60 minutes will re-air their piece on UBS whistleblower Bradley Birkenfeld tonight. Please tune in to watch at 7:00 pm EST then Take Action by sending a letter in support of Mr. Birkenfeld's clemency petition.
Ed O'Keefe of The Washington Post is quoting Stephen M. Kohn, Executive Director of the National Whistleblowers Center, in a story appearing on today's Fed Page. Called, "Immigration agency assailed over leak probe," the story reports on criticism the immigration service is getting from the American Federation of Government Employees (AFGE) Local 118. AFGE is upset that management at the immigration service is conducting a witch hunt for whoever leaked to The Washington Post an email about quotas for arrests of undocumented immigrants. The investigation has focused on an agent who has an Asian last name, apparently because the Washington Post reporter also has an Asian last name.
Kohn told O'Keefe that the backlash for President Obama on prosecuting whistleblowers is less than it would be since Obama is a Democrat. "It mutes the criticism," Kohn said. Kohn also said that whistleblowers face more risk since the president has not yet appointed a Special Counsel to protect them. Rep. Darrell Issa (R-Calif) told O'Keefe that he is calling on the president to appoint top leaders for 15 inspector general offices that still lack permanent leadership. Rep. Issa's letter is available here.
O'Keefe's story also mentions other whistleblowers facing prosecution by this administration. These include Thomas Drake who used to work for the National Security Administration (NSA). The article also mentions concern about the Internal Revenue Service failing to issue any whistleblower rewards, but neglects to mention Bradley Birkenfeld who is still in jail after delivering to the U.S. government information that helped collect $20 billion in unpaid taxes.
The Washington Post is running a story today by David Hilzenrath on page A11 called, "Change in IRS rules could block rewards for whistleblowers." 
The story focuses on a manual by the Internal Revenue Service (IRS) called the Internal Revenue Manual (IRM). The new IRM recognizes that if a whistleblower provides information leading to a payment to the IRS, the whistleblower would be entitled to a reward of up to 30%. However, the revised IRM adds that if the information reduces a credit or stops a refund, then no reward is made. It also bars rewards arising from criminal penalties. My friend Michael Sullivan of Atlanta told Hilzenrath, "There's apparently an institutional resistance to rewarding whistleblowers that will take some time to dissipate." UBS whistleblower Bradley Birkenfeld (pictured) provided information the led to the bank's $780 million settlement with the IRS. His whistleblower claim with the IRS is pending while he serves a prison sentence for having followed the bank's orders in connection with the tax evasion scheme he revealed. Hilzenrath's story reports that Sen. Charles Grassley has written to the Treasury Department asking that it delay the IRM revision. Sen. Grassley was a proponent of the IRS whistleblower reward program. Hilzenrath quotes a former IRS official saying that the reward program is "unseemly." Perhaps when the IRS whistleblower program starts to bring in as much money as the False Claims Act does, then attitudes will change and the government will see the wisdom in promoting rewards as a way to increase revenue. You can support Birkenfeld's campaign for clemency by following this link.
UBS bank whistleblower Bradley Birkenfeld spoke with the Wall Street Journal's Arden Dale in a story released Friday. The WSJ story, "UBS Whistle-Blower Rues the Tack, Not Tune," appears on page C-2 of today's Money and Investing section. Birkenfeld says that he would still want to expose the way UBS helped thousands of millionaires evade their taxes, but he would do it differently. The interview is a lesson for how other tax whistleblowers might want to proceed in the future. The article recognizes that Birkenfeld was "the central informant in an investigation that led to a wide-ranging IRS crackdown on secret offshore bank accounts." He is also the only figure in the case sentenced to substantial prison time, 40 months. Birkenfeld attorney, Stephen M. Kohn (who is also Executive Director of the National Whistleblower Center), explained to Dale how going to the Department of Justice was a mistake. One of their jobs, after all, is to put people in jail. Kohn says that tax whistleblowers should instead consider going to the whistleblower office of the Internal Revenue Service (IRS). That office would be more focused on using the whistleblower's information to collect taxes. It is also the office that will decide on financial rewards for whistleblowers. Federal officials declined to talk to Dale for this story.
Meanwhile, Reuters is running a story called, "Special Report: How the U.S. cracked open secret vaults at UBS." A U.S. government attorney involved in the case did speak to Reuters, and their story barely mentions Birkenfeld, and then only to mention his participation in UBS' crimes before he decided to cooperate with U.S. authorities. The Reuters story misses how Birkenfeld asked the Department of Justice to issue a subpoena to him to allow him to name all the names. That's why we bought the Wall Street Journal on Friday.
Want to take action to support Brad Birkenfeld? Follow this link.
Today, the Department of Justice (DOJ) issued an extremely misleading press release on the departments “successes” in tax enforcement. However, as NWC Executive Director, Stephen M. Kohn responded, the “DOJ spends much ink describing the importance of the UBS case without finding the space to add two more words - the name of the whistleblower who made it all possible - Bradley Birkenfeld.”
Instead, the DOJ has the audacity to trumpet their efforts to prosecute the whistleblower, Bradley Birkenfeld. Even more amazing is the fact that while they applaud themselves for throwing the whistleblower in prison, they neglect to tell the American taxpayers that they allowed the architect of the entire UBS illegal offshore tax fraud program, Martin Liechti, to return to the safety of Switzerland without prosecution.
For more on the NWC’s response to the DOJ’s refusal to recognize that their “treatment of Mr. Birkenfeld is not only a generational setback for tax whistleblowers, it will cost the American taxpayers billions of dollars” please click here.
To TAKE ACTION in support of Mr. Birkenfeld's clemency campaign please click here.
