Showing posts with label U.S. Congress. Show all posts
Showing posts with label U.S. Congress. Show all posts

Friday, February 8, 2019

For me, he was simply THE master politician of my 15 years in Washington, D.C. Remembering John Dingell and what legislators used to do and be











WDIV-TV, Detroit BREAKING: Former Michigan Rep. John Dingell dies at age 92

John Dingell writes a note to his younger self
CBS This Morning
Published on Dec 10, 2013
Rep. John Dingell, D-Mich., begins his 58th year as a member of the House of Representatives. At age 87, he is the longest serving member of Congress in history. In the "CBS This Morning" ongoing series, "Note to Self," Dingell write about his personal connection to Pearl Harbor.






















Make sure you read the pillow he's holding!
Longest-serving Rep. Dingell on how Washington has changed
Longest-serving Rep. Dingell on how Washington has changed
Video: CBS News, Published on June 9, 2013 

Rep. John Dingell, D-Mich., the longest-serving congressman in American history, discusses how Washington has changed since he arrived on Capitol Hill more than 57 years ago, particularly the gradual loss of bipartisan cooperation.

Updated February 11, 2019

Upon my arrival in Washington, D.C. in February of 1988, the day after the Super Tuesday presidential primary election day in Florida, the Southeast U.S. and a few other states, I was more than elated to finally be in the city that I had always wanted to live and work in, and I made a promise to myself.
That vow was that I’d do everything in my power to expand my base of knowledge of policy and process on many different issues in a way that would also help me get a job in a very competitive environment. Growing up in North Miami Beach in the 1970's sans the Internet, I always believed that information was power and always strived to be a person “in the know” whom other smart and savvy people turned to for advice or counsel. And all throughout high school at NMB Senior High and college at Indiana University in Bloomington, and various national and state political campaigns I worked on at a pretty high level, that’s exactly who I was and the reputation I garnered.

I have always had a crazy memory for trivia and context that always helped me recall details that others didn't know or recall. Yes, I was that guy who often won trivia contests at spring break events, at hotel bars or restaurants or get-together at parties in Dc and suburban Northern Virginia.
And thanks to a lot of hard work and diligent effort, I became a well-connected person that was in-the-know. Or so it seemed to me. But who can really know. right?
Growing up in South Florida, because of my personality and interests, I always knew LOTS of TV and print reporters and columnists and editors, when I was in high school at NMB -spent hundreds of hours at the late Miami News at both their Sports and Entertainment desks- and that was also true at IU where college newspaper, the IDS, was one of the best managed in the country, housed in a building named for a journalism icon, Ernie Pyle, an IU alum.

I knew nearly everyone who was anyone at the ids and frequently attended get-to-gethers with many of them on Sunday nights in the Fall after the last NFL football broadcast. We'd meet around 7:30 pm in the school library cafeteria on the ground floor, and there, over burgers, fries, cokes and pizza, we'd discuss what was REALLY happening on campus.
The stories that few students on campus knew about but should be talking about, ones we often knew a bit too much about to keep quiet for very long.
By the end of my freshman year at IU I knew and was friends with lots of influential people at the I.U. Varsity Athletics Dept., and gave camous tours for them when VIPs were in town, often before a big game, and knew as well some of the more influential students on campus at the various student groups, including the three most important: student government, Student Athletic Board and Student Alumni Council, being especially devoted to the latter two when not in class, spending hundreds of hours a semester doing things to help them prosper and have fun at the same time.

All in all, I'd done pretty well to create a well-oiled little network for myself in Blooomington, and I hoped to replicate someting similar in Washington, D.C., however difficult that would seem at the outset. Because of my insatiable curiosity, I was always digging to know a little bit MORE than most people about what was really going on below-the-radar and how the sausage was put together if you will.
That led to people noticing that I had a way of getting things done and get the results I wanted more often than not. Plus, in keeping with my outgoing ENFP personality, I was able to do that without grating on people, a not uninmportant ability that I knew would help me qa lot in Washington, based on conversations with friends who already worked there.
But I knew that there were LOTS and LOTS of people in Washington my age who knew a great deal more than me about specific subjects, and that while my general knowledge may've been better than most, I needed to figure out a way of getting MUCh BETTER informed on those subjects that I was clearly lacking in.
To help accomplish that, from 1988-2003, I took copious contemporaneous notes of what I observed first-hand at myriad events with policy makers, journalists and news makers at the Brookings Institution, CSIS, SAIS at Johns Hopkins, AEI, the Wilson Center, the Goethe Institute, the Center for Security Policy, the IMF and The World Bank -BEST wine!-the Economic Strategy Institute, et al. 
There I'd hear subjects and stories that, for whatever reason, rarely saw the light of day in the pages of the New York Times, the Wall Street Journal or the Washington Post. Not even mentioned by friends of mine who worked at those media groups. 
This, naturally, had the entirely predictable ripple effect of making me realize that this would only ensure that these stories and issues almost NEVER made the airwaves of the TV networks, cablenets or, even NPR, either.
So, combined with my own personality and interests, the nature of my jobs in DC and the kinds of friends I had, and all those days and nights I was going to forums and events ariound town, I wound up with a front-row seat and below-the-radar perspective on many of the most contentious and implacable issues in Washington, D.C.
That was especially true for the sorts of policy debates that would take place on Capitol Hill, and their resultant fallout at DC-area think tanks, industry groups and public policy groups.

