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Bill Black: Swiss banks have notoriously kept customers’ finances secret but European Union law will challenge that structure

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JESSICA DESVARIEUX, TRNN PRODUCER: Welcome to The Real News Network. I’m Jessica Desvarieux in Baltimore. And welcome to another edition of the Bill Black report.

Now joining us is Bill Black.

Bill Black is an associate professor of economics and law at the University of Missouri-Kansas City. He’s also a white-collar criminologist and former financial regulator, and the author of the book The Best Way to Rob a Bank Is to Own One. And he’s also a regular contributor to The Real News.

Thanks for joining us, Bill.


DESVARIEUX: So, Bill, what are you working on this week?

BLACK: Well, first, I’m in Monaco, and I’m, so, part of that picture question of who looks out of place here. So this is an incredibly wealthy place, where you have to have–you know, a Mercedes would barely rate, parked out front of the hotel.

It’s a conference on economics, and the issue I was talking about was taxes. And the Swiss in particular are up in arms because there’s been a change in the suggested rules for all of the world on taxes that would require Swiss banks to make criminal referrals when they found that their customers were engaged in what was likely to be tax evasion, which of course is a crime in the United States but not a crime in Switzerland.

DESVARIEUX: Okay. So my first instinct is: I can’t believe this wasn’t a crime before. Why was that?

BLACK: Because Switzerland is a long-standing tax haven–not to just pick on them. There are many tax havens, including Delaware, in the United States. But they have these bank secrecy laws that made it illegal for a banker to assist something like our FBI, Department of Justice, in finding out that an American had violated American law by evading taxes, because the Swiss don’t consider tax evasion of other countries’ tax laws to be a crime.

DESVARIEUX: So, Bill, what’s the actual significance of this new law?

BLACK: The significance is that the bankers know that their customers are often committing a crime in the United States, and this requires them to make a criminal referral in those circumstances and not to inform their customer that they’ve made the criminal referral to the United States. So this could get of lot of very wealthy Americans prosecuted for tax fraud.

DESVARIEUX: So, Bill, who actually really pushed for this legislation? Can you speak to what sort of interest groups?

BLACK: Yeah. So this is mostly the governments of Europe that are trying to do this, because they’re subjected to the biggest race to the bottom between the tax havens in the Channel Islands and in places like Bermuda and such. They’re having a great deal of difficulty, with their austerity programs, avoiding deficits if they want to raise money through taxes. So this would be an effort–if they could cut down on the tax evasion, they could get in more tax revenue.

DESVARIEUX: Alright. Bill Black, thank you so much for joining us.

BLACK: Thank you.

DESVARIEUX: And thank you for joining us on The Real News Network.


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William K. Black, author of The Best Way to Rob a Bank is to Own One, teaches economics and law at the University of Missouri Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public Affairs at the University of Texas at Austin and at Santa Clara University, where he was also the distinguished scholar in residence for insurance law and a visiting scholar at the Markkula Center for Applied Ethics.

Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and general counsel of the Federal Home Loan Bank of San Francisco, and senior deputy chief counsel, Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement.

Black developed the concept of "control fraud" frauds in which the CEO or head of state uses the entity as a "weapon." Control frauds cause greater financial losses than all other forms of property crime combined. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae's former senior management.