In her latest article for Forbes.com, Phillips & Cohen partner Erika Kelton puts the ongoing investigation into potential money laundering at Danske Bank’s Estonian branch into international context and argues that the scandal, which was revealed by a whistleblower, offers the EU an opportunity to learn from US whistleblower programs.
Behind Danske Bank’s money-laundering scandal was a pervasive culture of silence that flourished despite the fact that many people knew or suspected for years that the bank’s Estonian branch was laundering billions of dollars.
It took a whistleblower who is a former Danske official to spark serious investigations into the tiny Estonian unit, which handled more than $235 billion in non-resident transactions from 2007 to 2015 – including an untold amount that was due to money laundering.
The Danske case shows the top-to-bottom failure of management, internal auditors and regulators to detect and stop the laundering of billions of dollars in criminal proceeds from Russia and other former Soviet states, while also demonstrating the impact that a whistleblower can have by speaking up.
If the EU truly wants to protect and encourage whistleblowers, the Danske Bank scandal provides ample reasons why the EU Parliament should revise its approach and carefully consider what it can learn from the US whistleblower programs.