Nothing thou proved more valuable to me in widening my horizons than actually attending Congressional hearings and becoming familiar with not only the well-known public issues at hand, but also issues below-the-radar, and comparing and contrasting how the individual Members, their staff and the news media in attendance, all performed and interacted -or didn't- to either help illuminate or obfuscate an issue, for better or worse.

I heard pinpoint criticism of policies by members of Congress that I never saw mentioned in the press, and heard analysis that I hadn't heretofore known existed, found out that ideas that I always thought were popular had actually evaded public scrutiny, transparency or accountability for years, and I heard lots of well-aimed personal brickbats. 
Every week, I was able to see examples of the proverbial case of the media watchdog that doesn't bark, or see examples of why the latest case of media conventional wisdom had -again- been proven wrong, and why.
So on Capitol Hill, especially before the GOP takeover of Congress in 1994 that saw so many of my Democratic friends on Congressional committees get the heave-hoo, I saw first-hand how some Members chose to be earnest and diligent work-horses.
People like Lee Hamilton or Dante Fascell, my own Members back in Bloomington and Miami.

Members who did their hardest work behind-the-scenes, which was apparent by their choice of questions and their ability to intelligently follow-up  and elicit interesting answers from the people testifying, to get to the larger truth of an issue.
Others, of course, the Congressional show-horses, the majority, were largely content to simply show up and read the questions their well-informed but partisan staff had written for them, missing obvious follow-up opportunities. I also saw something I never imagined -Members who seemed to be bored with such a great job. A job I and so many others in the crowd would kill to have.

There were a few, though, who combined the work ethic of a work-horse and the showmanship of a show-horse, and one of them was John Dingell, the veteran Michigan Democrat who had held his Detroit-area seat since 1955, succeeding his father, who'd been swept into power during the first FDR presidential victory of 1932.
Dingell’s voluble style and legendary ability to generate both passion and news headlines were famous long before I arrived on the scene in Washington in 1988, of course, so I knew that whenever possible, I needed to attend one of his hearings so that I could see him operate in-person if I wanted to see how things could really work on the Hill, because those rare moments when he was properly engaged and enraged were truly magic.
I saw that Dingell magic for myself many times in the fifteen years I lived and worked in Washington, spending thousands and thousands of hours at/on/around Capitol Hill.

The hearings that made the most powerful impression on me came in April of 1988, just months after my arrival. I was fortunate enough to grab a seat at a Energy & Commerce committee hearing he chaired, after waiting in line for hours to get one of the coveted 30-plus seats inside, where Drexel’s Michael Milken was to testify before what seemed like most of the Beltway press corps.
A hearing where tension was already thick even before it started and then only seemed to grow once Milken publicly invoked his Fifth Amendment right against self-incrimination as camneras all over the room clicked, refusing to respond to the committee’s very pointed and explosive questions.
This, despite the fact that his attorney, the legendary Edward Bennett Williams -the Williams of the famous D.C. law firm, Williams & Connolly, as well as the cantankerous owner of the Washington Redskins football team and Baltimore Orioles baseball team- had already told the committee in advance that his client would not answer its questions because Milken was already under grand jury investigation. John Dingell, though, had bigger fish to fry that day, and was cagey enough to see Milken’s refusal to talk publicly for what it really was -for Dingell.
An opportunity for John Dingell to make a point much larger than the simple one being written about by the legion of journalistic lemmings in American newspapers and business magazines regarding whether Michael Milken and his business approach were a force of corporate good or evil. Dingell used his opening statement -which came before anyone else spoke- to outline what he perceived to be the “evils” of Drexels’s junk bonds, and their use in corporate takeovers that had led to the collapse of longstanding companies, thousands of productive jobs in towns large and small throughout America’s heartland.
People whose lives Dingell believed could never be made whole again. That was to be the drama.
April 27, 1988  Securities Markets and Federal Laws
The subcommittee held a hearing relating to the operations of the nation’s securities markets and the effectiveness of the federal securities laws. Following members' opening remarks, Mr. Milken invoked committee rules preventing television cameras from recording his testimony. After cameras left the room, he invoked his Fifth Amendment privilege against self incrimination. He was under investigation for racketeering and securities fraud.

