In 1929, two bunches of crooks – the South Side Italian Capone Gang led by the infamous Al Capone and assisted by the Purple Gang from Detroit – murdered 7 rival crooks – The North Side Irish Gang led by the equally infamous Bugs Moran – with the aim of taking control of all organised crime in Chicago, most notably to peddle dodgy booze at a time when the sale and consumption of hard liquor was prohibited and make huge tax free profits for the crime bosses.
It struck me that, as we approached St Valentine’s Day in 2015, the story of serious wrongdoing and poor banking practice, for all three at HSBC Switzerland should break this week and offer such a striking parallel. One gang, the amorphous Super Rich – a loose affiliation of UK Nationals connected by their wealth, greed and desire not to pay tax – ably assisted by the HSBC Swiss gang – led by Lord (then plain Stephen) Green – to hide cash and avoid paying tax in the UK to a rival gang – HM Treasury led by Gideon Osborne and HMRC – who were trying (and failing) to reduce the UK’s current account deficit.
Following the 1929 massacre, only one gang member was ever caught, tried and jailed for perpetrating the crime. Sound familiar? Since 2010 when HMRC and the Treasury became aware of the industrial scale of tax dodging engineered by HSBC’s Swiss subsidiary, just one person (yes that’s 1) in the UK has been prosecuted and of the 7,000 customers in the UK holding £13Bn with HSBC Switzerland, just 1100 have been tackled and a paltry £135M reclaimed by the HMRC gang. In 5 years!
But it gets worse, we now know that on his retirement, (local sheriff) Dave Hartnett Head of HMRC Tax at the time of the release of the HSBC Switzerland files to his organisation in 2010, joined HSBC on his retirement in 2012 as – you’ve guessed it – tax consultant. And as we all know, Stephen Green the CEO of HSBC from 2003-6 and its Chairman from 2006-10 was ennobled and made a Trade Minister by David Cameron, taking his £19M pension pot with him.
The French, Belgian, Spanish, Argentinian and even the US governments are all undertaking formal investigations as a preliminary to prosecution, both of HSBC and the beneficiaries of their tax evasion schemes. No such luck here in the UK.
Our own Chancellor Gideon Osborne signed a tax evasion deal with the Swiss in 2011 the terms of which he is now using as an excuse not to pursue HSBC, virtually guaranteeing their immunity from prosecution. So, of the £3Bn Gideon promised we would recoup from these Swiss bank accounts, we appear to have got next to nothing (excluding donations to the Tory Party of course). You couldn’t make this stuff up!
In the Commons on Wednesday, Ed Miliband accused Lord (Stanley) Fink (a £3M donor to the Tories, former Treasurer of the Party and hedge fund chief) as indulging in tax avoidance. Despite threats to sue Ed if he repeated the accusation in public, Stanley quickly withdrew the threat, claiming “…that tax avoidance is so wide that everyone does tax avoidance at some level…. and that everybody does it too.”, when Ed repeated the claim in a speech at his old school on Thursday. Now it appears there is a rumour that Lord Fink himself is to be sued by everyone and everybody for making untrue and defamatory remarks about them if an immediate apology isn’t forthcoming! This whole controversy comes just weeks after it is alleged (by an anonymous source) that the UK and US Governments are to deploy drones in the hunt for Starbucks’ and Gary Barlow’s missing tax millions!!
As Owen Jones points out in today’s (Friday 13th) Guardian, “tax avoidance – particularly in an era of cuts and austerity – is indefensible. But it is a symptom of a wider problem. British society favours a mean and greedy elite. The financial disaster brought this injustice into acute relief, but there has been a concerted attempt to redirect popular anger to those at the bottom of society. Maybe, just maybe, that anger is beginning to shift upwards instead.”
Just like 1929 Chicago, the ordinary people in the street – in our case PAYE taxpayers and welfare claimants – often one and the same – pay a high price for unethical and sometime illegal activity by a privileged few. We are the ones suffering the burden of austerity while the rich and privileged, aided and abetted by those in power, get away with murder! It’s not as if the whole austerity strategy even makes economic sense either. As an American professor recently said, “….austerity is complete horse***t!” (see http://www.alternet.org/economy/austerity-complete-horsesht-ivy-league-prof-dismantles-conservative-lie)
We need to follow the lead of the other nations affected by this scandal – investigate, identify, prosecute and recover the money owed to the rest of us. Sequestering bankers bonuses going back 10 years should be just the start. It’s time for the bankers and their rich tax evaders to be ‘in it together’. How about jailing a few like the Icelandic Government is doing?