Congress Hears Offshore Tax Haven Secrets

Abuses Cost U.S. Taxpayers $100B Each Year, According To Senate Panel Report

(AP)  A man wanted by Liechtenstein for leaking secret banking information that identified millionaire tax cheats across Europe and the United States has described to congressional investigators how money was concealed.

Lawmakers played a videotape of testimony by Henrich Kieber at a congressional hearing Thursday, in which he appeared only as a silhouette against a white screen with eyeglasses and a balding head apparent. Kieber, living under a new name in an undisclosed witness protection program, according to lawmakers, has never spoken publicly about his role in exposing tax shelters he says were used by Liechtenstein's LGT group.

In the videotaped interview with the congressional investigators, he described ruses that he saw while working at the bank, which he said were used to cover the tracks of money moved into accounts in Liechtenstein.

The video was played at a hearing in which the Senate Homeland Security and Governmental Affairs investigations subcommittee highlighted offshore tax abuses that they believe cost the U.S. government about $100 billion a year.

The hearing came a day after the panel released a 109-page report that took aim at LGT, owned by Liechtenstein's royal family, and Switzerland's UBS AG, one the world's largest wealth managers.

Mark Branson, chief financial officer of UBS' global wealth management, said at the hearing that the bank regrets "any compliance failures that may have occurred" and will now provide banking or security services to U.S. citizens only through companies licensed in the United States. He said the bank also is working with U.S. authorities to identify clients involved in U.S. tax fraud.

LGT refused to send a representative but said in a statement that it had cooperated by sending a senior official for a lengthy interview and providing all the documents requested by the panel.

Both LGT and UBS came under withering criticism from the lawmakers.

"Tax havens are engaged in economic warfare against the United States and honest, hardworking American taxpayers," said Democratic Sen. Carl Levin, chairman of the subcommittee. "Today we will look at two banks that relied on secrecy and deception to hide, not just the tax avoidance schemes of their clients but the actions they themselves took to facilitate U.S. tax evasion."

A U.S. federal judge ruled this month that the Internal Revenue Service, the federal tax-collection agency, could serve legal papers to UBS in an expanding probe of U.S. taxpayers who may have used overseas accounts to hide assets and avoid taxes. UBS has said it is cooperating with Swiss and American investigations and will disclose records involving U.S. clients who might have broken tax laws. It also has banned its Swiss bankers from traveling to the United States.

The IRS also has asked the Swiss government to help in its investigation.

Finance Ministry spokesman Jean-Michel Treyvaud said that Swiss tax authorities received the IRS' official request for "administrative assistance" on Thursday.

He said the request would now be analyzed, but he said nothing further.

The subcommittee report said that UBS bankers searched out wealthy U.S. clients and aggressively marketed services to taxpayers who otherwise would not have opened Swiss account. It said the bank's practices resulted in billions of dollars of U.S. taxpayer money in accounts that were not disclosed to the IRS. The report said UBS has estimated that it has 1,000 declared accounts in Switzerland for U.S. clients against 19,000 undeclared, with a combined value of $17.9 billion.

Investigations linked to LGT have been launched in a number of countries since German authorities obtained in February the CD-ROM of some 1,400 alleged tax cheats with accounts at the bank that Liechtenstein says Kieber leaked. Germany has since passed the file to other countries, including the United States.

In his videotaped testimony, Kieber described shell companies used as "high grade camouflage." Money was often transferred through bank-controlled legal entities registered in numerous countries with lax regulations, including Panama, the British Virgin Islands and Nigeria, he said.

Additional concealment was provided by fake transactions designed to make it look like clients had withdrawn cash from a bank, when in reality they were credited into a LGT account.

"The only purpose of all of this is to make it extremely complicated for law enforcement agencies to follow the trail," he said. "As each step serves as a filter to hide the track of the client's money.

He said that clients were advised how to avoid scrutiny, including not telling anyone including lawyers and family members about hidden money. Clients were also encouraged to use pay phones to contact bank representatives on cell phones from Switzerland and Austria and to use code words in communications.