The comedy was to come later, when Drexel’s CEO, Fred Joseph, came into the room and testified, apparently oblivious to everything everyone else in the room who counts had heard Dingell say from his seat in the middle of the dais during Milken’s portion of the hearing. In a shocking example of making a bad situation even worse, Joseph refused to address the legitimate points Dingell had raised, instead, claiming that financing takeovers was a small part of Drexel’s overall business.
(As opposed to, say, their percentage of company profits! If it really was so small, logically, you’d think that Joseph would try to address the thornier questions posed to Milken, without the embarrassment of taking the Fifth, but he didn’t.)
By the time Fred Joseph had concluded his testimony, the damage had largely been done. Dingell, ever the master pol, had simply let Milken and Joseph hang themselves on TV: Milken by his silence and Joseph by his inability to see the bigger picture that all of America would see that night on the network TV newscasts, via a narrative written and framed by Congressman John Dingell.
APRIL 28, 1988 Securities Markets & Federal Laws

The subcommittee met to investigate several areas of the securities market with the intent of improving the laws in this area. Subcommittee members were interested in regulating the market while also preserving the confidence of the public in the free market system.

John Dingell Visitation And Funeral Arrangements:



Saturday, December 8, 2018

Lots of glitz but little-to-no-heart in latest N.Y. Times T Style Magazine travel story re #SoFL, pre #ArtBaselMiami; Remembering what Congress said about Miami Beach's Art Basel's role in the UBS scandal

Lots of glitz but little-to-no-heart in latest N.Y. Times T Style Magazine travel story re #SoFL, pre #ArtBasel Miami Beach; Remembering what Congress said about Miami Beach's Art Basel's role in the UBS scandal

So, speaking of Art Basel...


Above, a December 2016 photo of my very creative and versatile artist friend Daniel Jayd from Montreal, down here for Art Basel 2016, at one of the most popular outdoor #ArtBasel Miami Beach exhibits at Collins Park on Washington and 19th Street, of Miami Mountain by Ugo Rondinone, which people were positively buzzing about.


Daniel is crazy talented with paint, brushes, pencils and a camera, and is a very smart, friendly and savvy guy, and has represented canada at many prestigious festivals and even at the 2008 Olympics in Beijing. It isn't bragging if it's true.
http://www.studiojayd.com/biography

https://www.facebook.com/daniel.jayd

@ArtistJAYD https://twitter.com/ArtistJAYD






Not that you asked but I'm somewhat incredulous by much of this recent N.Y. Times T Style Magazine travel story re things to see and do in the Miami area, pre #ArtBaselMiami invasion, since so much of it reads more like what you'd expect to find inside some free sponsored-magazine in an upscale hotel lobby on Miami Beach. More glitz than illumination
That this is in the NY Times style magazine is, well, in my opinion, quite telling, when you think about what sort of interesting story could really be told, and the really unique places and things to do down here.








Reading it, you would not know it was written by someone like Evan Benn who has actually lived in South Florida for a while, worked at The Miami Herald, and should know a thing or two about what's new and fun in this area that visitors would find worthwhile.

N.Y. Times T Style Magazine
Where to Stay, and What to Eat, in Miami

Beyond the umbrella-lined beaches and Art Deco architecture of South Beach, Miami is cementing its reputation as Florida’s cultural and culinary capital.

By Evan Benn

Nov. 9, 2018


For those who haven’t visited in a minute, some of the recent changes Miami has undergone may come as a surprise. The Design District, which for years was a maze of traffic cones and construction dust, is now brimming with fashion boutiques and places to stop and grab a cup of coffee, a taco or a scoop of local soft-serve ice cream. A $500-million investment to get ahead of rising sea levels has left the roadways of Miami Beach repaved and less prone to flooding — an especially welcome change in South Beach’s buzzy Sunset Harbour neighborhood, where the tables of locally beloved restaurants like Pubbelly Sushi and Stiltsville Fish Bar spill out onto the sidewalks.
Meanwhile, cultural capital has poured into the region, bringing with it new museums like Frost Science downtown and the Institute of Contemporary Art in the Design District, complementing the annual Art Basel Miami Beach fair that arrives each December. Then there is Brightline, a new high-speed rail service, which zips passengers from Miami to Fort Lauderdale and West Palm Beach in less time — and with less aggravation — than it takes to drive those routes on Interstate 95. The project’s next phase will extend the line all the way to Orlando.
Read the rest of the article at: https://www.nytimes.com/2018/11/09/t-magazine/miami-travel-guide.html

Now I'm no art expert, though I do read Art in America once in a while, and my Mother was one of the volunteeers who helped Christo and his wife Jeanne-Claude with Surrounded Islands Biscayne Bay, Greater Miami, Florida, 1980–83,




but I much-preferred #ArtBasel themed NYT pieces in past Novembers that actually gave an informed POV re new artists and their art and why we ought to see it -or shun it- since as we all know, avant-garde rarely comes this far south.


