The New York Times in a hard-hitting weekend article lashed out at Goldman Sachs and suggested that the bank should forget about employee bonuses and make a major donation to the US government. It points out that while the bank has repaid $10 billion, it owes taxpayers far more than that, and it calls the $16 billion the bank is planning to pay its workers to be rejigged: “A multibillion-dollar gift to the federal Bureau of the Public Debt, which accepts tax-deductible donations to reduce the national debt. The donation can come from the bonuses; that way, it would not harm shareholders, because they only get their cut after the bonuses are paid.”
Links to other sites: New York Times opinion page, Reuters
Health care debate (cartoon: © 2009 Patrick Chappatte)
New York, USA (GenevaLunch) – Economist and Nobel laureate Paul Krugman, writing in the New York Times (registration required) 17 August says of President Barack Obama’s proposed health plan that “it most resembles the system in Switzerland.” More pointedly, he says that unlike what many, including Fox News, would like the public to believe, the plan will not turn the US into a Soviet Union or a distorted version of Britain, but rather: “the truth is that the plans on the table would, roughly speaking, turn America into Switzerland – which may be occupied by lederhosen-wearing holey-cheese eaters, but wasn’t a socialist hellhole the last time I looked.”
Obamacare, he says, “is a plan to Swissify America, using regulation and subsidies to ensure universal coverage.”
Krugman has pointed to this similarity several times recently, prompting debate over how well the US could adopt the Swiss mandatory and well-regulated but largely private system, but facts about the Swiss system are few on the ground in the US debate.
US research on the dangers of driving while using a cell phone are finally coming to light, six years after a federal agency in the US decided not to publish them, in 2003, and the National Highway Traffic Safety Administration opted not to do further research, reports the New York Times, which is making the full report available on its web site after two consumer groups, led by consumer advocacy group Public Citizen, publish it 21 July. The data was withheld, it appears, largely out of concern over angering Congress, in an American-style state versus federal power lawmaking clash.
Washington, DC (GenevaLunch) - The US Justice Department has e-mailed major US media to deny a story that appeared 23 June in the New York Times, calling the report that the government plans to drop a lawsuit again Swiss bank UBS “simply untrue.”
New York, USA (GenevaLunch) – Charges dating back to 2002 against a number of companies who are accused of helping the old South African government to maintain apartheid can go ahead, a judged in New York ruled Thursday 9 April, but charges were dropped against Swiss bank UBS and Barclays of the UK, as well as electronics company Fujitsu. The judge dismissed charges against them, saying, “Corporate defendants accused of merely doing business with the apartheid government of South Africa have been dismissed.”
Fort Lauderdale, Florida, US and Zurich, Switzerland (GenevaLunch) – Raoul Weil, UBS head of Global Wealth Management & Business Banking who temporarily resigned from his job in November 2008 has been declared a fugitive from justice by a judge in Fort Lauderdale, Florida, after he failed to appear in court there.
Weil’s lawyers in New York have called fraud charges and the latest move “unjustifiable,” TSR reports. The designation is not likely to have an immediate impact on Weil’s direct participation in the US investigation because Switzerland, like most European countries, does not extradite its own citizens. The Swiss Justice Department Wednesday would not say if a request for Weil’s extradition had been made by American authorities. Ed. note: countries with Anglosaxon legal systems, including the US, will extradite their own citizens under the terms of some treaties, but the process can be long and complex.
Weil resigned from his job in November for the duration of the investigation. The bank has not commented publicly on his new fugitive status.
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Updated 08:50 Zurich, Switzerland (Sonntag, Ger and TSR, Fre) – The German weekly Sonntag says unnamed sources believe UBS will show a 2008 loss of CHF20 billion when it reports final figures for the year 10 February. If confirmed – and a bank spokesperson says the figure is only “speculative,” it would be the largest annual loss by a company in Switzerland.
Government prosecutors in New York, USA, Monday asked that Bernard Madoff be sent to jail rather than remain free on $10 million bond, saying he is a flight risk after sending gifts of jewelry worth $1 million to family and friends last month. His attorneys argue that his wife tried to recover the valuables once the couple talked to attorneys and realized this could be seen as a violation of bail terms. A judge will rule on the bail case Wednesday but in the meantime Madoff’s attorney now says he never said his client was cooperating with government officials – and the New York Times story is more guarded in its language than it has been about Madoff, “who is said to have confessed to a huge Ponzi scheme.”
The NY Times and International Herald Tribune carry a story about European banks tallying their losses from the Madoff scandal, saying “the size of the scheme calls into question why other big reputable banks in Spain, Britain and especially Switzerland, the world’s premier wealth haven, failed to spot the risks.” The article details some of these losses elsewhere in Europe but for Switzerland says only that the affair is front page news in Geneva, and it points to two losses in Switzerland, one at an arm of Spanish Bank Santander, Optimal Investment Services of Geneva, and the other at Union Bancaire Privée. The last sentence of the long article is a quote from Swiss Bankers Association spokesman James Nason, “”Like the rest of the world, we are scratching our heads, wondering how on earth the SEC and top auditing companies could have had the wool pulled over their eyes for so many years.”
