Swiss Leaks: Murky Cash Sheltered by Bank Secrecy

HSBC Private Bank (Suisse) continued to offer services to clients who had been unfavorably named by the United Nations, in court documents and in the media as connected to arms trafficking, blood diamonds and bribery.

HSBC served those close to discredited regimes such as that of former Egyptian president Hosni Mubarak, former Tunisian president Ben Ali and current Syrian ruler Bashar al-Assad.

Clients who held HSBC bank accounts in Switzerland include former and current politicians from Britain, Russia, Ukraine, Georgia, Kenya, Romania, India, Liechtenstein, Mexico, Lebanon, Tunisia, the Democratic Republic of the Congo, Zimbabwe, Rwanda, Paraguay, Djibouti, Senegal, Philippines and Algeria.

The bank repeatedly reassured clients that it would not disclose details of accounts to national authorities, even if evidence suggested that the accounts were undeclared to tax authorities in the client’s home country. Bank employees also discussed with clients a range of measures that would ultimately allow clients to avoid paying taxes in their home countries. This included holding accounts in the name of offshore companies to avoid the European Savings Directive, a 2005 Europe-wide rule aimed at tackling tax evasion through the exchange of bank information.

HSBC files show how Swiss bank helped clients dodge taxes and hide millions

HSBC’s Swiss banking arm helped wealthy customers dodge taxes and conceal millions of dollars of assets, doling out bundles of untraceable cash and advising clients on how to circumvent domestic tax authorities, according to a huge cache of leaked secret bank account files.

Routinely allowed clients to withdraw bricks of cash, often in foreign currencies of little use in Switzerland.

Aggressively marketed schemes likely to enable wealthy clients to avoid European taxes.

Colluded with some clients to conceal undeclared “black” accounts from their domestic tax authorities.

Provided accounts to international criminals, corrupt businessmen and other high-risk individuals.

So not only were they breaking US law, they were breaking EU law and the laws of various European governments, as well as Swiss banking regulations. The clients included members of outlaw regimes, international criminals, and citizens of countries who economies are in crippled in part because of corruption and the siphoning of national treasure by the elites.

So this is a story of international corruption on a massive scale. Nice to know that you are defending the "rights" of drug dealers, despots, crime bosses, dealers in blood diamonds, ...

You mean foosball right? That table game with the handles that you spin around and try to put the ball in the slot at the end of the table?

Or do you mean soccer? That game that little girls play, and the boys who parents drive Volvos and are all named Brad?

Oh, that game they always seem to be showing in the Mexican restaurants. Lots of guys in shorts running around, never seems to end, the really boring one. Nobody gives a shit about that.

You mean there's a league?And a tournament? Why? Hell, even golf has more action that that, and golf is like watching paint dry. And there's always replays of football and basketball and college hoops and baseball 24/7, or NASCAR. Who would waste time with guys in shorts?

And that, in short, is the kind of response you would get from 99% of US sports fans if you told them that the US had lost the bid for the FIFA World Cup. Don't flatter yourself, nobody here even knows what it is, much less gives a damn.

Telemarketers are human?

An equally valid statement.

I did not say that any laws would be changed. I did not say it was an act of terrorism, but it would be compared to terrorism. I did not say that that search results would be mandated in any way.

You did not read my post carefully. I said that there would be huge media frenzy, and that political opportunists would use it to whip up public opinion to their advantage.

I wonder about your reading comprehension. You seem to know what most of the words mean, but do not seem to grasp the actual content of the statements. You projected an interpretation that is not in the text. I worry about you. :(

Just imagine that a common simple search phrase referring to Christ had as it's first result a Satanist site?

It would be a major national news story. There would be editorials in news outlets large and small. Fox News and the right wing press would call it a terrorist act. There would be hearings in Congress, and calls for laws protecting religion. It would be a three ring media circus.

All truths are not created equal. Some points of view are more equal then others.

Six slides.

Bad science will inevitably lead to bad real world consequences. Somebody will die.

But who cares, because because you gotta keep turning that endless publication crank. If you don't you might get kicked off the team.

Just visualize legions of white coated scientists chained to their lab benches/computer screens, pulling a lever to get their jolt of drugs injected directly into their veins. If they don't pull the lever often enough they'll go into seizure and break their own backs through muscle contractions.

But it's all good because uncontrolled competition always produces the best outcome. Just ask any Wall Street banking executive who gets a mountain of money no matter how badly they screw up. Just trust the system and you will be safe, secure and happy. Really.

Windows in it's default state is dangerous. It doesn't make any difference which version is involved.

