Battling Tax Haven Banks
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The genesis of the hearing was, after the 2008 UBS scandal broke, when we asked other Swiss banks if they were engaged in similar misconduct. Credit Suisse, Switzerland’s second largest bank, privately admitted it was, but claimed it would close or disclose to the IRS all of its undeclared U.S. client accounts in Switzerland. Since we’d already made our point with UBS, we figured we’d let sleeping dogs lie while Credit Suisse and the other Swiss banks cleaned up their act. Fast forward three years to 2011. That’s when the Justice Department indicted seven Credit Suisse bankers for aiding and abetting U.S. tax evasion. It was also when whispers reached us that Credit Suisse still had thousands of undeclared U.S. client accounts open in Switzerland. Surprised, we decided to check. Credit Suisse grudgingly agreed to a meeting. Participants on our side included Bob, Allison Murphy, and me, as well as Henry Kerner, Stephanie Hall, and Mike Lueptow from the staff of Senator John McCain, then PSI’s ranking Republican. The meeting had a bad feeling from the get-go. Credit Suisse wouldn’t provide even basic information about its U.S. client accounts in Switzerland, offering only vague responses to our questions. Not a good sign. We decided to launch a full-blown investigation—subpoenas, interviews, the works. Because we were juggling several other inquiries, however, it proceeded slowly. Eventually, we put Allison Murphy in charge and through sheer relentless exertion as well as unexpected cooperation from some bank insiders, she got the information we needed. We learned Credit Suisse had been holding back on the extent of its U.S. client business. At its height, the bank had over 22,000 undisclosed Swiss accounts with U.S. clients holding up to $12 billion in assets. Not as big as UBS, but still a huge portfolio compared to other offshore banks we’d reviewed. We also learned that, like UBS, Credit Suisse had repeatedly sent Swiss bankers into the United States to recruit new clients and service existing ones. In addition, the bank had opened a Zurich airport branch to make it easy for foreigners to fly in, conduct their banking business, and depart. Almost 10,000 of its U.S. client accounts were located at the Zurich airport branch. Another 2000 were housed in a small private Swiss bank, Clariden Leu, which Credit Suisse had quietly purchased and allowed to operate with few controls. We confirmed that Credit Suisse had used many of the same secrecy tricks as UBS and LGT, including client code names, accounts opened in the name
