Tuesday, August 18, 2009
U.S. prosecutions expected in wake of UBS deal
At least the recent deal between the U.S. Justice Department and the giant Swiss bank UBS will result in more money for the deficit-ridden U.S. Treasury. U.S. prosecutors have opened 150 investigations against 150 U.S. citizens they believe were helped by Swiss bankers to avoid taxes on $20 billion in assets held in Europe, Central America and the Caribbean. Under the terms of the deal, a major dent in previously inviolate Swiss banking secrecy laws, 5,000 additional owners of hidden assets are expected to be revealed, according to the Reuters international news service. But Swiss bankers are believed to be still be hiding the identities of 10,000-15,000 more depositors from the United States with possibly hundreds of billions more in assets. Those names are not expected to be revealed in the current case, in which UBS also agreed to pay $780 million in fines. This apparently means that the United States has backed away from permanently neutering Switzerland's banking secrecy tradition, which has no place in the evolving global economy. It also looks like the United States has failed use the case to right one of the great festering wrongs from World War II, and force Swiss bankers to reveal the locations and amounts of money and assets stolen from victims of the Nazi conquest of Europe. Why Swiss banks should continue to be exempt from common human decency defies explanation. And, yet, even the world's most powerful nations seem to quiver at the prospect of correcting this indecency. In fact, if not for the testimony of one former UBS banker turned whistleblower, there may have been no case. That banker, Bradley Birkenfeld of South Boston, formerly of Geneva, pleaded guilty in 2008 to helping a South Florida billionaire hide $200 million in assets from U.S. tax authorities. Birkenfeld agreed to cooperate with prosecutors in exchange for a lighter prison sentence.