Using Windows were there is any sensitive information is the equivalent of promoting criminal activity. The only exception is if the system is tightly configured and continuously updated. In the real world a vanishingly small percentage of all Windows installations do the right thing.

The only way this will ever change is if the organization (or person) responsible for the system is held accountable for any sensitive data leaks. Accountability must include fines, monetary indemnification and criminal liability. In plain English, that means if you screw up and loose someone's private info, you are on the hook for paying a fine and compensating the victim for all their losses, including the time they spend dealing with the mess. And if the breach is significant enough, you should be facing a criminal trial and serious jail time.

If this was in place there would be very few data breaches, obviously. I also think that it would be better for the overall economy, because the cost of data loss would be accounted for. Right now the cost accrues to the victim and so the real economic damage is invisible. It's the same situation as a manufacturing company not paying for waste disposal because they can get away with dumping their trash on the neighbors property.

Of course this will never happen because Profit!

I completely agree.

Austerity doesn't work. Instead of giving money to incompetent self serving bankers, it would be far better to spend directly on productive economic projects: infrastructure, education, health care. In fact, significantly increased spending on unemployment payments would be better then stock buybacks for the general economy. People on unemployment spend the money immediately which generates immediate real economic demand, a driver of growth.

The reason I did not say this in my post was that I was trying not let it become too long and I wanted to avoid detail that would make things overly complicated.

As long as I'm going into detail, the ideology that you refer to is the F-word: fascism. I hate to use it, because it's just become a meaningless curse word, but it is a term of art in politics. In theory fascism combines the interests of the state, capitalists and workers into a single unified organization. In practice there are a lot of ways to do this, although they share some common patterns. One is that they are authoritarian to a great degree, and suppress (or eliminate) democracy. Another is they foster a demand economy, which is far away from free market capitalism.

Demand economies replace market forces with central decision making. Left wing regimes do this as well. Demand economies fail in one way or another, because you can only ignore market forces for so long before things go bad. An extreme current example is Venezuela, which is suffering a collapse because of ridiculous left wing policies.

In the US and Great Brittan, the right wing demand economy is run for the benefit of the wealthy elites. As I described earlier, that's how low interest rate siphon wealth from the general economy into the hands of the Wall Street elites. It's also why corporate tax rates are at an historic low, and why the 1% have so many tax avoidance opportunities.

Stock Buybacks are driving stock prices.

One big source of demand for stocks in recent years has come from companies buying back their own shares. These buybacks have not just provided extra demand — they have decreased the total supply of shares available. So the buybacks have shifted the supply-demand balance and helped drive stock prices higher.

All these buybacks, which have ranged between $75 billion and $159 billion a quarter for the past four years, have provided a steady flow of demand for shares. As the chart below shows, the buybacks have not been offset by new share issuance, so they have modestly reduced the total supply of shares available for S&P 500 companies. The number of shares outstanding is now lower than it was back in 2005, almost 10 years ago.

This is a direct effect of low interest rates. Companies are taking out loans for the buybacks

Another big source of cash for buybacks, however, has been debt. As the chart below shows, companies have been borrowing like mad in recent years. And they have been using lots of the cash they borrow to buy back their stock.

Why are they doing this? Because high stock prices disproportionally favor the top level executives. The get stock at a discount (stock options) and can game the tax code for lower taxes as well. It's a legal way to loot their companies.

Why are rates so low? Because the previous generation of corporate criminals wrecked the world economy with their greed. Low interest is the way that governments are trying to regrow their economies.

Now governments all over are giving free money to the same group of people (and even the same individuals) who caused the damage in the first place with these near zero interest rates. (For example, the US Federal fund rate for the big lenders is 0.25%.)

Stock buybacks don't grow the economy. There is a direct relationship between the sky high stock market and the long delayed general recovery outside the stock market.

This effectively redistributes wealth upward. The rich get richer at the expense of everyone else.

It's also another bubble. Whenever rates do go up there will be another crash. And given recent history, it will end up turning into another way of stealing from the poor to give to the rich.

Even though they did not act completely responsibly, Greece was horribly exploited by the international banking community.

Goldman-Sachs was a major player in the destruction of the Greek economy. They set up unsustainable loan arrangements and then bet that Greece would not be able to pay them off.

Goldman Sachs arranged swaps that effectively allowed Greece to borrow 1 billion Euros without adding to its official public debt. While it arranged the swaps, Goldman also sought to buy insurance on Greek debt and engage in other trades to protect itself against the risk of a default on those swaps. Eventually, Goldman sold the swaps to the national bank of Greece.

