What happens to whistle-blowers?
To high performers? Often, they get fired.
Whistleblowing: A Study of
John P. Keenan and
Hillsboro Drive, ... help
practices, and in so
doing avoid costly
lawsuits and negative
publicity .... Reprisal
involves taking an
against an employee or
by JP Keenan - 2002
· Culture and
Empirical Study of
Croatian and ...
International, a firm
presenting ..... Against
harm to others .... with
lawsuits, and negative
by AA Tavakoli - 2003
Oil-Rig Workers Gain Whistleblower Protections in
July 30, 2010
By Jim Efstathiou Jr.
The House passed legislation that would protect oil-rig workers who report health or
safety concerns from retaliation by their employers.
The measure, a response to BP Plc’s Gulf of Mexico oil spill, passed 315-93. The House
today is debating a second bill that would rewrite deep-water drilling rules and tighten
safety and environmental standards.
The Gulf spill began April 20 when the Deepwater Horizon drilling rig, which BP leased
from Transocean Ltd., exploded and caught fire, killing 11 workers and causing it to sink.
The well gushed from 35,000 barrels to 60,000 barrels of oil a day before the leak was
stopped on July 15.
Investigations into the accident found that workers on the rig had worried about drilling
operations in the days leading up to the blast, said Representative Ed Markey, a
Massachusetts Democrat and chairman of the Energy and Commerce committee’s
energy and environment panel.
“We have heard that the workers aboard the rig had safety concerns, but in the end they
were powerless to stop the cascading string of bad decisions by BP that led to the
disaster,” Markey said during debate. “We are putting in place state of the art protections
for oil and gas workers who are retaliated against because they raise safety concerns.”
The bill prevents companies from firing employees who report safety violations and allows
employees to appeal perceived retaliation to the Labor secretary.
The bill is H.R. 5851.
--Editors: Steve Geimann, Larry Liebert
Considering birthers and
other bullies, it seems that
Obama is still a favorite
target of bullies.
Obama speaks out
against bullying, says, 'I
By Nia-Malika Henderson
President Obama and the
first lady spoke out against
bullying Thursday, urging
parents, schools and
community leaders to look
for ways to address a
problem that they say has
gotten worse in the age of
the internet and social
Joined at the White House
Conference of Bullying
Prevention by top advisers,
cabinet officials and about
150 parents, teachers and
Obama said that bullying,
which effects about 13
million children annually
by one estimate, is
behavior that doesn't have
"If there's one goal of this
conference, it's to dispel
the myth that bullying is
just a harmless rite of
passage or an inevitable
part of growing up. It's
not," said Obama, who
acknowledged that he was
bullied when he was
"As adults, we all
remember what it was like
to see kids picked on in
the hallways or in the
schoolyard. And I have to
say, with big ears and the
name that I have, I wasn't
immune," he said. "I didn't
emerge unscathed. But
because it's something
that happens a lot, and it's
something that's always
been around, sometimes
we've turned a blind eye to
the problem. We've said,
'Kids will be kids.' And so
sometimes we overlook
the real damage that
bullying can do, especially
when young people face
harassment day after day,
week after week.
Obama: Bullying Not a
'Rite of Passage'
March 10, 2011
President and first lady
Obama hosted a
conference on preventing
bullying at the White
House Thursday. The
event is part of an effort to
highlight a problem that
affects millions of children
"If there's one goal, it's to
dispel the myth that
bullying is just a harmless
rite of passage," the
"As adults, we can lose
sight of how hard it can be
sometimes to be a kid,"
Obama said. "It's easy for
us to forget what it's like to
be teased or bullied, but
it's also easy to forget the
natural compassion and
the sense of decency that
our children display each
and every day when they're
given a chance."
Obama confessed that he
also had been a target of
bullying when he was a
"As adults, we all
remember what it was like
to see kids picked on in
the hallways or in the
schoolyard," he said. "And
I have to say, with big ears
and the name that I have, I
wasn't immune. I didn't
The day-long conference
will examine bullying on
college campuses as well
as at elementary and
secondary schools. It will
also focus on Internet
The White House has set
up stopbulling.gov and a
Facebook page to promote
In the following case,
incompetent or careless
administrators promoted a
mentally ill man who killed 13 at
Army to Punish 9 Officers for
Fort Hood Shootings
Officers Not Identified by Name
By LUIS MARTINEZ
March 10, 2011
The Army has begun
against nine officers for what it
calls "administrative and
leadership failures relating to
the career of Maj. Nidal
Hasan," the alleged shooter in
the Fort Hood, Texas, shootings
that killed 13.
Army Secretary John McHugh
has initiated "adverse
administrative action" against the
officers, according to an Army
statement released Thursday on
the results of an accountability
review to determine if Hasan's
superior officers were negligent.
"Although no single event directly
led to the tragedy at Fort Hood,
certain officers clearly failed to
meet the high standards
expected of their profession," the
Army statement said.
The officers were not identified
by name or rank, and it seemed
there would not be a uniform
"The severity of each action
varies depending on
case-specific facts and
circumstances," the statement
As part of its broader
investigation into the
circumstances that led to the
November 2009 Fort Hood
shooting, the Army conducted an
accountability review of the
actions of the officers that
supervised Hasan. Unlike the
conclusions, which were made
public this year, the results of the
accountability review have not
been made public -- until now.
