Question: California organic. Divide into two groups and prepare arguments for and against the following behavior: You work in the accounting department of a family-owned mushroom grower based in California that sells premium organic mushrooms to local restaurants and high-end retail grocery stores. The company's product range includes both fresh and dried mushrooms. Your organic certification allows you to charge top dollar for your product, but you notice from invoices that operating costs are increasing significantly without any increase in revenues. The market won't absorb a price increase, so the company has to absorb the higher costs and accept lower profits. One day you notice invoices for the purchase of dried mushrooms from a Japanese supplier. The dried mushrooms are not listed as being organic, but they are apparently being added to your company's dried mushrooms, which are labeled organic and California-grown. Should you speak out about this?

Thinking Critically

QUESTIONABLE MOTIVES

Bradley Birkenfeld was born in the Boston area but spent the last decade of his professional banking career in Geneva, Switzerland, as a personal banker for wealthy American clients of Swiss banking giant UBS. He has achieved notoriety in the fi nancial services industry as the whistle-blower of the largest tax fraud case in history. As a result of evidence he provided, his former employer, UBS, paid a $780 million fi ne, agreed to modify its international banking practices, and turned over the account records of 4,450 American account holders who, the IRS believed, were actively seeking to evade their U.S. tax obligations. Birkenfeld was an average midlevel banking executive, and his motives in becoming the fi rst banker to ever provide evidence on Swiss banking practices were initially perceived as altruistic. He offered to wear a wire transmitter to record conversations with high-level UBS executives and to provide documentation on almost 19,000 UBS accounts.

In return, he asked for immunity for his past actions as a UBS employee. When we consider the nature of his work, his request for immunity appears to be a very smart move. Birkenfeld's duties-he was a personal banker-included providing concierge-level service, under the protection of highly secretive Swiss banking laws, helping clients invest, spend, and move their money around the world. Such personal service included, for one wealthy client, the purchase of loose diamonds in Geneva and then personal delivery of those diamonds to the United States, carried through customs in a toothpaste tube. Despite a statement from Birkenfeld that the value of the diamonds was "less than $10,000" (which meant that they did not need to be declared at U.S. Customs), the choice of packaging raises questions about his desire to not draw attention to himself while traveling to the United States. Indeed, it was this practice of low-key, "under the radar" visits from UBS bankers to the United States on trips recorded in their business calendars as "vacations" that drew the attention of the FBI. Evidence provided by Birkenfeld revealed that these "vacations" were, in fact, carefully planned trips to service UBS's wealthy American clients at luxury yacht races and art shows where, conveniently, UBS bankers could also mingle, network, and solicit new clients.

Unfortunately, since those bankers were not licensed to conduct business in the United States, their actions amounted to a clear violation of U.S. banking regulations. With such a strong case, the U.S. government was able to negotiate, for the first time, the delivery of client records of U.S. citizens who were using UBS accounts to evade their domestic tax obligations. Even though UBS sought the intervention of the Swiss government to help its case, it came down to pragmatic reality. With 30,000 employees and a large fi nancial services business in the United States, the bank could not risk losing access to such a large market if it was to remain a global banking institution. For Birkenfeld, the outcome was not so positive. Despite his request for immunity for past actions as a UBS banker, he elected not to fully disclose his relationship with Californian real estate billionaire Igor Olenicoff, who was indicted for trying to evade U.S. taxes on $200 million hidden in Swiss and Lichtenstein bank accounts. Birkenfeld was charged with helping Olenicoff by referring him to a UBS specialist in the creation of offshore "shell" corporations designed to hide the true ownership of UBS accounts. Olenicoff cooperated with the investigation and paid $52 million in fi nes and back taxes. As a result of his cooperation, Olenicoff served no jail time. Birkenfeld, on the other hand, was charged with conspiracy to commit tax fraud, pleaded guilty, and received a sentence of 40 months in prison, beginning in January 2010. While he does not dispute his relationship with Olenicoff, Birkenfeld maintains that his involvement was only as a referral to another UBS specialist. As such, he feels strongly that his jail time is unjust given his altruistic services to the U.S. government in providing evidence against UBS that is expected to generate billions of dollars in recovered taxes for the U.S. Treasury. He is currently appealing to President Obama for clemency.

Critics are concerned that his prison sentence will discourage other tax whistle-blowers from coming forward, with the result that many more billions of lost tax revenue may never be recovered. The Justice Department officials who indicted Birkenfeld have stated that if he had fully disclosed the nature of his relationship with Olenicoff, it's unlikely that he would have been prosecuted, which brings us back to the question of Birkenfeld's true motives in coming forward as a whistle-blower-was it really altruism, or was he looking for a way to handle the mess that the Olenicoff case had created for him? In either event, there may still be a silver lining in Birkenfeld's cloud. As a key figure in the qui tam lawsuit between the U.S. government and UBS, he may be eligible for up to 30 percent of the money recovered from UBS-but that still has to be decided by the IRS.