It All Depends on Who You Know

A May 20, 2014 report by the Reuters news agency tells us that Credit Suisse, Switzerland’s second largest bank, has been fined $2.5 billion by U.S. regulators.  The bank was charged with helping wealthy Americans conceal major cash assets, making it possible for them to evade U.S.  federal and state income taxes.

In a related story, the Associated Press reports that, “The case is part of an Obama administration crackdown on offshore banks believed to be helping U.S. clients hide assets.  Justice Department officials said their investigations into secret bank accounts held by Americans in Switzerland and other countries likely will bring forth additional resolutions.”

The prosecution of Credit Suisse came after prolonged criticism that the Obama administration has not been aggressive enough in its pursuit of wrongdoing in the banking industry.  According to the AP, “A report from the Senate subcommittee that investigated Credit Suisse accused (Eric Holder’s) Justice Department of (surprise, surprise) lax enforcement and faulted the government for gleaning only 238 names of U.S. citizens with secret accounts at Credit Suisse, or just 1 percent of the estimated total.”  The Senate subcommittee was able to find more than 22,000 U.S. clients with Credit Suisse accounts totaling some $10-12 billion.

The subcommittee report charged that Credit Suisse had sent bankers to recruit American clients at golf tournaments and other events.  They encouraged potential clients to travel to Switzerland where they were assisted in hiding assets.  The report disclosed that, in one instance, a Credit Suisse banker passed bank statements to a U.S. client hidden in the pages of a Sports Illustrated magazine during a breakfast meeting.  In some instances, Credit Suisse bankers helped wealthy U.S. depositors withdraw funds from their Swiss accounts by either providing hand-delivered cash in the United States, or through Credit Suisse bank accounts in the U.S.

The $2.5 billion fine will be divided between the U.S. Department of Justice, the Internal Revenue Service, the Federal Reserve, and the New York State Department of Financial Services.  Just under $200 million has already been paid to the Securities and Exchange Commission.  In order to appease investors, the bank will begin paying out roughly half its profits to shareholders until its profitability reaches a pre-established price/earnings ratio.

However, the Credit Suisse settlement calls into question a 2009 “deferred prosecution agreement” between the U.S. Department of Justice and Switzerland’s largest bank, the Union Bank of Switzerland (UBS).  In 2009, following a lengthy investigation by the Senate Permanent Subcommittee on Investigations, UBS agreed to pay just $780 million in fines and to turn over the names of thousands of customers suspected of evading U.S. taxes.

So why the disparity in fines between the two largest Swiss banks, UBS and Credit Suisse?

In July 2008, Barack Obama boasted of a contributor base totaling some 1.5 million people, with one-fourth of his $265 million coming from those contributing $2,000, or more.  However, by October 2008, just five months later and just days before the General Election, the campaign reported that their contributor base has grown from 1.5 million to 2.5 million, and that the total amount raised approached $600 million.  So who were all those people, and where did all that money come from?

In a July 25, 2008, column we pointed out that UBS Americas, headed by Robert Wolf… along with George Soros, one of Obama’s top two money men… had been accused of highly unethical and illegal banking practices in six months of hearings by the Senate subcommittee.  According to an article in The Nation, UBS Americas had advised wealthy Americans, including many of our worst villains, how to shelter funds from the IRS, as well as from prosecutors, creditors, disgruntled business associates, family members, and each other.

In a Statement of Fact in the criminal trial of former UBS executive Bradley Birkenfeld, it was learned that UBS took extraordinary steps to help American clients manage their Swiss accounts without alerting federal authorities.   For example, UBS advised American clients to avoid detection by using Swiss credit cards to withdraw funds, to destroy all existing off-shore banking records, and to misrepresent the receipt of funds from their Swiss accounts as loans from the Swiss bank.  According to The Nation, UBS established an elaborate training program which taught bank employees how to avoid surveillance by U.S. authorities, how to falsify visas, how to encrypt communications, and how to secretly move money into and out of the country… ”

It was the perfect instrument for funneling illegal campaign contributions into the coffers of an unscrupulous American politician.  Putting two and two together, I suggested that a very wealthy individual, such as George Soros, wishing to influence the outcome of an American presidential election, could transfer unlimited sums of money through this device.  A U.S. recipient, such as the Obama campaign, could receive tens of thousands of individual contributions via Swiss credit card transfers, with the identities of bogus contributors “borrowed” from their extensive list of $10 and $20 U.S. contributors and entered onto FEC reports by teams of paid staffers working in a “boiler room” setting.  The owners of the Swiss accounts would receive periodic statements indicating debits of varying amounts, up to $2,300 each, and offsetting credits funded by the wealthy, but unnamed, “international financier.”

