Who is Bradley Birkenfeld ? He's a whistleblower. A former employee of the Swiss bank UBS, Birkenfeld provided information to US authorities on the biggest tax fraud in US history; $20 billion owned by US citizens and hidden in Switzerland to evade taxation. Mr Birkenfeld is in the slammer.
On April 15, Tax Day, Mr. Birkenfeld appealed to President Obama asking for clemency. He began serving a 40 month sentence in January because, as an employee of UBS, he was involved with hiding the assets of a UBS client. Amy Goodman and Juan Gonzalez of Democracy Now! reported on the story yesterday and again today. Gonzalez also had a good story on the case in this morning's NY Daily News.
Many will remember the '07 case. It was front-page news. Birkenfeld told his tale and UBS pleaded guilty. They admitted to helping 19,000 American clients to hide $20 billion in assets. They agreed to pay $780 million in fines and to release the names of 4,500 American tax cheats. 15,000 more American UBS clients got nervous and came clean with the IRS last year. They paid between 3 and 5 billion dollars in back taxes. The subsequent Senate investigation of the case resulted in a review of illegal offshoring to avoid taxation. The Senate estimated that $3-$5 trillion was being hidden offshore by US citizens and that it was costing the Federal government $100 billion per year in lost tax revenue. But that's not all.
There was something else troubling in Gonzalez' Daily News column. Gonzalez talked to Birkenfeld by phone from a federal prison in Pennsylvania. Birkenfeld revealed that there was a UBS subsidiary called UBS America. This firm had a referral desk in New York where they recruited wealthy clients and helped them with the offshoring process. They also had an office in Washington D.C. called the PEP office. That's short for Politically Exposed People. Birkenfeld is claiming that US politicians in Washington were hiding their money with UBS to evade taxes. He says that he doesn't know any names, that only top UBS officers did.
Who were these folks ? Enquiring minds want to know. This much is known; the chair of UBS America was Robert Wolf, a fundraiser for Barack Obama, and the vice-chair was good ole' Phil Gramm, senior economic adviser to John McCain. Here's Amy Goodman:
Perhaps why it didn't become a campaign issue for either party when you had, in August President-well then Senator Obama teeing off with UBS's Wolf in Martha's Vineyard at the same time, of course, though, McCain was with Phil Gramm.
I know that Birkenfeld had dealings, as a UBS employee, with a California billionaire who had been hiding assets. The guy ended up pleading guilty and paying a $52 million fine. I just think that Bradley Birkenfeld deserves clemency for the information he provided and for the money he recovered for Uncle Sam, and I think there should be international treaties banning secret bank accounts. I close with a quote form Stanley Kohn, Birkenfeld's attorney and executive director of the National Whistleblowers Center:
The problem with these secret accounts is a lot worse than just US taxpayers losing money. These accounts are used by corrupt politicians to put their bribe money.They're used by officials in developing countries to put illegally stolen development funds, money stolen from food programs, education programs. Who puts money into these illegal accounts ? How are they misused ? The scandal exposed by Mr. Birkenfeld - and keep in mind, he was the first major banker ever in world history to take information from these top-secret foreign accounts and give them to the government for prosecution. How was he treated ? That's the message.