Taxing questions for Lietchtenstein
It's not every day that you get to ask a member of a royal family, last in the line of the Holy Roman Empire, of the blood line of Charlemagne and co, whether he is a crook. Or not.
We were in Liechtenstein, a tiny monarchy, squeezed between Switzerland and Austria, high up in the Alps. There is of course, no suggestion, that the royal had stolen my trousers or anything like that.
It's all to do with national sovereignty, the theft of electronic disks and the little matter of billions of dollars stashed in places the world's tax men can't find.
The point is that Little Rich Liechtenstein is a tax haven, and there's a bloke who is not very keen on tax havens. His name is Barack Obama, and so tax havens the world over - and they include Jersey, Guernsey, the Isle of Man and the Caymans.
The charge against tax havens is that they don't just help rich cheats avoid tax while the rest of us pay more, but they can also be used by organised crime, dictators and terrorists.
Last year Heinrich Kieber, who had previously worked at the LGT trust, part of the royal banking group in Liechtenstein, became a global whistle-blower.
Kieber, whose past is a bit murky, copied the files of the royal bank trust containing the secrets of the super-rich, did a runner and flogged his disks to German intelligence, the BND, for five million Euros.
Last Valentine's Day, the German authorities arrested the boss of the German Post Office, Klaus Zumwinkel. Just last week he was convicted of evading tax, sentenced to two years, suspended, and ordered to pay back four million Euros plus one million in fines.
Now hundreds of other tax cheats around the world, some in Britain, too, are now worrying that they might be next...
The Liechtenstein royals, who from their schloss in Vaduz pretty much run the banking group, the tax haven and the state, were not amused. Last spring Liechtenstein put Kieber's name on an Interpol watch-list. Then the mob - or somebody pretending to be the mob, it's not quite clear, and you can't phone them up to check: 'Hello, is that the Mafia?' - put out a ten million dollar hit on Kieber, who went into hiding.
But the game of tax haven secrets tit-for-tat wasn't over.
A pre-recorded taped interview of Kieber then turned up in Washington DC and was played to the United States Permanent Sub-Committee on Investigations. He told the Senate that his files showed evidence not just of tax evasion on a massive scale but money salted away by corrupt officials and dictators.
Given all this hoo-hah, it seemed right to hurry along to Liechtenstein.
Imagine my disappointment on discovering that Liechtenstein was, in fact, the most boring place on earth. I'm used to boredom - I work for the ³ÉÈË¿ìÊÖ, for heaven's sake - but Liechtenstein was as dull as ditchwater, no duller. They bank behind closed doors. They create fuzzy trusts behind close doors. They make false teeth. And then they go to bed. The person who most looked like a ruthless killer was Howard, and he was the ³ÉÈË¿ìÊÖ producer.
The next morning we heard that there was a banking seminar at the university on openness. This being Liechtenstein, the openness meeting was closed, at least to us.
But imagine the almost erotic charge when we heard that a royal prince had turned up, His Serene Highness Prince Nikolaus von Liechtenstein.
His serenity turned out to be a tall cove, with lots of teeth, and they didn't look false to me.
He had a posse of princely PR people with him, and, if it came to a fight, we were outnumbered. On the other hand, I had Howard the ruthless killer on my side.
I asked His Highness: 'Kieber's lawyer says that the Liechtenstein royal family by aiding and abetting tax evasion are effectively crooks. So the question is: are you a crook, sir?'
By way of answer the prince socked my jaw with a left hook, then picked up a chair and smashed it over my head. I swayed slowly like a felled tree, and then crashed to the ground. Meanwhile, Howard had silently garrotted all the PR men...
Oh, all right, I made all that up.
To my question: 'are you a crook, sir?' the prince replied that America and Liechtenstein had different laws, and that Liechtenstein had a sovereign right to run its affairs as it thought fit.
Perhaps the prince didn't quite address the American issue that tax haven micro-states should not be allowed to undercut the tax-raising powers of the great democracies, but, fair do's, a good answer.
But, some might add, how very boring, how very Liechtenstein.
Comment number 1.
At 3rd Feb 2009, SuperJimBowen wrote:I didn't think Panorama could get any worse than the Peston Beatification a few weeks ago but last night it succeeded.
This was a really poor piece of reporting.
The below-average man on the street may be excused in spouting such Daily Mail-esque tripe about tax havens. But the ³ÉÈË¿ìÊÖ should really do some more research.
Obama? Perhaps he should look at how ol' Madoff managed to con investors and regulators alike - before venturing from his own backyard.
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Comment number 2.
At 3rd Feb 2009, Markfd wrote:Oh dear. As SuperJB says more research needed.
Does nobody at Panorama understand the difference between perfectly legitimate uses of offshore corporations and tax fraud?
People who have failed to declare offshore earnings are rightly being rounded up by the tax authorities. That's one thing.
But there's nothing wrong with offshore funds, securitisation and so on, all of which can be done in a perfectly transparent, and tax neutral way. But I guess it's easier to sneer at it than it is to do your research properly.
The Beeb really needs to break with its remorseless anti-business slant.
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Comment number 3.
At 3rd Feb 2009, peterm3 wrote:I can't believe a journalist working for Panorama doesn't know what "OECD" stands for. Its not "Organisation for Economic and Cultural Development" as in the broadcast. Peter Jay wouldn't have made that mistake. The ³ÉÈË¿ìÊÖ seems to be relying on its past reputation for quality. You won't survive very long in the 21st century, mark my words!
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