS GOING SLOW, SO IT DIDN'T CAUSE ME ANY

PHYSICAL DAMAGE.

>> Reporter: WHAT CAUSED THE RIGHT WHEEL TO FALL OFF?

>> WELL, WHEN IT SHEARED, ONE OF THE BOLTS WAS LAYING THERE AND

THE NUT WAS AT THE END OF THE STEM.

AND THEN I STARTED GETTING A CREEPY FEELING.

WHY WOULD THAT BE ALL THE WAY OUT AT THE END OF THE STEM?

AND I ONLY FOUND THE ONE.

AND SO I CALLED RICHARD ZOTT.

AND HE GOES, "JIM," HE SAYS, "THAT'S A CLASSIC WAY THAT THEY

MAKE IT LOOK LIKE AN ACCIDENT."

>> AND IF IT'S ACCIDENTAL, IT WOULD PROBABLY ONLY HAPPEN ONCE.

AND SO IT WASN'T ONLY ONE TIME, THIS HAPPENED A COUPLE TIMES.

>> YEAH, THREE TIMES.

A FEW WEEKS AFTER IT HAPPENED TO ME, THEN IT HAPPENED TO MY SON.

AND THEN MY DAUGHTER, A COUPLE WEEKS AFTER THAT, IT HAPPENED TO

HER WHEN THE TIRE SHEARED OFF OF HER CAR WHEN SHE WAS MAKING A

TURN, IT JUST BROKE RIGHT OFF AND ALL THE LUG NUTS WERE GONE.

>> Reporter: WHEN THE LUG NUTS WERE LOOSENED ON HIS CAR-- DO

YOU THINK PEOPLE WERE REALLY TRYING TO KILL HIM?

OR DO YOU THINK THEY WERE TRYING TO SEND HIM A MESSAGE?

OR, YOU KNOW-- >> YOU KNOW, WE-— I GO BACK AND

FORTH ON THAT.

I DON'T REALLY KNOW.

BUT EITHER WAY, THE CONSEQUENCES COULD'VE BEEN HIS DEATH.

>> WAS IT NORTHROP WHO MADE THE ATTEMPT ON MY LIFE?

I CAN'T SAY WHO IT WAS.

YOU KNOW?

SOMEBODY DID.

>> HERE'S NORTHROP ON THE LEFT.

THIS IS THE DEFENSE SYSTEMS DIVISION.

I WAS AT NORTHROP, I DON'T KNOW, MAYBE A HANDFUL OF TIMES, 'CAUSE

FRANKLY, THEY REALLY DID NOT WANT TO SEE ME.

>> Reporter: TO THIS DAY, THERE'S NO PROOF WHO WIRE TAPPED

THE WHISTLEBLOWERS' PHONES, TAMPERED WITH THE HOLZRICHTER

FAMILY'S CARS, OR WHO BROKE INTO THE HOUSE.

AND NO EVIDENCE THAT NORTHROP CORPORATION WAS INVOLVED IN ANY

OF THESE INCIDENTS OR WAS EVEN AWARE OF THEM.

>> Reporter: THE CASE AGAINST NORTHROP BECAME ONE OF THE

LONGEST RUNNING WHISTLEBLOWER LAWSUITS, EVER.

HOW MANY YEARS EXACTLY?

>> COUNTING THE TIME I WAS UNDERCOVER, 17-AND-A-HALF YEARS.

>> Reporter: YOUR DAUGHTER WENT FROM BEING THREE YEARS OLD TO 20

YEARS OLD.

>> YES.

>> Reporter: WHILE YOU WERE INVOLVED IN THE CASE.

>> YES.

>> Reporter: YOU FLEW COLONEL MOSELEY IN FOR DEPOSITION.

>> YES.

>> Reporter: AND ON THAT SAME MORNING, NORTHROP ANNOUNCED THAT

THEY WERE GOING TO SETTLE THE CASE.

>> YES.

>> Reporter: BEFORE HIS TESTIMONY?

>> YES.

>> SO, I WAS READY TO GO IN.

