In the latest sign that businesses behaving badly has become a chronic theme, dozens of people gathered today at City University in London for the launch party of a coalition called Whistleblowers UK. Well-known whistleblowers such as Ian Foxley, who questioned payments to Saudi officials made by aerospace defense firm EADS, want to share their experiences with others to make airing crimes by companies and governments easier. (Foxley’s allegations led to a probe by the UK’s Serious Fraud Office, which is still in progress). The organization, which has been operating since March, features a 24-hour hotline, as well as lawyers and psychotherapists working pro-bono.
It’s been a big year for scandals. Here’s our list of six notable whistleblowers in 2012.
The one-time technical liaison manager for Rolls Royce, a 30-year veteran, accused the company of handing $20 million and a blue Rolls Royce car to Tommy Suharto, the son of the late Indonesian dictator, to help win an engine-supply contract. Taylor made the claims in 2006 and was threatened with the loss of his job. Now retired, he’s been writing about it online ever since. Only this year did the Serious Fraud Office (SFO) take notice. Last week, Rolls Royce shocked markets by turning over documents to the SFO as part of a possible bribery and corruption probe involving Indonesia and China.
The Deutsche Bank vice-president in market risk management filed a complaint with the US Securities and Exchange Commission (paywall), claiming the bank covered up billions in losses on “leveraged super senior” securities during the financial crisis. The Israeli native with a PhD in mathematics was laid off—and told it had nothing to do with his complaints, but that his job had been relocated to Berlin. Deutsche Bank disputes the cover up claims, saying they’re unfounded and that Ben-Artzi and two others involved in the whistle-blowing had no real knowledge or responsibilities in the areas allegedly subject to fraud. The SEC has launched an investigation and Deutsche Bank said this month that it was fully cooperating.
A former police constable in Britain was hired as an investigator to review videos of British troops allegedly abusing Iraqi prisoners between 2003 and 2008. Thomas quit her job in July, and on Dec. 11 testified at a preliminary hearing in London over the government’s refusal to hold a public inquiry into possible abuse. She says the British defense ministry’s Iraq Historic Allegations Team, where she worked, is not independent, and its investigation was a “face-saving inquiry“. She also claims that videos have been doctored to cover up abuses by troops. Since Thomas came forward, lawyers have received complaints of abuse from more than one thousand Iraqis.
The Russian native who lived in Surrey, England turned over evidence to Swiss authorities involving his former business partners and allegedly corrupt tax authorities related to a £140 million tax scam against the Russian government. Even in the UK, he feared for his life. It turns out he had good reason. He was found dead outside his home in London this year after going for a run. The cause of death is still unclear. A previous informant died under mysterious circumstances in prison in 2009. Police and anti-fraud authorities in Britain are under fire now for ignoring evidence related to UK companies used in the scam and threats against Perepilichny.
The private banking adviser at Lloyds documented allegedly illegal sales practices at the bank’s retail arm and says he reported them to the Financial Services Authority (FSA). Since 2011 the watchdog has been investigating the incentive schemes of Lloyds and other banks, which may have led to widespread mis-selling of products. A court has since ordered Lloyds to set aside more than £5 billion to repay customers related to faulty insurance it sold. Whether Taplin’s complaints aided the case is unclear, but in any case he’s moved on. He says he was fired in 2010, allegedly for alerting senior management and the board of directors to unlawful behavior and fraud, and says the bank’s treatment of him included “bullying” after he went public with his claims. He also has a website (ignore the haphazard punctuation) where he attacks Lloyds and promotes himself. He’s part of Whistleblowers UK.
The former UBS banker reported a tax evasion scheme in which UBS bankers helped clients cheat the US government out of billions in tax revenue. This resulted in criminal charges against the the bank. UBS paid $780 million to settle with the US Department of Justice. The US got $5 billion in back-taxes and in September this year awarded Birkenfeld $104 million (the largest federal payout in history) as a whistleblower’s award. Birkenfeld couldn’t be at a press ceremony announcing the award because he was under house arrest, following 31 months of incarceration for helping a billionaire property developer avoid paying $7 million in taxes.