LGT questions Kieber's objectivity and accuses him of stealing the information, according to Michael Robinson, a spokesman for the bank. It says that much of the information that Kieber has provided involves records going back to the 1970s and 1980s.

"LGT's practices were consistent with accepted industry standards of the time and do not reflect the way in which LGT conducts business today," he said.

[Gary Kempf]

It said the bank''s practices resulted in billions of dollars of U.S. taxpayer money in undeclared accounts that were not disclosed to the IRS. The report said UBS has estimated that it has 1,000 declared accounts in Switzerland for U.S. clients against 19,000 undeclared, with a combined value of $17.9 billion.


And this surprises who?

[ubrew12]

A good book on this is ''Perfectly Legal'' by David Cay Johnston

[omega39-2009]

UBS? Isn''t that the financial institution that Phil "let them eat cake" Gramm is vice chairman of? No wonder he thinks we''re all a bunch of whiners, we''re dumb enough to play by the rules while his clients rip off the government.

[tootall10142]

WHEW!that was close i got mine out just in time . If the IRS was doing its job how the hell did that much U.S currency get out of the system without being noticed? if it was passed with through wire transfers the money still has to be somewhere to cover the transfers.It was a woman that spilled the beans she should be rewarded for this and just when she gets all excited about the reward, take it back for fines for crimes against the U.S tax payers.

[coco0331]

organized crime at its best. The Bush and Cheney connection.

[antoniof123]

Want to bet who most of the criminals are in this GOP?

[nssherlock1]

Sooooooooooooo, the thieves are going to investigate the thefts from the government by tax havens? I''ll be on the edge of my chair for this one....NOT!

[forthepeopl1]

Concerns about the international breadth of the fallout from Fannie and Freddie''s problems also eased. South Korea''s central bank denied a media report that it had unrealized losses of more than $7 billion in investments in U.S. agency debt including bonds issued by Fannie Mae and Freddie Mac.

Bank of China 3988.HK 601988.SS , meanwhile, may hold roughly $20 billion worth of bonds issued by Fannie and Freddie, according to a research note by analysts at CLSA.

A Bank of China spokesman could not immediately be reached for comment. Because the U.S. government has taken steps to support Fannie and Freddie, CLSA said in its note that it regards the credit risk for the two as near to that of a sovereign credit rating for the government itself.

[bm6005]

Now who passed the laws to allow these Tax havens? Could it be.......CONgress?

[wardoglrs]

Offshore Tax Havens Face Senate Scrutiny:
Dammit you guys were suppose to share this with the rest of us in congress... :[

[l8c6]

European bankers and some of their U.S. clients can expect a grilling from a Senate panel looking into offshore tax abuses that investigators believe are costing American taxpayers about $100 billion a year.------

And on top of that, they get tax breaks in the United States.

The fact is, this doesn''t generate the economy as the right wing narcissistic antisocial conservative with everyone but themselves organized criminals have hammered into the public via the hoe corporate media. It has drained the economy for the masses of working people for the benefit of a few elite oligarchs. Our politicians and the supreme court of "justice" are hoes to this pimping elitism. This nation has failed to maintain it''s principles of defending basic equity and justice for all.

When a nation has a set of rules for a special class separate from the masses, the nation no longer honors democratic values nor is it united. If this were an average citizen the IRS would spend more money going after them than was lost. The checks and balance are harsh for the "little people" and non-existent for the elite super rich. Yes, the news of this hits mainstream a couple of days late on the back page but the most that comes of this exposure will be a slap on the wrist when life imprisonment is the only way to let it be heard that no matter how much money one has, this nation is not for sale and not for exploitation. It''s too late though, the United States is a dying corrupted defunct empire.

[l8c6]

The 109-page report by the Senate Homeland Security and Governmental Affairs investigations subcommittee took aim specifically at Switzerland''s UBS AG, among the world''s largest wealth managers, and Liechtenstein''s LGT group, owned by the principality''s royal family.


