Bradley Birkenfeld, the banker awarded $104 million by the U.S. for revealing how he helped UBS Group AG hide assets for rich Americans, has a message for Swiss lawmakers wrangling over the draft of the nation’s first whistleblowing law: “stop living in the past.”
Birkenfeld won a record Internal Revenue Service whistleblower award in 2012 after serving most of a 40-month sentence for his part in the tax-evasion schemes. His testimony, in contravention of Swiss banking secrecy, triggered a U.S. probe that’s reaped more than $5 billion in penalties from wealth managers in the Alpine country.
“We have to make some changes in Switzerland -- it’s long overdue,” Birkenfeld, a 50-year-old American, said last week in a phone interview. “The environment there is hostile toward people exposing corruption.”
The role of whistleblowers in Switzerland was back in the spotlight on Tuesday as the court case resumed of a former Nestle SA executive, who claims she was fired after alleging there were lapses in food safety.
The Nestle case comes as political parties spar over proposals that some say risk undermining the corporate confidentiality that helped lure hundreds of multinationals to Switzerland. Swiss lawmakers, after deliberating for more than a decade, sent draft whistleblowing legislation back to the Justice Ministry in September.
Even the reworked law will fall short of the protection given to whistleblowers in the U.S. and the U.K., said Daniel Jositsch, a Social Democratic Party lawmaker pushing for stronger employee rights. The legislation will probably oblige employees to go first to their employer with allegations of wrongdoing, he said.
“Here in Switzerland, the government says ‘thank you for informing us but now we must prosecute you,”’ according to Jositsch, who said a compromise deal will be an improvement on the current situation, which affords whistleblowers little protection. “It’s absurd that secrets are being protected in Switzerland.”
Another high-profile whistleblower Herve Falciani, a former computer worker at HSBC Holdings Plc’s Geneva private bank, was found guilty of corporate espionage in absentia by a Swiss court in 2015 and given a five-year prison sentence for trying to sell client data. While the French, British, Spanish and Italian governments used the HSBC account data to track down tax dodgers, Swiss prosecutors said the data leak created “diplomatic crises for Switzerland and third-party pressure on banking secrecy.”
A spokesman for HSBC in Geneva said that Falciani didn’t report any concerns to his line manager or an employee whistleblower hotline. HSBC agreed in June to pay 40 million Swiss francs ($39 million) to close an investigation by Geneva prosecutors into related allegations of money laundering at its Swiss private banking unit. Falciani, like Birkenfeld, has said he tried to raise his concerns with the bank.
Nestle Case