A report by the Senate Homeland
Security and Governmental
Affairs Committee released last
month concluded that there were
warning signs about Hasan's
radicalization and antagonism to
the U.S. wars in Iraq and
Afghanistan that raised concerns
among his colleagues.
Entitled, "Ticking Time Bomb:
Fort Hood Massacre Could Have
Been Prevented," the report
cited examples of Hasan's
behavior that should have been
picked up by his supervisors.
Instead, the report found that
Hasan continued to receive
positive evaluation reports from
his supervisors that led to his
continued promotion and
eventual assignment to Fort
Hood, where he was slated to
deploy to Afghanistan.
How about the
mentally ill? The
they get promoted.
D.E.A. Deployed Mumbai Plotter Despite Warning
By GINGER THOMPSON, ERIC SCHMITT and SOUAD MEKHENNET
November 7, 2010
WASHINGTON — American authorities sent David C. Headley, a small-time drug dealer
and sometime informant, to work for them in Pakistan months after the Sept. 11, 2001,
attacks, despite a warning that he sympathized with radical Islamic groups, according to
court records and interviews. Not long after Mr. Headley arrived there, he began training
with terrorists, eventually playing a key role in the 2008 attacks that left 164 people dead
The October 2001 warning was dismissed, the authorities said, as the ire of a jilted
girlfriend and for lack of proof. Less than a month later, those concerns did not come up
when a federal court in New York granted Mr. Headley an early release from probation so
that he could be sent to work for the United States Drug Enforcement Administration in
Pakistan. It is unclear what Mr. Headley was supposed to do in Pakistan for the
“All I knew was the D.E.A. wanted him in Pakistan as fast as possible because they said
they were close to making some big cases,” said Luis Caso, Mr. Headley’s former
On Sunday, while President Obama was visiting India, he briefed Prime Minister
Manmohan Singh on the status of his administration’s investigation of Mr. Headley,
including the failure to act on repeated warnings that he might be a terrorist. A senior
United States official said the inquiry has concluded that while the government received
warnings, it did not have strong enough evidence at the time to act on them. “Had the
United States government sufficiently established he was engaged in plotting a terrorist
attack in India, the information would have most assuredly been transferred promptly to
the Indian government,” the official said in a statement to The New York Times. The
statement did not make clear whether any American agencies would be held accountable.
In recent weeks, United States government officials have begun to acknowledge that Mr.
Headley’s path from American informant to transnational terrorist illustrates the
breakdowns and miscommunications that have bedeviled them since the Sept. 11
attacks. Warnings about his radicalism were apparently not shared with the drug agency
that made use of his ties in Pakistan.
The director of national intelligence, James R. Clapper Jr., began an investigation into
Mr. Headley’s government connections after reports last month that two of the former
drug dealer’s ex-wives had gone to American authorities between 2005 and 2008, before
the Mumbai attacks, to say they feared he was plotting with terrorists. Combined with the
earlier warning from the former girlfriend, three of the women in Mr. Headley’s life
reported his ties to terrorists, only to have those warnings dismissed.
An examination of Mr. Headley’s story shows that his government ties ran far deeper and
longer than previously known. One senior American official knowledgeable about the
case said he believed that Mr. Headley was a D.E.A. informant until at least 2003,
meaning that he was talking to American agencies even as he was learning to deal with
explosives and small arms in terrorist training camps.
The review raises new questions about why the Americans missed warning signs that a
valued informant was becoming an important figure in radical Islamic groups, and
whether some officials chose to look the other way rather than believe the complaints
about him. The October 2001 warning from the girlfriend was first reported Friday by
ProPublica, the independent investigative news operation, and published in The
Fuller details of how the government handled the matter were provided to The Times by
officials who did not want to be quoted discussing a continuing inquiry. They disclosed
that the F.B.I. actually talked to Mr. Headley about the girlfriend, and he told them she
was unreliable. They said that while he seemed to have a philosophical affinity for some
groups, there was no evidence that he was plotting against the United States. Also
influencing the handling of the case, they said, was that he had been a longtime
The Indian government has been outspoken in its concerns that the United States
overlooked repeated warnings about Mr. Headley’s terrorist activities because of his links
to both American law enforcement as well as to officials in Pakistan’s Inter-Services
Intelligence Directorate — a key ally of the United States in the fight against terrorism.
Bruce O. Riedel, a terrorism expert at the Brookings Institution and a former C.I.A. officer,
said the Indians were right to ask, “ ‘Why weren’t alarms screaming?’ ”
Mr. Headley, 50, born in the United States to a Pakistani diplomat and Philadelphia
socialite, has pleaded guilty in connection with the Mumbai plot and a thwarted attack
against a Danish newspaper that published cartoons of the Prophet Muhammad. As he
has many times before, he is cooperating with the authorities, this time hoping to avoid
the death penalty. Officials of the D.E.A., which has a long history with Mr. Headley,
declined to discuss their relationship with him. The C.I.A. and the F.B.I. said that Mr.
Headley had never worked with them. Privately, the agencies point fingers at each other.
Japanese nuclear plant’s safety analysts brushed off risk
By David Nakamura and Chico Harlan
March 23, 2011
A Japanese government agency that spent several years evaluating the Fukushima Daiichi
nuclear plant declared the facility safe after dismissing concerns from a member of its own
expert panel that a tsunami could jeopardize its reactors.