For most of the super wealthy, especially those attempting to hide income and assets from U.S. authorities, an unexplained debit and credit of $2,300, or less, would not even raise an eyebrow.  It would look to the depositor as if the bank had made a debit error which had been immediately corrected with a credit of like amount.  However, in this instance, the Swiss bank account would actually have been debited, money transferred to the U.S. recipient, and funds replaced by person or persons unknown.  The scheme would represent money-laundering of the first order.  So who would ever know the source of such contributions?  No one.

In response to my July 25 column, and at my suggestion, Newsmax sent a team of researchers to the Federal Election Commission to take a closer look at Obama’s FEC reports.  In a follow-up October 20 article by Kenneth Timmerman, Newsmax provided details from FEC records that gave substantial weight to my theory.  In studying Obama’s FEC filings, Newsmax found more than 2,000 donors who had given substantially more than their $4,600 limit ($2,300 in the primaries and $2,300 in the General Election).

But these were relatively minor infractions compared to 66,383 highly suspicious contributions that were, oddly enough, not rounded to even dollar amounts.  For example, Newsmax reported that John Atkinson, an insurance agent in Burr Ridge, Illinois, gave a total of $8,724.26, more than double his legal limit.  He gave in odd amounts such as $188.67, $1,542.06, $876.09, $388.67, $282.20, $195.66, $118.15, and one of $2,300.  A self-employed caregiver from Los Angeles made 36 separate contributions totaling $7,051.12, of which thirteen were later refunded.  However, in an odd coincidence, those 13 refunds, in amounts such as $233.88 and $201.44, came to an even $2,300, the maximum amount allowable in any one election.

One contributor interviewed by Newsmax, Ronald J. Sharpe, Jr., a retired schoolteacher from Rockledge, Florida, was reported to have given $13,800… $9,200 over his limit.  However, when interviewed by Newsmax, Mr. Sharpe did not remember giving that much money to Obama, nor had anyone from the Obama campaign ever contacted him about a refund.

Lest anyone suggest that those 66,383 donors either emptied their piggy banks or emptied their pockets and purses periodically and just sent it all to Obama, pennies and all, I think it is far more reasonable to assume that those contributions were the proceeds of foreign currency conversions, smuggled into the country in foreign credit card transactions, converted to U.S. dollars, and deposited in Obama’s campaign coffers.  Of course, when your money is coming in large chunks from illegal offshore accounts and laundered though a Swiss bank in Zurich, it takes a bit of creativity to put authentic-sounding names on all of it for the quarterly FEC reports.  But the Obama campaign had a huge source of such data: the names, addresses, and occupations of tens of thousands of $10 and $20 U.S. Kool-Ade drinkers.

According to Newsmax, the Obama campaign finance reports contained some 370,500 unique names… a far cry from the 2.5 million contributors claimed by the campaign.  Of course, a great many of those 2.5 million contributors were illegal Muslim “conduits” who were given money by their local imams with the understanding that they would use it to help elect Obama… a crime for which Eric Holder is now prosecuting a major Obama critic, author Dinesh D’Souza. The principal difference being that, instead of creating tens of thousands of illegal conduits, as the Muslim clerics clearly did, D’Souza reimbursed only three people in a New York senate race.

So what happened to Robert Wolf, Obama’s most important friend in the international banking industry?  Was he fired, tried and imprisoned?  No, Wolf was named to UBS’s Group Executive Board and promoted to President and COO of the UBS Investment Bank.  From 2009-11, Wolf served on Obama’s Homeland Security Advisory Council, in 2011 he became a member of Obama’s Council on Jobs & Competitiveness, and in 2012 he was appointed to the President’s Export Council.

In response to the Credit Suisse prosecution, Attorney General Eric Holder has said that no bank  is immune from criminal prosecution.  But it’s clear that in his world, and in Obama’s world, the severity of punishment depends very much on who you are and who you know.

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