What happens to whistle-blowers? To high performers?
Often, they get fired.
Often, they get fired.
Whistleblowing: A
Study of Managerial
Differences
John P. Keenan
and Associates
International, 2
Hillsboro Drive, ...
help curb
fraudulent
practices, and in so
doing avoid costly
lawsuits and
negative publicity
.... Reprisal
involves taking an
undesirable action
against an
employee or ...
by JP Keenan - 2002
· Culture and
Whistleblowing An
Empirical Study of
Croatian and ...
Keenan and
Associates
International, a firm
presenting .....
Against harm to
others .... with
potential costly
lawsuits, and negative
publicity. ...
by AA Tavakoli - 2003
Study of Managerial
Differences
John P. Keenan
and Associates
International, 2
Hillsboro Drive, ...
help curb
fraudulent
practices, and in so
doing avoid costly
lawsuits and
negative publicity
.... Reprisal
involves taking an
undesirable action
against an
employee or ...
by JP Keenan - 2002
· Culture and
Whistleblowing An
Empirical Study of
Croatian and ...
Keenan and
Associates
International, a firm
presenting .....
Against harm to
others .... with
potential costly
lawsuits, and negative
publicity. ...
by AA Tavakoli - 2003
Why This Website
Stutz Artiano Shinoff
& Holtz v. Maura
Larkins defamation
SDCOE
CVESD
Castle Park Elem
Law Enforcement
CTA
CVE
Stutz Artiano Shinoff
& Holtz
Silence is Golden
Schools and Violence
Office Admin Hearings
Larkins OAH Hearing
Stutz Artiano Shinoff
& Holtz v. Maura
Larkins defamation
SDCOE
CVESD
Castle Park Elem
Law Enforcement
CTA
CVE
Stutz Artiano Shinoff
& Holtz
Silence is Golden
Schools and Violence
Office Admin Hearings
Larkins OAH Hearing
Oil-Rig Workers Gain Whistleblower Protections in House
Bill
July 30, 2010
Bloomberg Businessweek
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
Bill
July 30, 2010
Bloomberg Businessweek
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
Target of
bullies: future
US President
Considering birthers and
other bullies, it seems that
Obama is still a favorite
target of bullies.
03/10/2011
Obama speaks out
against bullying, says, 'I
wasn't immune'
By Nia-Malika Henderson
Washington Post
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
networking.
Joined at the White House
Conference of Bullying
Prevention by top advisers,
cabinet officials and about
150 parents, teachers and
school administrators,
Obama said that bullying,
which effects about 13
million children annually
by one estimate, is
behavior that doesn't have
to happen.
"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
younger.
"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'
CBNNews.com
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
every year.
"If there's one goal, it's to
dispel the myth that
bullying is just a harmless
rite of passage," the
president said...
"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
child.
"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
emerge unscathed."
The day-long conference
will examine bullying on
college campuses as well
as at elementary and
secondary schools. It will
also focus on Internet
bullying.
The White House has set
up stopbulling.gov and a
Facebook page to promote
the campaign.
bullies: future
US President
Considering birthers and
other bullies, it seems that
Obama is still a favorite
target of bullies.
03/10/2011
Obama speaks out
against bullying, says, 'I
wasn't immune'
By Nia-Malika Henderson
Washington Post
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
networking.
Joined at the White House
Conference of Bullying
Prevention by top advisers,
cabinet officials and about
150 parents, teachers and
school administrators,
Obama said that bullying,
which effects about 13
million children annually
by one estimate, is
behavior that doesn't have
to happen.
"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
younger.
"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'
CBNNews.com
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
every year.
"If there's one goal, it's to
dispel the myth that
bullying is just a harmless
rite of passage," the
president said...
"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
child.
"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
emerge unscathed."
The day-long conference
will examine bullying on
college campuses as well
as at elementary and
secondary schools. It will
also focus on Internet
bullying.
The White House has set
up stopbulling.gov and a
Facebook page to promote
the campaign.
In the following case,
incompetent or careless
administrators promoted a
mentally ill man who killed 13 at
Fort Hood.
Army to Punish 9 Officers for
Fort Hood Shootings
Officers Not Identified by Name
or Rank
By LUIS MARTINEZ
March 10, 2011
The Army has begun
administrative punishments
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
punishment.
"The severity of each action
varies depending on
case-specific facts and
circumstances," the statement
said.
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
broader investigation's
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.
incompetent or careless
administrators promoted a
mentally ill man who killed 13 at
Fort Hood.
Army to Punish 9 Officers for
Fort Hood Shootings
Officers Not Identified by Name
or Rank
By LUIS MARTINEZ
March 10, 2011
The Army has begun
administrative punishments
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
punishment.
"The severity of each action
varies depending on
case-specific facts and
circumstances," the statement
said.
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
broader investigation's
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
incompetent? Often,
they get promoted.
mentally ill? The
incompetent? Often,
they get promoted.
NYTimes.com
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 in Mumbai.
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 Americans.
“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 probation officer.
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 Washington Post.
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 informant.
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.
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 in Mumbai.
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 Americans.
“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 probation officer.
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 Washington Post.
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 informant.
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
of tsunami
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 threat.
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.
of tsunami
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 threat.
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
Church of
Scientology
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
top.”
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
happened.
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
Scientology’s spokesperson,
Davis was a senior vice-
president of the church’s
Celebrity Centre International
network.
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
church’s scripture.
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
Hostile”—“the most
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
explored outside
perspectives on
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
civil-rights violations.”
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
understand—”
“Well, what is
disconnection?” Roberts
interjected.
“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
disconnection?” Roberts
said again.
“—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.”
Haggis vs. the
Church of
Scientology
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
top.”
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
happened.
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
Scientology’s spokesperson,
Davis was a senior vice-
president of the church’s
Celebrity Centre International
network.
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
church’s scripture.
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
Hostile”—“the most
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
explored outside
perspectives on
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
civil-rights violations.”
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
understand—”
“Well, what is
disconnection?” Roberts
interjected.
“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
disconnection?” Roberts
said again.
“—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.”
Blog posts re incompetence
"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
The Observer
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 of
cocaine.
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 reverse.
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
boardroom".
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...
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
The Observer
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 of
cocaine.
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 reverse.
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
boardroom".
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)
Salon.com
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. ..
By Glenn Greenwald
(updated below: w/reaction from Jim Risen)
Salon.com
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
Washington Post
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
Tamosaitis.
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
taxpayers?
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
correct.
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
made.
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.”
actions by whistleblowers?
By Joe Davidson
Washington Post
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
Tamosaitis.
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
taxpayers?
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
correct.
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
made.
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.”
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