Friday, April 10, 2009



[prohindu] 4(Four) News. Who is lier on the Indian Black in Swiss Banks: Jai Ram Ramesh Or Advani? Is India ready tofollow USA?

Mohan Gupta Thu, Apr 9, 2009 at 9:08 PM

Subject: [rti-times] 4(Four) News. Who is lier on the Indian Black in Swiss
Banks: Jai Ram Ramesh Or Advani? Is India ready tofollow USA?

G-20 Must Combat Illicit Flight To Alleviate Poverty In Developing Countries
Joint News Release from Global Financial Integrity and Global Witness

Monique Perry Danziger, 202-293.0740 Corinna Gilfillan, 202-380.3583

Washington – Every year developing countries lose as much as $1 trillion due
to illicit financial practices such as government corruption, tax evasion,
and criminal activity. Today’s pledge from the G-20 to increase funding for
the IMF and for the developing world are laudable, but these efforts must
also address illicit capital flight which remains the greatest impediment to
economic development and poverty alleviation.

GFI Director Raymond Baker said today “increasing aid will be marginally
effective as long as the so-called shadow financial system remains intact.
Comprised of tax havens, secrecy jurisdictions, and a host of other entities
and techniques designed to shift assets across borders illicitly, this
global network is facilitating a draining of assets which outpace official
development aid at a rate of 10 to one. This means that for every $1 dollar
that goes into developing countries as aid, $10 goes right back out via
courtesy of this shadow financial system.”

Continue Reading >

Opinion - Secret wealth abroad | S Gurumurthy

L K Advani remarks about bringing back black money stashed in foreign banks
is unlikely to excite the ruling family which has aborted all previous
attempts to do so The whole nation knew then that the real reason why rulers
struck was their fear that the probe had targeted the Bofors payoff and
secret money of the ruling family abroad. Rajiv Gandhi moved honest civil
servants like Vinod Pandey and Bhure Lal out of the probe and sacked VP who,
was finance minister thenS witzerland has been accused of giving shelter to
black money and there has been a lot of inflow of such wealth from India and
other countries of the world.†This is not L K Advani, on election mode,
speaking last Sunday, but the Swiss ambassador to India briefing the media
in Delhi last year. The occasion was the 60th anniversary of Indo-Swiss
Friendship Treaty. Admitting that Indian black money gets hoarded in his
country, he added that the new law in Switzerland would, not stop it, but
control it “up to a certain limitâ€.The Swiss diplomat authentically
answers the first of the FAQs, that is, whether a lot of Indian money is
really stashed away in Swiss banks. Swiss banks are not the only secret
destination. There are 37 such shelters in the world, says US Inland
Revenue. The secret owners of the secreted monies operate in secrecy —
venal businessmen, corrupt politicians, public servants, drug lords, and
criminal gangs like the D-company. The slush monies are the financial RDX
for terror, besides weapons of mass destruction of national and global
finance. That there is secret money is no more a secret. Only the amounts
and persons are secret. But how much of India’s stolen wealth could be
stashed in Switzerland? Specific estimates of this later. Before that, here
is a sideshow, but a relevant one.In the late 1980s, at the behest of The
Indian Express, while investigating the Reliance scam, I had attempted to
trail the Indian monies secreted abroad. In the course of the probe, I had
contacted Fairfax, a US investigative firm, to uncover the Indian wealth
stashed abroad. Impressed by their skills, I persuaded the Government of
India to engage the firm for the task. Fairfax agreed to work for a slice of
the black wealth uncovered by them as fee. According to Swiss sources then,
the Indian money secreted in Swiss banks was some $300 billion. That was
enough to excite Fairfax to go for the kill.. But, soon my efforts landed me
in jail on March 13, 1987, when the CBI arrested me on charges that later
turned out to be bogus, but were enough to stop the probe.

