When I first heard that the Justice Dept. was going after Credit Suisse for hiding money for American fat cats, thus allowing them to evade taxes, I was skeptical that anything of substance would really be done. I mean, once it became clear that large financial institutions would never have to actually plead guilty to their crimes but could just settle with the government and pay a fine amounting the change in their sofas, I gave up on the concept of justice for the plutocrats.
But then Eric Holder announced the bank would have to plead guilty, and it looked like the people trying to rob the U.S. treasury would be revealed so they could be prosecuted, or at least penalized financially for their thievery.
The Swiss bank’s crime was systematically setting up, well, Swiss bank accounts, allowing Americans to evade taxes. According to the Senate Permanent Subcommittee on Investigations, the bank had 22,000 private accounts for American customers worth as much as $12 billion as of 2006. In meting out the punishment, the Justice Department, for the first time since the financial crisis, demanded that a major financial firm plead guilty to a criminal count. That is what the headline writers highlighted — and what Attorney General Eric Holder Jr. stressed.
“This case shows that no financial institution, no matter its size or global reach, is above the law,” said Holder at a news conference.So far so good, right?
In fact, it shows nothing of the sort. Yes, Credit Suisse agreed to pay $2.6 billion; that’s real money, but nothing a bank its size can’t handle. And yes, three years ago, seven midlevel Credit Suisse executives were indicted. But in the just-announced settlement, no one in top management was forced to resign.Wait, what?
The U.S. wanted the names of the Americans with private Credit Suisse bank accounts; Justice settled without getting them.Hold on. Hold on. I thought that was the point. You know, find out who the people are who have been robbing the citizens of the U.S. by stashing their cash in illegal offshore accounts. That's what all the original press was about - Hell yeah! Finally Uncle Sam would crack open the secret financial system and root out the thieves. Woohoo!
And, most amazing of all-No, no, no, no, no, no, no. How can there be a "most amazing of all" after that?
And, most amazing of all, pleading guilty to a felony will have absolutely no business consequences for Credit Suisse. For instance, a Securities and Exchange Commission rule forbids a firm convicted of a felony from serving as an investment adviser; the rule was temporarily waived for Credit Suisse.Of course it was. Facepalm. Rinse, repeat.