Bittersweet Justice for Bradley Birkenfeld

Today, the IRS awarded whistleblower Bradley Birkenfeld $104 million to reward him for having exposed UBS’ methods of helping US tax cheats hide their loot, tax free, in Switzerland.

It’s a bittersweet award, I’m sure. As Birkenfeld’s lawyer, Stephen Kohn, reminded at the ceremony, Birkenfeld was imprisoned by the Obama Administration for fraud in spite of what now is clear confirmation he acted as a whistleblower; he got out early on August 1 from his 40 month sentence.

The IRS reward will help undo the tremendous damage caused by the ill-conceived decision of the U.S. Department of Justice to ignore the whistleblower laws and prosecute Mr. Birkenfeld. Mr. Birkenfeld was the only UBS banker to blow the whistle and the only UBS banker to be prosecuted. By doing so the DOJ sent the wrong message to international bankers. They caused a chilling effect on the willingness of employees in the international banking industry with direct knowledge of illegal offshore banking practices to step forward to report these crimes.

The National Whistleblower Center carefully investigated the basis upon which the DOJ justified its prosecution. The DOJ did not tell the truth about Mr. Birkenfeld. At his sentencing hearing, the DOJ justified its decision to indict Mr. Birkenfeld based on its position that Mr. Birkenfeld had failed to inform the government about the illegal activities of his largest client, billionaire Igor Olenicoff.

But this charge against Mr. Birkenfeld was false and defamatory. The NWC carefully reviewed court records concerning the Olenicoff case, internal emails regarding Mr. Birkenfeld’s disclosures, and a confidential transcript of sworn testimony Mr. Birkenfeld provided to the U.S. Senate in 2007 about the illegal activities of Mr. Olenicoff. These materials absolutely verify that Mr. Birkenfeld did in fact blow the whistle on Mr. Olenicoff, and that the charges made by the DOJ were false. The NWC finds it very troubling that the prosecutor who leveled these charges in court against Mr. Birkenfeld has left his government job and taken a position with a major law firm that defends tax cheats. The DOJ also granted immunity to the top-ranking official at UBS who was responsible for the UBS tax frauds and permitted this official, Martin Liechti, to leave the United States and obtain safe-haven in Switzerland where, to this day, he has escaped justice. Mr. Liechti invoked the 5th amendment in testimony before the U.S. Senate.

There’s even a WikiLeaks cable suggesting we prosecuted Birkenfeld as a favor to the Swiss.

And it’s not just Birkenfeld who has gotten limited justice out of this–though obviously he is by far the worst off. While the IRS got over $5 billion in owed taxes as a result of his whistleblowing, no one else went to prison, not even the several individuals about whom specifically Birkenfeld blew the whistle. And a bunch of rich people–potentially including a Presidential candidate–enjoyed an amnesty that didn’t even require them to admit they had been cheating their country.

In short, like so much else with the Obama Administration, it’s an example where the real criminals go free while the whistleblowers get prosecuted.

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14 Responses to Bittersweet Justice for Bradley Birkenfeld

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Emptywheel Twitterverse
JimWhiteGNV Tide finally turning? Jordan Davis' murderer convicted! In Florida, no less.
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JimWhiteGNV RT @AP: BREAKING: Florida man convicted of 1st-degree murder for killing teenager after argument over loud music.
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emptywheel RT @alexisgoldstein: Shorter Eric Holder: "if only someone with power would do something about these oversized, unaccountable banks!" https…
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emptywheel @JimWhiteGNV To be fair, that kind of arrangement (cough, Bandar) is prolly one reason our intel on Syria is so bad.
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emptywheel @pwnallthethings Yep. But their number one rec was ... to do what Apple is now defaulting to. And Apples about half of stolen phones.
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JimWhiteGNV I understand that Louie Gohmert plans to hire the Khorasan Group as consultants to search for new head of SS.
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JimWhiteGNV RT @GreggJLevine: Ask not if sexism played a role in 30-year Secret Service vet Pierson's promotion; ask if it contributed to her ouster.
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emptywheel 3.1 million Americans had their smart phone stolen last year (Apple has ~45% market). http://t.co/6flb8CXbfe Consumer Report fix? passcode!
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emptywheel @noir Nope. Just no one is actually talking abt existing data.
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JimWhiteGNV @ClaireAdida @smsaideman Or is it more likeKarpinski for Abu Ghraib? Widespread problem w/woman taking biggest hit.
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emptywheel @ericghill 1,200 iPhones stolen in San Francisco alone last year. You'd get to 5,000 device requests pretty quickly from stolen phones
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