by Andrew Zajac
This can't be good for the campaign of the presumptive Republican presidential nominee John McCain.
The IRS is trying to serve a summons on Swiss bank UBS AG seeking information on U.S. taxpayers who may have used the bank to gin up records to avoid billions in taxes on offshore investments.
Top McCain economic advisor Phil Gramm is vice chairman of UBS' U.S. division which already has drawn unflattering scrutiny for writing off big losses in subprime mortgage-backed securities.
Gramm, the former Texas senator and presidential candidate, was registered to lobby Congress last year on mortgage securities issues on behalf of UBS.
There's no indication that Gramm has any involvement in the tax-avoidance scheme, but his presence in the pilothouse of a global finance company under fire from U.S. regulators is precisely the sort of special interest coziness that McCain insists he represents a break from.
At least five top McCain aides have left the Arizona senator's camp because their lobbying or business involvements were judged to be more than a maverick, tell-it-like-it-is campaign could bear.
The RNC was quick to point out today that Barack Obama has his own ties to UBS in the person of Robert Wolf, CEO of UBS Americas, who is a major fundraiser for the Illinois Democrat.
But Gramm's involvement in problematic economic policy issues benefiting UBS run to more than lobbying in the midst subprime mess. (Gramm successfully advocated defeat of a bill that would have given bankruptcy judges the clout to rewrite mortgage terms to prevent homeowners from losing their houses.)
As a senator he sponsored legislation that knocked down the regulatory wall separating commercial and investment banks, which in the view of some critics exacerbated the mortgage meltdown.
As a UBS lobbyist in Texas, he proposed selling so-called "death bonds", a complex financial product which would have allowed the ailing state teachers retirement system to take out life insurance policies on members and make money if they died prematurely.
Here's a copy of today's Justice Department's announcement of action against UBS:
JUSTICE DEPARTMENT ASKS COURT TO SERVE IRS SUMMONS
FOR UBS SWISS BANK ACCOUNT RECORDS
Bank Records Could Identify Those Who Use Swiss Accounts to Evade Income Taxes;
Former Employee Estimates $20 Billion in Assets in Undeclared Accounts for U.S. Citizens
WASHINGTON - The Justice Department announced today that it has filed papers seeking an order from a federal court in Miami, Fla., authorizing the Internal Revenue Service (IRS) to request information from Zurich, Switzerland-based UBS AG about U.S. taxpayers who may be using Swiss bank accounts to evade federal income taxes. The Justice Department seeks permission to allow the IRS to serve what is known as a "John Doe" summons on the bank. The IRS uses a John Doe summons to obtain information about possible tax fraud by people whose identities are unknown.
On June 19, 2008, former UBS banker Bradley Birkenfeld pleaded guilty to conspiring to defraud the IRS by assisting UBS clients in avoiding U.S. reporting requirements on income in Swiss bank accounts. According to Birkenfeld's court statement, UBS employees assisted wealthy U.S. clients in concealing their ownership of assets held offshore by creating sham entities and then filing IRS forms falsely claiming that the entities were the owners of the accounts.
The John Doe summons, if approved, will direct UBS to produce records identifying U.S. taxpayers with accounts at UBS in Switzerland who elected to have their accounts remain hidden from the IRS. In his court statement, Birkenfeld claims UBS had approximately $20 billion of assets under management in "undeclared" accounts for U.S. taxpayers.
The law requires a U.S. taxpayer to report all financial accounts in a foreign country if the total value of the accounts exceeds $10,000 at any time during the calendar year. A willful failure to report a foreign account can result in a penalty of up to 50 percent of the amount in the account at the time of the violation.
"We are working cooperatively with both the Swiss government and UBS to obtain this information. However, we are prepared to seek enforcement if that process is not successful," said John A. DiCicco, Deputy Assistant Attorney General for the Justice Department's Tax Division. "We will work hand-in-hand with the IRS to vigorously enforce the tax laws against those taxpayers who use offshore accounts to evade taxes."
"Offshore accounts harbor billions of dollars, and people should take notice that the secrecy surrounding these deals is rapidly fading," said IRS Commissioner Doug Shulman. "The information we gather from this action will help us detect wealthy individuals who don't pay their taxes as well as provide details about how advisors facilitate this abuse."
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Comments
Hey it's not just McCain pals and advisers who have tax problems! Mr and Mrs McCain themselves apparently don't pay taxes! At least they don't pay taxes on all SEVEN of their luxury homes!
