US senators demand tax crackdown
Senators allege tax evasion is costing the US $100bn each year.
But Peter Lowy, the managing director of Westfield Group, cited his constitutional right to not give self-incriminating testimony when called to answer questions.
‘Hurting Americans’
The committee also said during the past week’s hearings that UBS bank has roughly 19,000 Swiss accounts for US clients hiding $18bn in assets from the Inland Revenue Service (IRS)
Al Jazeera’s Rob Reynolds says the two banks are being investigated for allegedly peddling sophisticated tax-evasion strategies to super-rich Americans, using their countries’ banking security laws as a shield.
“The actions of a few to scam their way out of tax obligations hurt all Americans,” Norm Coleman, a Minnesota Republican, said on Friday.
“A privileged few believe they are entitled to shirk their obligations and heap their tax liability on the sagging shoulders of other Americans to make up for what they evade.”
The hearings on Friday came a day after the US Government Accountability Office said a building on the British Carribbean territory the Cayman Islands was being used by 18,000 companies, of which five per cent are US-owned and another 40 per cent to 50 per cent have a US billing address or other connection.
‘Whistle-blower’
Politicians accuse Lowy and his father, Frank Lowy, of hiding $68m in a foundation formed by LGT bank.
The scandal emerged when Heinrich Kieber, a former LGT computer technician, revealed hundreds of names and account details to tax authorities.
He is now wanted for arrest by the European state of Liechtenstein.
Jack Blum, a lawyer for Kieber, told Al Jazeera that the system of tax evasion operates on a global scale.
“It is the tip of an iceberg because what we are only talking about are US persons, one bank, in Switzerland. We are not talking about the worldwide scope of it,” he said.
“The worldwide issue is this – there has been a wealth transfer from a bottom chunk of the world population to the top one half of one tenth of one per cent. And they have escaped all kinds of scrutiny.”
US tax authorities have since served legal papers on UBS, and in June a UBS executive pleaded guilty in a US court to tax fraud.
And at a hearing last week, an official from UBS AG testified that the bank would overhaul its offshore private banking business and co-operate with summons by the IRS to provide names of US clients with undeclared accounts.