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European Whistleblower Howard Wilkinson - Lessons Learned From Danske Bank Money Laundering Case — Transcript

by National Whistleblower Center · 7,065 words · 1,066 segments · language en · Watch on YouTube

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0:00here we are welcome everybody to the
0:04session on the lessons from Dawn's Bank
0:08my name is Steve cone I am a lawyer who
0:13represents whistleblowers it's what I've
0:15done exclusively for the last 34 years
0:19since 1984 and an attorney for mr.
0:26Howard Wilkinson who's been identified
0:29as the donks bank whistleblower he was
0:34outed against his will by someone
0:39presumably with the donks bank either a
0:43current or former employee since they
0:46knew who he was
0:47so but for that disclosure which is
0:52violation of law I wouldn't be here and
0:56you wouldn't know who he was so we'll
0:59try to make the most of it by way of
1:06background I've represented many
1:10whistleblowers in the financial services
1:13and banking industry I've represented
1:15numerous whistleblowers in Europe I have
1:19clients in many countries here and we've
1:25been working very hard to demonstrate
1:28the extraterritorial application of the
1:32US laws one of my more famous clients
1:36was mr. Bradley Birkenfeld from the UBS
1:39Bank and he was able to obtain an award
1:43of a hundred and four million dollars
1:46for blowing the whistle I was a last
1:51minute addition to the conference mostly
1:54because Wilkinson just got outed so I
1:57don't have prepared information like
2:01some of the others I do have my business
2:02card here I brought I did bring some
2:05review copies of the handbook and I
2:08highly recommend and I'll get into this
2:10as I can but I recommend this book it
2:12has
2:13explains all the laws that would be
2:15applicable in Europe so let's just get
2:21started
2:22and just one last point I am NOT here in
2:26a representational capacity here in an
2:31educational capacity so the first is to
2:38understand
2:39Wilkinson donks Bank and the entire
2:42legal framework you have to just start
2:44with this quote from Senator Charles
2:46Grassley
2:47who's currently the chairman of the US
2:49Senate Judiciary Committee he had a lot
2:52of press over the Cavan no hearings but
2:54we know him mostly as a whistleblower
2:56advocate and he's been instrumental
2:58since 1985 in enacting many of the best
3:02US laws and this is just what he said
3:07more recently and it's it's very true
3:11going after waste fraud and abuse
3:14without whistleblowers is as useful as
3:16having as harvesting acres of corn with
3:19a pair of rusty old scissors I do want
3:24to say that although I don't have a
3:26document the PowerPoint I hope to have
3:31distributed if you don't get it you can
3:32ask me for it I have linked in here to
3:36the laws to the quotes to all the
3:38information so this PowerPoint actually
3:41becomes a roadmap to the legal
3:43protections available to financial
3:45whistleblowers or whistleblowers on
3:47money laundering worldwide the second
3:53quote this is from former Trump
3:56administration DOJ official he's now
3:59been nominated for the court but it's
4:01again it's a truism well understood in
4:04the United States not that well
4:07understood in Europe because those who
4:11commit fraud often hide I think he
4:15should not have used the word often
4:16fraud is always hidden
4:18no one publicizes their bribes or money
4:21laundering it's a hidden crime it is
4:24unlike murder worth
4:26theft if someone's shot you see the body
4:30but if someone commits a successful
4:33bribe you will never know the payment
4:36was made it's a hidden crime and our law
4:41enforcement agencies are very skilled
4:43with DNA and other you know ballistics
4:47in a murder or a robbery fingerprints
4:51but there how do they get to the hidden
4:54crimes and the hidden crimes the more
4:58hidden the better
5:00so as this former acting assistant
5:03attorney general says they hide their
5:07misconduct from the public and the
5:10whistleblowers are he uses the word
5:13often but I cut that out aren't
5:15essential to uncovering the truth and
5:17that is the predicate of all the new US
5:22whistleblower laws that everyone is like
5:24what's going on they're paying millions
5:26in rewards they're doing all types of
5:28crazy things in the United States it's
5:30all because someone figured it out that
5:36the only way to uncover frauds and I use
5:40that word broadly is by inducing and
5:44incentivizing whistleblowers to come
5:46forward if you do not have an active and
5:49successful whistleblower program the
5:51overwhelming majority of frauds and
5:55bribes and money laundering will remain
5:57hidden so let's just see a little bit in
6:03the donks bank case and we can almost
6:06presume that mr. Wilkinson has a very
6:09strict contractual obligation not to say
6:12a word to anyone about anything of
6:15course I can't confirm that because most
6:17non-disclosure agreements themselves are
6:20confidential so you can't tell anybody
6:22you've been gagged but assuming that's
6:25the case and I'm not confirming it here
6:29donks bank did confirm exactly what
6:34Grassley and the Trump administration
6:36official said
6:38it was a whistleblower who made the bank
6:43realized that the AML procedures
6:45manifestly insufficient inadequate in
6:48that all three lines of defense had
6:53failed well you know I wasn't there but
6:59I would be in shock
7:01if all three lines of defense had failed
7:04I just think people were afraid to speak
7:07up and I know that from my experience
7:12the overwhelming majority of employees
7:14will never ever ever ever blow the
7:17whistle period anyone who thinks that
7:21virtue has hit Wall Street and that
7:23banks have somehow seen the light well
