Some might call him a rebel, some might call him a whistleblower, some might call him both, but whatever the opinion is, Bradley Birkenfeld has changed Swiss Banking and tax havens forever. In his book, Lucifer’s Banker: The Untold Story of How I Destroyed Swiss Bank Secrecy, he details his upbringing, building his banking profession, all the way to the recent “Panama Papers” throughout his book.
A graduate of Norwich University, Birkenfeld started his banking and finance career in Boston, near his hometown. Years later he had become pariah in the Boston banking industry, after witnessing some questionable business practices at his job at State Street Bank and Trust Company and exposing it to the FBI, which he describes at the beginning of his book. Nothing happened – the Feds didn’t act.
Each scandal larger than before, in both stories with State Street and UBS, Birkenfeld became disenfranchised with the U.S. justice system, and with one person in particular at the DOJ related to the UBS case, Kevin Downing. Did Birkenfeld have some feelings of remorse when he acknowledged he was bilking the U.S. taxpayer by persuading wealthy Americans to conceal their millions in Swiss Banks to dodge the IRS? Did he want revenge on UBS when they reneged on their contractual arrangement to pay him handsomely at his job? Did he have the right lawyers and government employees to defend him when he became a whistleblower?
Birkenfeld amidst the whistleblowing activities with the DOJ, the U.S. Senate, the IRS, and the SEC, was not asked or permitted to testify publicly, and referred to the first U.S. Senate Permanent Subcommittee on Investigations hearing in 2008 led by then Chairman and Senator Carl Levin “a political dog-and-pony show.” The second hearing in 2009, however, intensified. After the internal conflicts occurred among the DOJ, the U.S. Senate, the IRS, and the SEC, Senator Levin wrote letters of support for Birkenfeld as a genuine whistleblower. Senator Chuck Grassley, Ranking Member on the Committee on Finance, certainly did his part to put pressure on the Department of Treasury and the IRS, highlighting the value that Bradley Birkenfeld brought to the whistleblowing table.
A risk-taker, Birkenfeld is sharp at retelling his story. His book is both informative and entertaining, and quite comical throughout, particularly when he uses similes to describe the characters he encounters. One that stands out is when he explained how greedy his boss was at UBS in Switzerland, “Turns out that when it came to money, Bovay was so tight you couldn’t pull a needle out of his ass with a tow truck.”
But on more serious terms, he had suspicions that when he finally went to the DOJ with his lawyers, he concluded carefully that there were hidden agendas among some in the DOJ and beyond who seemed to have an interest in protecting some of the 19,000 American Swiss Bank account holders rather than cooperating with U.S. legislative banking compliance laws. Birkenfeld writes, “Did someone in the US Department of Justice have a tight relationship with someone in the Swiss Ministry of Justice? Can’t say for sure, but Hillary Clinton, the soon-to-be new Secretary of State, certainly did…”
Toward the end of the book readers can draw their own conclusions when they learn the dirty details about how Hillary Clinton and the Obama Administration met with the Swiss government, and UBS officials. UBS had to pay a $780 million fine to the U.S. government, but Birkenfeld later discovered that AIG “slipped” $5 billion of the $100 billion in TARP money they received to the foreign bank UBS. Readers can easily do the math. According to Birkenfeld, after the pressure was off UBS by Federal authorities, thanks to Secretary Clinton and Obama, the Clinton Foundation received ten times more than the usual donation from UBS, and a subsequent speaking fee for a series of UBS fireside chats with Bill Clinton was $1.52 million. Some could call this unusual phenomenon “pay-to-play” and “pay-to-protect” … again and again. It was simply a merry-go-round of fun at the Clinton’s political amusement park.
Bradley Birkenfeld’s untold story, Lucifer’s Banker, makes up about a dozen master brushstrokes in an unfinished painting. His emotional reactions are helpful to understand the real lives that are impacted in whistleblowing and Federal investigations. The DOJ’s prosecution at his sentencing hearing in Florida understandably infuriates Birkenfeld.
Additional sweeping strokes are needed to paint the other perspectives of people who witnessed the financial industry first-hand to embellish Birkenfeld’s claims. It’s likely that his story of whistleblowing has and will embolden more truth tellers to come forward with their own account after he published his tell-all book. So the picture is becoming clearer, yet there are still at least four centuries of layered history.
Birkenfeld claimed in his book that the legends of Swiss Banking secrecy largely has its origins surrounding 1685 when French King Louis XIV declared Protestantism illegal in France with the Edict of Nantes. It was actually the Edict of Fontainebleau (1685), and it revoked the Edict of Nantes (1598), which was passed by King Henry IV of France. Nonetheless, it is true that the Edict of Fontainebleau led to massacres of the Huguenots (French Protestants) and created a mass migration of people, skills, and assets. Many Huguenots fled to Protestant countries, including Switzerland. Confidentiality in Swiss Banks deepened even further in the late 1700s during the French Revolution when French aristocrats fled to Switzerland to secure their lives and possessions, safely ensconced in the realm of the towering Swiss Alps. In due course, not even Napoleon could conquer Switzerland with his infantry, cavalry, and cannons.
The exquisite life of the wealthy continues today in Switzerland: lavish hotels and restaurants, exclusive skiing jaunts, top-rated private schools, charity events, polo matches, and the trusted secrecy of a Swiss Bank Account. At least one thing has changed since Bradley Birkenfeld lived and worked there.
A shameless self-promoter, in the Author Q&A section in the back of the book, the interviewer asks, “Any final words for your readers?” Birkenfeld responds, “It’s a known historical fact that Switzerland has never been successfully invaded…until I came along.”
Lucifer’s Banker is recommended reading to anyone interested in true stories on the banking industry and global finance, and those who are equally interested in understanding the world of whistleblowing. Simultaneously the reader is certain to absorb a fast, funny, and fierce adventure of what Birkenfeld describes as the competitive Mafia behavior between big government and big banking, and the unpleasant politics intertwined with it. It’s a matter of opinion to decide who won, big government or the Swiss Banking industry, or if it was a stalemate. What is more obvious is that the loser was sadly, once again, the American taxpayer.
Monica Morrill is a Geographer focusing on government economics, regulation and policies. She co-authored the book BETRAYED: The Shocking True Story of Extortion 17 as told by a Navy SEAL’s Father. Ms. Morrill is also a contributor to SFPPR News & Analysis, of the conservative-online-journalism center at the Washington-based Selous Foundation for Public Policy Research.