AND WE GET THIS PHONE CALL THAT SAID THAT NORTHROP HAD CAVED ON

THE LAWSUIT, AND THEY WERE GOING TO PAY DAMAGES, AND THEY HAD

OFFERED X AMOUNT OF MONEY AND THE GOVERNMENT HAD ACCEPTED IT.

IT MAY HAVE BEEN THE FIRST TIME THAT A GOVERNMENT GUY, WHICH I

CONSIDERED MYSELF, WAS GOING TO SAY THESE THINGS AND IT WAS

GOING TO BE IN THE PUBLIC RECORD.

THAT MIGHT HAVE BEEN THE KEY.

I DON'T THINK WE'LL EVER KNOW.

>> Reporter: IF THE COMPANY, NOW NORTHROP-GRUMMAN, WENT TO TRIAL

AND LOST, THEY FACED DAMAGES TOTALING AN ASTOUNDING $1.2

BILLION.

INSTEAD, NORTHROP-GRUMMAN SETTLED OUT OF COURT, ADMITTING

NO WRONGDOING.

THEY AGREED TO PAY A TOTAL OF $134 MILLION, ACCORDING TO THE

WHISTLEBLOWERS' ATTORNEYS.

THAT MONEY INCLUDED PAYMENTS TO THE GOVERNMENT, THE

WHISTLEBLOWERS, AND LEGAL FEES.

NORTHROP-GRUMMAN DISPUTES THAT TOTAL SAYING THE CORRECT FIGURE

IS $99 MILLION-- STILL A LOT OF MONEY.

THE COMPANY DECLINED A REQUEST FOR AN ON-CAMERA INTERVIEW, BUT

GAVE US A STATEMENT, READING IN PART: "AS DESCRIBED TO US, THIS

PROGRAM RELATES TO A FALSE CLAIMS ACT SUIT FILED ABOUT 30

YEARS AGO.

THE COMPANY SETTLED THE MATTER IN 2005, WITH NO FINDING OR

ADMISSION OF WRONGDOING ON THE PART OF NORTHROP GRUMMAN."

NORTHROP GRUMMAN ALSO STATED THAT ANY SUGGESTION THAT THE

COMPANY MAY HAVE ENGAGED IN ANY CRIMINAL WRONGDOING DECADES AGO

WOULD BE WITHOUT "CREDIBLE OR INDEPENDENT EVIDENCE" AND "FALSE

AND IRRESPONSIBLE."

SO, THE CASE SETTLES?

>> YES.

>> Reporter: BUT FOR SUBSTANTIALLY LESS THAN THEY

WERE EXPOSED?

>> CORRECT.

AND-- AND THAT'S USUALLY HOW IT RUNS.

THEY'RE-- IT-- IT'S-- IT'S INTERESTING HOW PEOPLE NOW REFER

TO IT.

THEY'RE REFERRING TO IT AS THE FRAUD TAX.

>> Reporter: THE FRAUD TAX?

>> THE FRAUD TAX.

>> Reporter: LIKE A TAX THAT A COMPANY HAS TO PAY BECAUSE THEY

COMMITTED FRAUD?

>> IF YOU GET CAUGHT.

>> Reporter: IF YOU GET CAUGHT?

>> IF YOU GET CAUGHT.

>> Reporter: THE OTHER WHISTLEBLOWER, REX ROBINSON,

DIDN'T LIVE TO SEE THE SUCCESSFUL OUTCOME OF THEIR LONG

ORDEAL.

>> REX ROBINSON HAD PASSED AWAY A COUPLE YEARS EARLIER.

HE WAS LIVING IN THE MIDDLE OF THE NEW MEXICAN DESERT IN A

TRAILER.

IT WAS TRAGIC.

IT WAS -- WE WEREN'T FRIENDS WHEN WE STARTED.

BUT TOWARDS THE END, WE TALKED EVERY WEEK.

EVERY WEEK, WE TALKED.

HE JUST FELT CHEATED OF A LIFE.

>> Reporter: THE WHISTLEBLOWERS' SHARE OF THE SETTLEMENT, SPLIT

BETWEEN JIM AND REX'S SURVIVING FAMILY, AMOUNTED TO AROUND SIX

MILLION DOLLARS EACH.