7:27you can pick up my card something let
7:31her know so the bank confirmed and this
7:39is very standard procedure there's
7:41nothing here that I haven't seen
7:43literally hundreds and hundreds of times
7:45it's just this is what happens the bank
7:50conceded in its report this is a report
7:53written by their outside counsel that
7:56there was a law in his first disclosure
7:58they just put that in context it wasn't
8:01his job this was happening outside of
8:04his direct lines of authority he wasn't
8:07in compliance he wasn't part of those
8:10three lines that all should have been
8:12doing their jobs
8:14he was just started he just did someone
8:16a favor well in his first disclosure a
8:21customer filed false accounts bingo the
8:26bank knowingly continued to deal with
8:29the company after they knew the company
8:30had committed a crime bingo in the bank
8:34continued dealing with the company even
8:36after it had committed another crime
8:39well we caught it out through the
8:41newspapers we know the situation of
8:43donks was fairly serious
8:49The Whistleblower reported to management
8:51that one of the suspicious accounts
8:53apparently included the Putin family
8:55well if you're getting two hundred and
8:57thirty billion dollars out of Russia I
8:59assume you're gonna get some of that
9:00money and apparently included the FSB
9:05the Russian Federal Security Service
9:08well why not just so you know it's not
9:13confirmed although it's in the bank
9:15report major deficiencies and
9:21deficiencies in control and governance
9:23made it possible for the donks Bank
9:27branch in Estonia for criminal
9:29activities we are not talking about the
9:38Mafia here we are not talking about some
9:42shyster hustling up small change on the
9:45street corner we are talking about a
9:47major financial institution for which
9:53many people are invested that is
9:56mandatory series of controls but we also
10:07see something else which is typical in
10:10pretty much every whistleblower case
10:12because you wouldn't have a
10:13whistleblower if the institution was
10:16doing its job this is typical the
10:23allegations brought forward by the
10:24whistleblower were not properly
10:26investigated this is all from the bank's
10:28own report by the way bottom line no
10:34reporting to authorities and that is the
10:42rub because in my studies and dealing
10:46with whistleblowers for years it's one
10:49thing to make an internal report but
10:53it's a very different thing to go to the
10:55authorities
10:56the statistics show although the vast
10:59majority will not raise a stink inside
11:02and those who raise a stink the moment
11:05they get any pushback will shut up
11:07they're just going to do their job they
11:09don't want the trouble and that very
11:11small group that pushes it internally
11:15even in that group the overwhelming
11:19majority will never take the leap and go
11:20to the police or the regulator's and
11:23that is the fundamental problem because
11:27guess what unless people make these
11:34reports crime is profitable how does an
11:43honest financial institution compete
11:46with the dishonest one that can have
11:48better annual returns that can pay
11:51bribes and get good leases that can pay
11:54bribes and get a business advantage how
11:56does an honest company compete the
12:00entire premise of all of the US
12:03whistleblower laws for which you will
12:06hear about and are in my handbook our
12:08premise that unless you have strong
12:12oversight and unless you incentivize the
12:15detectors the whistleblowers the
12:17absolute essential source of information
12:20the market itself will be corrupted bad
12:26behavior will be reinforced and honest
12:29people driven out yet with an effective
12:32oversight program and whistleblower
12:34program you can have the opposite Europe
12:36is asleep I am angry at what I see in
12:42Europe I am NOT I am upset that I have
12:45so many European clients and I am upset
12:48that the responses we get from the
12:51parliaments and the regulators have no
12:54sensitivity to whistleblowers and I will
12:59concede maybe I shouldn't but I have
13:01never recommended a client go to a
13:04European law enforcement agency simple
13:07as that you go to the US and I'll
13:09explain how you can do it the US may
13:12bring the information back to the
13:13continent
13:14that's the situation well the
13:22whistleblower spoke to a lawyer not me
13:25but when this was all happening while
13:27they worked there
13:28the lawyer advised him to resign because
13:31the ethical problems which he did there
13:33were no employment issues and eventually
13:36his name against his will was leaked to
13:38the press and violation of law for which
13:40he has no recourse the following quote
13:48is from a major study from the
13:54University of Chicago Booth School of
13:56Business this wasn't done by some
14:00whistleblower advocacy group this was
14:02economists their conclusion was very
14:06favorable to incentivizing
14:09whistleblowers through rewards but this
14:11is what they said honest behavior is not
14:14rewarded given the costs of
14:17whistleblowing the surprising part is
14:20not that most employees do not talk it
14:24is that some talk at all
14:28how true then to the rescue to the
14:35rescue President Abraham Lincoln in 1863
14:39at the height of the u.s. Civil War when
14:44he realized that there was corruption
14:47within the Union bureaucracy in
14:51contracting decided to incentivize
14:56whistleblowers and he enacted a qui tam
15:00law known as the False Claims Act still
15:02our number-one law and he said and this
15:06is what's incredible about these laws
15:07and they're so misunderstood this is a
15:10people empowerment law he said to the
15:15people and specifically going to
15:18employees but to the people and he said
