June 24, 2017 Disclaimer: Please read.
Statements and opinions expressed in articles are those of the authors, not Truthdig. Truthdig takes no responsibility for such statements or opinions.
Endgame for Gramm?
Posted on Apr 14, 2009
One wonders if Phil Gramm has been made just a tad nervous by the news on Tuesday that one of UBS’ super-wealthy private clients has pleaded guilty to tax evasion. That’s the second case in two weeks involving the bank at which the former senator is a vice chairman, and 100 other clients are under investigation for possible bank-assisted tax fraud.
Square, Story page, 2nd paragraph, mobile
In UBS’ “deferred prosecution agreement” with the Justice Department, the bank agreed to turn over the names of its secret account holders to avoid a criminal indictment. The complicity of top executives in this far-ranging scheme to use foreign tax havens to cheat the U.S. treasury of billions in uncollected taxes was noted at the time in a Justice Department statement: “Swiss bankers routinely traveled to the United States to market Swiss bank secrecy to United States clients interested in attempting to evade United States income taxes.”
What did Gramm think all of those Swiss bankers from his firm were doing over here? Was he totally clueless? The Justice Department statement suggests otherwise: “UBS executives knew that UBS’s cross-border business violated the law. They refused to stop this activity, however, and in fact instructed their bankers to grow the business. The reason was money—the business was too profitable to give up. This was not a mere compliance oversight, but rather a knowing crime motivated by greed and disrespect of the law.”
Is it conceivable that this “knowing crime,” so widespread within the UBS enterprise, was unknown to Vice Chairman Gramm—even though it primarily involved U.S. tax evasion, and he had been hired by the company because of his expertise in American law, some of which he helped to write? As Gramm said when he was hired in 2002 by UBS, the position “will provide me with the opportunity to practice what I have always preached. I have been involved in every major financial debate since I’ve been in the Congress.”
Square, Site wide, Desktop
Square, Site wide, Mobile
But then again, if you are Phil Gramm or his wife, Wendy, you might expect to get away with a great deal in the way of financial machinations. After all, neither has ever been held legally responsible for the Enron debacle, in which the Gramms played a major part.
As a top government regulator, Wendy Gramm changed the rules to make Enron’s chicanery possible, and as the chairman of the Senate Finance Committee, Phil codified those rule changes into federal law. While Enron execs like Chairman Ken Lay (a major Gramm campaign contributor) were indicted, the charmed couple that created the loopholes Lay and others jumped through escaped legal responsibility.
After leaving the government, Wendy Gramm joined Enron’s board, where she headed the audit committee that managed to avoid auditing the company’s disgraceful accounting procedures—just as her husband has apparently looked the other way during his stint in the private sector with UBS.
Sure, Phil Gramm lost his position as the co-chairman of John McCain’s presidential campaign when he blamed the recession not on the banking deregulation he championed but rather the people of the United States, which he described as a “nation of whiners.” But that was a sideshow compared with the serious charges now swirling around UBS, charges that may finally prove to be Gramm’s undoing.
Banner, End of Story, Desktop
Banner, End of Story, Mobile
Watch a selection of Wibbitz videos based on Truthdig stories:
New and Improved Comments
Right Skyscraper, Site Wide
Right Internal Skyscraper, Site wide