Oh yeah, this is the bank that Phil Graham the Texas dude is a chairman of. Didn''t he just call the american people a bunch of whiners the other day.

Justice for him will never ever happen in this country but in he*ll justice will have him squealing like a pi*g.

[kennedy7955]

"Abuses Cost U.S. Taxpayers $100B Each Year, According To Senate Panel Report"

Okay, maybe abuses cost taxpayers $100B but to be fair nothing costs taxpayers more than the government. The government wastes a lot of our money on needless wars, interest on debt, corruption and graft. I guess every little bit counts though, the reason for this story.

Funny how the USA charges so many countries around the world with corruption and never admit to any of it here. I think it unlikely that any other country wastes as much money as our government.

The USA spends $100 billion more on the military than all other countries combined. In addition, the government has $8-9 trillion in debt and counting.

It makes their concerns about $100 bill lost a year a trifle.

[forthepeopl1]

Fannie and Freddie shares have declined by about 80 percent this year. The slump in the two mortgage agencies has sparked a new catchphrase -- ``Too Chinese to Fail'''''''' -- based on the $974 billion of U.S. agency debt held by foreign investors, a fivefold increase since 2003.

Financial markets and U.S. legislators alike have derided U.S. Treasury Secretary Henry Paulson''''s plan to bail out the mortgage lenders. One of the two key elements is illogical, while the second is plain outrageous.

Just last week, Fannie Mae said it ``has access to ample sources of liquidity, including access to the debt markets.'''''''' Freddie Mac said it was ``adequately capitalized, highly liquid and an essential part of the nation''''s housing system.'''''''' Either they are being economical with the truth, or the decision to let them borrow from the Federal Reserve''''s discount facility is window-dressing that serves no real purpose.

Defending the Indefensible

Worse is the scheme to allow Paulson to dip into the nation''''s tax revenue to purchase shares in Fannie and Freddie -- shares that investors have already deemed to be almost worthless. If the mortgage lenders can''''t survive in their current form, the government shouldn''''t be defending the indefensible.

In April, Standard & Poor''''s said the risk that the U.S. would have to prop up its so-called Government Sponsored Enterprises posed a bigger threat to the country''''s AAA rating than its willingness to underwrite securities firms.

[kennedy7955]

I hate Bush and what he has done to this country but there is plenty of blame to go around. The dems have stood by and watched. Pelosi is a great example of Dems stupidity and cowardice.

[l8c6]

It makes their concerns about $100 bill lost a year a trifle.

Posted by kennedy7955

Oh, so 100 billion annually for the war in Iraq and tax breaks for the super rich in american and an additional opportunity for them to to commit 100 billion dollars tax evasion...yeah, no big deal. It''s just money, to hel*ll with principles and leadership. Everyone knows the right wing sociopaths value neither. The cost of the 100 billion to the trust of society in this system is far more than a 100 billion dollars, it''s incalculable and it''s this right wing neo con cronyism is what is the unraveling of the United States.

[l8c6]

It makes their concerns about $100 bill lost a year a trifle.

Posted by kennedy7955

Oh, so 100 billion annually for the war in Iraq and tax breaks for the super rich in american and an additional opportunity for them to to commit 100 billion dollars tax evasion...yeah, no big deal. It''s just money, to hel*ll with principles and leadership. Everyone knows the right wing sociopaths value neither. The cost of the 100 billion to the trust of society in this system is far more than a 100 billion dollars, it''s incalculable and it''s this right wing neo con cronyism is what is the unraveling of the United States.

[l8c6]

The USA spends $100 billion more on the military than all other countries combined. In addition, the government has $8-9 trillion in debt and counting.

It makes their concerns about $100 bill lost a year a trifle.

Posted by kennedy7955

I can''t believe the perpetuation of the big lies. This debt, this borrowing, these cost benefit PRIVATE GLOBAL CORPORATE PROFITEERING OLIGARCHS !

They have become the government.

[forthepeopl1]

Fannie and Freddie shares have declined by about 80 percent this year. The slump in the two mortgage agencies has sparked a new catchphrase -- ``Too Chinese to Fail'''''''' -- based on the $974 billion of U.S. agency debt held by foreign investors, a fivefold increase since 2003.