15:20if you have information come forward you
15:24will get a reward if it's proven true
15:27and the key is the concept known as qui
15:31tam which is in the name of the king but
15:36in the United States they used it but
15:39it's in the name of the people it's we
15:41the people and it gave the whistleblower
15:44the power of the United States
15:48government they could stand in the shoes
15:52of the government itself and file a
15:55lawsuit when the government was
15:57corrupted and wasn't willing to do it
15:59itself
16:00this is a fundamental citizen
16:03empowerment law this is not some strange
16:06thing yet there's not a country in
16:08Europe right now that's even willing to
16:10consider this provision I'm gonna skip
16:14over some of the details let me just say
16:16it's a great law and I'll come back to
16:19it law was modernised in 1986 and it
16:26allows the whistleblower to stand in the
16:28shoes and obtain a reward of 15 to 30
16:32percent of the money collected in the
16:34fraud the government can pursue the case
16:37and the whistleblower still gets the
16:39reward but after 30 years of monitoring
16:44this law was modernized in 86 so we've
16:48had time to watch it this is not idle
16:52speculation all of the attacks on these
16:55reward laws in Europe are all
16:56speculation this is based on concrete
16:59empirical evidence so let's see what
17:03they say
17:04so this is the former assistant attorney
17:06general who had responsibility over
17:08these civil fraud cases this False
17:11Claims Act ERISA below or a law this is
17:13key is the most powerful tool the
17:18American people have to protect the
17:20government from fraud the key phrase
17:22here is most powerful most after 30
17:31years of reviewing these concept it was
17:35realized that by incentivizing the
17:37insider those who actually know where
17:40the
17:41fraud's are you converted a theory an
17:44idea something that Abe Lincoln himself
17:47envisioned it was a visionary law and as
17:52implemented it becomes the most
17:53effective tool and as I like to say the
17:57debate over whistleblowing is over it is
18:01over it doesn't matter if you love them
18:05hate them their good or bad it works and
18:09it is the only thing that I have seen
18:11and I've been doing this for 34 years
18:13that works really well so let's go see
18:19how we how do they know this why would
18:22this guy say Oh such a good law because
18:25he has to 2017 the False Claims Act
18:32monetizes the effectiveness of
18:34whistleblowing if the United States
18:36brings a case on its own without a
18:38whistleblower
18:39it goes into a category they figure it
18:41all out if a whistleblower comes in it
18:44goes into another category why they have
18:46to pay an award so every single fraud
18:49case they have to evaluate whether it
18:51came in from a whistleblower so they
18:53know to the penny how much money the
18:57whistleblowers are bringing in and how
18:59much money all the government people the
19:01inspectors the contract people how much
19:03they're bringing in and in 2017 it was
19:0792% coming from whistleblowers so when
19:12they said most effective they're not
19:15blowing it but there's another
19:17interesting statistic as I like that
19:20little blue line it shows the amount of
19:24fraud recoveries from the day they
19:26modernize the law in 86 till today and
19:28what you see is an upward tilt it gets
19:32better and better more people know about
19:36it and this doesn't catch the deterrent
19:40effect of the law so what we know is
19:42from 87 when the first cases started
19:45coming in till today whistleblowers were
19:4872% this is one when you when you get a
19:52copy of my thing you can read it a
19:54little better
19:55is a print out of the US Department of
19:57Justice analyzing every single year
19:59since 87 of the False Claims Act every
20:01penny collected so the pennies that I
20:04like are the two circled so the
20:08whistleblowers brought in 40 billion in
20:10sanctions and here's what people don't
20:13really know look at the second circle
20:16the United States government has paid
20:19whistleblowers under this law alone
20:21six point five billion dollars six point
20:29five billion I will tell you right now
20:31if you take every other whistleblower
20:34law in the world in the world throughout
20:37all of history and add them up you'll
20:40probably get to 25 30 40 million under
20:43this law alone this does not include
20:46employment cases does not include
20:48attorneys fees does not include
20:49retaliation rewards it's fundamental
20:53groundbreaking given time I have a lot
20:59of other good quotes we'll just skip
21:01them because we're gonna get to the good
21:03part now the international application
21:06of the u.s. whistleblower reward laws so
21:11because the False Claims Act was so
21:13effective other laws were passed modeled
21:17on it
21:17covering tax securities commodities
21:25Foreign Corrupt Practices Act and in a
21:29nineteen in a 2008 amendment unanimously
21:34passed just this year under President
21:37Trump in a Republican Congress
21:38unanimously passed expanding the IRS law
21:41to cover money laundering to cover every
21:47form filed with the IRS even if it has
21:50nothing to do with tax including F bar
21:54FATCA
21:55and covering every case that the IRS has
22:01jurisdiction to investigate why was it
22:06expanded B
22:08horse whistle blowing works because we
22:11can go to the Congress with documented
22:14evidence that this is how you do it and
22:18it's nice that it's transnational this
22:22is just some of the international
22:24companies or big banks that have paid
22:25sanctions under the False Claims Act
22:27which primarily deals with government
22:29contracting but don't think it doesn't
22:32have transnational application so you
22:35can see royal dutch/shell a hundred and
