In this blog, first published in the Whistleblower Edition of Tax Justice Focus (available here), TJN’s director John Christensen, a former Economic Adviser to the island of Jersey, reflects on his experience of exposing a banking scandal, which involved him in a direct confrontation with senior politicians and island officials. In September 1996, the Wall Street Journal published what was effectively his resignation letter in the form of a front-page article titled ‘Offshore Hazard: Isle of Jersey Proves Less Than a Haven to Currency Investors.’
Late one evening in January 1996 I took a call from a Wall Street Journal reporter called Michael Sesit. This call changed my life. He was enquiring into the failure of my then employer, the government of Jersey, a small British-linked tax haven, to investigate accusations by US based investors that the Jersey-based subsidiary of Swiss banking giant UBS had violated US federal racketeering laws by conspiring with a British currency trader in a variety of crimes including fraud, executing fictitious currency trades, churning accounts, theft and deceit.
My office was not directly implicated in the story, but I was in a position to confirm whether or not proper procedures had been followed by relevant government departments in licensing the trader at the heart of this multi-million dollar scandal. When I discovered a web of procedural irregularities that reached the very top of the government, I knew that I had to decide between keeping my secure, well-salaried job or to act on principle and cooperate with a journalist investigation. I called the reporter 24 hours later, and agreed to cooperate.
Many thoughts crowded into my head during the 24 hours between those fateful phone calls. First, a degree of disbelief (surely senior government officials and politicians wouldn’t conspire to block investigations into corruption?), followed by anger (yes, they had). Second, I knew beyond any shadow of doubt that by cooperating with Sesit I was effectively resigning my post; the States of Jersey is not an organisation that tolerates any form of whistleblower, especially involving a senior economic adviser.
But resigning my job would have knock on effects. Small island tax havens don’t tolerate dissent; my wife and I would have to sell our home, say goodbye to friends and family on the island, re-settle elsewhere (London, as it happens) and start over. I was forty then, with a son aged 3 and another son soon to be born. This was not a decision taken on impulse, but I knew that I wouldn’t be able to live with myself if I chose to do nothing.
Sesit’s report, published on the front page of the WSJ on 17th September 1996 under the title ‘Offshore Hazard: Isle of Jersey Proves Less than a Haven to currency investors’ stirred up a storm in Saint Helier. But the Jersey media somehow managed to spin the story into one about a single rogue currency trader, without disclosing that top politicians and senior officials were also implicated in a succession of regulatory failures.
In practice it took over 18 months to move from Jersey to London, during which time I stayed in post as economic adviser (I had tenure, and was almost unsackable.) It was a period of poisonous relations with senior politicians and civil service colleagues, who were enraged that I had broken Jersey’s offshore omertà.
On one occasion, a sympathetic colleague stopped me on my walk to work to tip me off that the Attorney General’s office was preparing a warrant to search my home. I sent a discreet message to the AG advising him that all the relevant documentation was held by the WSJ in London. (The raid, in the end, didn’t happen.)
We left Jersey in July 1998 and found new jobs in London. The UBS investigations ground on (UBS eventually pleaded ‘criminal recklessness’) and a few journalists began to pay attention to my critical analysis of Jersey’s tax haven activity, which in addition to being weakly regulated and policed was also rapidly crowding out other sectors of the island’s economy as Jersey succumbed to the Finance Curse. Jersey’s politicians and senior bankers reacted in time honoured fashion, by attacking me personally rather than addressing the issues I had raised.
I first heard of Jersey’s counter-attack from a BBC radio journalist, who had been contacted by a public relations agency, retained by the Jersey finance industry, claiming I wasn’t a reliable interviewee since – in their words – I was “personally motivated.”
The allegation was that I criticised Jersey simply because I hadn’t been appointed Chief Adviser. Other journalists who cited me got similar visits from the same PR agency. As recently as Spring 2015, seventeen years after leaving Jersey, a journalist was told by several senior island officials that I was not to be trusted because I have “baggage”, the implication being that I still bear a grudge about not being appointed Chief Adviser. Why a senior civil servant seeking promotion would preface his job application by whistleblowing to the WSJ, they don’t explain. Though the grudge argument never stacked up, it is still wheeled out. The strategy of continuously slinging muck inevitably creates doubts in some minds.
Almost two decades after that phone call, what were the outcomes of my decision to cooperate with Sesit’s investigation? Leaving my job was relatively easy, though few of the skills I learned in Jersey have been useful outside the world of offshore finance. Selling our family home and leaving Jersey was far harder since we had strong emotional and social ties to the island, which have inevitably worn thin with the passing of time.
There’s also no doubt that whistle-blowing cost us a huge amount of lost income, and we’ve had to learn to live with financial insecurity. I’ve also learned how to live with the personal attacks, though privately I feel contempt for people who play the man rather than the ball. Sadly, some friends and family in Jersey have suffered from these attacks, and personal relations have inevitably been strained. One close relative who works in a Jersey trust company has refused to speak with me for fifteen years, which makes family reunions unbearably awkward.
Like many small island communities Jersey has various mechanisms for repressing dissent – best captured in the expression “if you don’t like it here, there’s a boat in the morning”. Most islanders know that the best way of adapting to these social pressures is to keep their heads low and internalise their opinions. The small minority who do dare to rock the boat can expect a torrent of personal abuse.
If looks could kill, I’d be dead many times over from the distilled hatred I’ve seen on the faces of some bankers, lawyers and senior politicians, and more than once I’ve been called a “fucking traitor” to my face.
But that’s not the full story. In 2009 I visited Jersey with a BBC television documentary crew. Within minutes of starting to film in Saint Helier, a man approached front of camera to say that Jersey was ruled by bankers and captured politicians and only one senior official had ever had the courage to confront them. Speaking to camera, he said that without my (and by extension TJN’s) efforts, nothing would ever be done to tackle the corruption inflicted on Jersey since it became a tax haven.
I can’t say that that rare moment of public support justified the many years of exile from my island, but I do take some comfort from the fact that TJN has won so many of the crucial arguments and public opinion outside of Jersey has swung firmly behind us. Jersey is a state captured by offshore finance: public opinion there will take a long time to shift.
Judging from my experience, any would-be tax haven whistleblower should expect the following:
• Little or no support from colleagues and senior management, they might well sympathise with your principles but they won’t put their jobs on the line;
• Savage kickback from employers whose business models are based on secrecy; they will do whatever it takes to punish you as a deterrent to others. The rich and powerful are at their most thuggish when their backs are up against the wall;
• Little or no support from police or judicial authorities in most tax havens, they largely toe the line;
• Harassment from local media, most of which is captive and depends on advertising revenue from banks and other tax haven players;
• A widening gap between you and the vast majority of your former friends and acquaintances: most will keep their heads low, and few will understand why anyone would put civic duty and matters of principle ahead of personal advancement and a secure income.
My experiences, painful though they were at the time, have been relatively benign compared to the treatment meted out to other whistleblowers such as Ruedi Elmer and Antoine Deltour. Ruedi has been imprisoned and faces constant harassment; Antoine faces criminal proceedings with the threat of a custodial sentence. The HSBC whistleblower Hervé Falciani has faced legal threats, extradition proceedings and death threats.
Whistleblowers need strong support networks to resist the repressive tactics of the tax haven world. All three deserve recognition as potential prisoners of conscience.