NEW YORK (TheStreet) -- Today's grilling of Credit Suisse (CS) CEO Brady Dougan and Hans-Ulrich Meister, the bank's co-head of private banking and wealth management, by the Senate Permanent Subcommittee on Investigations could will be painful for the bank executives, but could also provide necessary pressure on the Department of Justice, President Obama and even the Senate itself to take more action to address the underlying problem of Switzerland's culture of bank secrecy.
The story of Swiss banks' complicity in the efforts of thousands of U.S. clients to evade U.S. taxes is nothing new. UBS (UBS) in 2009 entered into a deferred prosecution agreement with the Justice Department, which included a fine of $780 million. UBS also provided the names of 4,700 U.S. account holders, whose names hadn't previously been disclosed to the Internal Revenue Service. But according to a report released on Wednesday ahead of the Subcommittee meeting, the "Justice Department has failed to hold accountable the vast majority," of the people whose identities were provided by UBS.
The Permanent Subcommittee's Report is entitled, OFFSHORE TAX EVASION: The Effort to Collect Unpaid Taxes on Billions in Hidden Offshore Accounts. The chairman of the Subcommittee is Senator Carl Levin (D., Mich.) and the ranking minority member of the Subcommittee is Senator John McCain (R., Ariz.). The report examines the roles of several Swiss banks, focusing on Credit Suisse, which according to the Subcommittee, "was deeply involved in facilitating U.S. tax evasion and whose unnamed U.S. customers continue to owe unpaid U.S. taxes on billions of dollars in hidden assets."