Some more reasonable takes than Evan Benn's effort:












Those NY Times articles in the past actually tried to educate and inform you about something rather than reading like talking points from micromanaging corporate publicists.
Here are a few of them...





























I know from personal experience how many Airbnb hosts in Hollywood and South Florida are able
to turn a profit for the year in large part because of the reliability of the #ArtBasel crowd coming into
the area from out-of-town or even overseas. That's how I met my friend Daniel.

Talented successful creative people who will not be buying large meals every night -or even sleeping much- per se, because they are SO busy networking and yes, actually trying to SELL their creative efforts and arrange future exhibitions, not be impressed by fancy window displays of throw pillows and wicker sofas near Lincoln Road.

Those folks have been on adrenaline all day after swinging by the Starbucks at Lincoln Road before
9 am, and are racing to the parking garage across from Miami Beach City Hall at the end of the night
as soon as they can, but in slow-motion, so they can get in their car and come back up to Hollywood
and head over to a nice place on the beach or on Hollywood Blvd. downtown and chill a bit.
Decompress!

I know those Airbnb guests in town for ArtBasel stay locally and spend locally, because I've been with them when they did it, even if local restaurant owners or managers didn't know why they were here or why they looked so tired and exhausted - It's not easy being part of the creative class.

Just a thought...

For those of you who want more substance than sizzle, take a look back at one of my posts from over ten years ago...
JULY 18, 2008  Miami's Art Basel's Role in the UBS Scandal

FRIDAY, JULY 18, 2008
Miami's Art Basel's Role in the UBS Scandal
Of course Florida and South Florida in particular is a character in the emerging tax scandal involving Swiss banking giant UBS, and billions of undeclared greenback$.
Why should this 2008 story be any different from so many dozens of crazy stories before it over the past thirty years?

(See: Sen. Levin: Shut Down Giant Swiss Bank UBS, Investigation Reveals Secrecy Tricks Allegedly Used by Swiss Bankers
By BRIAN ROSS, AVNI PATEL, and RHONDA SCHWARTZ, July 17, 2008 http://abcnews.go.com/Blotter/story?id=5394214&page=1 )

It's really great that the Art Basel Art Fair could help facilitate the meet-and-greet card exchanges that led directly to illicit behavior and financial transactions among the monied class.
Friendly, competent help like that down here is VERY hard to find, as we all know from experience.
No wonder UBS kept coming back year-after-year!

As of this morning, the UBS logo still appears in the bottom left of the Art Basel web page
http://www.artbasel.com/
FYI: Art 40 Basel takes place June 10-14, 2009.

In a few years, when they eventually make a feature film out of 
Tom Wolfe's upcoming novel on the Miami area, I hope they at least do some on-site shooting down here so that some good can come from all the (temporary?) ill-gotten gains.(Who knows, maybe MIA's construction will even be finished by then!)

Regardless of how old the cool as a cucumber Swiss banker Bradley Birkenfeld really is, I hereby nominate Jeremy Irons to play him. http://www.imdb.com/name/nm0000460/

I can already see him in the role, stepping out of a long dark 
Town Car at night, impeccably dressed with a tan and saying bon mots to folks who love nothing in the world so much as cultured and erudite people tossing bon mots their way.
A little bit of Reversal of Evidence http://www.imdb.com/title/tt0100486/ and a little bit of Damage http://www.imdb.com/title/tt0104237/ and pretty soon you're talking Swiss banker with dollar signs in his eyes as he hands out UBS business cards with the familiar three keys on it.

Ironically, I'm doing this post while simultaneously watching Clark Gable and Lana Turner on Turner Classic Movies in 1941's Honky Tonk, http://www.imdb.com/title/tt0033726/ in which Gable plays -yes- a lovable but tough con man in the Old West.

Naturally, now that I say all these things about characters and actors, I see thru this

http://www.msnbc.msn.com/id/22474914/ and this New York magazine article from early this year, http://nymag.com/daily/entertainment/2008/01/inside_tom_wolfes.html that Wolfe's novel Back to the Blood already has identifiable characters, and, none of 'em are Swiss bankers with the savoir-faire to help those with the dough avoid the tax man.
Maybe I'll have to be the one write that screenplay after all!

