After targeting the war on terror and US diplomacy, WikiLeaks founder Julian Assange says his next “mega-leak” will expose the “ecosystem of corruption” in the financial industry.
Speaking to Forbes, Assange said he plans to release thousands of internal emails and documents belonging to “a big US bank” in early 2011. He gave no clue as to which institution it will be, but said that the data dump will “give a true and representative insight into how banks behave at the executive level in a way that will stimulate investigations and reforms”.
Bank of America is the expected target, based on an interview Assange gave in Malaysia last year to IDG News Service, in which he said WikiLeaks had acquired a hard drive belonging to one of the bank’s executives. Markets seemed to react to the news on Tuesday when BoA’s stock traded down by around 3%, underperforming rival banks such as Citi, J.P. Morgan and Wells Fargo, which all traded flat or slightly up.
The stock closed at an 18-month low of $10.95 on Tuesday and continued down in after-hours trading. Bank of America has acknowledged the comments Assange made last year but said that it had no other knowledge of any information he might have.
Assange compared the material to emails that surfaced during Enron’s bankruptcy, which he said “provided a window into how the whole company was managed. It was all the little decisions that supported the flagrant violations”.
If Assange is right, his next mega-leak could prove hugely embarrassing to one of America’s biggest banks -- and extremely damaging to client relationships -- but the outcome might not be much worse than that. In the interview, he stopped short of saying there was any evidence of criminal activity and his description of the material seems to support that.
“Yes, there will be some flagrant violations, unethical practices that will be revealed, but it will also be all the supporting decision-making structures and the internal executive ethos that comes out,” he said. “You could call it the ecosystem of corruption. But it’s also all the regular decision-making that turns a blind eye to, and supports, unethical practices: the oversight that’s not done, the priorities of executives, how they think they’re fulfilling their own self-interest, the way they talk about it.”
That sounds like a difficult case to bring to court, but a bigger worry is the litany of lawsuits that could follow from the revelations. Any bank victim to such a public outing is bound to be overwhelmed by the sheer number of fires it has to fight on all sides.
But, as one lawyer told us, the biggest lesson of the WikiLeaks scandals has been to highlight the security implications of emails and other forms of electronic communication. For the US government, whose diplomatic cables WikiLeaks exposed on Monday, that is likely to mean an end to the post-911 period of open intelligence-sharing. For banks, it probably means bigger salaries for security consultants.
And, for Assange, it means yet more notoriety. The newspapers that have cooperated with him in publicising the past two mega-leaks have certainly made a good case for the beneficial effects of transparency and openness, but most of those newspapers were also scathing about the publication of emails from a climate research lab in the UK earlier this year, which urges the question: who decides when a leak is in the public interest and what is their authority to make that decision?
Asked if he was a proponent of free markets, this is what Assange had to say: “Absolutely. I have mixed attitudes towards capitalism, but I love markets. Having lived and worked in many countries, I can see the tremendous vibrancy in, say, the Malaysian telecom sector compared to the [same sector in] the US. In the US everything is vertically integrated and sewn up, so you don’t have a free market. In Malaysia, you have a broad spectrum of players, and you can see the benefits for all as a result.”
Needless to say, few FinanceAsia readers would agree with a single word of that – Malaysia’s telecoms market is right now in the middle of yet another licensing scandal – and even fewer would relish the idea of Assange deciding whether they are good capitalists or bad ones.
Photo provided by AFP.