For the first time in its five-year history, the Merit Systems Protection Board has ordered an agency to punish a manager because he took action against an employe who had reported alleged waste, fraud or abuse.

The three-member board ordered the Veterans Administration to demote Jerome Hoban, a police chief at the VA medical center in Palo Alto, Calif., by four grades and to remove him as a superviser. It said Hoban had harassed and demoted Vernon Mize, a police supervisor, after he had complained to the VA inspector general and Rep. Frank McCloskey (D-Ind.) about alleged mismanagement at the VA hospital.

The complaint was filed by the board's special counsel, K. William O'Connor, whose office was created in 1979, in part to protect whistle blowers from reprisals. O'Connor yesterday described the board's action as a "benchmark."

"It provides a meaningful sanction which should be a lesson to those who would consider taking reprisal against whistle blowers," said O'Connor, who in the past has complained that his office lacks the power to protect whistle blowers.

Since 1979, according to Alma Hepner, a spokesman for O'Connor, the special counsel has filed nine complaints against 13 persons for allegedly taking action against whistle blowers. The four cases filed by O'Connor's predecessors were rejected by the MSPB. O'Connor has filed five cases; one case was settled before a board hearing and three are pending.

One of those is an expensive and controversial case involving the director of the Defense Contract Audit Agency and three of his top subordinates. They have been accused of punishing an auditor because he complained about a defense contractor who allegedly had billed the government for such expenses as dinners and entertainment for top Pentagon officials. An administrative law judge for the board ruled in favor of the agency officials this summer, but O'Connor has appealed the case to the full board.