Next in WikiLeaks' Crosshairs: a Big U.S. Bank

Last Updated Nov 30, 2010 6:44 PM EST

Having muddied international diplomatic relations by disclosing sensitive political cables, Julian Assange has a fat new target: U.S. financial firms. The WikiLeaks founder tells Forbes's Andy Greenberg that the not-for-profit media firm's next document dump will expose widespread corruption within a major American bank.

Assange says he expects the revelations, which will come out early next year, to prompt government investigations and to "take down a bank or two." He adds:
It will give a true and representative insight into how banks behave at the executive level in a way that will stimulate investigations and reforms, I presume.

Usually when you get leaks at this level, it's about one particular case or one particular violation.... This will be like 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 cames out, and that's tremendously valuable.
Assange declined to say which bank is the focus of the leaks. He also stopped short of saying the information would expose any criminal activity, noting that WikiLeaks is still investigating. For now, Assange is only willing to say the data will shed light on what he calls the "ecosystem of corruption" within banking:
[I]t'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.
This is no idle threat. WikiLeaks last year released an internal document from Iceland's Kaupthing Bank detailing how it funneled money to company managers and prominent investors as the institution was sliding into insolvency in late 2008. The leak helped trigger investigations into Kaupthing by Icelandic and European legal authorities that revealed fraud.

Assange isn't only targeting financial firms. He tells Forbes that WikiLeaks also has confidential documents showing misconduct at a range of companies, including pharmaceutical, energy and technology firms. Indeed, rough half the secrets WikiLeaks has in its possession are related to the private sector.

Among energy companies, for instance, Assange says WikiLeaks has information "on everything from BP to an Albanian oil firm that he says attempted to sabotage its competitors' wells." Assange also claims to have material that points to spying by an undisclosed country on the tech industry.

Not all this info will offer evidence of corruption, of course. WikiLeaks also publishes documents that simply offer a view into corporate strategy (My colleague Kirsten Korosec has details on U.S. embassy cables appearing on the site that convey Chevron's difficulties operating in Central Asia). But Assange suggests there's enough dirt in the next round of secret documents to make corporate executives squirm.

As for which U.S. bank lies in WikiLeaks's crosshairs, that's anyone guess. All Assange will say is that the revelations center on a major existing bank. That will presumably set off alarm bells at Citigroup (C), Goldman Sachs (GS), Morgan Stanley (MS) and Wells Fargo (WFC), not to mention set the banks' internal IT staff scrambling to beef up security.

As far as investors are concerned, the most likely target appears to be Bank of America (BAC). Shares in the financial giant fell three percent following news of WikiLeaks's plans. Assange told Computerworld magazine last year that he had obtained a hard drive belonging to a senior B of A executive with some 5 GB of data.

Federal authorities may also be eager to see what new info WikiLeaks has to share. Few financial industry execs have been prosecuted for any misdeeds related to the financial crisis, whether preying on borrowers with dodgy loans or conducting illegal foreclosures.

Assange makes no bones about his wish to pressure companies to behave ethically. How should they act? Simple, he says:
Do things to encourage leaks from dishonest competitors. Be as open and honest as possible. Treat your employees well.
I think it's extremely positive. You end up with a situation where honest companies producing quality products are more competitive than dishonest companies producing bad products. And companies that treat their employees well do better than those that treat them badly.
Thumbnail from Flickr user VanDammeMaarten.be; interior image from Wikimedia Commons, CC 2.0
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  • Alain Sherter On Twitter»

    Alain Sherter is an award-winning business journalist who has written for The Deal, MarketWatch and Thomson Financial Media.

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