Herewith, the Swiss variation of a con, except here, rich folks are the easy marks, eager to escape paying Uncle Sam their fair share of the tax load while indulging their haute culture in South Florida.
And remember, as the 
Herald keeps insisting we must, they're not all snobs, they're just connoisseurs and possible condo-owners to be.

Meanwhile, back in The Miami Art District...

__________________________________

(Numbers in blue are footnote numbers)
from page 3/114 of 
U.S. SENATE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS,
STAFF REPORT ON TAX HAVEN BANKS AND U.S. TAX COMPLIANCE,
July 17, 200

On June 30, 2008, the United States took another step. It filed a petition in the 
U.S. District Court for the Southern District of Florida requesting leave to file an IRS administrative summons with UBS asking the bank to disclose the names of all of its U.S. clients who have opened accounts in Switzerland, but for which the bank has not filed forms with the IRS disclosing the Swiss accounts.10 The court approved service of the summons on UBS on July 1, 2008.11 The summons has apparently been served, but according to Swiss authorities the Swiss and American governments are negotiating over its execution.12 This John Doe summons represents the first time that the United States has attempted to pierce Swiss bank secrecy by compelling a Swiss bank to name its U.S. clients.


from page 6-7/114:

In May 2008, a second international tax scandal broke when the United States arrested a private banker formerly employed by UBS AG, one of the largest banks in the world, on charges of having conspired with a U.S. citizen and a business associate to defraud the IRS of $7.2 million in taxes owed on $200 million of assets hidden in offshore accounts in Switzerland and Liechtenstein. 
The United States had earlier detained as a material witness in that prosecution a senior UBS private banking official from Switzerland traveling on business in Florida, allegedly seizing his computer and other evidence. In June 2008, the former UBS private banker, Bradley Birkenfeld, pleaded guilty to conspiracy to defraud the IRS.8 His alleged co-conspirator, Mario Staggl, part owner of a trust company, remains at large in Liechtenstein. The current UBS senior private banking official, Martin Liechti, remains under travel restrictions. This enforcement action appears to represent the first time that the United States has criminally prosecuted a Swiss banker for helping a U.S. taxpayer evade payment of U.S. taxes.9

On June 30, 2008, the United States took another step. It filed a petition in the U.S. District Court for the Southern District of Florida requesting leave to file an IRS administrativesummons with UBS asking the bank to disclose the names of all of its U.S. clients who have opened accounts in Switzerland, but for which the bank has not filed forms with the IRS disclosing the Swiss accounts.10 The court approved service of the summons on UBS on July 1, 2008.11 The summons has apparently been served, but according to Swiss authorities the Swiss and American governments are negotiating over its execution.12 This John Doe summons represents the first time that the United States has attempted to pierce Swiss bank secrecy by compelling a Swiss bank to name its U.S. clients.

from page 9/114:

Marsh Accounts: Hiding $49 Million Over Twenty Years. 
James Albright Marsh, a U.S. citizen from Florida in the construction business, formed four Liechtenstein foundations, two in 1985, one in 1998, and one in 2004, and transferred substantial sums to them. LGT assisted him in establishing the two 1985 foundations, using documents that gave Mr. Marsh and his sons substantial control over the foundations and strong secrecy protections. By 2007, the assets in his four foundations had a combined value of more than $49 million. Although LGT became a participant in the QI Program in 2001, which requires foreign banks to report information on accounts with U.S. securities, LGT did not report the Marsh accounts. Instead it advised Mr. Marsh to divest his LGT foundations of U.S. securities, and treated the accounts as owned by non-U.S. persons, the Liechtenstein foundations that LGT had formed. After Mr. Marsh’s death in 2006, the IRS apparently discovered the Liechtenstein foundations through the documents released by the former LGT employee. Mr. Marsh’s family is now in negotiation with the IRS over back taxes, interest and penalties owed on the $49 million in undeclared assets.


from page 16/114:
Mr. Birkenfeld testified that UBS also provided its Swiss bankers with tickets and funds to go to events attended by wealthy U.S. individuals, so that they could solicit new business for the bank in Switzerland. He said that UBS sponsored U.S. events likely to attract wealthy clients, such as the Art Basel Air Fair in Miami; performances in major U.S. cities by the UBS Vervier Orchestra featuring talented young musicians; and U.S. yachting events attended by the elite Swiss yachting team, Alinghi, which was also sponsored by UBS. A UBS document laying out marketing strategies to attract U.S. clients confirms that the bank “organized VIP events” and engaged in the “Sponsorship of Major Events” such as “Golf, Tennis Tournaments, Art, Special Events.” This document even identified the 25 most affluent housing areas in the United States to provide “targeted locations where to organize events.”


