Brussels — On 21 November 2018, the whistleblower who exposed the alleged €200 billion ($228 billion) money laundering scandal tied to Danske Bank accused British company structures of helping hide the people behind suspect payments.
Howard Wilkinson, who ran Danske Bank’s Baltics trading unit from 2007 to 2014, told European Union lawmakers that British limited liability partnerships and Scottish limited liability partnerships had been misused for years to obscure the beneficiaries of the transactions.
He said the United Kingdom’s role in the affair was “an absolute disgrace,” adding that the structures had been abused “for absolutely years.”
Authorities in Denmark, Estonia, Britain and the United States are investigating payments that moved through the small Estonian branch of Denmark’s largest bank between 2007 and 2015. The scandal has already forced out Danske’s chief executive and chairman.
Britain’s National Crime Agency has said it is examining the use of UK-registered companies and several so-called professional enablers in connection with the case.
Wilkinson also said his anonymity was ended by an Estonian newspaper, which he described as a “gross abuse of human rights” because named whistleblowers can struggle to work again. He did not endorse mandatory internal reporting channels for whistleblowers.
He told lawmakers that in 2013 it would not have occurred to him to go to Estonian authorities because he trusted his employer to deal with the problem. He also urged the EU to ban non-disclosure agreements such as the one he signed with Danske Bank, saying they can stop former employees from speaking about wrongdoing.
Wilkinson repeated his view that most of the money moving through Danske’s Estonian branch passed through banks in the United States, including one major European lender. “In my estimate 80-90 percent of the money that went through Danske Bank ended up in dollars leaving through U.S. correspondent banks into the financial system,” he said.
Sources told Reuters that Deutsche Bank, JPMorgan and Bank of America all cleared dollar transactions for the Estonian branch. A source with direct knowledge of the matter said on Monday that Deutsche Bank processed most of the payments. Deutsche Bank said it ended the relationship in 2015 “after identifying suspicious activity.” JPMorgan ended its correspondent banking relationship with Danske in 2013 because the transactions did not comply with anti-money laundering rules, according to a person familiar with the matter, while Bank of America declined to comment.
Wilkinson’s U.S. lawyer, Stephen Kohn, said the EU should align whistleblower protection with the United States to help prevent scandals like the Danske case. In written answers to EU lawmakers, Kohn called for a confidential or anonymous reporting agency, rewards of 10 to 30 percent of proceeds recovered from wrongdoers, stronger anti-retaliation protection, and compensation for reputational harm, lost income and emotional distress. He also said the scope of nondisclosure agreements should be narrowed so they cannot block employees from reporting misconduct and fraud.
Danish lawmakers, after a public hearing on Monday, pledged to strengthen legal protection for whistleblowers.