The whole nation knew then that the real reason why rulers struck was their
fear that the probe had targeted the Bofors payoff and secret money of the
ruling family abroad. Rajiv Gandhi, who was the prime minister then, moved
honest and bold civil servants like Vinod Pandey and Bhure Lal out of the

and eventually sacked V P Singh who, as finance minister then, had
authorised the efforts.The chain of events that followed led to corruption
emerging as the major issue in the 1989 polls in which Rajiv Gandhi, who had
wiped out the opposition in 1984 elections, was defeated, and V P Singh
became the prime minister. But there is a great lesson in these developments
that often goes unnoticed. And that is, the way the bold national interest
initiative to unearth the Indian black wealth abroad was aborted clearly
confirmed that the ruling family was mortally afraid of any probe into
secret money abroad. This fear haunts the family-led Congress party even
today. That is why the 1987 episode is relevant now. Now back to the main
story.Illicit money is the dirty outcome of modern capitalism. But, after
9/11, the US realised that not just the buccaneers in business, but Osama
bin Laden could also hide his funds in secret havens and use them to bomb
the world. Campaigns against dirty money as high security risk commenced
with the path-breaking research done by Raymond W Baker, a Harvard MBA and a
Brookings scholar. He published his research as a book Capitalism’s
Achilles Heel: Dirty Money and How to Renew the FreeMarket System. The book
was published in 2005. This set off intense debate in the US as the exposure
linked dirty business and dirty money with terror and national security.

Raymond Baker had estimated, using authentic data, tools and reasons, the
dirty wealth secreted in banks at $11.5 trillion to which, he found, one
more trillion was being added annually. He added that in the process the
West was getting an annual bounty of $500 billion from the developing
countries, India included. Global Financial Integrity (GFI), a global watchdog headed by Baker to curtail illicit
money flows, has recently brought out detailed estimates of the black wealth
hoarded in secret havens from different countries. GFI research shows that
during the period 2002 to 2006, annually $27.3 billion was stashed away from
India, making a total of $137.5 billion for the five-year period. That is,
in just five years, Indian wealth amounting to Rs 6.88 lakh crore has been
smuggled out of India. This gives a clue as to how much Indian money would
have slipped out of India in the last 62 years, particularly during the
Nehruvian socialist regime when the income tax (97.5 per cent) and wealth
tax (almost equal to the income earned on investments) together constituted
double the income earned. It is undisputed that the Nehruvian socialist
model forced huge sums out of India. So the amount of Indian black wealth
secreted away in the last 60 years — estimated at from $500 billion (Rs 25
lakh crore) to $1400 billion (Rs 70 lakh crore) — does not seem to be wide
off the mark. Economists call it flight of capital. This is the people’s
money stolen from
them.See the consequence even if part of it is brought back.

A portion of it would make India free from all external debts which is now
over $220 billion; India will transform into an economic superpower; some 10
or 15 Indian rupees could buy a US dollar which today 50 Indian rupees
cannot; a litre of petrol on our roadside would cost Rs 15 or even less,
against today’s 50 plus; the cost of imports in rupee terms would be down
to a third or half; India’s entire infrastructure needs can be funded;
India will become so energy efficient and costcompetitive that exporters may
need no sops at all; India will lend to — not, as it does now, borrow from
— the world; Indian housing can be funded at affordable cost; rural
poverty can be wiped out... The list is endless. But, then, is it possible
to bring back the secreted monies? What are the roadblocks to such efforts¦

Swiss money: Congress calls Advani a liar

By our Delhi correspondent | April 08, 2009 | 15:36 IST

Responding to Bharatiya Janata Party leader L K Advani's allegations about
black money hoarded in Swiss bank accounts, Jairam Ramesh, the man in charge
of the Congress' campaign for the forthcoming Lok Sabha polls, has advised
the party's prime ministerial candidate against using 'obscure and
unauthenicated Internet sources' to back his claims.

In a curtly worded letter to Advani, Ramesh accuses him of lying on the
issue, claiming that the numbers presented by the BJP leader were a 'total

This is the letter written by Ramesh to Advani:

Dear Shri Advani,

I have always been amused by the sources you cite in your speeches in
Parliament and outside. But your use of some obscure and unauthenicated
Internet source to raise the pitch on Indian money stashed away in Swiss
banks is really the limit. It is not just amusing. It is shocking, coming
from a leader of your purported stature.

To put it bluntly, Shri Advani, you are lying. That your entire edifice of
numbers on the black money issue is a total hoax has been demonstrated most
convincingly by two of India's most distinguished economists -- Ashok Desai
and Bibek Debroy -- who have both been critical of the Congress as well in
the past on various issues.

