Aug 6, 2020 in Analysis
Everett Stern - Whistleblower

Whistleblowing has always been an important element of social life that allowed the society to identify and isolate its less honest and law-abiding members. For centuries, whistleblowers uncovered secret plots and plans of various ambitious groups and individuals that wanted to receive personal profits at the cost of a community’s welfare. Therefore, their actions were mostly beneficial to society and contributed to its development and well-being. Nevertheless, whistleblowers were often viewed as troublemakers and were marked as unreliable and disloyal individuals. This issue is especially topical for the modern society, where powerful business organizations tend to put personal interest first without regard to the protection of common people and the needs of a community. Additionally, the development of technology has seriously contributed to the intensification of international trade and socialization. For instance, the invention of the Internet and new means of communication has allowed people to freely receive and share information from all over the world and increased the influence of media on public opinion and social reality. During the last decades, there were several well-known whistleblowers like Jeffrey Wigand and Edward Snowden, who revealed the secret plots of business and government organization in the society. One of them is Everett Stern who uncovered the biggest money laundering scheme in the modern history. This essay focuses on his story with an attempt to analyze the impact of whistleblowing on the well-being of society.

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First, it is essential to mention the basic facts from the biography of Everett Stern. He has always been a noble person who wanted to serve his country and society, and right before his graduation, he decided to apply for a position in the CIA (Taibbi, 2013). Regretfully, his application was rejected by the agency, and he decided to search for another job that would fit his professional skills and provide decent career opportunities. As a result, he applied for a position at the major international bank HSBC, went for an interview to New Castle, Delaware, and started working at the anti-money laundering department as a specialist on Middle Eastern transactions (Shevarnadze, 2014).

Soon after acquiring the position at the company, Everett Stern found suspicious activities performed by certain clients. For instance, a Saudi fruit company was sending millions to one of the leaders of the Yemeni wing of the Muslim Brotherhood, a terrorist organization that committed violent crimes against humanity (Halasa, 2013). Regretfully, this situation was not the only one that attracted Stern’s attention. A short time later, he discovered that HSBC allowed the transfer of millions from the African chain of supermarkets Caraiba to a firm called Tajco, which had already been marked by the US authorities from the Treasury Department as one of the main sponsors of Hezbollah (Halasa, 2013). This Lebanese Shiite group is one of the major Islamist terrorist organizations that are responsible for numerous acts of terrorism, murders, and the other illegal activities.

Eventually, Everett Stern found solid evidence of transactions of large sums of money to Hezbollah and Hamas from different parties. Thus, he decided to share his findings with superiors to start the investigation of such suspicious activities. He wrote a letter to the chief of the department, where he stated that the company’s investigators were unknowingly making a major compliance error regarding Palestine that was governed by a terrorist organization Hamas (Mollenkamp, 2012). Sadly, the reaction of his superiors was unexpectedly irritated, hostile, and inappropriate. It seemed that they were not concerned about such operations and wanted to ignore the situation to preserve the financial profits of the company and avoid any further allegations and investigations. For example, an anti-money laundering manager Jeff Kraft started screaming and acting aggressively when he heard of the problem (Mollenkamp, 2012). He also threatened to fire Stern for his investigation and warned that there would be negative financial consequences for the company in case he does not halt his inquiry.

Everett Stern also repeatedly expressed the opinion that his colleagues were inexperienced, untrained, acted unprofessionally, and did not pay necessary attention to their duties (Taibbi, 2013). He had to visit different libraries to take books on anti-money laundering in order to develop better understanding of the issue and increase his professional skills and knowledge. Moreover, the company did not provide any training courses or seminars for the employees on how to detect such illegal activities (Taibbi, 2013). Therefore, he had to discover it himself and resort to such means of obtaining information as checking the names of suspicious clients on the Internet and cross-checking them with the help of the internal bank system. Additionally, Stern’s colleagues did not take their work seriously and used to spend time attending to personal matters instead of doing any actual work and treated any additional requests on professional matters with irritation and hostility (Taibbi, 2013).

The company also decided to replenish lacking anti-money laundering specialists personnel by transferring the employees from a liquidated credit card collections unit. They did not know how to perform their duties or even what their tasks were exactly, because they were not provided with any training courses or educational programs (Taibbi, 2013). Moreover, HSBC hired hundreds of people to deal with suspicious activity reports by whitewashing suspicious transactions to avoid investigations performed by the Treasury Department. What is even more astonishing is that every employee had a minimum of 72 alerts per week that needed to be cleared (Taibbi, 2013). Therefore, Everett Stern had to create appearance of working intensively instead of actually looking for money laundering.

Eventually, after receiving numerous refusals to investigate suspicious transactions and threats of dismissal from current position from his superiors, Stern decided to notify such government agencies as the FBI, CIA, and SEC of HSBC operations (Halasa, 2013). Surprisingly, these authorities did not perform any decisive actions on the matter. Instead, they chose to ignore the violation of the US money laundering laws and justified this position by insisting that prosecuting such a powerful and influential bank could lead to the collapse of the financial system (Halasa, 2013). Everett Stern was shocked by the inactivity of the government officials who swore to protect laws and society and decided to seek justice by going public. He provided different media companies with information about HSBC activities and officially became a whistleblower. His decision caused one of the biggest financial scandals in the US.

Eventually, the bank had to pay a $1.9 billion penalty in 2012 and promised government agencies and society that it improved the anti-money laundering system to avoid such situations in the future (Halasa, 2013). Regretfully, Everett Stern had to pay for his actions and suffer their negative consequences. Despite being an honest person who strived to protect American society, he was marked as an unreliable and disloyal employee and lost the trust of potential employers. He was not welcome in the banking sphere and could not find a decent job for a long time until he decided to start a private intelligence agency called Tactical Rabbit (Shevarnadze, 2014). It specializes in investigating suspicious activities that could possibly harm business and social organizations. Therefore, Everett Stern continues to do his dream job – protecting society from dishonest companies and individuals.

In conclusion, whistleblowing is an important element of social life aimed at revealing information about unethical and potentially harmful secret activities. Everett Stern is a famous whistleblower who uncovered suspicious operation of HSBC bank that was related to money laundering and caused one of the biggest financial scandals in the US. Regretfully, he had to pay for his actions by losing the ability to work in the banking sphere, but eventually he started a private intelligence agency and continued to protect the modern society.

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