>> SO, WHEN YOU SEE THESE LARGE AWARDS LIKE IN MY CASE-- WAS IT

A LIFE CHANGING AWARD?

YES, IT WAS.

BUT THE THING IS-- IS THAT PEOPLE ARE UNAWARE THAT THE

ATTORNEYS, RIGHT OFF THE TOP, TAKE 40%.

OH, DON'T FORGET THE I.R.S.

>> Reporter: SOME PEOPLE THINK THAT WHISTLEBLOWERS DO THIS FOR

THE MONEY.

SEEMS LIKE A VERY DIFFICULT WAY TO MAKE MONEY.

>> [LAUGHS] IT'S EXTRAORDINARILY DIFFICULT.

THEY'RE DOING IT BECAUSE IT'S THE RIGHT THING TO DO.

AND THAT'S WHAT MOST WHISTLEBLOWERS GET INTO IT FOR,

BECAUSE THEY'RE HONEST PEOPLE OF INTEGRITY AND REPORTING FRAUD IS

THE RIGHT THING TO DO.

>> MANY CASES, THE WHISTLEBLOWERS ESPECIALLY THAT

WE'VE BEEN HONORING AS PART OF OUR CONFERENCE, HAVE THEIR LIVES

THREATENED.

IN JIM'S CASE, JIM WOUND UP HOMELESS.

>> Reporter: IN THE YEARS SINCE, JIM HOLZRICHTER HAS BEEN HONORED

FOR HIS EXAMPLE, STANDING UP FOR WHAT'S RIGHT, WHATEVER THE

COSTS.

TODAY HE WORKS AS A MENTOR TO OTHER WOULD-BE WHISTLEBLOWERS.

>> I'VE MENTORED SEVERAL DOZEN WHISTLEBLOWERS OVER THE YEARS.

AND IT'S MY PRIVILEGE TO BE ABLE TO DO THAT BECAUSE WHEN I WAS

GOING THROUGH THIS, THAT RESOURCE WASN'T THERE.

>> YOU STOOD UP FOR WHAT WAS TOTALLY RIGHT AND WHAT WAS

TOTALLY WRONG.

>> BECAUSE WITH AS LITTLE AS WE HAD, YOU STILL TAUGHT US

HOSPITALITY.

>> YEAH.

>> YOU STILL TAUGHT US CLASS-- >> YOU SAID "YOU DO NOT NEED A

LOT OF MONEY TO HAVE CLASS."

WE LEARNED THINGS THAT WE WOULD NOT HAVE LEARNED OTHERWISE.

>> THIS IS SO HUMBLING TO HEAR ALL OF YOU TALK THIS WAY.

AND, YOU KNOW, AND TO -- TO HEAR HOW YOU FEEL ABOUT ME AS YOUR

FATHER.

'CAUSE ONE OF MY GREATEST FEARS IS THAT YOU WOULD HAVE RESENTED

ME, YOU KNOW, FOR HAVING YOU TO GO THROUGH THIS.

IT'S-- IT'S-- [CLEARS THROAT]

IT'S REALLY PAINFUL TO KNOW THAT WHAT YOU HAD GONE THROUGH.

>> WE'RE STRONGER BECAUSE OF IT.

>> TOWARD THE END OF THE CASE, I WAS JUST PRAYING THAT IT WAS

OVER.

I DIDN'T CARE IF WE WON, WE LOST, IF THERE WASN'T A DIME.

I JUST WANTED IT TO BE OVER, AND THAT'S WHAT I WAS PRAYING AND IT

FINALLY WAS, SO I FEEL LIKE MY PRAYER WAS ANSWERED THERE.

>> TO ME, MY FAMILY ARE THE TRUE HEROES THE ONES WHO STUCK WITH

ME AND NEVER ABANDONED ME.

>> Reporter: BLOW THE WHISTLE, CHANGE THE WORLD.

Captioning sponsored by CBS Captioned by

Media Access Group at WGBH access.wgbh.org

Media Access Group at WGBH access.wgbh.org

>> FOR MORE INFORMATION GO TO cbs.com/whistleblower.

HERE IS WHAT'S COMING UP ON THE NEXT "WHISTLEBLOWER."