22:37ten million you can see Deutsche Bank
22:41two hundred and two million among others
22:43you can see then Bank of America it can
22:46get to the banks a billion we did some
22:48great mortgage cases on this but let's
22:52go to the heart of what we're talking
22:54about here money laundering tax and cash
23:01the IRS is serious efforts on offshore
23:04tax evasion were brought to our
23:06attention by whistleblowers well another
23:08understatement the United States had no
23:11effective program to police offshore
23:13banking until they enacted that law in
23:162006 for IRS Bradley Birkenfeld walked
23:20in in 2007 and history was made he got
23:24the largest whistleblower award in
23:26history but it triggered other
23:29whistleblowers many of whom I've had the
23:31honor of representing from numerous
23:33Swiss banks and Swiss financial
23:35institutions ending in over 16 billion
23:39collected in penalties ending in my
23:43estimation although no one has done this
23:45I would estimated at about five hundred
23:47billion half a trillion dollars at least
23:50in capital coming back into the declared
23:52economy 50,000 Americans voluntarily
23:57admitting they engaged in tax evasion
24:06so we can the PowerPoint has a lot more
24:10information so I hope you get it then
24:15you hit the Foreign Corrupt Practices
24:16Act many of you may know what this law
24:19covers it has broad transnational
24:21application so I'll just summarize it
24:25from the whistleblower perspective any
24:28foreign national can file in the United
24:35States anonymously a claim on bribery
24:45that claim can be predicated on a bribe
24:48paid outside of the United States by a
24:52non the bribe paid by a non-us person
24:55paid to a government official non-us and
25:00that whistleblower can have full
25:03confidentiality full an amenity and
25:06fully entitled to the reward as these
25:10all of these laws are transnational in
25:12impact between 2011 and fiscal year 17
25:20last numbers we have 2,600
25:23whistleblowers from 113 countries have
25:26filed these claims let no one tell you
25:30that these reward laws are somehow
25:32unique to America there is a thirst for
25:36honesty just like Howard Wilkinson he
25:39wanted to see things done right and
25:41there's a lot of people who want to see
25:43things done right they just don't have a
25:45way to do it this door opened there's
25:49been very little publicity of the
25:51whistleblower program by the way most of
25:52my lectures most people don't even know
25:54I don't know how these 2,600 people
25:56learned of it from 113 different
25:58countries and that's it as of 2017 all
26:03the countries in red that's where
26:05whistleblowers have come in I would say
26:06almost overwhelmingly anonymously this
26:10is an example of the broad extra toriel
26:13jurisdiction that can be reached
26:18so let's just find the quote don't
26:24believe me you can believe this guy
26:27Kevin O'Neill Deputy Secretary of the
26:32SEC you filed with the SEC but you
26:34collect for DOJ as he see the works
26:37here's his quote now this quote is
26:40applicable to the IRS to the DOJ to the
26:44SEC all of our laws are extraterritorial
26:47in nature it makes no difference whether
26:50the claimant was a foreign national the
26:54claimant resides overseas the
26:57information was submitted from overseas
26:59or the misconduct comprising US
27:02securities laws and occurred entirely
27:05overseas they've paid well over 30
27:09million dollars under this to foreign
27:11nationals already making it the most
27:14successful whistleblower law outside of
27:17the United States just for 30 million
27:22now the Securities and Exchange
27:24Commission also has a whistleblower law
27:28for all securities violations and I like
27:32just to emphasize things and it's not
27:35that the money is everything but it's
27:37real its objective the reason the money
27:42is objective because believe it or not
27:44the United States won't just be handing
27:46out checks to people you have to work
27:48for it and prove it your information has
27:51to be of high quality leading to a
27:53successful investigation it's not a
27:55giveaway program at all it's stuff
27:58should hire a good lawyer to get it but
28:01this is just shows you some of the the
28:03top ten awards the SEC has paid since
28:05this law was implemented and you'll
28:07notice some of the biggest were all paid
28:10in 2018 under the current administration
28:12in other words these systems are in
28:14operational and they have strong
28:16bipartisan support
28:22I just want to go to the Commodities
28:26Futures Trading Commission only because
28:28a lot of people don't understand it it's
28:30a relatively new law and they've now
28:33awarded the first foreign national under
28:37that law in 2018 and the Commission
28:42publishes sanctions for which there's
28:45whistleblower eligibility the granting
28:49of these awards for the most part is
28:51completely confidential nobody knows who
28:54the whistleblower was or what company
28:56they blew the whistle on it's all secret
28:58to keep confidentiality but they do
29:01publish the cases for which
29:02whistleblowers are eligible and these
29:05are some of the cases the Commodity
29:07Futures Trading Commission published to
29:10let whistleblowers come in and you'll
29:12see they have jurisdiction over things
29:15like foreign exchange and others coming
29:22back to the booth School of Business
29:24University Chicago as I like to say it
29:27not the most whistleblower friendly
29:30institution in the world but they
29:32studied it they were they did they were
29:34really smart they studied for a specific
29:37period of time every single major fraud
29:42case with the point of view was how was
29:47it reported who are the detectors were
29:50they the journalists where the internal
