This morning the New York Times reported that the Justice Department may drop a closely watched legal case aimed at forcing the Swiss bank UBS to divulge the names of 52,000 wealthy American clients suspected of offshore tax evasion, a United States official briefed on the matter said Monday.
The move, which would halt an unusually aggressive effort to force Switzerland to lift its veil of banking secrecy, could happen by mid-July.”
During February, the Times reported, the Justice Department sued UBS in federal court, seeking to compel the bank to turn over the names. The move came a day after UBS agreed to pay the government $780 million to settle accusations that it had defrauded the IRS by allowing wealthy Americans to hide billions in secret offshore accounts.
But now the government has second thoughts. UBS says that disclosing client names would violate Swiss laws, and its executives might then be prosecuted by Swiss courts. And, UBS notes, they already paid off the Feds-so give us a break, will ya?
And, it appears, the Feds just don’t have the cojones to go after the fearsomely rich Swiss. As the Times reports:
“To have a complete meltdown in Swiss-U.S. relations and go to the mat with Switzerland three years from now when money is getting back into the system doesn’t make sense,” said an American official who was not authorized to speak publicly about the matter.”
UBS, and its officers, must respect client confidentiality. That comes first-and niggling little details, like potential conflicts of interest, or rich Americans scamming the IRS, come in a distant second.
Money talks – and everything else walks.