Yukinobu Okamura, a prominent seismologist, warned of a debilitating tsunami in
June 2009 at one of a series of meetings held by the Nuclear and Industrial Safety Agency
to evaluate the readiness of Daiichi, as well as Japan’s 16 other nuclear power plants, to
withstand a massive natural disaster. But in the discussion about Daiichi, Okamura was
rebuffed by an executive from the Tokyo Electric Power Co., which operates the
plant, because the utility and the government believed that earthquakes posed a greater
That conclusion left Daiichi vulnerable to what unfolded on March 11, when a 9.0-
magnitude earthquake struck off Japan’s northeast coast. Experts now say that Daiichi,
as designed, withstood the quake. It was the ensuing tsunami, with waves more
than 20 feet high, that knocked out the facility’s critical backup power supply and
triggered a nuclear emergency, resulting in widespread releases of radiation.
The Apostate: Paul
Haggis vs. the
by Lawrence Wright
February 14, 2011
The New Yorker
Asked how high he got in
Scientology’s levels of study,
Haggis said, “All the way to the
On August 19, 2009, Tommy
Davis, the chief spokesperson
for the Church of Scientology
International, received a letter
from the film director and
screenwriter Paul Haggis. “For
ten months now I have been
writing to ask you to make a
public statement denouncing
the actions of the Church of
Scientology of San Diego,”
Haggis wrote. Before the 2008
elections, a staff member at
Scientology’s San Diego church
had signed its name to an
online petition supporting
Proposition 8, which asserted
that the State of California
should sanction marriage only
“between a man and a woman.”
The proposition passed. As
Haggis saw it, the San Diego
church’s “public sponsorship of
Proposition 8, which succeeded
in taking away the civil rights of
gay and lesbian citizens of
California—rights that were
granted them by the Supreme
Court of our state—is a stain on
the integrity of our organization
and a stain on us personally.
Our public association with that
hate-filled legislation shames
us.” Haggis wrote, “Silence is
consent, Tommy. I refuse to
consent.” He concluded, “I
hereby resign my membership
in the Church of Scientology.”
Haggis was prominent in both
Scientology and Hollywood, two
communities that often
converge. Although he is less
famous than certain other
Scientologists, such as Tom
Cruise and John Travolta, he
had been in the organization for
nearly thirty-five years. Haggis
wrote the screenplay for
“Million Dollar Baby,” which
won the Oscar for Best
Picture in 2004, and he
wrote and directed “Crash,”
which won Best Picture the
next year—the only time in
Academy history that that has
Davis, too, is part of
Hollywood society; his
mother is Anne Archer, who
starred in “Fatal Attraction”
and “Patriot Games,” among
other films. Before becoming
Davis was a senior vice-
president of the church’s
Celebrity Centre International
In previous correspondence
with Davis, Haggis had
demanded that the church
publicly renounce Proposition 8.
“I feel strongly about this for a
number of reasons,” he wrote.
“You and I both know there has
been a hidden anti-gay
sentiment in the church for a
long time. I have been shocked
on too many occasions to hear
Scientologists make derogatory
remarks about gay people, and
then quote L.R.H. in their
defense.” The initials stand for
L. Ron Hubbard, the founder of
Scientology, whose extensive
writings and lectures form the
Haggis related a story about
Katy, the youngest of three
daughters from his first
marriage, who lost the
friendship of a fellow-
Scientologist after revealing
that she was gay. The friend
began warning others, “Katy is
‘1.1.’ ” The number refers to
a sliding Tone Scale of
emotional states that
Hubbard published in a 1951
book, “The Science of
Survival.” A person
classified “1.1” was,
Hubbard said, “Covertly
dangerous and wicked level”
—and he noted that people in
this state engaged in such
things as casual sex, sadism,
and homosexual activity.
Hubbard’s Tone Scale, Haggis
wrote, equated “homosexuality
with being a pervert.” (Such
remarks don’t appear in recent
editions of the book.)
In his resignation letter, Haggis
explained to Davis that, for
the first time, he had
Scientology. He had read a
recent exposé in a Florida
newspaper, the St.
Petersburg Times, which
reported, among other
things, that senior
executives in the church
had been subjecting other
Scientologists to physical
violence. Haggis said that
he felt “dumbstruck and
horrified,” adding, “Tommy,
if only a fraction of these
accusations are true, we are
talking about serious,
indefensible human and
Online, Haggis came across an
appearance that Davis had
made on CNN, in May, 2008.
The anchor John Roberts
asked Davis about the church’s
policy of “disconnection,” in
which members are encouraged
to separate themselves from
friends or family members who
criticize Scientology. Davis
responded, “There’s no
such thing as disconnection
as you’re characterizing it.
And certainly we have to
“Well, what is
“Scientology is a new religion,”
Davis continued. “The majority
of Scientologists in the world,
they’re first generation. So their
family members aren’t going to
be Scientologists. . . . So,
certainly, someone who is a
Scientologist is going to respect
their family members’ beliefs—”
“Well, what is
“—and we consider family to be
a building block of any society,
so anything that’s characterized
as disconnection or this kind of
thing, it’s just not true. There
isn’t any such policy.”