29:51compliance who did it and in that study
29:56which was comprehensive their conclusion
29:59was quite simple a strong monetary
30:04incentive to blow the whistle does
30:06motivate people with information to come
30:09forward is that really hard monetary
30:13this is the then it gets to the next
30:15point monetary incentive seemed to work
30:17well without the negative side-effects
30:22often attributed to them all this
30:25nonsense I hear in Europe about why
30:28these are all bad ideas it's all
30:30speculation it's all nonsense and it's
30:32all been disproven they work well and
30:35they don't have these negative
30:36side effects and then their final
30:39conclusion which is what was set up in
30:41the front employees clearly have the
30:45best information to come back to that in
30:51a second but I love this we'll just the
30:54final quote is from chuck grassley
30:57chairman of the Senate Judiciary
30:58Committee and he's essentially an expert
31:01because he has monitored these laws from
31:031985 he's on top of them he knows them
31:06intimately empowering these
31:09whistleblowers to prosecute fraud proves
31:11to be smarter faster and more effective
31:15than just relying on the government no
31:18offense to the government they do a good
31:19job often I just want to come to one
31:24other point which is these
31:26non-disclosure agreements that are
31:28rampant in Europe that absolutely
31:32prevent information from going to
31:35Parliament's from going to regulators
31:37that employees often have to sign
31:40I will presume that all the employees at
31:43donks bank have had to sign something
31:45like this which means how will anyone
31:47ever learn the truth if all the
31:49witnesses are a gagged in the United
31:53States they're all outlawed you could
31:57never get away with this
32:01and I'll just going to point to three
32:04provisions of law that are applicable
32:07dodd-frank Act Foreign Corrupt Practices
32:10so that's commodities securities FCPA
32:13not only our NDA's that prevent
32:17employees from going to any governmental
32:20entity to blow the whistle about
32:22possible crimes or to go to congress not
32:24only are they prohibited they are
32:27considered a securities violation on par
32:31with insider trading the SEC has
32:37actually sanctioned corporations for
32:41securities violations just for having an
32:45NDA that restricts the flow of
32:47information
32:49my favorite excuse me well-hit defend
32:52trade secrets act as I like to say you
32:55abuse it you lose it so company say oh
32:58you can do whatever you want but you
33:00can't release a trade secret and then
33:02they broadly define trade secrets well
33:05thank God
33:07Congress again unanimously with broad
33:10bipartisan support amended the trade
33:13secrets law to say whistleblowers can
33:16bring any information deemed a trade
33:18secret to every Police Department in the
33:21country and they can use it in their
33:24retaliation cases so when the companies
33:27try to use trade secrets to hide their
33:29crimes Congress responded appropriately
33:33finally obstruction of justice which is
33:36what it all is 2002 sarbanes-oxley Act
33:41they looked at an obstruction of justice
33:45to go beyond just beating up a witness
33:48or blowing up their house or giving them
33:51poison on the streets of London and they
33:55said that if you interfere with the
34:00livelihood of any person , including
34:05their employment but its livelihood
34:08because they gave truthful information
34:11so you can't be a fraud about a possible
34:16crime didn't have to prove it to law
34:19enforcement if you do that it is a
34:23felony ten years in prison
34:29they criminalized retaliation that does
34:34not exist in Europe believe me I know
34:36that through the donks bank case we ask
34:40permission from Dongs bank which is
34:46insane okay
34:48that's my prepared remarks I just want
34:50to give a little boost I did bring some
34:54for review copies but the whistleblowers
34:57handbook it's all in here
34:58the rules that cover transnational I
35:01highly recommend it
35:02I would have brought more but they were
35:04just too heavy so I apologize for that I
35:06would like to have given one to
35:08everybody so thank you very much I'm
35:10open for questions
35:14[Applause]
35:20yes sure so it's a great question
36:15because it leads to another it's one of
36:16the rules in the handbook I have a rule
36:19that's called follow the money and
36:21essentially what it says and it's my
36:25belief that most people aren't born evil
36:27but greed does seep in and behind most
36:30whistleblower cases you can usually find
36:32some form of profit mechanism and so
36:35many of these new whistleblower laws
36:37target that they target the financial
36:40side of the misconduct so under our
36:42False Claims Act the single largest
36:45amount of recoveries come from our what
36:48are is our National Health Service which
36:50is the Medicare and Medicaid programs
36:52and it covers everything from lying
36:56about medication to abuse in nursing
36:58homes to giving people bad you know
37:03operations when they don't need it and a
37:05variety of other crimes and misdemeanors
37:08so the lawyers very successfully because
37:12there was government money involved
37:14adapted it
37:16also state that the United Kingdom's
37:19Bank of England Prudential regulatory
37:21authority issued a report on
37:22whistleblower rewards it was requested
37:25by Parliament we wrote a rebuttal it's
37:29easy to get I'd provided the report was
37:31full of missed statements I could say
37:35outright lies it was shockingly
37:38deceptive and from that point on we
37:42really I just pretty much have nothing
37:43to do with any law enforcement agency in
37:46the UK no offense to the good people who
37:49are probably doing a great job the u.s.
