What do the Senate Permanent Subcommittee on Investigations, wealthy people too keen on evading taxes and malls in Pinellas and Hillsborough counties have in common?
They are all lead or bit players in a spectacular series of congressional hearings exploring the hidden but huge business of concealing income and assets in a world of secret meetings, hidden funds, shell corporations, captive foundations and complex offshore transactions. All in a dubious quest to avoid taxes.
Surprise, surprise: Florida plays a prominent role in these investigative hearings. How rare to have the Sunshine State front and center on a matter where light so rarely illuminates.
On Friday, the Senate panel pressed the son of Frank Lowy, Australia's second-richest person, to answer questions about the family's alleged use of Liechtenstein bank accounts to shelter at least $68-million from taxes. The son, Peter Lowy, refused and invoked his Fifth Amendment right against self-incrimination in appearing under subpoena.
Representing Lowy was Washington attorney Robert Bennett, the same high-priced chap who defended President Bill Clinton during the Monica Lewinsky scandal, was hired to defend Florida's Barnett Banks against government claims of mortgage discrimination in the mid 1990s, and whose office boasted a mounted trout with the saying, "If I had kept my mouth shut, I wouldn't be here."
Why care? Peter Lowy is a U.S. citizen who runs the U.S. operations for Westfield Group, the world's biggest owner of shopping centers that include Westfield Countryside, Westfield Citrus Park and Westfield Brandon.
The Senate panel is investigating how Liechtenstein's LGT Group and Swiss bank UBS helped Americans hide assets in offshore bank accounts. UBS now has agreed to help the United States identify 19,000 Americans with hidden accounts that the Senate panel says are worth as much as $18-billion. The IRS is also investigating 147 Americans with accounts at LGT Group.
The panel, chaired by Sen. Carl Levin, D-Mich., released results of a six-month investigation detailing a problem costing the U.S. Treasury about $100-billion a year in uncollected taxes.
Lowy was just the latest witness to avoid nasty tax questions.
Fort Lauderdale's Shannon Marsh, son of the late building contractor James Albright Marsh, recently faced claims by the Senate panel that the family controlled more than $49-million in four LGT-created foundations. LGT instructed the Marshes to use the code "Friends of J.N." when they wished to "get in touch," according to investigators. None of these accounts was ever disclosed to the IRS.
Marsh took the Fifth to avoid testifying earlier this month.
How did all this surface? Investigators thank UBS banker Bradley Birkenfeld. Last month, the now ex-UBS employee pleaded guilty in a federal court — in Florida — to defrauding the IRS. He said UBS holds an estimated $20-billion in assets for U.S. clients in undeclared accounts that prosecutors say generated some $200-million a year in revenue for the bank.
Hey, there ought to be a law to prevent this. Oh yeah, there is.
You see, we have this nagging federal deficit and need all legitimately owed taxes we can get.
Robert Trigaux can be reached at firstname.lastname@example.org.