That there are Indians with Swiss bank accounts is incontrovertible -- many
of them, incidentally, may well be BJP supporters and part of your election
funding may well be coming from these sources. There can also be no dispute
on the fact that we must try and get this money back. We have had amnesty
schemes in the past -- some have succeeded and some have not. But I would
like to ask you a straight question -- in the six years that you were Home
Minister, can you tell the country one single step you took to get Indian
accounts in Swiss banks made transparent?

Your use of 'ISI' data to claim that poverty has increased during
2004/05-08/09 is another example of complete bogusness. I think you may well
be referring to a study done by Inter Services Intelligence of Pakistan and
not by our prestigious Indian Statistical Institute. The study of ISI,
Kolkata stops at 2004/05 and whatever conclusions you have drawn from that
study are completely false. I have already written to your aide Sudheendra
Kulkarni on this issue. I attach a copy of the email I have sent him.

Goebbels believed that if you keep repeating a lie several times, people
will begin to believe it. Your ideological brotherhood has perfected this

With regards,

Jairam Ramesh

URL for this article:

Milap Choraria Editor: Suchna Ka Adhikar / RTI TIMES
National Convenor : Movement for Accountability to Public (MAP)


APRIL 8, 2009, 11:50 A.M. ET
Facing Tax-Haven Crackdown, Swiss Bankers Avoid Travel
LONDON -- Swiss private bankers are becoming wary about traveling abroad,
underscoring how hard a global crackdown on tax avoidance is hitting the
discreet business of providing banking services to the wealthy.
UBS AG, the world's largest manager of private wealth by assets, has barred
"client-facing" staff in its wealth-management divisions from traveling
abroad -- a move aimed at avoiding further trouble for the bank, which has
had two bankers arrested as part of a continuing U.S. investigation into tax
At the same time, other private bankers in Switzerland are being advised to
exercise personal discretion in their travel decisions, people familiar with
the matter said.
The travel jitters come as leaders of the Group of 20 developed and
developing nations have redoubled efforts to crack open the secretive tax
havens where private bankers often park their clients' money. Following last
week's G-20 meeting, the Organization for Economic Cooperation and
Development included Switzerland on a "gray list" of countries that hadn't
yet followed through on promises to comply with its directives on sharing
tax information.
Meanwhile, U.S. authorities have been offering leniency to tax evaders in
exchange for information on the bankers who helped them hide the money.
For UBS, the travel ban could hinder the lucrative wealth-management
business on which it has relied to survive the financial crisis. That
business was already declining as U.S. tax authorities pushed the bank to
provide them with names of U.S. clients suspected of tax evasion.
UBS has turned over information on nearly 300 accounts as part of a deal in
which it admitted to conspiracy to defraud the U.S. Internal Revenue
Service. The bank is still under pressure from the IRS to provide
information on 52,000 other accounts. UBS says bank secrecy laws forbid it
to do so.
Two UBS bankers have been arrested and a further senior executive is being
sought in connection with the case. U.S. investigations continue into some
of the bank's U.S. clients.
Private clients at UBS withdrew a net 123 billion Swiss francs ($108.17
billion) in 2008, compared with a net inflow of 156 billion francs in 2007.
That means the bank lost market share to its chief rival, Credit Suisse
Group AG, whose private-banking business saw 51 billion francs of inflows
last year. UBS had a total of 1.6 trillion francs under management at the
end of last year, compared to 789 billion francs at Credit Suisse.
A UBS spokesman said the travel ban, which went into effect April 1, was a
"precautionary measure" that would last at least several more weeks while
the bank reviews its compliance procedures.
The ban affects about 1,000 of the bank's roughly 14,000 client advisers.
Most advisers deal only with domestic clients. They can still use the phone
and email to communicate with clients in other countries, and clients can
visit their advisers.
UBS instructed its private bankers not to travel to the U.S. last year,
after U.S. authorities detained one banker in Florida. In February, Swiss
authorities banned UBS from engaging in cross-border business with U.S.
Other Swiss banks, including Credit Suisse, said they hadn't introduced
blanket travel bans. A spokesman for Zurich-based Julius Baer Holding Ltd.
said travel was left to individual bankers' discretion.
In a separate development, the OECD announced that the four jurisdictions it
had included in a "black list" of uncooperative tax havens -- Uruguay, Costa
Rica, the Philippines and Malaysia -- had agreed to come into line.
Write to Stephen Fidler at


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