Financial markets and U.S. legislators alike have derided U.S. Treasury Secretary Henry Paulson''''s plan to bail out the mortgage lenders. One of the two key elements is illogical, while the second is plain outrageous.

Just last week, Fannie Mae said it ``has access to ample sources of liquidity, including access to the debt markets.'''''''' Freddie Mac said it was ``adequately capitalized, highly liquid and an essential part of the nation''''s housing system.'''''''' Either they are being economical with the truth, or the decision to let them borrow from the Federal Reserve''''s discount facility is window-dressing that serves no real purpose.

Defending the Indefensible

Worse is the scheme to allow Paulson to dip into the nation''''s tax revenue to purchase shares in Fannie and Freddie -- shares that investors have already deemed to be almost worthless. If the mortgage lenders can''''t survive in their current form, the government shouldn''''t be defending the indefensible.

In April, Standard & Poor''''s said the risk that the U.S. would have to prop up its so-called Government Sponsored Enterprises posed a bigger threat to the country''''s AAA rating than its willingness to underwrite securities firms.

[l8c6]

Phil Graham steals and calls the rest of us "whiners" and his media hoes and politicos agree because they''ve been stealing and honing out the sensibilities of this nation.

[mbcsmith]

Phil Graham steals and calls the rest of us "whiners" and his media hoes and politicos agree because they''''ve been stealing and honing out the sensibilities of this nation.


--------------------------------------------------------------------------------

Posted by l8c6 at 01:31 PM : Jul 17, 2008


What did Graham steal?

[l8c6]

(AP) A man wanted by Liechtenstein for leaking secret banking information that identified millionaire tax cheats across Europe and the United States has told congressional investigators how money was concealed.

Liechtenstein? What is that? Could it be Satan?

This man has stepped on the elite''s special protective rules and put them beneath integrity and justice, in the oligarchs''narcissistic dinosaur brains, he''ll have to pay for this.

[l8c6]

(AP) A man wanted by Liechtenstein for leaking secret banking information that identified millionaire tax cheats across Europe and the United States has told congressional investigators how money was concealed.

Liechtenstein? What is that? Could it be Satan?

This man has stepped on the elite''s special protective rules and put them beneath integrity and justice, in the oligarchs''narcissistic dinosaur brains, he''ll have to pay for this.

[forthepeopl1]

Still, the rising number of defaults in mortgages, home equity loans and credit cards suggested that the worst was not over. Chase, the bank%u2019s big consumer arm, set aside $3.8 billion in reserves, about twice the amount from the previous year, to cushion its expected losses. Yet, in those businesses, it catered to some of the industry%u2019s most creditworthy borrowers.


Although the bank is widely praised for its strong balance sheet and management under its chief executive, James Dimon, Thursday%u2019s results showed that it was not immune to economic and competitive pressure. The bank loosened lending standards and was caught off-guard by the severe downturn in home prices along with many of its rivals.

%u201CWe were wrong,%u201D Mr. Dimon said on a conference call with analysts and investors. %u201CWe obviously wish we hadn%u2019t done it.%u201D

%u201COur expectation is those mortgage losses could triple from there,%u201D Mr. Dimon said. %u201CWe had $100 million a quarter and we could go to $300 million a quarter sometime in 2009.%u201D

He cautioned that conditions could get worse.

%u201COur expectation is for the economic environment to continue to be weak %u2014 and to likely get weaker %u2014 and for the capital markets to remain under stress,%u201D Mr. Dimon said in a statement.

[vnveteran72]

Just to Translate the Story:

The American People now live in an Unconstitutional Police State Controlled by Corporate Criminals that Ignore our Nations Laws without fear of Reprisal or Penalty, and Reap Massive Fortunes while Enslaving and Subjugating the Citizenry. Bend over and get your Reward for voting these Scumbags back into Power Year after Year, after Year, ...........
Don''t Whine and Cry if you don''t vote out ALL the Incumbents until NONE are left.
They are ALL Criminals.

