Tax Dodgers, Secret Banking, and a Whistleblower – 4 stars
Shortly before the meltdown and recession that threw the world economy into a turmoil in 2008, there was another major upset in the international banking world that uncovered the secrets of Swiss private banking and the well-hidden assets of thousands of wealthy Americans being sheltered from taxation. The revelations came from an American, Brad Birkenfeld, who had been working in Switzerland as a procurer of these wealthy clients for Union Swiss Bank (UBS) and eventually became a whistleblower to the IRS and US Senate. At the end of his experience, he found a place in the Guinness Book of World Records as the recipient of the largest payout to date of a whistleblower monetary award by the IRS as a result of his revelations.
In this book, Birkenfeld tells his side of the story, from how a kid from Boston who wanted to be a fighter pilot ended up as a banker in Geneva schmoozing with the high rollers and facilitating the transfer of millions of dollars into the coffers of Swiss banking, all protected by Swiss privacy laws. Even more importantly, what caused him to reevaluate what he was doing at UBS and turn whistleblower even as his career was going strong?
What comes across through the text is a man who likes living on the edge, has high-ticket tastes, a talent for making personal connections with a wide range of people, and has a generous dollop of smart mouth. He also has a very poor track record of choosing attorneys.
The mystifying point for me was why, after his poor experience with the Department of Justice when still working in Boston for a local bank, he would agree to go first to them when bringing in the bombshell of the Swiss banking procedures? It was not explained to my satisfaction, especially when this misstep ended up with Birkenfeld serving thirty one months in federal prison despite his heroics, all due to the animosity of members of the Department of Justice to him personally. Pure stubbornness? Poor judgment? Poor counsel? I also had trouble swallowing that Birkenfeld became worried about the middle class taxpayers back in the US who were being cheated by the wealthy tax dodgers. A more believable reason was the infamous “Three Page Memo” that threatened to throw the bankers on the UBS North America desk to the wolves if the taxmen of the US or Canada came sniffing around with questions about UBS operations in their countries.
My favorite sections were those that went into detail about the way the Swiss banks took in the huge deposits and then manipulated the funds to their benefit, each move costing the depositor additional fees. After all, when the hidden accounts are dodging as much as 36% in federal taxes alone, why should the account holders mind paying the bank several percent for simply holding their money or more fees for making a withdrawal of their own money? Also of interest was how the “hunter-gatherers” of the bank’s wealth management group went about reeling in new clients for their employers through UBS sponsored events and international wining and dining.
The book features a section of suggested discussion questions for book clubs, copies of several key documents that were used as evidence in the investigation, and a question-and-answer section with the author.
Recommended for anyone interested in international banking, whistleblowers, or stories of misapplied justice.
A free copy of this ebook was provided by the publisher for review purposes.