Recently I asked you, readers of my blog, to email me your comments for publication on my blog page following each entry.
Until now our Sovereign Society blogs haven’t published readers comments, but now we do. And I welcome your comments, pro or con. We want to know what you think.
Easy on the Swiss
In response to my blog entry, Teeing Off on Obama's Cynicism, Hypocrisy, Tony, responded: " I am terribly grateful for your excellent sense of right and wrong as it pertains to the sovereign individual. Keep up the good work!!" But he added: "With very great respect, I believe that you have been much too easy on UBS, Obama, and the Swiss Government. None of them have the slightest interest in anything but their own immediate selfish interests. They are nothing more or less than power-hungry, greedy, treacherous, lying thugs." (You can read Tony's full comment at the bottom of the blog page on which my article appeared).
Questionable at Best
Tony also touched upon several important background points I've commented on during the last year, as the UBS debacle gained momentum and worldwide notice. Comsider these points:
** In February 2009, UBS and the Swiss government violated due process of law when they handed over to the IRS the names of an accused 250-300 account holders, without permitting any appeal of this action as Swiss law allows;
** In August 2009, the Swiss government and UBS caved in to IRS demands and abrogated the existing U.S.-Swiss tax treaties by not demanding specificity with respect to the release of a reported 4,500 UBS American client names.
Tony believes that the settlement agreement between the IRS and UBS is another example of the Swiss government making a mockery of Swiss law, and he may well be rght..
Appeals Mockery
For example, in the so-called "appeals process" the Swiss government is requiring U.S. persons to notify the U.S. attorney general if they wish to prevent their confidential account information (previously guaranteed as secret by UBS as well as the Swiss government and law) from being released to the IRS.
Try to appeal and the Swiss government will give account details to the U.S. Department of Justice, just as they did previously, even though UBS American account holders sued in a vain attempt to maintain their privacy and enforce Swiss law.
Closer Look
Tony's points made me take a closer look at what the IRS-UBS-Swiss government agreement and what it entails. At the time al parties also made public declarations that make interesting reading.
Freedom and Privacy at Issue
I previously wrote about the deal. However, after further research, especially a review of the IRS official statement and related documents.
I think anyone interested in the future of bank secrecy in Switzerland, (if indeed there is any such future), should consider what the Swiss government in fact has agreed to do.
Threat of Future IRS Attack on Other Banks
** The deal suspends the immediate enforcement of that broad "John Doe" summons under which the IRS demanded upwards of 52,000 UBS client names.
However the underlying summons remains in effect in court and can be reactivated if the IRS concludes "...the results are significantly lower than expected and other measures fail." At that point the IRS can start all over by resuming enforcement of the John Doe summons.
Score one big one for the IRS, and for the continuing threat that will be held over both UBS and the Bern government.
** The IRS claims that "the Swiss Government has agreed to review and process additional requests for information for other [Swiss] banks regarding their account holders to the extent that such a request is based on a pattern of facts and circumstances equivalent to those of the UBS case."
Swiss Admission; IRS Bluff
This echoes the statement of IRS Commissioner Douglas Shulman (left) who said that the IRS plans to target more Swiss and other offshore banks, law firms and entities that help Americans hide assets.
Ironically, the IRS admitted that it never really wanted all 52,000 UBS clients names, but used that number as scare tactic and ploy to gains access to the smaller 4,500 account holders with larger deposits.
Faces Saved, Butts Covered
With cunning maneuver, the Bern politicians used the existing Swiss-U.S. tax treaty as the process vehicle to accomplish this questionable deal. That trick avoids the very real threat of a national referendum in which the deal might well have been defeated by angry Swiss voters rightfully protesting U.S. violation of their national sovereignty.
All of which makes a mockery of those pious statements by Swiss president, Hans-Rudolf Merz, (right) about Swiss bank secrecy having been preserved -- under glass in a museum?.
History Will Judge
I think history will see this as a classic case of political face saving and butt covering by the Swiss politicians who surrendered to the IRS.
The IRS, good at bluffing and threats, and high tax U.S. politicians, were the big winners.
Losers were the 4,500 U.S. clients abandoned cavalierly by both the tax-evading UBS and a highly nervous Swiss government willing to abandon principles and avoid a fight – but a great coast.
But then we really shouldn’t feel too sorry for Americans who evade taxes and violate the law.
The real losers were thousands of honest Americans and others who seek true financial privacy because their own governments have destroyed it.
What do you think? Send me your comments at info@sovereignsociety.com
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