'Banks moved their evasion experts to LatAm'

UBS whistleblower Stéphanie Gibaud talks to the Herald before travelling to Argentina
With tax evasion allegations against HSBC under the spotlight in Congress, a whistleblower from another banking giant famous for its secrecy, Switzerland’s UBS, says she is coming to the country to testify soon, and warns that emerging economies have been the latest target of bankers promoting that kind of crime.

As the head of Marketing and Communication at the French branch of Switzerland’s biggest bank, Stéphanie Gibaud discovered that her PR work was being ilegally used to attract some of the wealthiest people in France into tax evasion schemes.

Interviewed by the Herald, Gibaud says pressure from US and European regulators after 2008’s financial crisis made bankers move their tax-dodging specialists into emergent economies such as those of Latin America.

Soon, she expects to be in front of the Bicameral Commission to reveal some of the little-known internal workings of mass-scale tax cheaters.

Is it fair to say your job at UBS was, although unknowingly so, helping to lure the fortunes of very wealthy people into countries that hid them from the taxman?

I did public relations for the bank, which means you travel everywhere and entertain the clients so that they place their money with you rather than your competitors. The biggest part of the budget in the area I managed was to develop links with luxury networks to invite clients and potential clients in France. But since day one I was working with Swiss client advisors despite being in France, which I then discovered was something illegal. When the UBS scandal emerged in the US, I understood that American clients couldn’t be visited by Swiss client advisors, so I asked my manager if what we did was normal. As of the day I started asking these questions, things started to get complicated. I was seen as annoying, they started lying to me and it finished like crazy with harassment and worse.

Were authorities ignorant, not interested or representing hidden interests?

A country like France cannot be uninformed. These Swiss client advisers were here all the time, between 100 and 150 of them, from Basel, Laussane, Zurich, Geneva. I also worked with client advisers from Belgium, Monaco, Luxembourg — which are also tax paradises around my country —, who were here to find clients and ask them to put their money elsewhere. Don’t tell me this has been done without French customs, police, Banque de France and so on not noticing. But when the crime is so big, everyone shuts up.

How was your meeting with AFIP tax bureau’s president Ricardo Echegaray?

Mr. Echegaray and four other gentlemen had a meeting with (HSBC whistleblower Hervé) Falciani and me six months ago in the Argentine consulate in Paris. Hervé scheduled this appointment with Mr. Echegaray, and said we were ready to help Argentina against tax evasion. Hervé explained who I was because Mr. Echegaray hadn’t heard about the UBS case. We told him we can be very helpful in explaining how the bank works because we are insiders. We know how to decode what they do. What to you is very dark, it’s very easy for us to understand.

What did you explain to him?

I explained the strategy of the bank, which was to penetrate networks of people. And I said that when the US case against UBS emerged in 2009, Switzerland anticipated that European and US regulators would move against these banks so, by 2009-10, UBS started to focus its business on the BRICS, trying to penetrate networks of potencial clients in developing markets. One of my previous bosses, and UBS president in 2007-2008, Gabriel Castello, ended up working on UBS South America. Other Swiss banks probably did likewise.

So your former boss is now working in Latin America and probably trying to seduce Latin American clients to move their money elsewhere.

Absolutely. I have their sales strategy. There are different ones, for different networks, there was one for football and tennis players, for example. I have all their sales strategies for South America.

Is that something like a manual on how to attract these clients?

When you are a client adviser it’s as if you sold cars: you have a sales quota, but instead of selling 20 or 30 Mercedes a year your objective is to attract say 5, 10 or 15 million into the bank, depending on whether you are a junior adviser or a more senior one. You must have net new money coming in. To reach these goals there are lots of internal tools, explanaitions on how to do it. I have all of them.

Apart from these strategies, did you also give Echegaray a list that you had?

I read that in the media, but as far as I know there is no UBS list, except if someone else has it, but not me. We explained to Echegaray that I can help with the strategy of the bank, to help him understand how Argentine clients are targeted and how the bank helps them to place the money offshore, and in which countries.

Are you coming to Argentina to testify in the Bicameral Commission that is currently following HSBC’s case?

Mr. Echegaray should have replied to me this week regarding my accommodation details, so I don’t know the date yet, but yes, I think so.

DRAWING ATTENTION

Did the financial crisis put more attention on the banks?

It definitely did. UBS, which is one of the most powerful banks in the world, was tracked in three crises, the subprime crisis first, then it emerged that UBS was the bank supporting (convicted pyramid-schemer) Bernard Madoff in Luxembourg, and then the American story with Brad Birkenfeld, the whistleblower who went to see American authorities and said “my job as a client adviser is to help all American clients to hide their money from the IRS (Internal Revenue Service).”

What happened before?

Back in 2008 no-one here in Europe was talking about evasion, laundering, paradises. They said they were exceptional cases, but no one said that the bank was organizing money laundering on an international scale. At that time I understood my bank here in France had never been profitable. A wealth management bank that is not profitable, that is something strange. They open subsidiaries in onshore countries, France, Spain, Germany, Italy, Greece, US, Canada, but what is the purpose of the game if the subsidiary isn’t a profitable entity? Where does the money go?

You said you were followed by spies due to your activism, how did that happen?

In 2011 I was contacted by Antoine Peillon, a French journalist, and the French intelligence services had told him that I was being followed and that my phones were tapped, etc. An example: as I was a PR person I spent two weeks in Roland Garros, you know, the French tennis open with amazing Argentine players, and I was followed during the whole tournament, they were behind me every day.

Are authorities being more helpful now?

Since the new government of Francois Hollande in 2012 things changed. The judge is apparently about to close the case and UBS could pay a fine up to 5 billion euros. However, our budget minister Jérôme Cahuzac turned out to have a UBS account in Geneva he had never declared. You cannot ask your citizens not to evade taxes when you do it. And Bercy, the finance ministry, said they are fighting tax evasion, but we know some of the names will never be published and some people will never be in trouble.

You mean friends of the state?

Yes.

WHISTLEBLOWER SAFETY

What kind of help do you think is needed to encourage more whistleblowers?

We need laws to pass everywhere. The United States has the best laws (for whistleblowers), although it’s quite limited when you see what happened to Edward Snowden or Chelsea Manning, but at least in the financial sector it improves the conditions. For us here in France it’s awfully complicated. We need to pay for our lawyers, we need a job (maybe as civil servants for the Finance Ministry or whatever). I am obviously not working now beause once you do something like this no one wants to hire you, as everyone thinks you are dangerous, even though we have helped our countries. We should not be treated like outlaws.

Have you lost much because of what you did?

Yes. You lose everything, your health, your friends, your job, your career, everything falls apart. Why are governments so reluctant to protect us? Is it because our democracies are somehow not democracies, is it because there are laws for the citizens and not for the people at the top, be them politicians or the extremely rich? We are persona non grata. But what we do is for the general interest. We don’t do this to be rich or famous. When I refused UBS’ request to destroy my files it was not to have my name in the media. We should be protected from this, or no one else will stand up and blow the whistle again.