[jntlw-2009]

Phil Gramm , who stated that Americans are "whiners" and in a "mental recession" is on the board of UBS and is the financial advisor to JOhn McCain. Connect the dotts and you will find the disgusting cockroaches of the planet all stealthily hiding their money from taxes of their various countries. Evidently they are above having to pay taxes and deserve the right to secretly protect their assets whilet he rest of us poor working peons pay the entire taxes burden.

[l8c6]

What did Graham steal?

Posted by mbcsmith

It would be technically alleged at this point but we''ll never know for sure. Graham is a chairman of this Swiss bank and if he is one of the tax evading clients ... there is a 19:1 chance he is, then he has stolen from this social economic system he claims residency in. If the wealthy are permitted to operate under a separate set of standards without sanction then the U.S. is officially a defunct corrupt failing empire.

[habu99-2009]

More and more examples of why Republican aversion to governmental regulation is a completely empty argument. We''ve had 7+ years of degregulation and non-enforcement of a variety of laws covering a variety of industries, and inevitably the greedy rich fail to act in anybody''s interests except their own. Without government regulation and enforcement, greed is the ONLY driving principle, which not only completely fails to deliver "the best goods at the lowest possible price", but also cheats the US Treasury twice out of tax revenue from the robber baron types, many of whom are instead given money in the endless stupidity of privitization of government services.

When somebody of moderate or minimal means cheats on their taxes, the IRS comes down on them like a ton of bricks. When the ultra rich cheat on their taxes, they cheat all of us out of way more money, but apparently the only way they are caught is when whistleblowers step forward. Tax evaders in the lower 90% of the population get heavily fined and/or go to jail. I''m guessing the well-heeled tax cheats will have Bush Administration officials (metaphorically) helping them load the boat full of money and then waving goodbye as they sail away with their illegal profits.

[ioweign]

*** you liberals!!! Whats next, fuel use standards for cars?

Posted by GOP_forever at 08:47 AM : Jul 17, 2008


You can always take refuge in your secret off-shore safety deposit box...

[six-six-seis]

Phil Gramm,

we will soon hear you Whine and grumble as the feds
take their 50% cut of the accounts youve certainly hidden from public view......

thanks for doing your part in reducing the deficit.

[l8c6]

I''''m guessing the well-heeled tax cheats will have Bush Administration officials (metaphorically) helping them load the boat full of money and then waving goodbye as they sail away with their illegal profits.

Posted by habu99

Yeah, Phil Graham, calling the american people "whiners" Phil Graham, Texas crook and John McCain''s financial advisor. Bush will say he is a good american. What a mess this nation is in. A separate set of rules for the elite oligarchy. A broken nation, no values, no principles, a whole lot of empty rhetoric and talking points. Limbaugh, Coulter, Hannity, O''Reilly, ---treasonous media hoes.

Phil Graham and the rest won''t be whining in h*el*l, they''ll be squealing like the pi*gs they are.

[whitemale08]

These are just a couple of small fry.

You have to go after the clowns that run the Federal Reserve System, IMF, Bank of International Settlements, World Bank, W.T.O.

Go after these bandits shut them down, get the Europeans to shut down their monarchies and you will see this nightmare over.

Anything short of that is just embracing the New World Order !!!

[l8c6]

Phil Gramm,

we will soon hear you Whine and grumble as the feds
take their 50% cut of the accounts youve certainly hidden from public view......

thanks for doing your part in reducing the deficit.

Posted by six-six-seis

I don''t have nearly that much faith in our "justice" system. Phil Graham, a chairman of UBS bank has a 19:1 chance of being one of the tax evading accounts. He''ll play dumb like Bill Frist when he played dumb to insider trading and got by with it.

Right wing sociopaths are in control.

[l8c6]

Our faux justice system under Scalia will just say, so what, life isn''t fair.

As Bush says, dictatorships are more efficient so long as he''s the dictator. Efficient at robbing the public to the benefit of organized crime.

