It is refreshing to read the foreign press because they have decidedly different takes on issues.Whether you agree or not, it is important to hear those views.
The Swiss are very negative on the U.S. and their tax fight against UBS. This has them dredging up past legal skirmishes. Here’s an article from the Swiss daily Tagesanzeiger – a media outlet that is not considered a establishment paper – about Marc Rich. Remember him? He’s the wealthy man living in exile who created a scandal when he was pardoned by U.S. President Bill Clinton at the urging of Rich’s ex-wife. Here’s what the paper had to say (my translation):
U.S. law takes precedence: thanks to this principle and massive financial penalties, the United States has also forced Marc Rich on his knees.
The American oil dealer Marc Rich, living in Zug, got into the crosshairs of the U.S. authorities in the beginning of the eighties. The United States accused him of profiting from untaxed income of 100 million U.S. dollars at his Swiss company, and therefore claimed 48 million U.S. dollars in tax payments.
Rich denied the claim. Then a district court judge in New York asked Marc Rich & Co. AG to submit all business documents concerning the oil deals. There were hundreds of thousands of pages. Rich refused. The judge, therefore, punished him with a fine of 50,000 dollars per day. For a full year, the oil dealer transferred a check on Monday and Friday to the U.S. – a total that came to over 20 million U.S. dollars in the U.S.. Only then was Rich ready to deliver the documents to the court.
And as a result, he fell into the crosshairs of the Swiss judiciary. The Office of the Attorney General seized all the remaining documents. An investigation into Rich was opened because of the economic news agency.
100 million U.S. dollars blocked
In the U.S. as well, the then-Attorney General Rudi Giuliani stepped into action, bringing charges against Rich and blocking his assets in the U.S. (real estate, pension funds, etc.). Their value was estimated at around 100 million U.S. dollars.
But that was not enough. Banks which had been associated with Rich in business were put under pressure. They were warned not to receive any money from Rich or to pay out money to him – including his own. Beside U.S. companies, non-American banks with branches in the U.S. became entangled in the wider net of the judge’s ban. “It was this pressure which forced him to capitulate,” said “Weltwoche» journalist Daniel Ammann, who in October will publish a biography of Marc Rich ( “The King of Oil,” St. Martin’s Press, New York). Under these conditions, Rich could no longer do business transactions. He signed to pay a re-imbursement in U.S. court, although he has always denied the allegations.
According to Ammann, Marc Rich is sad to have paid 200 million U.S. dollars, which for 1984 was a huge sum. Did the U.S. win? Ammann: “In the Rich case, the U.S. has not won. They were not not able to get Rich before a court and never were able to obtain the desired documents. But they got the money. “The Americans could have gone through the legal route. This way was just too slow,” said Ammann. He calls this attitude of the U.S. in his book “legal isolationism.”
While you might abhor Rich and think the Swiss banking system is built on a bunch of tax dodging, this account regarding “legal isolationism” has the ring of truth to it. Certainly, these same issues are at play in the detention of enemy combatants at Guantanamo Bay. I would argue they are also at play in the Swiss tax law cases as well. And despite the Obama’ Administration’s claims to break from the past, don’t expect a change in America’s sense of “legal isolationism” any time soon.
Wie die USA den Ölhändler Marc Rich weichklopften – Tagesanzeiger
Originally published at Credit Writedowns and reproduced here with the author’s permission.