In light of this combination of arranging structured financing while shorting the customer's debt, Goldman may find itself in a familiarly uncomfortable public light. Goldman has come under a barrage of criticism for structuring mortgage backed securities while its traders shorted that market.

They pulled the same scam on US home buyers that they pulled on an entire country. They originated loans that they knew were going to default. They made money doing that. Then they sold the loans to another sucker. They made money doing that. Then the bet that the loans would fail. They made money doing that as well. In the end, both the US home buyers and an entire country were left with unpayable debts.

Goldman-Sachs was monumentally predatory. As the article says:

Goldman was uniquely well-positioned to understand that Greek debt service obligations were higher than they would have appeared just by looking at its official debt levels, making Greece a riskier credit. This knowledge may have allowed Goldman to acquire credit protection on the trades on the cheap.

If you read the full article it's full of excuses why Goldman was not really a bad actor, but you must remember the source is the Business Insider, and they would happily support selling children into sex slavery if it was legal because Profit!

It's a pure swindle. Goldman had the deck stacked and the cards marked. Even a sovereign government was not up to understanding how a huge banking institution was able to manipulate the financial system to squeeze them dry and avoid any responsibility.

You're absolutely right. Ever person who has read Slashdot since it started knows far more about astrophysics then that feeble Ethan guy. He's scientifically illiterate compared to the rest of us.

We all just woke up one morning and said to ourselves "I'm going over to Wikipedia and read about the forbidden spin flip transition of hydrogen and it's relationship to the 'dark age' period when the expanding universe first became transparent to electromagnetic radiation." I know I did.

You shouldn't hold back. Tell the full story. We all know at least as much as the authors of any author who is the subject of a Slashdot posting. Slashdot readers that that superior to everyone else.

Since we are all so damned smart and know so much about everything, the only logical conclusion is that Slashdot should just shut down. It's beneath us. I'm so glad you pointed this out to everyone here. Even given our collective genus, you are slightly superior. I take my hat off to you, sir.

Of course, there is a somewhat simpler solution that you could unilaterally execute that would solve the problem: never log into Slashdot ever again. It's an insult to those of true enlightenment and we should all immediately log off. Leave it to the cretins and let it die the natural death of the stupid. I'm taking your advice, and this is my last time here.

Arrogant much?

It's good to be honest about your past. Nothing is gained by pretending that you were uninvolved in something you once did.

However, like an alcohol or drug abuser who is in a state of denial about their past, you need to reexamine your behavior. You will never recover and regain your sense of self worth until you admit your destructive activities, ask for forgiveness, make amends to those you harmed, and actively pursue a path of helping others. It sounds like you are still obsessing about negative things you should have let go.

Seek help. Do not be ashamed to ask. Although there are some who will hold your previous actions against you, there are still people in the Unix/Linux/BSD community who will help you get to a better place. If you don't feel comfortable with them, try Android. Even if you are scarred by the past, you can still have a better future.

Now get the hell off my lawn.

I quoted Wikipedia articles to verify my statements. Hussein used chemical weapons against Iran when they were fightiing a proxy war for the US and it's allies. I quoted that Wikipedia article too. I showed evidence that the only chemical weapons in Iraq were left over from the Iran-Iraq war.

The justification for going to war was based on all the bad intelligence pushed by the Bush administration. For example Colin Powell said that his incorrect statement to the United Nations were "a 'blot' on his record."

The Blair government in England published the September Dossier claiming that Iraq was seeking yellowcake uranium and that it could used weapons of mass destruction in 45 minutes, It was found to be completely wrong: "Without exception, all of the allegations included within the September Dossier have been since proven to be false". An inquiry after the war was told by Major General Michael Laurie, one of those involved in producing the dossier: "the purpose of the dossier was precisely to make a case for war, rather than setting out the available intelligence, and that to make the best out of sparse and inconclusive intelligence the wording was developed with care."

The British, like the Bush administration, deliberately lied. They did not, in fact, have credible or actionable intelligence.

I pointed out not only that they were wrong about everything, but that they had previously stated intentions to topple Saddam Hussein. If it was a crime investigation, this would supply clear motive.

You have quoted nothing. Your reply is an opinion with no external references. I made a point to quote sources like Wikipedia that have some claim to objectivity.

Bush, Cheney, all the people who signed the PNAC statement, are far right ideologues who instigated an unnecessary war of aggression. They used propaganda and lies to achieve their ends. The result is an unmitigated disaster that has destabilized the Middle East. You are an accessory after the fact and you share their guilt. You are known by the company you keep.