Monday, July 20, 2009

UBS wins court stay: justice made or election payback?

Offshore providers elsewhere take note: big checks at election time may give relief from anti-tax haven measures...


Obama’s Double-Edged Sword
Guest Column By Paul R. Hollrah July 16, 2009
In a July 14th editorial titled "Picking on the Swiss," the Wall Street Journal criticizes the Obama Administration for attempting to require the Swiss Bank, UBS, to turn over to the IRS the names of some 52,000 US taxpayers who currently maintain secret accounts with the bank.
According to the Journal, "This sort of fishing expedition expressly violates the U.S.-Swiss treaty on sharing tax information. The original treaty dates back 30 years, and under the pact the Swiss regularly provide the IRS with information on specific cases. But what the IRS is attempting here is a mass search of U.S. taxpayers merely for banking in Switzerland."
In response, the Justice Department argues that "UBS systematically marketed its private banking services in order to avoid U.S. taxation," which, in fact, they did.
The Journal concludes, "Apart from the diplomatic ramifications, the government's request for so broad a swath of information could well run afoul of the Fourth Amendment's protections against unreasonable search. The Obama Administration should use the court reprieve to rethink the whole case."
Actually, it is surprising that the IRS, currently supervised by Obama's tax-cheating Treasury Secretary, Timothy Geithner, would actually pursue such information. The last thing that Obama needs is for U.S. authorities to have the names of UBS's American clients, a list that could then be compared with Obama's Federal Election Commission filings from the 2008 election.
Here's a bit of background, and why it represents a double-edged sword for Obama.
In a July 22, 2008 article in The Nation magazine, titled, "Attack of the Global Pirate Bankers," it was disclosed that Robert Wolf, CEO of UBS Americas, had been "outed" in six months of hearings conducted by the Senate Permanent Subcommittee on Investigations, then chaired by Senator Carl Levin (D-MI).
So, aside from being CEO of UBS's North American subsidiary, exactly who is Robert Wolf? Wolf is, along with the world's most evil man, George Soros, one of Obama's two top financial backers. He is also a highly influential member of Obama's Council of Economic Advisors.
In it's article, The Nation tells us, "Last week in Washington we got a rare look inside the global private banking industry, whose high purpose it is to gather up the assets of the world's wealthiest people and many of its worst villains, and shelter them from tax collectors, prosecutors, creditors, disgruntled business associates, family members, and each other."
According to a Statement of Facts in the June 2008 criminal trial of former UBS executive Bradley Birkenfeld, UBS took significant steps to help American clients manage their Swiss accounts without alerting U.S. government authorities. For example, the Statement of Facts described how UBS advised American clients to withdraw funds from their accounts using Swiss
credit cards that "could not be discovered by U.S. authorities," to "destroy all off-shore banking records existing in the U.S.," and to "misrepresent the receipt of funds from their Swiss accounts... as loans from the Swiss bank."
The Nation reported that, "To achieve these results, UBS established an elaborate formal training program," which coached UBS bankers on how to avoid surveillance by U.S. Customs and law enforcement, how to falsify visas, how to encrypt communications, and how to secretly move money into and out of the U.S. undetected. It was, as I suggested in a July 28, 2008 column titled, "Who Owns Barack Obama," the perfect instrument for funneling illegal foreign contributions into the coffers of an ambitious and unscrupulous American politician.
I suggested, just for the sake of argument, that a billionaire international financier who wished to influence the outcome of the American presidential elections, could transfer unlimited sums of money through this device. A U.S. recipient, such as the Obama campaign, could receive hundreds of thousands of individual contributions via Swiss credit card transfers, with fictitious payees being entered by teams of paid staffers working in a "boiler room" setting. The owners of the Swiss accounts would receive periodic statements indicating: a) debits of varying amounts, up to $2,300 each, and b) offsetting credits provided by the wealthy, but unnamed, "international financier."

If some American taxpayers are hiding taxable income from the IRS through the use of a Swiss bank account, it's only fair that they be identified and punished. Every American taxpayer who pays his/her taxes in full would agree with that. However, if the United Bank of Switzerland is ultimately forced to turn over the names of its 52,000 American depositors, and those names are then compared with UBS credit card receipts received by the Obama campaign, there'll be hell to pay. It's a double-edged sword for Obama and it couldn't happen to a better guy.
Given the newsworthiness of the underlying story, the Wall Street Journal may wish to reevaluate its editorial stance. The uncovering of a few thousand tax cheats is small potatoes compared to the unearthing of the largest electoral
fraud in history... a fraud that facilitated the purchase of the presidency of the United States.

Full text in

President Barack Obama shakes hands with Robert Wolf, Chairman & CEO, UBS Group Americas, after signing an executive order establishing the new Economic Recovery Advisory Board as members of the Board gather around him in the East Room of the White House in Washington on February 6, 2009.

