Tuesday’s New York Times piece saying that the Justice Department would soon drop its case against UBS was later retracted after a department spokesperson said there “no basis for the report.”  How could this be?  Did reporter Lynnley Browning – a 15 year veteran of the ink trade – get it wrong?  Was her original source badly misinformed?  Or was it a trial balloon by Justice?  Hard to say unless you’re one of the principles.

Whatever the reason, it is good to hear Justice say it’s still on the case.  Especially since some of the reasons given for possbily dropping it are specious.  For example, the Times report said that since “scores of wealthy clients, worried about being prosecuted, have come forward in recent months to declare their accounts,” dropping the case was a plausible option.  But even if that is true (the story did not source the number) it still represents only a tiny fraction of the 52,000 UBS accounts held by wealthy Americans.

Second, the Times says that the original source for the story told the paper “prosecutors are focused on several thousand ultrawealthy Americans with offshore accounts containing from tens to hundreds of millions of dollars. Some 30,000 of the accounts are smaller, cash-only accounts, and many of those have been repatriated to American-based banks in recent months.”  The Times does not say what it means by “many” accounts have been repatriated and it might be the scores mentioned above.  Evidently tax evasion only counts when you’re ultrawealthy and not just wealthy.

At the end of the day, Justice should continue to push this case to obtain as many names as possible.  Not because I like Big Brother.  It’s because tax evasion is a crime and when some are allowed to skirt the law (ultrawealthy or not) it undermines the credibility of the law in the first place.

No doubt one of the relevent counterveiling arguments to Justice continuing its case is the valueable roll the Swiss government plays as a back-channel to Iran.  If the Swiss so choose they can cut that link and the US would be the poorer for it.  But the US has other friends in Tehran would could fill that role quickly.  When the Swiss play that card hopefully the Justice Department doesn’t blink.

This entry was posted on Wednesday, June 24th, 2009 at 3:33 pm and is filed under Blog.You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.