Archive for March, 2009

Senate panel to question Swiss banker, secrecy (Reuters)

Wednesday, March 4th, 2009 | Finance News

WASHINGTON (Reuters) –
The sanctity of the secret Swiss bank account -- an icon of global finance -- is under growing pressure in a tax investigation due to come into public view on Wednesday at a U.S. congressional hearing.

Senator Carl Levin, a long-time foe of offshore tax havens estimated to deprive the U.S. government of $100 billion in annual revenues, will convene the hearing before the Senate Permanent Subcommittee on Investigations that he chairs.

Levin will grill Mark Branson, a top officer at UBS AG, over a tax case in which the U.S. government wants the giant Swiss bank to disclose the names of thousands of rich U.S. clients suspected of dodging U.S. taxes.

The Michigan lawmaker told reporters in a briefing on Tuesday that the hearing will also focus on a U.S.-Swiss tax treaty he described as having "very, very limited value." He said, "You can't rely on the Swiss. That's the bottom line."

Branson will appear before the Senate panel for the first time since UBS last month acknowledged responsibility for helping U.S. clients conceal assets from the U.S. government, which is cracking down on tax dodgers with offshore accounts.

UBS, the world's largest banker to the rich, also agreed last month to pay a $780 million fine, and to identify some U.S. clients, in a legal agreement that resolved criminal fraud charges that it helped wealthy Americans evade taxes.

U.S. authorities, fearing that the agreement might yield very few names, have since filed a lawsuit against UBS seeking information on as many as 52,000 undeclared accounts.

UBS has said it will fight the lawsuit, arguing that the information sought by the United States is protected by Swiss financial privacy laws. Branson is chief financial officer of UBS Global Wealth Management and Swiss Bank.

Also testifying will be top officials of the U.S. Internal Revenue Service and the Justice Department's tax division.


Nearly a third of wealth kept abroad globally is in Swiss banks -- an amount estimated at $2.2 trillion, making the Alpine state the world's biggest offshore center.

Levin's subcommittee has been probing offshore tax havens for years, taking aim sometimes at tax havens other than Switzerland, including Liechtenstein and the Cayman Islands.

Branson last testified before Levin in July. In that dramatic session, Branson apologized for UBS' activities and said it would cease offering cross-border private banking through its unregulated units to U.S.-domiciled customers.

Levin and Democratic colleagues this week introduced legislation into Congress to crack down on tax havens.

The Obama administration on Tuesday endorsed the bills filed in both the Senate and the House of Representatives.

The administration's support greatly improves the chances of offshore tax legislation becoming law this year, Levin said.

He asked Treasury Secretary Timothy Geithner to join other nations "calling for action to be taken at the G20 meeting in April to clamp down on offshore secrecy jurisdictions that impede tax enforcement." The global economic crisis is expected to dominate the meeting of the Group of 20 major developed and emerging economies.

The bills introduced by Levin and Texas Rep. Lloyd Doggett would ban patenting of tax avoidance plans; close offshore tax loopholes, including one that lets shell corporations escape U.S. taxes; target dozens of "secrecy jurisdictions" for greater scrutiny; and put a greater burden on U.S. taxpayers to show that their tax arrangements are legitimate.

When he was a senator last year, President Barack Obama co-sponsored similar legislation with Levin.

(Reporting by Kevin Drawbaugh; Editing by Valerie Lee)


MySpace COO, 2 other execs leaving for new venture (Reuters)

Tuesday, March 3rd, 2009 | Finance News

NEW YORK (Reuters) –
Three top MySpace executives, including chief operating officer Amit Kapur, are leaving News Corp's (NWSA.O) online social network to start a new venture, the company said on Tuesday.

MySpace said Kapur was leaving along with Jim Benedetto, senior vice president of engineering, and Steve Pearman, senior vice president of product strategy, but that they would remain on board for the next few weeks to ensure a smooth transition.

The company made no comment on plans to replace Kapur, who was at MySpace for four years andd was COO for more than a year.

The executive oversaw the social network's first MySpace initiatives for mobile phones and was a key part of the creation of the MySpace Music venture.

(Reporting by Robert MacMillan; Writing by Sinead Carew; Editing by Gary Hill)


Lockheed wins big U.S. Special Operations contract (Reuters)

Tuesday, March 3rd, 2009 | Finance News

WASHINGTON (Reuters) –
Lockheed Martin Corp (LMT.N) has won a contract worth up to $5 billion through 2018 to provide contractor logistics support for the U.S. military's Special Operations Command, the Pentagon said on Tuesday.

The contract included a variety of payment provisions, including firm fixed price, incentive arrangements and cost reimbursable arrangements, the Defense Department said in its daily digest of major contract awards.

Under the contract, Lockheed would provide contractor logistics support services to support U.S. Special Operations Command at locations worldwide.

The contract, which has a minimum guaranteed amount of $2.5 million, runs through March 2018, the Pentagon said.

(Reporting by Andrea Shalal-Esa; Editing by Andre Grenon)