page 19/114:

Olenicoff Accounts.
These concerns are further illustrated by the recent criminal prosecution involving UBS accounts opened in Switzerland by Mr. Birkenfeld for Igor Olenicoff. 
Mr. Olenicoff is a billionaire real estate developer, U.S. citizen, and resident of Florida and California. From 2001 until 2005, Mr. Birkenfeld and Mario Staggl, a trust officer from Liechtenstein helped Mr. Olenicoff open multiple bank accounts in the names of offshore companies he controlled at UBS in Switzerland and Neue Bank in Liechtenstein. For a time, Mr. Olenicoff was Mr. Birkenfeld’s largest private banking client. To service these accounts, Mr. Birkenfeld met with Mr. Olenicoff in the United States and elsewhere, communicated with him by telephone, fax, and email in the United States, and advised him on how to avoid disclosure of his accounts and assets to the IRS. In 2007, Mr. Olenicoff pled guilty to one criminal count of filing a false income tax return by failing to disclose the foreign bank accounts he controlled. He was sentenced to two years probation and 120 hours of community service, and paid six years of back taxes, interest, and penalties totaling $52 million. In 2008, Mr. Birkenfeld pled guilty to conspiring with Mr. Olenicoff to defraud the IRS and avoid payment of taxes owed on $200 million in assets hidden in accounts in Switzerland and Liechtenstein. Their alleged coconspirator, Mr. Staggl, remains at large in Liechtenstein.


page 42/114: one of the most fascinating parts of the story!

(1) Marsh Accounts: Hiding $49 Million Over Twenty Years
James Albright Marsh, Jr. (“Mr. Marsh”) is a construction contractor who lived in Florida with his wife and six children, until he died in 2006.117 He, his wife, and his children have always been U.S. citizens. In 1985, Mr. Marsh traveled to Liechtenstein, and LGT helped him establish two Liechtenstein foundations, the Chateau Foundation and Lincol Foundation, which then opened accounts at LGT Bank. Also during the 1980s, Mr. Marsh formed two more Liechtenstein foundations, called Topanga Foundation118 and Largella Foundation,119 apparently using two other financial institutions in Liechtenstein.120 Over the years, these four Liechtenstein foundations opened accounts at five Liechtenstein banks.121 By 2007, the Liechtenstein accounts had assets with a combined value in excess of $49 million.122
This section on Mr. Marsh continues for about five pages with all sorts of secretive legal corporate tactics they employed to keep below the radar. 


from page 79-81/114:

Using Transfer Corporations to “Cover Up the Tracks” of Client Funds. As indicated in some of the case histories described earlier, LGT documents obtained by the Subcommittee show that it was not uncommon for LGT to set up intermediary, pass-through corporations that were used by the bank, in the words of an LGT employee, “to cover up the tracks” of funds moving into LGT client accounts. When asked about these corporations, the head of compliance Officer for LGT Group confirmed their existence, explaining that these “auxiliary services corporations” served several functions, including the transmission of funds “confidentially.”
338

The documents show that LGT used BTS Management Ltd., formed in the British Virgin Islands (BVI), to establish a number of the transfer corporations. The documents indicate that LGT typically asked BTS Management to form a BVI corporation which then opened an account at LGT or another bank, such as Bank du Gothard in Luxembourg. The transfer corporation then received funds or securities from an LGT client and immediately transferred those funds or securities to LGT, if its account was at an outside bank. In some instances the transfer corporation was then dissolved; in other instances, it continued in existence. Once the funds or securities were delivered to LGT bank, they were moved internally within the bank, using a mechanism called “journaling” to transfer them from one LGT account to another, here from the transfer corporation’s LGT account to the client’s LGT account. This internal transfer mechanism makes it much more difficult to trace the movement of funds and securities, since it leaves no record outside of the bank showing that the assets were transferred to the ultimate recipient, the LGT client.

