Last year German citizens provided information to US authorities in 44 whistleblower cases, because they believed nobody in Germany would listen to them if they pointed out misconduct in the financial sector and other industries. Germans are numerically in second place, tied with the UK, among foreign whistleblowers from the US perspective. This is one of the sensational results of the 2019 whistleblower program report submitted to Congress by the US Securities and Exchange Commission (SEC). Only Canadians gave the SEC more tips on corruption cases than Germans.
How whistleblowers are generously rewarded for helping US authorities raise $2.6 billion in four years is reported on here. Cases are reviewed and presented by specialized law firms, the cases are made public, yet whistleblowers can remain anonymous. $2.6 billion – such amounts also could be collected by the German Federal Ministry of Finance. Yet Germany is going away empty-handed.
When it comes to the business of corruption, Germany is not far behind poorer, emerging countries. The Wirecard scandal is just the latest evidence that the dimensions of corruption in this country are much greater than in regions such as Africa. It is not uncommon for German banks and insurers to be involved in the business of corruption, all while the export bronze world champion Germany is globalizing.
After the German company Fresenius Medical Care violated the Foreign Corrupt Practices Act (FCPA) for almost 10 years in various countries, it paid $231 million to the SEC and judicial authorities last year. It therefore received the scepter of impudence of German economic power.
Deutsche Bank paid $16 million to the SEC last year; how could it be left out? Commerzbank also paid the SEC, and Allianz was sued for unclean business in Indonesia.
Whistleblower revelations exposed corruption, insider trading and other violations from these European companies:
- Belgium: Anheuser-Busch
- Estonia: Tallinex
- France: Société General, Sanofi, Total
- Italy: ENI
- Netherlands: VimpelCom, Royal Dutch Shell, Koninklijke Philips Electronics
- Norway: Statoil
- Poland: Biomet
- Russia: JSC VTB Banks, Mobile TeleSystems
- Sweden: Telia, Ericsson
- Switzerland: Credit Suisse, Novartis
- UK: GlaxoSmithKline, Barclays, AstraZeneca, Royal Bank of Scotland
But while Fresenius & Co. are shedding feathers because of corruption, only the US federal budget is benefiting from it. A prerequisite for this is that the German company is listed on a US stock exchange.
However, whistleblowers in Germany who point out grievances in the financial sector are usually fired, ostracized and lose their personal well-being. Authorities and the judiciary usually destroy the lives of courageous whistleblowers, as the case of mad cow disease whistleblower Margrit Herbst shows. Contrary to this, in the US, people like Herbst are rewarded.
The $2.6 billion flushed into the coffers of the US Treasury over the past four years was based on 1,159 cases. Within the US, the authorities recorded 3,262 tips, complaints and referrals last year, and a total of 479 reports from other countries.
In 44 cases last year, the tips came each from Germany and the UK, 22 from Russian, 20 from South Africa, 13 from the Netherlands and one from Austria. The fact that only four tips came from Swiss people could be due to the end of the Swiss banking secrecy – or a signal that the pressure mechanisms within Swiss banks are still intact.
In his book Lucifer’s Banker, Bradley Birkenfeld describes how he destroyed Swiss banking secrecy. Birkenfeld is proud to have flushed $25 billion back into the cashier’s office of his own country after exposing tax evasion enabled by his employer UBS Group and other banks. One of the leading “gangsters,” as Birkenfeld likes to say, is Deutsche Bank. Since 2000 the banking group has paid at least $18 billion in fines in various contexts.
The convicted banking group includes Deutsche Bank Securities, DB Group Services UK, DB Structured Products, Deutsche Asset Management, Deutsche Investment Management Americas, Deutsche Bank Trust Co. America, Deutsche Bank Americas Holding Corp., Deutsche Bank Energy Trading LL or Deutsche Bank Suisse SA.
Time and again, Deutsche Bank employees are driven to uncover corruption and injustices in their own company. There is an internal whistleblowing guideline for this, which we published five years ago exclusively. The bank’s improper whistleblowing guideline bank had been leaked analogo.de.
In implementing the EU whistleblower protection directive into German law, Germany can replicate the successful US system. Comprehensive expertise for this was made available to all members of the Bundestag, the Federal Ministries of Economics and Justice, and 500 journalists in a joint campaign by analogo.de, Whistleblowing International, the National Whistleblower Center, Kohn, Kohn & Colapinto LLP and the European Center for Whistleblower Rights.
Rainer Winters is the founding publisher of the independent investigative news and data analysis portal analogo.de, based in Kiel, Germany.