In his resignation letter, Haggis
said, “We all know this policy
exists. I didn’t have to
search for verification—I
didn’t have to look any
further than my own home.”
Haggis reminded Davis that,
a few years earlier, his wife
had been ordered to
disconnect from her parents
“because of something
absolutely trivial they
supposedly did twenty-five
years ago when they
resigned from the church. . .
. Although it caused her
terrible personal pain, my
wife broke off all contact
with them.” Haggis
continued, “To see you lie
so easily, I am afraid I had to
ask myself: what else are
you lying about?”
Haggis forwarded his
resignation to more than twenty
Scientologist friends, including
Anne Archer, John Travolta,
and Sky Dayton, the founder of
EarthLink. “I felt if I sent it to my
friends they’d be as horrified as
I was, and they’d ask questions
as well,” he says. “That turned
out to be largely not the case.
They were horrified that I’d
send a letter like that.”
"Martin Woods, a Liverpudlian in his mid-40s, joined the London office of Wachovia Bank
in February 2005 as a senior anti-money laundering officer."
How a big US bank laundered billions from Mexico's
murderous drug gangs
As the violence spread, billions of dollars of cartel cash began to seep into the global
financial system. But a special investigation by the Observer reveals how the
increasingly frantic warnings of one London whistleblower were ignored
3 April 2011
On 10 April 2006, a DC-9 jet landed in the port city of Ciudad del Carmen, on the Gulf of
Mexico, as the sun was setting. Mexican soldiers, waiting to intercept it, found 128 cases
packed with 5.7 tons of cocaine, valued at $100m. But something else – more important
and far-reaching – was discovered in the paper trail behind the purchase of the plane by
the Sinaloa narco-trafficking cartel.
During a 22-month investigation by agents from the US Drug Enforcement Administration,
the Internal Revenue Service and others, it emerged that the cocaine smugglers had
bought the plane with money they had laundered through one of the biggest banks in the
United States: Wachovia, now part of the giant Wells Fargo.
The authorities uncovered billions of dollars in wire transfers, traveller's cheques and cash
shipments through Mexican exchanges into Wachovia accounts. Wachovia was put under
immediate investigation for failing to maintain an effective anti-money laundering
programme. Of special significance was that the period concerned began in 2004, which
coincided with the first escalation of violence along the US-Mexico border that ignited the
current drugs war.
Criminal proceedings were brought against Wachovia, though not against any individual,
but the case never came to court. In March 2010, Wachovia settled the biggest action
brought under the US bank secrecy act, through the US district court in Miami. Now that the
year's "deferred prosecution" has expired, the bank is in effect in the clear. It paid federal
authorities $110m in forfeiture, for allowing transactions later proved to be connected to
drug smuggling, and incurred a $50m fine for failing to monitor cash used to ship 22 tons
More shocking, and more important, the bank was sanctioned for failing to apply the
proper anti-laundering strictures to the transfer of $378.4bn – a sum equivalent to one-
third of Mexico's gross national product – into dollar accounts from so-called casas de
cambio (CDCs) in Mexico, currency exchange houses with which the bank did business.
"Wachovia's blatant disregard for our banking laws gave international cocaine
cartels a virtual carte blanche to finance their operations," said Jeffrey Sloman,
the federal prosecutor. Yet the total fine was less than 2% of the bank's $12.3bn
profit for 2009. On 24 March 2010, Wells Fargo stock traded at $30.86 – up 1% on
the week of the court settlement.
The conclusion to the case was only the tip of an iceberg, demonstrating the role of the
"legal" banking sector in swilling hundreds of billions of dollars – the blood
money from the murderous drug trade in Mexico and other places in the world –
around their global operations, now bailed out by the taxpayer.
At the height of the 2008 banking crisis, Antonio Maria Costa, then head of the United
Nations office on drugs and crime, said he had evidence to suggest the
proceeds from drugs and crime were "the only liquid investment capital"
available to banks on the brink of collapse. "Inter-bank loans were funded by money
that originated from the drugs trade," he said. "There were signs that some banks were
rescued that way."...
During research into the Wachovia Mexican case, the Observer obtained documents
previously provided to financial regulators. It emerged that the alarm that was ignored
came from, among other places, London, as a result of the diligence of one of the most
important whistleblowers of our time. A man who, in a series of interviews with the
Observer, adds detail to the documents, laying bare the story of how Wachovia was at the
centre of one of the world's biggest money-laundering operations.
Martin Woods, a Liverpudlian in his mid-40s, joined the London office of
Wachovia Bank in February 2005 as a senior anti-money laundering officer. He had
previously served with the Metropolitan police drug squad. As a detective he joined the
money-laundering investigation team of the National Crime Squad, where he worked on the
British end of the Bank of New York money-laundering scandal in the late 1990s.
Woods talks like a police officer – in the best sense of the word: punctilious, exact, with a
roguish humour, but moral at the core. He was an ideal appointment for any bank
eager to operate a diligent and effective risk management policy against the
lucrative scourge of high finance: laundering, knowing or otherwise, the vast
proceeds of criminality, tax-evasion, and dealing in arms and drugs.
Woods had a police officer's eye and a police officer's instincts – not those of a
banker. And this influenced not only his methods, but his mentality. "I think that a
lot of things matter more than money – and that marks you out in a culture which appears
to prevail in many of the banks in the world," he says.
