The explosive case of the Danske Bank whistleblower
The now-infamous Danske Bank case from 2018 drew considerable press attention after news of the money-laundering scheme broke, but one employee blew the whistle long before that. This article will recount the story of Howard Wilkinson who spoke up about the ongoing misconduct at the Danish bank’s Estonian branch, including a discussion of aspects common to the experience of many who decide to come forward.
The long road to being heard
Mr. Wilkinson first reported the suspicious activity confidentially in 2013. This was related to a London account moving millions of dollars while reporting no income or assets, later blowing up as one of the largest money-laundering schemes ever uncovered. Wilkinson continued to raise the alarm on related issues, along with Estonia’s regulators who sent 6 letters to their Danish counterparts regarding the branch between 2007 and 2014.
Danske Bank officials assured Mr. Wilkinson, as well as the Danish authority that the situation would be addressed. No such thing occurred, resulting in a shouting match at a 2013 meeting of the European Banking Authority. Eventually an internal investigation Danske’s management used to placate Howard Wilkinson turned up nothing useful.
Escalation
The atmosphere within the branch deteriorated as Mr. Wilkinson’s alarm went unheeded. Danske Bank’s management had bigger fish to fry and the report did not garner the concern it merited. Coworkers at the Estonian branch turned hostile, reportedly insisting they are not the police, implying it was not their business to monitor fraudulent activity. Then, in early 2014 Estonian officials barged into the office without permission from Copenhagen, producing a scathing 340-page report detailing violations.
This prompted the aforementioned internal investigation, which Mr. Wilkinson initially saw as promising. After a two-month long probe, he was informed by phone that the report was being watered down under pressure. It remained a draft, never to be seen by Denmark’s banking supervisor. Mr. Wilkinson was later told by a colleague that management had been listening in on his conversations with the auditors. This led to his resignation in late 2014, but not before he informed the bank’s chief risk officer that he would inform authorities of what he had uncovered if they did not do so themselves.
Resolution
It would take just over two years for the news to actually break, first reported by Denmark’s Berlingske paper in 2017. Danske Bank had been unsuccessfully attempting to sell the Estonian branch, before closing it altogether in 2015. Investigators uncovered the branch had handled €200 billion in largely suspicious transactions. By then however the trail was cold and it could not be determined who owned the fraudulent accounts.
Remarkably familiar, Mr. Wilkinson’s story mirrors that of many other brave individuals speaking up. Many report internally first, allerting management to the misconduct several times and to no avail. Not only that, ostracization from coworkers is similarly a frequent occurrence, as is the intimidation he experienced as a result of being monitored. This often leads to resignations, as observed in this case. This is not only detrimental to the well-being of the individuals raising the alarm, but also the companies wherein the misconduct has occurred. Danske Bank suffered a devastating blow to their stock price and reputation as a result of the scandal.
