Senate hears tax-cheat testimony
A protected witness, who leaked secret banking data, named abusers from Europe and the U.S.
WASHINGTON - A man wanted by Liechtenstein for leaking secret banking information that identified millionaire tax cheats across Europe and the United States has described to congressional investigators how money was concealed.
Lawmakers played a videotape of the testimony by Heinrich Kieber at a congressional hearing yesterday that revealed details of offshore practices at two European banks. At the hearing, Swiss banking giant UBS AG announced that, because of recent revelations, it would stop offering U.S. clients offshore services through branches based abroad.
Kieber appeared only as a silhouette against a white screen. He is living under a new name in an undisclosed witness-protection program, according to lawmakers. He has never spoken publicly about his role in exposing tax shelters he says were used by Liechtenstein's LGT group.
In the videotaped interview with the congressional investigators, he described ruses that he saw while working at the bank, which he said were used to cover the tracks of money moved into accounts.
The hearing by the Senate Homeland Security and Governmental Affairs investigations subcommittee highlighted offshore tax abuses that they believe cost the U.S. government about $100 billion a year.
The hearing came a day after the panel released a 109-page report that took aim at LGT, owned by Liechtenstein's royal family, and UBS.
In his videotaped testimony, Kieber described shell companies used as "high-grade camouflage." Money was often transferred through bank-controlled legal entities registered in countries with lax regulations, including Panama, the British Virgin Islands and Nigeria, he said.
Mark Branson, chief financial officer of UBS's global wealth management, said at the hearing that the bank regretted "any compliance failures that may have occurred" and would now provide banking or security services to U.S. citizens only through companies licensed in the United States. He said the bank was working with U.S. authorities to identify clients involved in U.S. tax fraud.
LGT refused to send a representative, but said in a statement that it had cooperated by sending a senior official for a lengthy interview and by providing all the documents requested by the panel.
Both LGT and UBS came under withering criticism from the lawmakers.
"Tax havens," said Sen. Carl Levin (D., Mich.), chairman of the subcommittee, "are engaged in economic warfare against the United States and honest, hardworking American taxpayers."