Posted by: athena | June 30, 2008 7:02 PM
Oh! Gramm's got to be guilty...he's linked to McCain, but forget about Weatherman Terrorist .....William Ayers....Tony Rezko and Rev. Wright.
Obama's scum-bag friends will come home to roost in October!
Paulo
Posted by: Paulo | June 30, 2008 7:23 PM
Here's a prime example of a media smear of McCain--a big headline about how someone who talks to McCain is a VP of the American branch of a Swiss bank, which bank is being asked to provide information about US taxpayers who MAY HAVE used the bank.
Is that thin or what?
Posted by: Bruce | June 30, 2008 7:33 PM
That THUD sound you just heard is the sound of John McBush's campaign hitting rock bottom...
I wonder who the Repubs are going to replace him with at their upcoming convention?
Posted by: John E | June 30, 2008 7:37 PM
Oh, it's just those Republicans engaging in " questionable conduct ", again !! Had enough, yet, America ?!!
SUPPORT OUR TROOPS, BRING THEM HOME, ALIVE AND WHOLE. NOW.
Posted by: Don Fitzgerald, Chicago | June 30, 2008 10:04 PM
McCain and his party are vile and corrupt. They will bring down America if elected.
Posted by: DIRTY DICK CHENEY | June 30, 2008 11:05 PM
John E.,
I beg to differ, the McCain campaign can, and will, go lower...
Posted by: Doug "Hussein" Zook | June 30, 2008 11:06 PM
John, it hasn't hit bottom--just as the Dow hasn't hit bottom yet.
Phil ("maahhh maaamaaa tole me") Gramm has many skeletons. Wasn't his wife at CFTC and didn't she push through the infamous ENRON LOOPHOLE?
But McC himself has heavy baggage. Keating. Vickigate. Dumping crippled first wife. Womanizing all the way through his career (like BillyC).
Bottom is still way, way down there.
Posted by: ornery | July 1, 2008 1:18 AM
The co-chair of the Obama campaign, his spouse, and son are registered lobbyists - Tom Daschle.
There are 22,000 registered lobbyists - how many are Democratic? How many are Republican? Nice try Swamp, but you need to connect all the dots, not just the ones you like.
For a full read on lobbyists check out:
http://brokengovernment.wordpress.com/2008/06/27/congress-for-sale/
Posted by: Ken Moyes | July 1, 2008 1:43 AM
Try saying something legitimate...the IRS isn't a valid U.S. Entity in the first place. People need to stand up for the Constitution and rid this land of the IRS to begin with. We also need to impeach and try nearly every Congressman and Senator for treason, as so well defined in the Constitution.
Posted by: Mitch | July 1, 2008 1:57 AM
a big headline about how someone who talks to McCain
Posted by: Bruce | June 30, 2008 7:33 PM
Someone who talks to McBush? He is the top economic adviser for crying out loud. Nice spin Bruce. Gramm has been the dark overlord who made money and brought the sub-prime to us as well as the housing crisis. He is also the one who let the speculators in oil have a hayday. Some "change".
Posted by: bill "Hussein" r. | July 1, 2008 6:55 AM
Gramm, the prime ochestrator of the Enron loophole while he was Senator and his wife was on the board of Enron, is the king of deregulation. He needs all the negative exposure the media can give him. If this means association with McCain, who chose him as an adviser, so be it. Gramm's policy caused heartache, misery and destruction of multitudes of lives while he and his cronies profitted from the losses of others. This country does not need any more Phil Gramms in positions of decision making.
Posted by: ernieson | July 1, 2008 8:52 AM
According to McCain, he's been friends with Phil Gramm FOR YEARS, so why wouldn't his good friend turn him on to such a good deal?
BTW You too may been in the same room or on the same plane with Ayers - oops, that makes everyone who came within 20 feet of Ayers a Commie, too. Hope he didn't ride any commuter trains, the El... Chicago is tainted!
This is guilt by proximity!
Posted by: babaloo | July 1, 2008 9:50 AM
Do you understand the Swiss Banking Secrecy Act? I am guessing not, otherwise you would not post something so ignorant without performing the necessary research.
Posted by: Paul | July 1, 2008 9:54 AM
Here's a prime example of a media smear of McCain--a big headline about how someone who talks to McCain is a VP of the American branch of a Swiss bank, which bank is being asked to provide information about US taxpayers who MAY HAVE used the bank.
