Tuesday, 10 February 2015

Swiss comedy gold

One inevitable stage in the endlessly repeating cycle of banking scandals is the ritual assertion that, although past "mistakes" were made, the miscreant bank or toothless/complicit regulator has now changed and the same thing could never happen again (almost always because the bankers have since moved on to some new and equally outrageous swindle, although they don't generally say that last bit). Rinse, repeat.

So kudos to an anonymous commentator at The Register for this masterly take-down of the boilerplate assurance that HSBC's private Swiss bank has now moved on and put its dodgy past behind it:
HSBC: 'In the past, the Swiss private banking industry operated very differently to the way it does today.'

Anon: 'They no longer have a box on the deposit slip for "Gold Teeth"?'
It's also worth reading the whole article, just to hammer home the obvious point that this problem will never go away, so long as the relevant authorities not only fail to prosecute crooked bankers, but also add insult to injury by using the full weight of the law to persecute whistleblowers like Hervé Falciani who reveal the banksters' crimes.

And what goes for the bankers goes for the tax cheats who use their services. Back at home, the former head of Her Majesty's Revenue and Customs, Dave Hartnett, (who subsequently moved on to a £1.25 million-a-year consultancy job for HSBC, before becoming trade minister), defended HMRC's decision not to prosecute the people who'd been hiding their loot from the tax authorities in HSBC's Swiss vaults:
 ...Yet at HMRC it was decided that prominent British individuals found to be cheating on their taxes would not be prosecuted, a process which would have led to them being named and the facts coming out.
Hartnett has defended the secret tax repayment deals. "There was never an intention to deliberately use taxpayer confidentiality to hide the identity of HSBC clients." Lin Homer, the overall head of HMRC, also defended this non-prosecution approach before the UK's public accounts committee in 2012, as a cheaper source of revenue. "The important thing is to get the money in," she said. 
Nobody at HMRC seems to have considered the obvious consideration that if you think you're likely to get away with it or, at worst, might have to come to a discreet arrangement with the Revenue, there's little disincentive to cheat. If you see the authorities going after your peers, who end up in jail, you might be a lot less inclined to dodge your taxes in the first place.

A quick glance at the divergent career paths of Hervé Falciani (on the run after exposing the crimes of the rich and powerful) and Dave Hartnett (passing effortlessly through the revolving door from his high-profile job as head of the Revenue, to a six-figure salaried post in banking, to the heart of government, after helping to cover up the crimes of the rich and powerful)* shows you why some people might get the unfortunate impression that we're the global subjects of a corrupt trans-national plutocracy, where the powerful do as they please and the little people get screwed, as opposed to citizens of mature democracies where everybody is equally subject to the rule of law.

* Update - not only did the HMRC fail to prosecute the tax cheats, but it apparently failed to pass on information about HSBC's malpractice to the financial services regulator.