Over the years, the National Whistleblower Center has had the pleasure to work with some incredible whistleblowers, from courageous Swiss bankers who exposed massive tax evasion at Swiss banks, to scientists exposing forensic fraud at the FBI, to an Enron Vice President who helped expose corporate misconduct.
Below are the stories of a few of the whistleblowers whose disclosures have had an impact across their entire industry. These brave people prove that whistleblowers truly can change the world.
Bradley “Brad” Birkenfeld was the first international banker to blow the whistle on secret Swiss bank accounts and had an industry changing impact. His disclosures resulted in unprecedented recoveries for U.S. taxpayers, with over $780 million dollars in civil fines and penalties paid by UBS and over $5 billion dollars in collections from U.S. taxpayers who had illegally held “undeclared” offshore accounts in Switzerland and other countries.
As a result of his whistleblowing, these secret accounts are no longer available for corrupt US taxpayers to hide their earnings, and the Swiss government was ultimately forced to change its treaty with the United States in order to turn over the names of nearly five thousand Americans who held illegal offshore accounts.
He received a reward of $104 million under the IRS Whistleblower Program for his invaluable assistance with the case, the largest whistleblower reward ever given. His reward has helped to drive massive growth in prosecutions of securities, commodities and tax fraud by demonstrating to both whistleblowers and prosecutors the critical role of this economic incentive to motivate high-level executives to take the substantial risk of exposing crime.
Howard Wilkinson is a former employee of Danske Bank who confidentially raised concerns over a $234 billion dollar illegal money laundering scheme in 2013. Many believe it may be the largest money laundering scheme in history, with billions of dollars reportedly flowing from Russia and other former Soviet states, through Estonia and to major banks such as Deutsche Bank, Bank of America, and JP Morgan.
In September of 2018, news reports on the scandal revealed the existence of a whistleblower but not the identity. Mr. Wilkinson had wished to remain anonymous, but his name was leaked to an Estonia newspaper, and he has since testified before the Danish Parliament and European Parliament about the scandal.
Since the fraud came to light, numerous European law enforcement agencies along withthe Securities and Exchange Commission, the Internal Revenue Service, and Department of Justice have all begun investigating the scandal.
In 2018, the CEO Thomas Borgen resigned, and in May 2019 he was charged with neglecting his responsibilities by Danish authorities. Danish prosecutors also charged the bank’s former finance director, Henrik Ramlau-Hansen, with failing to prevent the money laundering.
The Danish Parliament also tightened its money laundering laws, making penalties for money laundering eight times larger. Bloomberg reported in September 2018 that Danske Bank is facing a fine as large as $630 million in Denmark – the largest in Danish history. That does not include expected fines imposed by the U.S. and other European countries. In response, shares for Danske Bank fell by half in 2018.
Sherron Watkins is the former Enron Vice President who wrote a now infamous memo in the summer of 2001 to then-CEO Kenneth Lay warning him about improper accounting methods.
At the time, Enron was one of the largest corporations in the U.S. and a giant in the energy-trading and utilities field. Fortune had named it “America’s Most Innovative Company” for six consecutive years. However, Watkins’ memo revealed that the company’s finances were sustained by systemic accounting fraud and corruption.
Enron was forced to declare bankruptcy in late 2001, and she was called to testify before both the U.S. House of Representatives and Senate about the accounting irregularities that she had found in the financial statements.
As news broke publicly about the memo in early 2002, it came to light that that the company had sought legal advice about firing her almost immediately after her initial meeting with Lay.
She maintains that she is the “only whistleblower in any kind of modern history that has a positive story” because Enron imploded before the company had time to pursue its retaliatory plans. For her whistleblowing, she was named one of Time’s Persons of the Year in 2002.
Her story also had far reaching policy implications. It highlighted the glaring lack of protection for Wall Street whistleblowers and became one of the driving forces of the Sarbanes-Oxley (SOX) reforms. SOX ultimately laid the groundwork for Dodd-Frank years later, one of the most important whistleblower laws in recent U.S. history.
Dr. Frederic Whitehurst
Dr. Frederic Whitehurst blew the whistle on the systemic forensic fraud in the FBI crime lab. In 1994, he reported his concerns with FBI lab practices internally – concerns that included, alterations of reports, alterations of evidence, and inexpert testimony. Some of the cases he reported included the 1993 World Trade Center attack, the Oklahoma City bombing, and the O.J. Simpson murder case.
After his superiors failed to take any action, he took his concerns to the Department of Justice. Whitehurst faced significant and ongoing retaliation from the FBI, who highly criticized his claims, attacked his credibility, and fired him from his position at the FBI crime lab as chemist and lab supervisor.
Eventually, investigations were launched into Whitehurst’s allegations but it wasn’t until ten years later that a scathing 500+ page study of the lab by the Justice Department Inspector General, Michael Bromwich, concluded major reforms were required in the lab and vindicated Whitehurst.
As a result, the FBI agreed to unprecedented reforms. These included outside accreditation of its crime lab, the appointment of an objective and independent scientist to oversee lab operations, and the removal of various lab officials who had engaged in misconduct. The FBI pledged to review all cases potentially affected by the lab’s flawed forensic science.
While Dr. Whitehurst received $1.16 million as settlement from the FBI in 1998, he continued to investigate and research FBI misconduct in cases that used hair analysis. He discovered the Justice Department had failed to keep its promise to review the potentially affected cases and to notify the adversely affected defendants.
In 2012 the Washington Post published an extensive review of the FBI and DOJ failures to properly review the cases impacted by the FBI lab scandal, based on Whitehurst’s research. As a result, the DOJ agreed to conduct yet another review of hair cases in collaboration with the Innocence Project and the National Association of Criminal Defense Lawyers (NACDL).