Woods was set apart by his modus operandi. His speciality, he explains, was his
application of a "know your client", or KYC, policing strategy to identifying dirty money.
"KYC is a fundamental approach to anti-money laundering, going after tax evasion or
counter-terrorist financing. Who are your clients? Is the documentation right? Good,
responsible banking involved always knowing your customer and it still does."
When he looked at Wachovia, the first thing Woods noticed was a deficiency in KYC
information. And among his first reports to his superiors at the bank's headquarters in
Charlotte, North Carolina, were observations on a shortfall in KYC at Wachovia's operation
in London, which he set about correcting, while at the same time implementing what was
known as an enhanced transaction monitoring programme, gathering more information on
clients whose money came through the bank's offices in the City, in sterling or euros. By
August 2006, Woods had identified a number of suspicious transactions relating
to casas de cambio customers in Mexico.
Primarily, these involved deposits of traveller's cheques in euros. They had sequential
numbers and deposited larger amounts of money than any innocent travelling person
would need, with inadequate or no KYC information on them and what seemed to a trained
eye to be dubious signatures. "It was basic work," he says. "They didn't answer the obvious
questions: 'Is the transaction real, or does it look synthetic? Does the traveller's cheque
meet the protocols? Is it all there, and if not, why not?'"
Woods discussed the matter with Wachovia's global head of anti-money
laundering for correspondent banking, who believed the cheques could signify
tax evasion. He then undertook what banks call a "look back" at previous
transactions and saw fit to submit a series of SARs, or suspicious activity reports,
to the authorities in the UK and his superiors in Charlotte, urging the blocking of
named parties and large series of sequentially numbered traveller's cheques
from Mexico. He issued a number of SARs in 2006, of which 50 related to the
casas de cambio in Mexico.
To his amazement, the response from Wachovia's Miami office, the centre for
Latin American business, was anything but supportive – he felt it was quite the
As it turned out, however, Woods was on the right track. Wachovia's business in
Mexico was coming under closer and closer scrutiny by US federal law enforcement.
Wachovia was issued with a number of subpoenas for information on its Mexican
operation. Woods has subsequently been informed that Wachovia had six or seven
thousand subpoenas. He says this was "An absurd number. So at what point does
someone at the highest level not get the feeling that something is very, very wrong?"
In April and May 2007, Wachovia – as a result of increasing interest and pressure from the
US attorney's office – began to close its relationship with some of the casas de cambio. But
rather than launch an internal investigation into Woods's alerts over Mexico, Woods claims
Wachovia hung its own money-laundering expert out to dry. The records show that during
2007 Woods "continued to submit more SARs related to the casas de cambio".
In July 2007, all of Wachovia's remaining 10 Mexican casa de cambio clients operating
through London suddenly stopped doing so. Later in 2007, after the investigation of
Wachovia was reported in the US financial media, the bank decided to end its remaining
relationships with the Mexican casas de cambio globally. By this time, Woods says, he
found his personal situation within the bank untenable; while the bank acted on
one level to protect itself from the federal investigation into its shortcomings, on
another, it rounded on the man who had been among the first to spot them.
On 16 June Woods was told by Wachovia's head of compliance that his latest SAR
need not have been filed, that he had no legal requirement to investigate an
overseas case and no right of access to documents held overseas from Britain,
even if they were held by Wachovia.
Woods's life went into freefall. He went to hospital with a prolapsed disc,
reported sick and was told by the bank that he not done so in the appropriate
manner, as directed by the employees' handbook. He was off work for three
weeks, returning in August 2007 to find a letter from the bank's compliance
managing director, which was unrelenting in its tone and words of warning.
The letter addressed itself to what the manager called "specific examples of your
failure to perform at an acceptable standard". Woods, on the edge of a
breakdown, was put on sick leave by his GP; he was later given psychiatric
treatment, enrolled on a stress management course and put on medication.
Late in 2007, Woods attended a function at Scotland Yard where colleagues from the US
were being entertained. There, he sought out a representative of the Drug Enforcement
Administration and told him about the casas de cambio, the SARs and his employer's
reaction. The Federal Reserve and officials of the office of comptroller of currency in
Washington DC then "spent a lot of time examining the SARs" that had been sent by
Woods to Charlotte from London.
"They got back in touch with me a while afterwards and we began to put the pieces of the
jigsaw together," says Woods. What they found was – as Costa says – the tip of the
iceberg of what was happening to drug money in the banking industry, but at least it was
visible and it had a name: Wachovia...
After years of tribulation, Woods was finally formally vindicated, though not by
Wachovia: a letter arrived from John Dugan, the comptroller of the currency in
Washington DC, dated 19 March 2010 – three days after the settlement in Miami. Dugan
said he was "writing to personally recognise and express my appreciation for the role you
played in the actions brought against Wachovia Bank for violations of the bank secrecy act
… Not only did the information that you provided facilitate our investigation, but you
demonstrated great personal courage and integrity by speaking up. Without the
efforts of individuals like you, actions such as the one taken against Wachovia
would not be possible."
The so-called "deferred prosecution" detailed in the Miami document is a form of probation
whereby if the bank abides by the law for a year, charges are dropped. So this March the
bank was in the clear. The week that the deferred prosecution expired, a spokeswoman for
Wells Fargo said the parent bank had no comment to make on the documentation
pertaining to Woods's case, or his allegations. She added that there was no comment on
Sloman's remarks to the court; a provision in the settlement stipulated Wachovia was not
allowed to issue public statements that contradicted it.