37:51laws are supersonic they give my people
37:54an amenity confidentiality so if nothing
37:58turns up the best protection against
38:00retaliation is that no one knows who you
38:02are they reward you not because you
38:06suffered not because you were fired and
38:09driven into unemployment for years or
38:11forced to live in a car which I've seen
38:13many times they compensate you based on
38:17the value of your information and
38:19nothing could be better than that so
38:22these are supersonic laws that I urge
38:25all of my European clients to utilize so
38:30I hope that answered the question
38:31sir I think you had your hand up yeah
38:37thank you very much you and Grant
38:41Institute for statecraft I've seen when
38:45I was working in the UK Customs Service
38:48the need for greatly beefed up internal
38:54protection for the reporting of
38:56wrongdoing even if it doesn't come under
38:58whistleblowing because it's not going
39:00outside one person who would be able to
39:05confirm that when he retires is the
39:09present head of our security service mr.
39:12Andrew Parker because he was one of the
39:15men who was brought in from the security
39:19service to sort the shenanigans out and
39:23one of the key successes in sort
39:27it out was he made it clear to staff
39:31that he was going to do that and the old
39:34ways were no longer going to be
39:37tolerated my question around danske is
39:41are you I know it's early days yet are
39:45you able to say something about how you
39:49perceive the current responses were
39:53getting to this in the European media to
39:58the reported criminal investigations and
40:02particularly the announcement that
40:04danske will make large sums available to
40:09fund investigator your rien regulatory
40:13procedures the thing that would really
40:16worry me at the moment and is something
40:20you you mentioned right at the start in
40:22Howard Wilkinsons initial report that
40:26this isn't this isn't Mexican drugs
40:31gangs
40:32this is the Russian deep state and that
40:37needs a rather different response which
40:39is not entirely one for law enforcement
40:42alone
40:44thank you sure I as I said that we
40:47didn't intend or want mr. Wilkinson's
40:50name to come out unfortunately he'd gone
40:53internally and many people do Bank knew
40:56he was who he was
40:58it's just hard to say the case is
41:01flowing we'll see where it goes I have
41:05essentially I view these cases on two
41:08levels one representation of a client to
41:13use the laws that are available to his
41:15best interest to we are very concerned
41:19about systemic reforms and and strongly
41:21believe in using our experiences and
41:25expertise to try to get structures in
41:28place to fix the problem so that's that
41:34and I appreciate your comments yeah
41:41there's my card well actually I'd
41:45represent myself cuz myself David and I
41:47represent whistleblowers I'm a former
41:48AUSA so I used to prosecute them with
41:50DOJ one of the things great presentation
41:53by the way thank one of the things that
41:54I think you should share with our
41:56European friends is that as you know
41:58there's usually a parallel track or
42:00potentially a parallel track that the
42:02civil whistleblower there's also another
42:04federal prosecutor there's another AUSA
42:07there's somebody from the FBI that could
42:09arguably put the handcuffs on somebody
42:11which i think is a beautiful thing thank
42:12you this is a very good point so as our
42:17laws have developed as I say they've
42:19become supersonic so let me just
42:22describe the Foreign Corrupt Practices
42:24and also the tax law now with the
42:27amendment because it combines rewards
42:29for civil and criminal but the way the
42:33dodd-frank works which is securities
42:35commodities and foreign corruption if
42:39the SEC or Commodity Futures Trading
42:42Commission sanctions a company or any
42:47one part of the broader conspiracy
42:49that's part of the relay the the the
42:51core element 1 million dollars or more
42:56collectively so if 10 people each have
42:59to pay a hundred thousand it triggers a
43:02related action provision if you filed
43:07your claim right you can then obtain a
43:10reward for every single civil and
43:14criminal case related to that case in
43:20other words it's supersonic it's the the
43:25the Congress when they were crafting
43:27these as it moved forward was trying to
43:28fill loopholes make them better so
43:32you're a hundred percent correct the
43:33criminal cases often drive the civil
43:36cases the FBI and the DOJ often do the
43:39lion's share the work and do a fantastic
43:42job but as the laws have developed now
43:45the whistleblowers can share in that
43:50the PRA report the that was full of
43:55flaws and and falsehoods I think you
43:57said can can you be a bit more specific
43:59about what you specifically sure so yeah
44:05generalize if you could about someone
44:13told me a British word I should use for
44:14it I have some u.s. words that aren't
44:17very kind so the first thing they do
