I started working on this article during my last month at Mother Jones. Although it took longer than I had hoped to get it published–and required a revised lede–I’m happy this bit of reporting finally made it into the top story box. (Unlike, say, my body armor piece.) Clocking in at some 1300 words, this article is the longest piece I’ve had published anywhere. It also opened my eyes to the shadowy world of offshore tax evasion–an interesting beat that I hope to return to in another professional capacity.
UPDATE: My reporting was featured on BuzzFlash and in ProPublica’s daily round up of the top investigations elsewhere; re-posted on Corporate Crackdown, a blog by Citizens for Responsibility and Ethics in Washington; and linked to an article from FINS, a new financial careers site from Dow Jones. Rational Review, which is apparently “the premier libertarian web journal,” also disapprovingly cited my piece.
When President Barack Obama’s jobs bill passed the House in early March, it contained a little-noticed provision to recover part of its $35 billion price tag by cracking down on offshore tax evasion, which costs the US some $100 billion a year in lost revenue. The provision, which requires foreign financial institutions to report more data to the Internal Revenue Service, was likely prompted by a 2008 Senate investigation that revealed the systematic efforts made by Swiss bank UBS to help moneyed Americans hide massive sums from the IRS.
The insider information that formed the backbone of the investigation—insight that eventually helped the feds recover billions in unpaid taxes—was provided by a former midlevel executive at UBS, American-born Bradley Birkenfeld. Birkenfeld is the only international banker who has ever blown the whistle to the US government on Switzerland’s legendarily secretive banking practices. He is also the only person connected to UBS’ massive tax evasion scheme to have been sent to prison: Birkenfeld is currently serving a four-year sentence for fraud. Whistleblower advocacy groups warn that this punishment could have a “chilling effect,” discouraging other financial whistleblowers from coming forward. Did Obama’s Department of Justice (DOJ) exact retribution that could cost US taxpayers billions?
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