But the settlement leaves a sour taste in many mouths – and certainly in Woods's. The
deferred prosecution is part of this "cop-out all round", he says. "The regulatory authorities
do not have to spend any more time on it, and they don't have to push it as far as a
criminal trial. They just issue criminal proceedings, and settle. The law enforcement people
do what they are supposed to do, but what's the point? All those people dealing with all
that money from drug-trafficking and murder, and no one goes to jail?"
One of the foremost figures in the training of anti-money laundering officers is
Robert Mazur, lead infiltrator for US law enforcement of the Colombian Medellín
cartel during the epic prosecution and collapse of the BCCI banking business in
1991 (his story was made famous by his memoir, The Infiltrator, which became a movie).
Mazur, whose firm Chase and Associates works closely with law enforcement agencies and
trains officers for bank anti-money laundering, cast a keen eye over the case against
Wachovia, and he says now that "the only thing that will make the banks properly
vigilant to what is happening is when they hear the rattle of handcuffs in the
Mazur said that "a lot of the law enforcement people were disappointed to see a
settlement" between the administration and Wachovia. "But I know there were external
circumstances that worked to Wachovia's benefit, not least that the US banking system was
on the edge of collapse."...
Antonio Maria Costa, who was executive director of the UN's office on drugs and
crime from May 2002 to August 2010, charts the history of the contamination of the
global banking industry by drug and criminal money since his first initiatives to try to curb it
from the European commission during the 1990s. "The connection between organised
crime and financial institutions started in the late 1970s, early 1980s," he says, "when the
mafia became globalised."...
"With these crises," says Costa, "the banking sector was short of liquidity, the banks
exposed themselves to the criminal syndicates, who had cash in hand."
Costa questions the readiness of governments and their regulatory structures to
challenge this large-scale corruption of the global economy: "Government
regulators showed what they were capable of when the issue suddenly changed
to laundering money for terrorism – on that, they suddenly became serious and
changed their attitude."
Hardly surprising, then, that Wachovia does not appear to be the end of the line. In August
2010, it emerged in quarterly disclosures by HSBC that the US justice department was
seeking to fine it for anti-money laundering compliance problems reported to include
dealings with Mexico.
"Wachovia had my résumé, they knew who I was," says Woods. "But they did not
want to know – their attitude was, 'Why are you doing this?' They should have been
on my side, because they were compliance people, not commercial people. But really they
were commercial people all along. We're talking about hundreds of millions of dollars. This
is the biggest money-laundering scandal of our time.
"These are the proceeds of murder and misery in Mexico, and of drugs sold around the
world," he says...
Obama's whistleblower war suffers two defeats
By Glenn Greenwald
(updated below: w/reaction from Jim Risen)
Jul 30, 2011
The Obama administration's unprecedented war on whistleblowers suffered two serious and
well-deserved defeats. The first occurred in the prosecution of NSA whistleblower Thomas
Drake, who was accused of multiple acts of espionage, only for the DOJ to drop virtually all
of the charges right before the trial was to begin and enter into a plea agreement for one
minor misdemeanor. Today, The Washington Post -- under the headline "Judge blasts
prosecution of alleged NSA leaker" -- reports that the federal judge presiding over the case
"harshly criticized U.S. prosecutors’ treatment of a former spy agency official accused of
leaking classified material."
As the transcript of Drake's sentencing hearing published by Secrecy News reflects, Judge
Richard Bennett of the U.S. District Court for Maryland was infuriated by two aspects of the
DOJ's conduct: (1) after the Bush DOJ executed a search warrant of Drake's home in 2007,
the Obama DOJ -- 2 1/2 years later -- finally indicted him, meaning he had to live with that
cloud of criminal uncertainty over his head for that outrageously lengthy period of time; and
(2) despite dropping all of the serious charges right before the trial was about to begin, the
DOJ demanded that Drake be forced to pay a $50,000 fine as "a deterrent" (on top of the
tens of thousands of dollars he spent in legal fees until he had no money left and had to use
public defenders, as well as the fact that he was five years away from earning a federal
pension when he was fired and ended up working at an Apple Computer store to support his
family); to justify the requested fine, the prosecutor cited a $10,000 whistleblowing prize
Drake was awarded earlier this year.
As for the first issue, the court condemned what it called the "extraordinary position taken by
the government, probably unprecedented in this courthouse" of dropping the whole case on
the eve of trial after "an extraordinary period of delay." Judge Bennett added: "I find that
unconscionable. Unconscionable. It is at the very root of what this country was founded on
against general warrants of the British." As for the second issue, the court reviewed the
difficult circumstances of Drake's childhood (he was raised in poverty and sent himself to
school with risky military service), his complete lack of any prior criminal record, and -- most
of all -- the multiple ways in which the failed prosecution destroyed his life ("the financial
devastation wrought upon this defendant"), and flatly refused to impose any fine at all,
explaining: "I'm not going to add to that in any way."