The skeleton in Obama’s money closet
By Judi McLeod Thursday, July 24, 2008
Robert Wolf, CEO of UBS Americas, who has bundled more than $370,850 for Barack Obama so far this year, is one of the most embarrassing skeletons in BO’s money closet, now that the financial institution Wolf heads up in America has been outed in The Nation’s Attack of the Global Pirate Bankers.

“…This crowded docket, combined with the UBS mea culpa, almost distracted us from the sordid details of the Levin Committee’s actual findings,” investigative journalist James S. Henry, wrote in The Nation on Tuesday.

It’s not as if Wolf is just another number in the contribution side of the ledger paying for Obama’s race to the White House.

Among the groupies pushing Obama’s rock star-status, Wolf stands at the front of the line.

Wolf was “wowed” by the Senator from Illinois when he first met in December 2006. “He handed Obama his card and said, “I’d like to get to know you more.” (John Heilemann, New York Magazine, April 16, 2007). Obama phoned the next day. “When we hung up, he said, `I’ll call you after the holidays,’ and I’m thinking, Yeah, right, he’s gonna call me,” Wolf says. But call Obama did. The next week they had dinner in Washington, just the two of them, on the night that George W. Bush gave his speech announcing the surge of additional troops into Iraq. “I felt so honored to be sitting down with him for two hours on an occasion like that,” Wolf recalls, “knowing that he was going off to be interviewed on television later.”

“Within ten days, Obama had announced his intention to run and Clinton was officially in. A story in the Times reported that Obama had nailed two A-list New York donors: Soros and Wolf. But though Soros’s backing was a symbolic coup, it’s Wolf who has emerged as Obama’s most copious cash collector in the city so far—hosting two high-dollar cocktail parties, making countless calls, harvesting more than $500,000.

“As Wolf tells me about the soirees he’s hosted, he reaches into a meticulously organized scrapbook, takes out a photograph of him and Obama grinning madly, and tells me that I can keep it. “The way Barack has taken this nation with his rock-star status,” he says, “it’s very exciting!”

But Obama’s biggest New York groupie was nowhere around in last Thursday’s standing-room only hearing on tax haven banks and tax compliance held by the US Senate’s Permanent Subcommittee on Investigations, chaired by Michigan Senator Carl Levin.

Wolf’s financial institution’s parent company UBS, Switzerland’s largest bank and the world’s largest private wealth manager, with $1.9 trillion in client assets and nearly 84,000 employees in fifty countries, including 32,000 in the United States, was one of two exposed in the results of the Congressional Committee’s six-month investigation.

It was not UBS’s most honorable corporate moment.

“The Statement of Facts in the Birkenfeld criminal case describes additional actions taken by UBS bankers to help U.S. clients manage their Swiss accounts without alerting U.S. authorities. It states, for example, that UBS bankers advised U.S. clients to withdraw funds from their accounts using Swiss credit cards that “could not be discovered by the United States authorities”, to “destroy all off-shore banking records existing in the United States”; and to “misrepresent the receipt of funds from the Swiss bank account in the United States as loans from the Swiss Bank.”440. The Statement of facts also discloses that, on one occasion, “at the request of a U.S. client, defendant Birkenfeld purchased diamonds using that U.S. client’s Swiss bank account funds and smuggled the diamonds into the United States in a toothpaste tube,” presumably so that the U.S. client could obtain possession of his Swiss assets without alerting U.S. authorities.441. It also states that Mr. Birkenfeld and his business associate Mario Staggl “accepted bundles of checks from U.S. clients and facilitated the deposit of those checks into accounts at the Swiss bank” and elsewhere, presumably to assist the clients in making transfers to their Swiss accounts, again without alerting U.S. authorities.442.

But wait a minute, didn’t Obama tell AP last April, “We’re proud of the fact that we were able to do this (collecting just $1 million less than rival Hillary Rodham Clinton’s record haul) without any money from federal lobbyists or PACs”?

And does find it mind boggling that Obama was one of three congressional sponsors of the new “bundling disclosure” provision in the Disclosure of Contributions “Bundled” by Lobbyists as a key provision in new Lobbying Disclosure Law to be interpreted and implemented by the Federal Elections Commission (FEC)?

From Attack of the Global Pirate Bankers, ˆ”In 2001, UBS had signed a formal “qualified intermediary” agreement with the US Treasury. Under this program, it agreed either to withhold taxes against American clients who had Swiss accounts and owned US stocks, or disclose their identities. However, when UBS’s American clients refused to go along with these arrangements, the bank just caved in and lied to the U.S. government. Eventually, it concealed 19,000 such clients, partly by helping to form hundreds of offshore companies. This cost the US Treasury an estimated $200 million per hear in lost taxes.”

Of the high fliers in the “utterly unprincipled global private banking industry”, Henry concludes: “They wield enormous political influence even without paying taxes, merely by making contributions, threatening to withhold them—or better yet, threatening to abscond with their capital unless certain conditions are met. In a sense, this is the ultimate libertarian pipe dream: representation without taxation. But it is a nightmare for the rest of us, and we must design and organize our way around it.”

Full text in

No comments: