The End Of Tax Havens? Not Until The Far Right Is Wiped Off The Face Of The Earth
Well, I wish I could report that the primary author of the worldwide economic meltdown, political hack-turned-Swiss bankster, Phil Gramm, has been arrested and carted off to prison but... rarely is there that much justice in the world. Instead we find out that the company he worked for and helped to rip off the U.S. government to the tune of billions of dollars, UBS, has agreed to pay a fine of $780 million for "facilitating" American criminals-- wealthy corporate ones-- avoid taxes on billions of dollars. And the first of UBS' crooked clients, Steven Rubinstein, has been arrested. Set-ups like UBS-- which was caught smuggling diamonds in toothpaste tubes for rich Americans clients-- hold as much as $10 trillion shielded from the tax man.
The arrest is the first of an American client of UBS, which has been under criminal investigation for helping scores of wealthy Americans evade taxes through secret offshore accounts that went unreported to the Internal Revenue Service. It signals that federal authorities are making good on a promise to pursue American clients suspected of tax evasion, and in some cases to make indictments.
UBS admitted in February to conspiracy to defraud the I.R.S. by helping scores of wealthy Americans hide nearly $20 billion overseas.
The bank paid $780 million to settle the charges, but it remains under investigation, as do its American clients. The admission has helped to open the world of offshore banking and dealt a death blow to Swiss financial secrecy.
But Swiss banks, which, like UBS, helped the German Nazis pillage Europe-- and get away with it for decades after the war was won-- are hardly the only places where those eager to avoid anyone knowing about their income-- from drug deals and Third World dictators to garden variety Republican tax cheats. UBS alone was working for 52,000 American crooks.
You may have heard me complaining this week about how dismayed I was that Obama didn't seem to be on board with the Franco-German regulatory demands, one of which was to shut down the off shore tax havens. Under immense pressure from the wealthiest families in the country not to cooperate, it looks like Obama has bucked the establishment after all and agreed to cracking down on tax cheats. I'll believe it when I see it though.
For as long as I've been alive make believe countries like Andorra, Liechtenstein and Monaco, not to mention Vatican City, the worst of them all, have been functioning as what is known in international law enforcement as uncooperative tax havens. More recently they've been joined by a gaggle of island mini-states in the Caribbean, like Antigua, and the Pacific, like Vanuatu, all dedicated to hiding tainted money for wealthy clients. The racket accounts for 13% of Switzerland's GDP and even a higher proportion for the organized crime principality of Liechtenstein.
The G-20 has decided to "blacklist" uncooperative tax havens and possibly even apply sanctions. Of the 4 named as the world's worst, two immediately promised to mend their ways, the Philippines and Uruguay. That leaves Costa Rica and Labuan (part of Malaysia) on the top of the list of rogue states. It's unclear exactly what's going on with other shady financial centers, like Switzerland, Luxembourg, Macao, Hong Kong, Singapore, Iceland, the Cayman Islands, Vatican City, and the 2 British nests of tax evasion, the Isle of Man and Jersey.
The Group of 20 industrialized and developing nations at an economic summit here Thursday agreed to end "an era of banking secrecy," rooting out hundreds of billions of dollars estimated to be hidden from tax authorities in offshore banks. Faced with the prospect of penalties making it harder for their companies to do business overseas, Austria pledged to comply "without delay." The Philippines swore to take "the necessary steps" and Monaco promised to be off the list by "by the end of the year."
...The list, published by the Organization for Economic Cooperation and Development, a Paris-based group of wealthy nations, in coordination with the G-20, singled out four countries as the worst offenders: Costa Rica, Malaysia, the Philippines and Uruguay. Another 38 countries and territories, including the Cayman Islands, Panama, Bahamas and Liechtenstein, were listed as less serious offenders.
Billionaires and the shills who make a living by scraping and bowing before them and faithfully serving their interests-- like the Republican Party and GOP front groups like the American Heritage Institute, Fox News and the Cato Institute-- are hardly giving up and will fight a battle to persuade gullible Americans that tax cheats are true patriots. This video by Republican Party astroturf group, the Center for Freedom and Prosperity Foundation explains, with a straight face, how absolutely fabulous tax havens are. This isn't a spoof; it's real (I swear):