What is most notable about this hearing is that the prosecutor candidly described not only
his reasons for wanting a substantial fine imposed on Drake, but (without his saying so) also
the motive for the Obama DOJ's broader war on whistleblowers: namely, an attempt to send
a "message" of intimidation to future would-be whistleblowers (click on image to enlarge):
Yet Judge Bennett -- who, as a Bush 43 appointee, is presumably not overly sympathetic
either to criminal defendants generally or national security leaks in particular -- was having
none of that. He first explained that he had never seen prosecutorial delays as extreme as
the one in this case (accounted for by the fact that the Bush DOJ had apparently decided
not to prosecute Drake, but the Obama DOJ then proceeded):
Judge Bennett then eloquently explained that the DOJ already destroyed Drake's life, even
though it ended up convicting him of nothing other than a minor misdemeanor:
That, of course, is the real point here. Drake's leak involved no conceivable harm to
national security, but did expose serious waste, corruption and possible illegality. ..
Is the government reimbursing companies facing legal
actions by whistleblowers?
By Joe Davidson
December 21, 2011
Remember the story about Walt Tamosaitis, the federal contractor consigned to a
basement office after detailing safety and technical issues with the Energy Department’s
Hanford Waste Treatment Plant in southeastern Washington state?
This month, when he told a Senate subcommittee about the troubles his whistleblowing
generated, he said that Bechtel Corp., the prime contractor on the nuclear waste job, was
being reimbursed by Energy for the company’s defense against legal action by
At the hearing, he said he “learned that in the [Department of Energy] contracting world,
the legal costs incurred by the companies are reimbursed by the DOE. Since this is
taxpayer money, I began to feel that I was battling myself. It is unclear to me that if a
company loses a retaliation case, whether they have to pay DOE back for the funds they
received. Further complicating it, if the company chooses to settle but admits no guilt, it
appears they do not have to pay DOE back for any of the legal costs. I felt like everything
was stacked to support the companies.”
This raises an important question. Should the federal government pay to defend a
company against whistleblowers whose actions might well be in the best interests of
The inquiring mind of Sen. Claire McCaskill (D-Mo.) wants to know.
On Tuesday, she sent a letter to the department’s National Nuclear Security
Administration (NNSA) to determine if what Tamosaitis said about reimbursement is
If his allegation is true, “this raises serious concerns,” she wrote to Thomas P. D’Agostino,
the department’s undersecretary for nuclear security and NNSA administrator.
“The federal government relies on whistleblowers to report information about waste,
fraud, abuse, and mismanagement of taxpayer dollars and has mandated whistleblower
protections, including protections for employees of contractors of the National Nuclear
Security Administration (NNSA), to ensure that employees are not retaliated against for
their disclosures. Reimbursing a contractor’s legal costs for defending against these
types of claims appears to contravene these policies.”
She told the agency to let her know how much it has paid to defend companies against
Tamosaitis’s claims. The department said no final decision on reimbursement has been
A Bechtel statement says its agreement with the department “includes a standard contract
provision for reimbursement of legal expenses. DOE’s final determination on the
allowability of costs in the Tamosaitis matter will occur after the case is resolved. The
criteria for reimbursement afforded to BNI [Bechtel National Inc.] does not differ from that
of other DOE contractors and is not unique to the WTP [Waste Treatment Plant] contract.”
Energy’s practice of reimbursing contractors to defend the companies against
whistleblowers, however, is not the norm in the federal government.
“DOE’s financial cushion for contractors to fight whistleblower lawsuits is unique, in GAP’s
experience,” said Tom Devine, legal director of the Government Accountability Project, a
nonprofit whistleblower advocacy organization. “The practice is so outrageous that in the
2005 Energy Policy Act, Congress passed a law requiring re-payment when there is a
judgment against the contractor in whistleblower cases.”
Mayo Clinic ordered to reinstate whistleblower
Feb 15 2012
ROCHESTER, Minn. (AP) -- Mayo Clinic says it will appeal an order from a federal
administrative law judge to reinstate an employee who complained about the safety of the
The Department of Labor judge ruled Mayo unlawfully discriminated against courier
James Seehusen, who had complained about a broken windshield on a vehicle and said
the clinic failed to do required daily inspections of certain vehicles. Seehusen also said
drivers didn't have proper certification to operate the clinic's shuttle bus.
Mayo said Wednesday it took immediate action to address the employee's concerns and
that his discipline and suspension were unrelated to his complaints. The Post-Bulletin
reports the judge ruled Mayo failed to prove that the discipline would have happened
regardless of Seehusen's safety complaints.
|San Diego Education Report
"It’s not the first time that the education service district has settled a whistleblower lawsuit
filed against a former teacher. In 2010, the district settled a lawsuit for $45,000 with
Maggie Vogenbeck in which the former teacher claimed state and federal discrimination,
whistleblower retaliation and wrongful discharge."
WESD finalizes $150,000 settlement for whistleblower claim
Nov. 1, 2013
WESD board members in state ethics probe
A laid off Willamette Education Service District teacher and her lawyer will get $150,000
as part of a settlement to a whistleblower lawsuit filed against the district three years ago.
Former teacher Terri Moore claimed she lost her job because she repeatedly reported
safety violations at the high school at Hillcrest Youth Correctional Facility and filed a
formal complaint about harassment and bullying by Bill Conlon, the school’s principal.
She filed a lawsuit in Marion County Circuit Court in 2010 asking for as much as
$500,000, plus attorney fees and reinstatement as a full-time teacher.
