McCain and Gramm Have History of Tax Evasion

If you've been following the UBS tax fraud story, you're aware that A) UBS is a huge Swiss bank accused of helping rich Americans hide up to $20 billion in off shore accounts to avoid paying taxes, and B) that sleazy Phil Gramm, former U.S. Senator and current economic adviser to John McCain, is a vice chairman for UBS (when he's not investing in porn films).

Yesterday a U.S. Senate subcommittee took their first peak behind the curtains at UBS and did nothing. They did reveal that UBS helped approximately 19,000 of the richest American citizens hide money and jewels in off shore accounts through a series of illegal actions to avoid paying taxes.

Michigan Senator Carl Levin revealed some of the lengths UBS went to, including...

• using code names for clients


• using fake charities to transfer funds


• using shell companies to hide money

Levin said that UBS's U.S. banking license should be revoked, but it's what he said at the end that shows the entire investigation is just a charade..."I don't think that any bank that goes to the extent that UBS has gone through to avoid doing what their agreements with the United States require them to do, should be allowed to continue to do business," Levin said, "unless they clean up their act."

So if UBS promises to stop committing felonies and helping the rich avoid paying taxes, they can keep on keepin' on? Let's point something else out right now, this tax fraud isn't a U.S. isolated incident for UBS - they have been apparently doing the same thing for rich German citizens. UBS has only been caught in the U.S. and Germany, how many other countries are they helping the world's rich elite avoid paying their share of taxes?

It's amazing that when an average working American doesn't pay their taxes, they are prosecuted to the full extent of the law, yet here is a company that helped the elite rich hide $20 billion, even had their own bankers smuggling customer's diamonds into the U.S. in toothpaste tubes to avoid paying taxes, and nothing is going to be done about it, other than a fine?

UBS Chief Financial Officer Mark Branson told the Senate subcomittee, “we have decided entirely to exit the business. UBS will no longer provide offshore banking or securities services to US residents through our bank branches.”

What Branson didn't say, but what investment analysts are saying, is that UBS will continue to offer services to the same law-breaking clients through other U.S. owned companies, including the former Payne Weber (now called Wealth Management USA). UBS was only able to purchase Payne Weber, btw, because Phil Gramm, their former lackey in the Senate, deregulated the banking industry and then immediately quit the Senate to go to work for UBS.

Helvea analyst Peter Thorne says UBS will have the final laugh. UBS will pay a large fine, perhaps $500 million, but, "U.S. offshore private business was not a big business for UBS," said Thorne. Off-shore accounts represented "only" about $40 billion, just 4% of UBS's wealth management division, which is worth over $1 trillion.

If UBS is fined $500 million, that's equivalent to paying a 2.5% tax on the $20 billion they hid. The poorest people in American pay four times that tax rate.

And while Phil Gramm continues on as John McCain's economic adviser, banking and IRS fraud is nothing new to the McCain campaign.

John McNasty himself was one of the Keating Five (see "Is John McCain a Crook?"). McCain's behavior cost taxpayers $3 billion by covering up for his friend, Charles Keating, who was illegally using the savings of his customers to speculate on real estate deals. When the Lincoln Savings and Loan went belly up in the late 1980's, the FDIC had to re-imburse Lincoln investors. The fiasco helped drive the U.S. into a recession in the early 90's.

Keating went to prison after being convicted of 73 counts of fraud - but not before McCain's wife made a $359,000 investment in a strip mall with Keating that was eventually sold for $15 million. McCain also admitted to committing tax fraud by intentionally filing false IRS returns that didn't declare thousands of dollars in gifts from Keating.

So what have we learned this week? John McCain and friends continue to be involved in illegal schemes to deceive the United States Government so the rich, including John McCain, avoid paying taxes or being held responsible for breaking laws. But once again, McCain doesn't even get a single question about it from the mainstream press.