Crime and Punishment – and Payment

 Crime and Punishment   and Payment

The PR Verdict: “B” (Good Show) for the US Government. (Pictured: Bank fraud whistle blower Brad Birkenfeld)

Who knew that whistle blowing could be so profitable? Bradley Birkenfeld, a former private banker for one of the leading Swiss banks, just landed a cool $104 million as his reward for ratting on his former employer. Big headlines yesterday, but as the news broke, Bradley wasn’t photographed in a glamourous nightspot celebrating his new win. He was in New Hampshire finishing his 40-month jail term in home confinement.

His evidence relating to tax evasion and non-declaration of foreign accounts has netted the US government over $5 billion, but that wasn’t enough to protect him from criminal charges. Prosecutors were unhappy with his previously withholding information about his own clients at the bank, which earned him 40 months in jail.

On the face of it, this seems a perverse result. But under existing legislation the Internal Revenue Service can pay whistleblower awards of up to 30 percent of the collected proceeds. Birkenfeld’s payment is being touted as proof that the US government is committed to rewarding courageous whistle blowers. The PR sting in the message is that ratting on others doesn’t give you immunity; not such a lottery win after all. The US government sent a clear signal that Brad is no angel, yet they’re no welchers.

The PR Verdict: “B” (Good Show) for the US Government. Sending mixed signals is sometimes the only way to accomplish goals. Complicated, yes; confusing, no.

The PR Takeaway: Bitter and sweet can live together, even if it seems sometimes counterintuitive. Birkenfeld’s payment sends a clear signal that the government takes the issue of fraud, and reward for whistle blowing, seriously, and is willing to share the upside of newfound gains. Yet Birkenfeld paid a personal price for wrongdoing. Birkenfeld, more than anyone, knows this, as he ponders his newfound fortune – and his ankle brace.

Should government entities send mixed messages of punishment and reward? Should Birkenfeld have received his whistle-blower payment even though he was sentenced? Give us your PR Verdict!