44:19they come right out and say we met with
44:21the US regulators and all of them said
44:23that where the laws don't work well I've
44:26met with the people who implement those
44:28laws I work with them all the time they
44:30love them I can on these quotes I could
44:32literally gone for ten hours on
44:36documentation and quotes who did they
44:38talk to what this is not true and then I
44:41read their footnotes oh we spoke to the
44:44United Nations oh well they don't give
44:47out rewards oh you've travelled all the
44:49way to New York to meet with the UN and
44:52then they said oh we went to the SEC
44:54which I found not believable because I
44:57know what the SEC was saying and doing
44:58they loved it and two years later an
45:01article appears in the paper from the
45:03former director of that office he says
45:06in the newspaper oh I told him it was
45:08great and I invited them to stay and
45:11watch how we work it's such a great
45:14program and they got up and left that's
45:19just the beginning of it and the whole
45:21thing was like it just wasn't truthful
45:23so we did write a rebuttal we sent it to
45:26the Bank of England and the Prudential
45:28Regulatory Authority they said they're
45:30going to respond two weeks later they
45:32write some letter that said absolutely
45:34nothing like we wrote a report and we
45:37read yours so they didn't run thing in
45:39our report but he showed a systemic
45:43hostility which we see all the time
45:46unfortunately so the United States has
45:48some great laws there's still a lot of
45:50hostility hostility to whistleblowing is
45:52is embedded culturally in many
45:55institutions government and
45:56non-government and unfortunately it's
45:59embedded in that regulatory agency
46:03Thanks it's Caroline venom from the
46:05Financial Times
46:06I'm Bradley Birkenfeld spent time in
46:09prison even though he got a reward so
46:11the process isn't entirely without risk
46:14so could you perhaps speak to how you
46:15advise your clients whether it's worth
46:18taking that risk and going forward
46:20sure oh and I had the honor really said
46:23representing mr. Birkenfeld so I know
46:24what happened in the case
46:26so mr. Birkenfeld was a pioneer he was
46:30one of the first to walk to file an IRS
46:33case but he made a fundamental error and
46:37I say that's why you need to follow the
46:40law follow the procedures do it right he
46:43walks into the prosecutor's office not
46:46the whistleblower office he walked into
46:48a prosecutor's office what do they do
46:50all day they prosecute tax frauds
46:51without any immunity he sits there and
46:54admits to tax Ford he was a banker in
46:56Switzerland well I'm a banker in
46:59Switzerland I have all these clients and
47:00I travel to the United States and isn't
47:02this terrible
47:03and I'm sure the prosecutor was saying
47:05oh yeah it's terrible I own you
47:08you just admitted to everything so
47:12totally crazy so then things went
47:15downhill from there and he got charged
47:17and convicted but here's the trick the
47:22US whistleblower laws 100% protect
47:29participants if you are the the planner
47:34and initiator you're out you're the
47:38bigwig I've never had a planner an
47:39initiator come to me but all of these
47:42frauds have participants whether there's
47:44a guy that drops off the bribe a banker
47:47with illegal accounts donks bank had
47:49hundreds probably of participants all
47:52working on their laundering scheme and
47:56what we understand in our law is that
47:58the participant is the key the
48:02participant will have the best
48:04information in 1863 when the original
48:09law was debated in Congress by the
48:11Radical Republicans fighting to save the
48:14United States democracy and
48:16slavery the senator from Massachusetts
48:18stood up and said we're gonna do this
48:21law because it takes a thief to catch a
48:25thief we need to get people from inside
48:29the conspiracies to come forward so as I
48:34understand in the 30-year history in the
48:36thousands of cases there has never been
48:38a prosecution of one of these
48:40whistleblowers but for Birkenfeld he's
48:43the only one ever who was convicted of a
48:46crime and got an award it just doesn't
48:48happen if you use the laws correctly
48:51they'll of you to prosecute you're their
48:54best witness that case went awry
48:57unfortunately it just it was new it
49:02won't happen again I I don't think
49:04they'll okay so I probably answered that
49:07question yeah can I just ask a question
49:10about something that I feel strongly
49:13about and which is a common thread
49:15throughout conferences like this namely
49:17the role of the watchdogs the auditing
49:19firms just out of interest now I just
49:21googled who were the accountants for the
49:23Danske Bank and I'm reading here from
49:27the Irish Times between 2010 and 2014
49:30it's switched between Grant Thornton PwC
49:33KPMG Deloitte an ey what have you found
49:40with God to any whistleblowers coming
49:43from auditing firms and what do you see
49:47happening with God - the attitudes of