The LA Times reported last week on a series of trends in securities fraud. The $65 billion lost in the Madoff scandal highlights the huge losses millions of investors suffer as a result of corporate fraud. Meanwhile, the new enforcement chief at the Securities and Exchange Commission (SEC) reports a dramatic rise in enforcement actions. The numbers of formal investigations and restraining orders have approximately doubled. The total sum of restitution orders has more than doubled.
After serving his first year as the SEC's enforcement director, Robert Khuzami is now calling for improving the protections for whistleblowers, and even rewarding them for turning in their bosses or co-conspirators. Khuzami proposes "cooperation agreements" that could assure whistleblowers that they will receive leniency or exemption from SEC enforcement action, or legal assistance in the event of prosecution. Khuzami is also calling for changes in the law to protect whistleblowers and even to reward them financially. "Whistle-blower laws provide a powerful incentive for people to come forward," Stephen M. Kohn told LA Times reporter Kathy M. Kristof. Kohn is Executive Director of the National Whistleblowers Center. Kohn adds, "The U.S. government has collected billions and billions of dollars as the result of the False Claims Act." Khuzami's call for a whistleblower reward recognizes what works. The reward provided by the False Claims Act (FCA) has recovered billions of dollars for U.S. taxpayers.
Kristof's article notes that the success of Khuzami's new proposal may hinge on what happens to the world's most famous corporate and tax fraud whistleblower, Bradley Birkenfeld.
On January 28, 2010, the Washington Post announced that the Swiss government has suspended the disclosure of information about tax cheats to the United States under a February 2009 “deferred prosecution” agreement and may seek to renegotiate the deal. Under the agreement the Swiss government was supposed to provide the U.S. with 4,450 accounts of the 52,000 secret accounts not declared to the IRS.
Basically, this means that 14,700 people walked away without prosecution under the IRS amnesty program, the head of entire illegal UBS program Martin Liechti was allowed to return to Switzerland without prosecution, the 4,450 tax cheats are likely to escape prosecution, and Bradley Birkenfeld (the person responsible for blowing the whistle and ending the illegal UBS program) is still the only banker sitting in prison.
When will the U.S. government wake up? Bradley Birkenfeld’s prison sentence is not only unjust in terms of how they treated every other person associated with the UBS scandal, it is permanently harming national and international efforts to fight corruption. Once again, what whistleblower is going to want to come forward after seeing how Mr. Birkenfeld was treated?
Please TAKE ACTION to stop this injustice now!
Leading national and international anti-corruption groups have joined the National Whistleblowers Center (NWC) in a clemency campaign on behalf of UBS whistleblower Bradley Birkenfeld. In an open letter President Barack Obama, the groups request a presidential pardon for Mr. Birkenfeld, or commutation of his prison sentence to time served to “reverse the devastating impact Mr. Birkenfeld’s case will have on international law enforcement efforts.“
The National Whistleblowers Center, with support from public interest groups, is urging people to personally endorse the clemency campaign for Mr. Birkenfeld through their TAKE ACTION program.
Mr. Birkenfeld blew the whistle on UBS bank in Switzerland, exposing a $20 billion tax scheme involving illegal, offshore bank accounts. Despite the government's acknowledgement that the multi-billion dollar UBS tax fraud scheme would have continued undetected without Mr. Birkenfeld's voluntary disclosure, Mr. Birkenfeld commenced serving a 3-year, 4-month prison sentence on January 8, 2010.
The letter states points out that “in return for his extraordinary cooperation with the U.S. government, Mr. Birkenfeld remains the only banker involved the in the largest illegal tax scheme in history to receive a prison sentence,” and advises that “great importance must be placed on the public policy implications of Mr. Birkenfeld’s case, international bankers must be able to come forward to report illegal practices like those exposed by Mr. Birkenfeld.“
Lindsey M. Williams, Director of Advocacy and Development, National Whistleblowers Center, said, “Sadly, saving the American taxpayers billions of dollars was not enough to save Mr. Birkenfeld’s freedom. A presidential pardon is the only way to correct this injustice.”
UBS whistleblower Bradley Birkenfeld told a Wall Street Journal reporter that the government's decision to send him to jail arises from “a cover-up at the highest levels.” Brikenfeld noted how the UBS clients who actually cheated on their taxes got either house arrest or probation, but the messenger who brought the key information to the US government is now in jail.
The WSJ's Thomas Coyle reports that,
Whatever his culpability, Birkenfeld helped set in motion a chain of events that included UBS agreeing to pay a large fine to the U.S. for its role in helping an initial list of several hundred Americans hide money in Swiss accounts, Switzerland changing its laws to allow banks to share the names of several thousand U.S.-based Swiss account holders, and thousands of Swiss-account holders coming forward under the terms of a voluntary disclosure program.
Birkenfeld disclosed that among his clients who used UBS to evade taxes are a wealthy US politician and a Hollywood movie star. Follow this link to TAKE ACTION TO SUPPORT BRAD BIRKENFELD.
Speaking on the Diane Rehm Show today, IRS Commissioner Doug Shulman said that the agency's amnesty program for US citizens who hid their assets in off-shore accounts brought in "billions" of dollars. That program, of course, was prompted by the disclosures of former UBS employee Bradley Birkenfeld. Over 15,000 taxpayers came forward because they faced criminal prosecution once UBS was forced into turning over its records revealing the huge scheme to help Americans evade their taxes. Audio of the interview is available here. Although Commissioner Shulman addresses the UBS scandal earlier in the show, his comment about the huge recovery is in the last ten minutes of the hour-long interview.
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