The Subcommittee investigation uncovered several examples of LGT engaging in this practice. For example, Sera Financial Corporation is a BVI corporation that appears to have functioned as an LGT transfer corporation. An internal LGT document describes Sera Financial as a “[s]pecial purpose company (indirect subsidiary of LTV) for portfolio transfers for assets which are to be brought into an LTV structure.”
339 The document shows, by account number, that Sera Financial held one account at Banque du Gothard and eleven separate accounts at LGT Bank in Liechtenstein.340 The document explains this unusual account structure as follows:

For each customer, a sub-account or deposit facility is opened under a reference at BdG[Banque du Gothard] and at LGT …. Funds transfers as well as securities deliveries to BdG are in favor of SERA …. BdG is instructed to forward cash values and securities without delay to LGT BIL [Bank in Liechtenstein] in favor of Sera Financial Corp. with specification of the reference. ... As soon as the assets are credited at BIL, they are transferred to the destination account ….
341
One example of how Sera Financial was used involves a new trust set up for a U.S. client in 2000. A LGT memorandum to the file discussing the transfer of assets to the new trust states:
“The trust shall open an account in the LGT Bank in Liechtenstein. The transfer of assets should take place using this account. To cover up the tracks from UBS Zurich to the trust in Liechtenstein, I recommend an intermediary Single Purpose Company.”
342 LGT decided to use Sera Financial as the transfer corporation. A wire transfer instruction from Gotthard Bank shows how the transfer operation worked.343 It shows that on October 31, 2000, after $1.2 million had been credited to the Sera Financial account at Banque du Gothard: “BTS Management Limited, Tortola, as Managing Director of the company Sera Financial Corporation, Tortola, B.V.I. [h]ereby declares: … that the following beneficiary(ies) is/are entitled to the above-referenced transaction,” naming the U.S. citizen from Florida, known to the Subcommittee as a U.S. client of LGT at that time. The $1.2 million was then transferred to his account.


pages 96-97/114:


Mr. Birkenfeld testified that UBS not only authorized and paid for the business trips to the United States, but also provided the Swiss bankers with tickets and funds to go to events
attended by wealthy U.S. individuals, so that they could solicit new business for the bank in Switzerland. He said that UBS sponsored U.S. events likely to attract wealthy clients, such as the Art Basel Air Fair in Miami; performances in major U.S. cities by the UBS Vervier Orchestra featuring talented young musicians; and U.S. yachting events attended by the elite Swiss yachting team, Alinghi, which was also sponsored by UBS. An internal UBS document laying out marketing strategies to attract U.S. and Canadian clients confirms that the bank “organized VIP events” and engaged in the “Sponsorship of Major Events” such as “Golf, Tennis Tournaments, Art, Special Events.”405 This document even identified the 25 most affluent housing areas in the United States to provide “targeted locations where to organize events.”406

Mr. Birkenfeld described to the Subcommittee how Swiss private bankers used these events and other means to find new U.S. clients during their trips to the United States: You might go to sporting events. You might go to car shows, wine tastings. You might deal with real estate agents. You might deal with attorneys. … It’s really where do the rich people hang out, go and talk to them. … [I]t wasn’t difficult to walk into a party with a … business card, and then someone ask[s] you, ‘What do you do?’ and you say, ‘Well, I work for a bank in Switzerland, and we manage money there and open accounts.’ And people immediately would recognize, oh, this is someone who could open new business by opening accounts.



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For example, the Subcommittee found that at least five UBS client advisors travelled to the United States for trips coinciding with the Art Basel Art Fair, an annual UBS-sponsored event held in early December in Miami Beach since 2002. The data shows that, over the years, several UBS Swiss client advisors were in Miami during the art show, including three in 2007.On the customs forms completed over the years by UBS travelers prior to landing at Miami International airport, only one client advisor stated that the purpose of the trip was for business, while five described the visit as for pleasure. These client advisors’ trips, however, coincided closely with the dates of the Art Basel event, including an invitation-only private showing. Moreover, the Subcommittee’s analysis of the customs and travel records obtained from the Department of Homeland Security show that a Swiss-based UBS client advisor traveled to New England from June 20-25, 2004, a trip coinciding with the UBS Regatta Cup, held in Newport, RI from June 19-26, 2004.

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(5) Violating Restrictions on U.S. Activities

The UBS practices just described, related to Swiss banker activities undertaken in the United States to recruit and service U.S. clients, may have violated U.S. law as well as UBS policy. As explained earlier, U.S. securities and banking laws prohibit non-U.S. persons from advertising securities services or products, executing securities transactions, or performing banking services within the United States, without an appropriate license. Moreover, U.S. tax laws may require a foreign financial institution to report to the IRS on 1099 Forms sales of non-U.S. securities effected in the United States, such as by executing a transaction by a broker physically in the United States or ordering the completion of a transaction through telephone calls or emails originating from the United States.

It was to avoid violating U.S. law, exceeding its licensed activities, or triggering 1099 reporting requirements, that caused UBS to issue policy statements restricting the activities that its non-U.S. bankers could undertake while in the United States. Its 2002 and 2004 policy statements, for example, prohibited UBS Swiss bankers, while in the United States, from advertising securities products to their clients, informing clients of how their security portfolios were performing, providing copies of account statements, or using U.S. mails, faxes, telephone calls or email to discuss a client’s securities portfolio.
443 UBS also prohibited its Swiss bankers from prospecting for new clients while in the United States, soliciting new accounts, or obtaining signatures on account opening documentation.

