A federal judge has rejected a whistleblower claim by a former Bank of America Corp. computer guru who charged that he’d been fired for questioning the effectiveness of the bank’s new money laundering-detection technology.
Boris Galinsky, a senior vice president who had done much of the technical work on a major anti-money-laundering computer project, lost his job after complaining that management was pressuring him to cut corners and “develop crap.”
U.S. Administrative Law Judge Ralph Romano ruled against Galinsky last week in what was essentially a split decision that gave the win to Bank of America.
Romano concluded in his 20-page ruling that Galinsky’s internal whistleblowing complaints were “contributing factors” to his bad job reviews and termination.
But the bank had other good reasons to discipline and fire Galinsky, the judge found, because of his “propensity for rude behavior”and his violation of company policy by secretly taping conversations with managers.
Under whistleblower protections in 2002’s Sarbanes-Oxley corporate reform law, a company can avoid liability if it can show that it “would have taken the same unfavorable personnel action” even in the absence of a worker’s whistleblowing efforts.
In a statement, Bank of America told iWatch News it was “pleased that the Court agreed with the bank in the Galinsky matter.” Bank of America said it thoroughly investigates employee complaints and that it doesn’t retaliate against workers who raise concerns.
Bank officials previously said the computer program was a success as part of the bank’s overall anti-money-laundering strategy. A Bank of America spokeswoman told iWatch News earlier this year that the bank “spent tens of millions of dollars on sophisticated systems and processes” to prevent money laundering.
Like other big banks, Bank of America has been criticized for not doing enough to stop money laundering by drug traffickers and Third World politicians. In February 2010, a U.S. Senate investigation concluded that Bank of America and other banks had ignored money laundering rules as they shuffled hundreds of millions of dollars on behalf of African politicians and their associates.
The ruling in Galinsky’s case ends a 4½ -year legal battle.
Galinsky, who has acted as his own lawyer, said he didn’t plan to appeal the decision. “I promised my wife that I will not,” Galinsky told iWatch News in an email.
Galinsky’s problems with the bank began in 2006, after he began work on a statistical modeling program that would sift millions of transactions and try to identify money launderers. The idea was to look for questionable clusters of money transfers and other red flags, such as cash coming from regions deemed as high-risk areas for terrorism.
In a series of internal emails, Galinsky complained that managers were lowering standards on the project and the system was “destined for failure.”
Galinsky filed the first in a series of Sarbanes-Oxley whistleblower claims in January 2007 with the U.S. Labor Department, which handles whistleblower complaints filed under that corporate reform law. The bank fired him in April 2008.
The Labor Department rejected Galinsky’s claim for whistleblower protection. After a series of appeals, Galinsky laid out his claims before Judge Romano in January in a courtroom in Philadelphia.
Galinsky testified that the bank was under pressure from regulators to show it had improved its money laundering controls. Because of this, he said, management wanted him to be “politically correct” and say only good things about the computer project.
Two managers testified that the bank never had any problems with Galinsky voicing concerns, but how he went about it caused problems.
Romano found that Galinsky had made his internal complaints in “good faith” and that he engaged in “protected activity” under Sarbanes-Oxley’s whistleblower provisions.
But the judge said the bank was justified in firing Galinsky, in part because he covertly taped conversations with bank managers, including a performance review. Also, Romano said, the bank discovered that Galinsky had violated bank policy by improperly downloading company information for personal use.
Galinsky argued that the bank had used such issues as pretexts for firing him. In an email to iWatch News, Galinsky said, “I don’t quite follow the judge’s logic of how he can determine that a protected activity was a contributing factor to a negative employment action and then claim that it was not.”
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