Is that thin or what?
Posted by: Bruce | June 30, 2008 7:33 PM
No thinner than the idiotic attacks on Obama for the bad deeds done by people he's encountered.
Posted by: Anonymous | July 1, 2008 9:56 AM
"There's no indication that Gramm has any involvement in the tax-avoidance scheme..."
Uhh, isn't this exactly what the article is indicating, that there is some involvement?
Next up on the IRS list, serving summons on US banks that have been robbed. There's no indication that higher ups in these organizations had any previous knowledge of the bank robberies that occured, but regulators want to find out if these robberies, where the money is insured by the Federal Government, is in any way linked to former president Franklin D. Roosevelt. FDR was president when the federal insurance program for banks was created in 1933.
Posted by: Bailers | July 1, 2008 10:03 AM
this is just another example of obama's smear campaign against mccain. obama cannot say anything good about himself so he uses the democrat attack machine to trash a decent american patriot. it is obvious that obama will stop at nothing to grab power.so much for a new kind of politics. obama is just the same old polititical hack politician that we are all sick and tired of. it is time for change-- DEFEAT TRASH POLITICS--- DEFEAT OBAMA!
Posted by: mark | July 1, 2008 10:37 AM
Looks like Old Man McCain is up to his old tricks: Do as I say, not as I do.
Posted by: Mark Twain | July 1, 2008 10:41 AM
Bruce,
It may be thin but it's thicker than the Rezko/Obama relationship.
PS Why does John McCain tend to leave thousands if not millions in his wake financially destroyed? He cut his teeth in the Keating Five now the sub-prime crisis? I can't afford him having more absolute power.
Posted by: jo | July 1, 2008 10:55 AM
Note that once again, a close advisor for McCain is a paid lobbyist for a foreign interest. This campaign is completely controlled by those who's finacial interest are tied not to what's best for the United States, but to what's best for some other country. How does anyone continue to believe that the McCain campaign is concerned about the needs of the average US citizen? The Swiss owners of UBS, and the rulers of Saudi Arabia, Myanmar , Albania amongst others are much more important to the McCain capaign and it's core of lobbyists.
Posted by: K-street | July 1, 2008 12:19 PM
OK, let's see, instead of finding a basis to defend McCain, GOPers will try to smear Obama or any Dem. That's always been their "best defense". If challenged, smear and lie. It's about time the "liberal media" really did become "liberal" instead of being shackled by their corporate paymasters and actually REPORT the corporate sponsored Republican wrongdoing! McCain has had too much of a free pass. Can you imagine what would happen if Obama had this problem? Like the Bill Clinton's endless coverage, we keep hearing a barrage of endless details about his marital infidelity. Instead, we get only the deafening silence of the past 8 years of criminal offenses ranging from war profiteering, torture, illegal wiretapping of who-knows-what (foreigners... yeah right), questioning of why only ONE person has been convicted of terrorism in the US despite years of war and tons of money and even the anthrax perpertrator (against Dem senators) was never caught. Billions of dollars just gone "missing" in Iraq when planeloads of dollars placed on wooden pallets couldn't be found. Where was the "liberal press" on all these? Dumb cons will never learn that the way propaganda is used is to demonize the other sources of information. It's only when you read BOTH sides that the truth from in between comes out, not when you read and belief only one side or the other.... but then again, you people have been brainwashed from young by a fundamentalist accept-at-face-value mindset. No wonder we are doomed.... so many idiots running around...
Posted by: Jon | July 1, 2008 12:38 PM
It is sad that even comments on this blog come down to smear from both sides. The McBush comment is getting old and probably is spouted by folks who don't fully understand that McCain is nothing like Bush - so they spout McBush.
Frankly, I would not give your two cents for either candidate.
It seems that every four years we get to choose the least objectionable candidate.
http://brokengovernment.wordpress.com
Posted by: Ken Moyes | July 1, 2008 1:39 PM
This is too complicated for the average double-digit voter. Won't mean a thing, won't cause any concern for the McBushes.
Posted by: S in PA | July 1, 2008 8:28 PM
One would think that some of the hundreds of millions of dollars that Cheney has skimmed off the top for himself since he took office would also be in UBS accounts. Should be interesting. Wonder what his UBS nom de plume is? Vader?
Posted by: Not So Rich | July 2, 2008 11:49 AM