Bush says not all poor people are killers... says Bush, just because a person is poor doesn''t necessarily make them a killer.

[six-six-seis]

Posted by l8c6,
im afraid its all too true.

[condumbism]

The American taxpayer is now paying for the unregulated banking industries near collapse under Republicon style failed capitalism. 8 months ago CDs payed 5% and a 30 year fixed mortgage was 5.6%. Today banks pay out 2.5% on CDs and charge 6.9% on a fixed 30 year mortgage. Vote for John McCain and the Republicon criminals for Congress for more of the same, or worse.

[l8c6]

Vote for John McCain and the Republicon criminals for Congress for more of the same, or worse.

Posted by ConDumbism


Vote for McCain and it will be worse than McSame = Bush. McCain has Phil Graham as his financial advisor. Phil Graham, a chairman of UBS Bank. Phil Graham the p*ig who calls working americans "whiners". Graham and the rest of these criminals will squeal like the little pi*gs they are in h*e*ll because "justice" Scalia and the right wing court will make certain that justice remains beneath them on this earth.

[vnveteran72]

Corporate Criminals repeat the lines from the movie "Godfather" by Gangsters who loved doing Business in Cuba where Government Officials favor was easily purchased for a modest %age. They now have acheived an identical situation within the US Government, except on a much larger scale.
Ain''t Capitalism Swell???......

[deacon20081]

Does anyone remember all of that CASH that just disappeared from Iraq? 8 Billion I think it was.
The "footballs" of 100.00 bills they tossed around the office under Bremmer? Hummm wonder where it went.

[deacon20081]

CORRECTION

I am sorry for the gaffe on the amount of missing Cash it was not 8 Billion after all.
It was 12 Billion.

[flajoe1]

Ya think we''ll ever get to see the list of rich american taxs cheats?

[habu99-2009]

"Ya think we''''ll ever get to see the list of rich american taxs cheats?"

Posted by Flajoe1

A good way to start would be to find a list of RNC "Pioneer" donors who gave 250k+ to Junior''s election/re-election campaign. I''d figure a high percentage (75-80%) would have moved their excess earnings to Europe with a nod and a smile from their GOP friends.

[flajoe1]

The fact that this story was down on the bottom left of the CBS home page and not on the top shows that the media is not going to follow this to closely.

You would think a story about people not paying billions in tax would be a big story.

[whitemale08]

Why does Wall Street hate America?

I''m asking you Republicans.

You tell us to worship the markets, confide in their infinite wisdom, be in awe of their natural market forces and offer sacrifice.

Why if I''m sick and fell on hard times because my job got hollowed out by some hedge fun managed by Mitt Romney that I have to agree with the markets and die for the sake of the economy?

[wardoglrs]

It is not a good idea to let congress know about such things.....

[dougmsbbs]

Folks, this is not an party thing. They are ALL in on it. Also: this was not a fact finding thing. it was a ''here''s how to do it right'' thing.
The guy wasn''t there uncovering anything, he was teaching them the proper way to structure their retirement plans in case the worst happens this fall...
You can stop with the party bashing. It''s more of a ''they that are in'' against ''them that are out'', and we are the out.
Get used to it.

[standlee5]

$100 billion a year. WOW. get that money we need it. Penalties and interest baby. teach em a lesson just like us little folks.

[babooph]

Let us not act in haste-many powerful politicos & other bigshots will have to be protected first-then we can proceed.Congressional hearings are very important-the big lie must get sworn to first.Remember the "special prosecuter " for Clinton ?All-ON BOTH SIDES LIED UNDER OATH!!

[thepitbull13]

George Soros who lines the poctets of Democratic candidates, the DNC, and MoveOn has openly admitted he uses these offshore tax shelters for the sole purpose of not having to pay taxes. And when Obama gets elected he will tax the rich more, only to see this get worse.

[smilnjackw]

I don''t understand why it has took so long. This has been rumored for 20 years some big name politions were hiding their money and their dynasty money. Let the chips fall where they may before they are in their grave.