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UNDERNEWS

Undernews is the online report of the Progressive Review, edited by Sam Smith, who covered Washington during all or part of ten of America's presidencies and who has edited alternative journals since 1964. The Review, which has been on the web since 1995, is now published from Freeport, Maine. We get over 5 million article visits a year. See prorev.com for full contents of our site

January 8, 2010

BANK WHISTLEBLOWER GETS JAIL, BANK PRESIDENT GETS GOLF WITH OBAMA

Juan Gonzalez, NY Daily News - Barack Obama, who entered the White House promising all this change, should be hailing Bradley Birkenfeld as a modern-day hero.

He should erect a statue on Wall Street for this former banker for Swiss giant UBS who blew the whistle on the biggest tax-evasion scheme in U.S. history.

Instead of rewarding Birkenfeld, Obama's Justice Department is sending him to prison. He begins serving a 40-month federal sentence for conspiracy and bank fraud.

What about his former bosses and fellow bankers at UBS and thousands of rich American clients who for decades stashed billions of dollars in secret UBS accounts to evade paying federal taxes?

Well, the government let them buy their way out of jail.

UBS pleaded guilty and paid a $780 million fine in February, while thousands of Americans with unreported offshore accounts have been allowed to belatedly disclose them and pay civil penalties.

Only Birkenfeld, the 44-year-old whistleblower, ends up in jail - the No. 1 example of injustice and hypocrisy in the age of Obama.

Who can forget that priceless photo of the President playing golf on Aug. 24 during his Martha's Vineyard summer vacation with Robert Wolf, president of UBS Americas?

Wolf and his employees donated $540,000 to Obama's presidential run. That made UBS the 12th largest source of his campaign funds.

Of all the people in America to choose for a golf partner, Obama chose Wolf.

The outing was only three days after Birkenfeld's harsh sentencing, and less than a week after UBS agreed to turn over the names of 4,450 of its American clients to the Justice Department. That's just a portion of 19,000 American accounts the bank has admitted keeping secret from U.S. tax officials.

So why is Birkenfeld, who gave hundreds of those names to prosecutors, going to jail?

"Without Mr. Birkenfeld . . . I doubt . . . this massive fraud scheme would have been discovered," Assistant U.S. Attorney Kevin Downing conceded at the Aug. 21 sentencing hearing.

Prosecutors also claimed in that hearing and in a "60 Minutes" interview Sunday night that Birkenfeld withheld information on how he had helped his biggest U.S. client, California billionaire Igor Olenicoff, hide hundreds of millions in assets. So when Birkenfeld flew here from Switzerland in early 2008, they arrested and charged him.

Birkenfeld's lawyer Stephen Kohn denies those allegations. He says the government is sending a terrible signal to future whistleblowers.

Kohn filed a formal complaint yesterday with the U.S. attorney general's office of professional responsibility, claiming the "main allegations used to secure [Birkenfeld's] indictment and imprisonment were not based on accurate or truthful information."

Birkenfeld offered to provide every name he knew of secret account holders at UBS, Kohn said, but he first wanted a formal subpoena because he was then a resident of Switzerland. Under Swiss law it is illegal to disclose client information.

The Justice Department refused to issue the subpoena, so Birkenfeld then went to the IRS, the Securities and Exchange Commission, and the U.S. Senate during the summer of 2007 offering the information to them.

The Senate's permanent investigations subcommittee agreed to subpoena him. He gave the committee a detailed deposition on Oct. 11, 2007 about UBS fraud scheme with lots of names, including that of Olenicoff. E-mails Kohn provided back up that claim.

Birkenfeld gave the same information to the IRS and the SEC.

Several weeks later, Olenicoff was indicted. He pleaded guilty and paid a $53 million fine.

Kohn has asked Attorney General Eric Holder for a formal investigation of the actions of Justice Department prosecutors.

Holder has his own UBS headache. Last year, the attorney general recused himself from the case because he once served as a lawyer for the Swiss bank.

The Birkenfeld case has exposed a lot more than hidden bank accounts.

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3 Comments:

Anonymous Anonymous said...

Isn't it customary for people to receive a 10% fee for things like this? Hope Birkenfeld gets Millions.

January 9, 2010 9:55 AM  
Anonymous Woody Guthrie in " Pretty Boy Floyd" said...

"As through the life you travel, you'll meet lots of funny men. Some'll rob you with a six-gun and some with a fountain pen."

January 9, 2010 8:24 PM  
Anonymous Anonymous said...

Sucker betrayed his clients and trusted the government - he belongs in jail.

January 10, 2010 3:31 AM  

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