Wednesday, February 26, 2014

Video of the Hearings for the Senate Permanent Subcommittee on Investigations Hearing (2/26/14)

FIRST HEARING (Credit Suisse Apologists):

Chief Executive Officer
Credit Suisse Group AG, Credit Suisse AG
New York, NY 
General Counsel
Credit Suisse Group AG, Credit Suisse AG
Zürich, Switzerland 
Co Head, Private Banking and Wealth Management, Chief Executive Officer - Region Switzerland
Credit Suisse Group AG, Credit Suisse AG
Zürich, Switzerland 
Co Head, Private Banking and Wealth Management, Chief Executive Officer - Region Americas
Credit Suisse Group AG, Credit Suisse AG
This is the video from the first hearing (Credit Suisse Guys):

A reporter's contemporaneous notes of the first hearing.  Shannon Bond, As it happened: Credit Suisse Senate hearing (Financial Times 2/26/14), here.

Here is one report of statements by CEO Brady Dougan:  David Voreacos, Alan Katz and Elena Logutenkova, CEO Dougan Says Executives Weren’t Aware of U.S. Tax Dodges (Bloomberg 4/26/14), here.
“Some Swiss-based private bankers went to great lengths to disguise their bad conduct from Credit Suisse executive management,” Dougan said at a Senate subcommittee hearing in Washington today. “While that employee misconduct violated our policies, and was unknown to our executive management, we accept responsibility for and deeply regret these employees’ actions.” 
* * * * 
Senator John McCain, an Arizona Republican on the committee, said it’s not plausible that senior management wasn’t involved, considering the “systemic” misconduct. 
“If you believe that, I have some beachfront property in Arizona,” McCain said yesterday in a briefing on the report.
SECOND HEARING (DOJ Officials - Cole and Keneally):

Deputy Attorney General - Office of the Attorney General
U.S. Department of Justice
Washington, DC 
Assistant Attorney General - Tax Division
U.S. Department of Justice
Washington, DC
Here is the video from the second hearing

A reporter's contemporaneous notes of the first hearing.  Shannon Bond, As it happened: Credit Suisse Senate hearing (Financial Times 2/26/14), here.

JAT Comments: 2:18 pm:  Deputy Attorney General James M. Cole contrasted the OVDI/P results of 43,000 doing voluntary disclosure under OVDI/P.  Prior to that, he claimed, the voluntary disclosures per years were about 50 to somewhat over 100 per year.  This is a bit misleading.  The IRS got far more "voluntary disclosures" than that.  They were quiet disclosures which, at least outside the new OVDI/P initiatives, practitioners believed and practitioners' anecdotal evidence confirmed had the desire effect of voluntary disclosures -- i.e., no criminal prosecutions.  And, by doing the quiet disclosures, in almost all cases, civil penalties  were avoided because (i) the quiet disclosures were treated as qualified amended returns which avoid the accuracy related penalty and (ii) the IRS did not spend the resources to determine whether the civil fraud penalty  could apply.  I understand that even where noisy quiet disclosures were made in the past, it was problematic as to whether any civil penalties were asserted.

At least to some extent, it is almost healing to see that bipartisanship is possible.  And, if there is this degree of bipartisanship, those who are "deniers" -- Swiss banks and their enablers and their apologists -- should check into the real world.

I made the point early in this process that the only practical difference between Swiss bankers and Somali pirates is that Swiss bankers wear suits.  These Swiss bankers testifying today wore the uniform.  But, as the truth has come out, Swiss bankers would wear anything appropriate to the schemes they were promoting -- such as wearing Hawaiian shirts while claiming to be on vacation in the U.S.  And, as they look for more profit opportunities, they may even find it convenient to wear the garb of the Somali pirates (they too want to hide their ill-gotten loot).

2:41 pm:  Cole just testified that the U.S. Swiss Bank Initiative would generate a lot of leads about bankers and enablers that can be prosecuted.

I have been double tasking while this testimony was going on and taking some calls.  Still, I don't think Cole really knows the detail they are asking him about.  That's not surprising since he covers a whole lot of responsibilities at DOJ than this narrow(er) area.

Senator McCain is now asking whether 1 prosecution out of 14 or 15 (I suppose the Wegelin prosecution) is "success" or "progress."  Keneally says it is progress.  McCain is skeptical.

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