Despite these prohibitions, it appears that UBS Swiss bankers in the United States servicing U.S. clients routinely undertook actions that contravened the UBS restrictions.
Mr. Birkenfeld described, for example, an art festival sponsored by UBS in Miami each year, which he attended with other Swiss bankers for the express purpose of soliciting new accounts. “We went to these events. We went to dinners, we went to art exhibitions, we went to private homes as private bankers, knowingly by management that they were paying for our hotel, paying for our airfare, paying us our salary, and getting us tickets to the UBS VIP tent to drink champagne with clients.”444 He testified that he witnessed Swiss bankers soliciting new accounts and completing account opening documentation while in the United States. He testified that in some cases, “instead of saying, ‘I signed it in New York,’ they brought the forms back to Geneva and they put in ‘Geneva.’”445 When asked whether he had promoted securities products during his trips to the United States, he responded, “We were promoting anything.”446
Mr. Birkenfeld also told the Subcommittee that UBS Swiss bankers routinely communicated with their U.S. clients about the status of their accounts, including their securities portfolios. He said that some Swiss private bankers communicated with their U.S. clients by telephone or fax, or by sending occasional documents to them in the United States by overnight mail.447 He said the bankers sometimes used code names during the telephone calls, so that the U.S. client would not have to identify themselves by name, in case anyone was listening.448 He said that U.S. clients generally did not like sending or receiving emails via computer, “because they didn’t want that link, for obvious reasons.”449 Nevertheless, some clients did use email, as shown in the case involving Mr. Birkenfeld and Mr. Olenicoff, examined further below. Mr. Birkenfeld also described how Swiss bankers brought into the United States information about clients’ accounts and securities portfolios. He told the Subcommittee that his day-to-day interactions with clients were in direct contradiction to the restrictions set out in UBS’ policy statements. He indicated those policies simply were not enforced while he was at the bank.450

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Contrary to this representation by UBS, however, a Subcommittee review of the relevant travel data for the Swiss bankers determined that, from January to April 2008, UBS client advisors made twelve trips to the United States, travelling from Switzerland to New York, Miami, San Francisco, and Las Vegas. The Customs I-94 Forms indicate that, on half of these trips, the Swiss bankers indicated they were travelling for business purposes, while on the other half, the Swiss bankers indicated they were travelling to the United States for non-business purposes. With respect to Mr. Liechti, head of the UBS Wealth Management Americas division, the I-94 Form shows that he arrived in the United States on April 20, 2008, on business. There is no record of his departure to date.

The clear contrast between the UBS policy restrictions dating back to at least 2002, and the activities undertaken by UBS Swiss bankers while traveling in the United States, as described by Mr. Birkenfeld in his deposition, in connection with his recent indictment, and in internal UBS documents, suggests that until recently, the UBS restrictions were not being enforced. This lack of enforcement, in turn, raises concerns that UBS Swiss bankers with U.S. clients may have been routinely violating not only the bank’s internal policies, but also U.S. law. UBS is currently under investigation by the SEC, IRS, and Department of Justice regarding the activities of its Swiss bankers in the United States.


And in the end...

D. Analysis

Unlike LGT, UBS did not generally refrain from conducting banking operations within theUnited States. UBS Swiss bankers targeted U.S. clients, traveled across the country in search of wealthy individuals, and aggressively marketed their services to U.S. taxpayers who might otherwise never have opened Swiss accounts. UBS practices resulted in its U.S. clients maintaining undeclared Swiss accounts that collectively held billions of dollars in assets that were not disclosed to the IRS. UBS serviced these accounts, in part, by offering banking and securities products and services within the United States that UBS Swiss bankers were not licensed to provide. Swiss bank secrecy laws hid not only the misconduct of U.S. taxpayers hiding assets at UBS in Switzerland, but also the actions taken by UBS bankers to assist those U.S. clients.UBS has now stopped all travel by its Swiss bankers to the United States, issued morerestrictive policies, and is conducting an internal review to gauge the nature and extent of the problem. UBS also cooperated with this Subcommittee in its efforts to gain a full understanding of the facts and issues.
from the:
U.S. SENATE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS,
STAFF REPORT ON TAX HAVEN BANKS AND U.S. TAX COMPLIANCE,
July 17, 2008 
at: http://abcnews.go.com/images/Blotter/REPORT-Tax%20Haven%20Banks%20(July%2017%2008).pdf



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