49:50the auditing firms not just in Europe
49:53but could we just widen the scope and
49:55see do you have any experience for
49:57instance from Asia yeah okay great
49:59question so first some of my best
50:01clients have been in compliance they
50:04know where the skeletons are and they're
50:06fully protected so the False Claims Act
50:09and the IRS law you can be an auditor
50:11you can be a compliance official you can
50:15come in now if you have certain
50:18confidential information that's actually
50:20protected under law the government will
50:23put up what's known as a taint team and
50:26screen information that might be
50:28attorney-client
50:29list recovered under some other
50:30privilege but mark my word the vast
50:33majority of information will come in and
50:35there is a crime fraud exception even to
50:37some of these stricter privileges so if
50:43you are in an auditing or even in an
50:45attorney capacity you can still blow the
50:47whistle you just have to go a separate
50:50route which is making sure the lawyers
50:52you work within as you do it identify
50:55information that might be privileged
50:56under any law and then make sure it goes
50:59to a tank team but let me tell you about
51:01auditing and it's in the handbook I have
51:06these numbers I have a couple charts and
51:10I can't find one of them which I know I
51:14have somewhere but in a comprehensive
51:20survey of auditors by the national
51:24association that represents auditors
51:26whatever their name is you may know it
51:31they found that 55% of chief auditing
51:35executives were directed to omit
51:38important findings from their reports
51:4155% this was a survey of 14,000 auditors
51:45from 166 countries it's on page 227 of
51:50the handbook 49 percent were directed
51:53not to perform audit work in high risk
51:55areas and who is making these directions
52:00the mob the crook on the corner chief
52:05executive officer 38 percent of the time
52:09operations management 25 percent chief
52:12financial officer 25 percent these were
52:16directions from the top in the majority
52:19of audits when we fought the dodd-frank
52:23fight over that law Wall Street came in
52:28and they said you must exclude from
52:31these whistleblower reward provisions
52:33auditors and compliance and the audit
52:37committees because they're paid they're
52:39our army to find the misconduct
52:42and it was a good argument it almost won
52:45it sounded good until I dragged up a
52:49chief compliance officer from a large
52:51multinational corporation to meet with
52:53every commissioner to say what was
52:55really going on and we showed him the
52:58cases how compliance officers are being
53:00retaliated against
53:01so compliance officers our particular
53:04special rules for them therein as they
53:07should be they're often in the front
53:09line of retaliation trying to bring
53:27people from England and the EU to the
53:31United States so I think that's pretty
53:34telling that I think people Europeans
53:37and your figures bear that out want to
53:39be to be using US programs but my
53:42comment was that I don't want everyone
53:44to be completely disheartened with what
53:47is going on in the United Kingdom
53:48because I think a lot of people may not
53:50be aware that there is now what was
53:53convened in this summer an all-party
53:55parliamentary group on was alone they
53:58just started to take testimony last week
54:01it is a bipartisan group and the purpose
54:05of it is to look at the Public Interest
54:08Disclosure Act which is the protection
54:11law here which is 20 years old and there
54:14seems to be a consensus is not no longer
54:16fit for purpose and that they're
54:18considering things again so I'm hoping I
54:22recommend people to go on the AP PG
54:25website and participate and fill out the
54:28survey but I'm hopeful that we may be
54:32able to get change and I want to say I'm
54:35actually meeting with Member of
54:36Parliament tomorrow and we are urging
54:39the UK to fix their laws on and I hope
54:43that people review our critique of the
54:46Bank of England report because there was
54:48some support on Parliament to really
54:50modernize these laws don't wait 230
54:52years
54:52none of the laws I used when I started
54:55practicing law and
54:56today for do I use today they were fixed
54:59slowly over time took 30 years don't
55:04wait 30 years study what we have done
55:07and model it the UK is an advanced
55:10democracy it can do it tomorrow there's
55:14a lot of misconception so and you know
55:17anything and we can chat after we are as
55:20I say we're very involved in public
55:21policy and would love to see UK get it
55:24right
55:25I think there's time now for one more
55:28question then I'm available after if
55:30people want to come up in chat so can we
55:32have the last question of the day right
55:35I think this is my time right one hour
55:37we're done correct okay
55:41so is there one last question going
55:45going thank you all very very much thank
55:49you

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