Sunday, August 23, 2009

UBS Squealer Gets Extra 10 Months

FT reported:

Bradley Birkenfeld, the former UBS private banker turned key informant, was on Friday sentenced to a tougher-than-expected 40 months in prison for helping wealthy American clients evade taxes.

The prison term is 10 months longer than was recommended by prosecutors, who said Mr Birkenfeld had provided “substantial assistance” to their tax evasion investigation involving UBS, Switzerland’s biggest bank.

U.S. District Court Judge William J. Zlock handed down the stiffer sentence. Does he not like whistle blowers? Who might Judge Zlock have been protecting?

Phil Gramm has been Vice Chair of UBS since 2002. A NYT article on his appointment said:

At Warburg, Mr. Gramm, 60, will be one of three vice chairmen and will report to John P. Costas, the chairman and chief executive.

The firm became aware of the tax evasion scheme in 2005. For years it did nothing to ameliorate the situation. What did Phil Gramm know and when did he know it? A nation of "whiners" awaits an answer to that lingering question.

Republican Phil Gramm was elected to the U.S. Senate in 1984. One of his first jobs was voting on the judgeship of William Zlock. His bio states Zlock was confirmed by the Senate on November 1, 1985.

Did the Zlock-Gramm history, however sketchy, play into the legal decision? Corporatists hate accountability, especially when a peon is delivering justice. There are lots of warnings in the legal world these days. It's getting harder to read the tea leaves, at least without a program describing links to the Red or Blue team.

Update: President Barack Obama played golf with the President of UBS Investment Bank/Chairman & CEO of UBS Group Americas during his Martha's Vineyard vacation.

(HT-Economic Policy Journal)