Swiss bankers say tax evasion was ‘a business model’
Banking group hits out at Credit Suisse chief executive after he tells US that alleged tax schemes were due to a few dishonest employees
A group representing Swiss bankers has demanded an apology from Credit Suisse boss Brady Dougan after he said the practice of helping Americans conceal their wealth was the work of a few dishonest employees.
The American-born chief executive told a US Senate subcommittee on Wednesday that he and other top managers were not aware that a small group of Credit Suisse private bankers had helped US customers evade taxes with offshore accounts.
“The evidence showed that some Swiss-based private bankers went to great lengths to disguise their bad conduct from Credit Suisse executive management,” Mr Dougan told the senators.
He said the wrongdoing appeared to have taken place before 2009 despite “industry-leading compliance measures” at the bank.
The body representing staff at Credit Suisse and other Swiss banks reacted with astonishment to Mr Dougan’s comments, saying it was “hardly credible” that the bank’s bosses knew nothing of the practices.
“It was common knowledge that tax evasion was the strategy, a business model pursued by many banks for a long time,” the Schweizerischer Bankpersonalverband said in a statement.
It said Mr Dougan’s comments “vilify lots of employees that had nothing to do with offshore US banking”, and demanded he apologise to the bank’s 46,000 staff.
Mr Dougan’s comments may have been motivated by efforts to lessen the bank’s penalties in the US, but he still owes staff an explanation, the employee group said.
More than 22,000 Americans were using Credit Suisse to park combined assets of $12bn at one time, according to a report released by the US Senate ahead of Wednesday’s hearings.
The Senate subcommittee alleged Credit Suisse bankers held secret meetings in luxury hotels and used hidden elevators to help foreign clients hide their wealth, a practice that one senator said belonged in a spy novel, not a bank.
Credit Suisse management has accepted responsibility for wrongdoing by its staff, while rejecting any suggestion that it was bank policy to help foreign clients hide their wealth from their goverments.
When the bank sent data on employees to US prosecutors investigating its US dealings last year, some staff voiced outrage and went to court to prevent Credit Suisse from releasing the data.
Credit Suisse last week settled charges levied by the US Securities and Exchange Commission, admitting to wrongdoing and paying $196m in fines. But a settlement with the Justice Department is not imminent, a person familiar with the matter has told Reuters.
Credit Suisse is one of 14 Swiss banks being probed by US prosecutors over taxes, after UBS became the first major bank to agree a settlement over the charges. Two smaller Swiss banks, Wegelin & Cie and Bank Frey, have had to close as a result of the US investigation.
Credit: The Telegraph