The latest revelations about how HSBC's Swiss unit helped clients evade taxes put both the bank and politicians back on the spot. The information may be eight years old or more. But it still raises questions about how much authorities knew, and what they ignored, when they went after HSBC.
The bank's antics are being made public thanks to Herve Falciani, a former HSBC employee who leaked the documents - detailing activities up to 2007 - to several news outlets, including the BBC, the UK's Guardian newspaper, France's Le Monde and CBS's 60 Minutes.
The tricks he details are not as wacky as, say, a UBS private banker taking diamonds to a client by smuggling them in a tube of toothpaste. But HSBC's Swiss outfit offered advice on dodging taxes, allowed clients to use pseudonyms on their accounts, and colluded in keeping so-called "black" accounts hidden from clients' home tax collectors. They also didn't ask many questions when dodgy characters wanted to keep their money at the bank. All in, the documents provided by Falciani cover 30,000 accounts with some $120 billion of assets.
The whistle-blower provided much of the same information, and more, to French, UK and US authorities several years ago. A number of clients in several countries were arrested for tax evasion and so far the UK has recouped £135 million (just over $200 million).
HSBC has made big changes in the way it handles private clients since then. Even so, its tax-related misdeeds have gone largely unpunished. Its $1.9-billion fine and deferred prosecution deal with the US Department of Justice (DoJ) in 2012 covered money laundering and the violation of sanctions. The DoJ may have had the tax goods and focused elsewhere, but the new details have already provoked fresh questions from the top Democrat on the Senate's banking committee.
While some clients have been forced to pay up, the bank has faced no legal action in the UK. Its former chief executive, Stephen Green, served as a minister in the current government and was rewarded with a peerage. The nexus of tax-dodgers and bankers surely makes good fodder for the opposition as Britons prepare for a general election in May. Add politics to HSBC's old bad habits, and the bank could find itself in the dock again.
