Potential fallout from WikiLeaks obtaining Swiss bank data
Hackers visit the anti-secrecy website WikiLeaks, in a coffeehouse in Lille, northern France.
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BOB MOON: What happens when you engage in offshore banking tricks does not necessarily stay offshore. Or, stay secret. Today, a former Swiss banker gave the website WikiLeaks the names of around 2,000 alleged tax-dodgers with accounts in the Cayman Islands. WikiLeaks is reviewing the information,
and plans to release it in coming weeks. And yes, at least some names to be revealed are said to be Americans.
Marketplace's Jeff Tyler has been looking into the possible fallout.
JEFF TYLER: Former banker Rudolf Elmer shared the private banking data with WikiLeaks just days before he goes on trial in Switzerland for revealing confidential bank information. But chances are slim that publicizing secret bank accounts in the Cayman Islands will result in prosecutions in this country. For one thing, the Cayman Islands is working to clean up its reputation.
Gary Hufbauer is with the Peterson Institute for International Economics. He says the Caymans has an agreement with the U.S. Justice Department to...
GARY HUFBAUER: Reveal data on suspicious bank accounts. So anybody who wants to hide money for tax reasons or drug-related reasons, would be pretty ill-advised to use the Cayman Islands.
The pending WikiLeaks disclosure is part of an ongoing trend to shine more light on the darkened recesses of international banking. But just because a tax-dodger is publicly exposed doesn't mean the IRS will take legal action.
DAVID ROSENBLOOM: They're doing the best they can. But this takes more resources than they've got.
That's David Rosenbloom, an off-shore banking expert with the law firm Caplin & Drysdale. To help the IRS build legal cases, Rosenbloom says, the agency has added an incentive for whistleblowers.
ROSENBLOOM: You can get a reward for turning information in. That sounds like a very nice potential retirement plan for employees of foreign banks.
If people no longer trust the Cayman Islands to keep their accounts secret, where is the money moving? Experts say the new tax havens of choice are Singapore and Macau.
In Los Angeles, I'm Jeff Tyler for Marketplace.