Under the settlement, Moore will get $86,355.75 and the law firm representing her —
Lafky and Lafky — will receive $63,644.25.
She won’t be entitled to return as a full-time employee at WESD, but still could work as a
substitute teacher, according to the agreement.
WESD’s liability carrier, the Special Districts Association of Oregon, decided to settle the
lawsuit because of the costs of going to trial last month.
The district’s board chairman Ken Hector said in a statement Friday he understood the
carrier’s decision to settle the case.
“Choosing to move forward to defend the case at trial would burden WESD with all
attorney fees and costs, impacting our general fund,” Hector said. “The ultimate outcome
of resolution for this case is best for WESD and the districts we serve.”
Moore taught health and physical education at WESD’s youth correction education
programs but was laid off in 2009 after 11 years with the district.
WESD has denied the allegations brought by Moore, noting that they have been
thoroughly investigated and found to be without merit. The district’s settlement signed by
Moore is not an admission of wrongdoing or liability.
Moore’s lawyer, Kevin Lafky, said it’s clear Moore was retaliated against. She wanted to
get her old job back; because that did not happen, they decided settling was the best
thing for her to get some sort of compensation for the retaliation.
“The money she’s getting paid certainly doesn’t make up for losing a full-time job with
benefits,” Lafky said. “For years, she’s been working as a substitute teacher to make
ends meet since she was terminated from WESD.”
It’s not the first time that the education service district has
settled a whistleblower lawsuit filed against a former teacher.
In 2010, the district settled a lawsuit for $45,000 with Maggie
Vogenbeck in which the former teacher claimed state and
federal discrimination, whistleblower retaliation and wrongful
WESD provides education services such as special education, home school registration
and professional development to 17 school districts in Marion, Polk and Yamhill counties,
according to its website.
Reporter Tracy Loew contributed to this story.
The $9 Billion Witness:
Meet JPMorgan Chase's
By Matt Taibbi
November 6, 2014
...Fleischmann is the central witness in
one of the biggest cases of white-collar
crime in American history, possessing
secrets that JPMorgan Chase CEO
Jamie Dimon late last year paid $9 billion
(not $13 billion as regularly reported –
more on that later) to keep the public
Back in 2006, as a deal manager at the
gigantic bank, Fleischmann first
witnessed, then tried to stop, what she
describes as "massive criminal securities
fraud" in the bank's mortgage
Thanks to a confidentiality agreement,
she's kept her mouth shut since then.
"My closest family and friends don't
know what I've been living with," she
says. "Even my brother will only find out
for the first time when he sees this
Six years after the crisis that cratered
the global economy, it's not exactly news
that the country's biggest banks stole on
a grand scale. That's why the more
important part of Fleischmann's story is
in the pains Chase and the Justice
Department took to silence her.
She was blocked at every turn: by
asleep-on-the-job regulators like the
Securities and Exchange Commission,
by a court system that allowed Chase to
use its billions to bury her evidence,
and, finally, by officials like outgoing
Attorney General Eric Holder, the chief
architect of the crazily elaborate
government policy of surrender, secrecy
and cover-up. "Every time I had a
chance to talk, something always got in
the way," Fleischmann says.
This past year she watched as Holder's
Justice Department struck a series of
historic settlement deals with Chase,
Citigroup and Bank of America. The root
bargain in these deals was cash for
secrecy. The banks paid big fines,
without trials or even judges – only
secret negotiations that typically ended
with the public shown nothing but vague,
quasi-official papers called "statements
of facts," which were conveniently
devoid of anything like actual facts...
A few months into her tenure,
Fleischmann would later testify in a DOJ
deposition, the bank hired a new
manager for diligence, the group in
charge of reviewing and clearing loans.
Fleischmann quickly ran into a problem
with this manager, technically one of her
She says he told her and other
employees to stop sending him e-
mails. The department, it seemed,
was wary of putting anything in
writing when it came to its mortgage
Jul 17, 2015
Cheney's Halliburton killing
babies. Where are the pro-
A fracking well in Colorado, pictured in 2012
Rolling Stone's article What's Killing the
Babies of Vernal, Utah? by Paul Solotaroff
covers the story of Donna Young, the
primary midwife in Vernal, Utah, that noticed
a recent rise in stillborns in her rural town.
The town, state, oil companies and many
residents don't want to know the reason for
the uptick in birth defects, stillborns and
general rise in respiratory issues.
In most places, detecting a grave risk to
children would inspire people to name a
street for you. But in Vernal, a town literally
built by oil, raising questions about the
safety of fracking will brand you a traitor and
Which is exactly what has happened to
Young. She has been made a villain and the
town continues to celebrate oil at every
major holiday. And while reading the
incredible article—which clearly outlines the
real villains: W, Cheney, legislation written
by oil barrens, and the giddy-because-US-
Obama administration—all I could think was
where are all the pro-life rallies? This is
Where are the hell-bent on redemption
preachers and bible thumpin', baby lovin'
soldiers for Christ, with their signs equipped
with high-resolution pictures of the fetuses
that are being exposed to life-threatening
pollution, the stillborn babies that are
So this is my formal request of the pro-life
crowd: Could you start fighting for
regulations on the corporations that are
killing expectant mothers' babies instead of
standing in the way of women making
healthcare decisions for themselves?