Documents obtained and analyzed by the International Consortium of Investigative Journalists (ICIJ) reveal how HSBC (HSBC) used the secretive Swiss banking system to conceal the identities of accounts holders, and in many cases, help depositors avoid paying taxes.
ICIJ’s findings are based on data turned over to French authorities by former HSBC employee Hervé Falciani in 2008. The files were later obtained by the newspaper Le Monde and shared among other media outlets.
ICIJ said the leaked documents show that HSBC “repeatedly reassured clients that it would not disclose details of accounts to national authorities” and even “discussed with clients a range of measures that would ultimately allow clients to avoid paying taxes in their home countries.”
In a statement provided to ICIJ, HSBC said that its Swiss private bank has undergone a “radical transformation in recent years,” including reforms that will make it more difficult for clients to evade taxes or launder money.
“We acknowledge that the compliance culture and standards of due diligence in HSBC’s Swiss private bank, as well as the industry in general, were significantly lower than they are today,” the statement said.
Shares in HSBC fell 1.5% in London on Monday.
According to ICIJ, HSBC “served those close” to regimes including that of former Egyptian President Hosni Mubarak, former Tunisian President Ben Ali and current Syrian ruler Bashar al-Assad.
Other clients included former and current politicians from Britain, Russia, Ukraine, Georgia, Romania, India, the Democratic Republic of the Congo, Rwanda and Senegal, among others. (Explore the data here.)
HSBC, in its statement, said that it has drastically reduced the number of accounts at its Swiss private bank. In 2007, the bank had more than 30,000 accounts. It now has around 10,000.
The granddaughter of the late Trinity Broadcasting Network founder is suing her uncle, the now vice president of programming at the network, after she says he threatened her with a gun.
Brittany Koper, the granddaughter of founder Paul Crouch, was promoted to Chief Financial Officer of TBN in 2011. She became the corporate treasurer soon after, Christian News Network reports.
“Koper learned through specific instructions from Defendant Trinity Broadcasting, Defendant Jan Crouch, Defendant Matthew Crouch, and Defendant John Casoria that the requirements of Plaintiff Brittany Koper’s new job included active participation in numerous illegal schemes that were disclosed to Plaintiff Brittany Koper following her promotion,” her husband Michael wrote in a new lawsuit filed on Jan. 29.
Just two months after she was promoted, Koper, her husband and father were fired from the network.
Koper also claims that during a meeting about the issue, her uncle, Matthew Crouch, threatened her with a gun.
Koper first filed a legal complaint in 2012, saying that TBN officials were using donations for personal expenses and her job was to “find ways to label extravagant personal spending as ministry expenses.” This new lawsuit claims that her confidential communications with officials had been disclosed without her consent.
TBN attorneys have claimed that Koper stole $1.3 million from the network, but returned $500,000. She has since admitted that she took loans from TBN with permission.
Publication date: February 6, 2015
MOSCOW (Reuters) – Slumping oil prices have put Russia’s economy on course for a sharp recession and double-digit inflation next year, government ministers said on Friday, as authorities scaled up a bailout for the first bank to succumb to this month’s ruble crisis.
The economy is slowing sharply as Western sanctions over the Ukraine crisis deter foreign investment and spur capital flight, and as a slump in oil prices severely reduces Russia’s export revenues and pummels the ruble.
The government has taken steps to support key banks and address the deepening currency crisis in the past week, including a sharp and unexpected interest rate hike, but analysts are pessimistic on the outlook for both the economy and the ruble.
Finance Minister Anton Siluanov told journalists on Friday the economy could shrink by 4 percent in 2015, its first contraction since 2009, if oil prices averaged their current level of $60 a barrel.
Siluanov also said the country would run a budget deficit of more than 3 percent next year if the oil price did not rise.
“Next year we will, without doubt, have to bring the Reserve Fund into play,” he said, referring to one of Russia’s two rainy-day funds intended to support the economy at times of crisis.
Crude prices have almost halved from their June peak amid a global glut and a decision by producer group OPEC not to cut output. Saudi Arabia said on Friday it was prepared to withstand a prolonged period of low prices.
“We need to have our budget break even at $70 per barrel by 2017,” said Siluanov.
Russia’s government imposed informal capital controls this week, including orders to large state-controlled oil and gas exporters Gazprom and Rosneft to sell some of their dollar revenues to shore up the ruble.
Russians have kept a wary eye on the exchange rate since the collapse of the Soviet Union. Hyper-inflation wiped out their savings over several years in the early 1990s and the ruble collapsed again in 1998.
The ruble’s latest fall will inevitably lead to higher inflation next year, which after years of stability threatens President Vladimir Putin’s reputation for ensuring Russia’s prosperity.
“The inflation forecast is tough, high. We forecast the level of 10 percent at the end of the year (2015),” Russian Economy Minister Alexei Ulyukayev said on Friday.
Inflation would remain in double digits throughout 2015, peaking at the end of the first quarter or in the second quarter, he added.
The Russian currency slipped on Friday after hitting its strongest levels in more than three weeks earlier in the day.
The ruble traded at 53.9 per dollar during the evening, a sharp rebound from its recent all-time lows of 80 but still far weaker than the 30-35 range it was trading at in the first half of 2014.
“If oil goes down to (per barrel)… I don’t think our authorities will be able to artificially maintain the (ruble) rate even with higher sales by exporters,”
said the head of treasury at a major Russian bank, who asked not to be named because he is not authorized to speak to media.
On Friday, Russian authorities also significantly scaled up rescue funds for Trust Bank, saying they would provide up to $2.4 billion in loans to bail out the mid-sized lender, the first bank to fall victim to the crisis.
The falling ruble has prompted panic buying of foreign currency in Russia and a spike in deposit withdrawals, heaping pressure on a vulnerable banking sector whose access to international capital markets has already been restricted by Western sanctions.
Siluanov said on Friday that authorities would provide additional capital to the country’s second-largest bank, VTB, and fellow state lender Gazprombank.
VTB could receive 250 billion rubles and Gazprombank 70 billion rubles to help fund investment projects, including those planned by Russian Railways, he said.
It was not clear whether this support would be in addition to the 1 trillion ruble capital boost the banking sector is set to receive as part of legislation recently approved by parliament.
Credit agency Standard & Poor’s said this week it could downgrade Russia’s rating to junk as soon as January due to a rapid deterioration in “monetary flexibility” in the country.
“Practically this (a downgrade) may mean the increase of capital outflow from Russia, which would be necessary to replace with instruments we have,” Ulyukayev said.
Russia may repurchase corporate bond issues, especially denominated in foreign currency, if needed, he added.
Meanwhile Russian gold and forex reserves have fallen to their lowest levels since 2009 as the central bank has spent billions to prop up the currency. Last week, reserves dropped by as much as $15.7 billion to below $400 billion, down from over $510 billion at the start of the year.
(Additional reporting by Vladimir Soldatkin, Dmitry Zhdannikov, Yelena Fabrichnaya, Alexander Winning, Polina Devitt and Anton Zverev; Writing by Dmitry Zhdannikov and Alexander Winning; Editing by Hugh Lawson, John Stonestreet and Peter Graff)