He preferred not to come near what this Swiss turncoat had. He didn’t even want to meet him. So he’d denied the turncoat immunity and even a subpoena, hoping he would get cold feet and just disappear. But it turned out the mysterious banker didn’t give a shit. He was coming in anyway, full speed ahead. The fucking idiot was a pit bull.
Okay, full stop.
I know I wrote that stuff above as if I knew exactly what this guy Downing was thinking. Pretty arrogant of me, you might opine. But on the other hand, I’ve been studying this dude for nearly ten years and by now I know him pretty damn well. Full disclosure: I also hate the guy’s guts, and I relish the fact that he hates me right back. But that’s a side issue.
Back to the above. How did I conclude what Kevin Downing was thinking when my lawyers called him up and told him they had a client who was ready to turn over all the secrets of illicit Swiss banking? Process of elimination. Nothing else made sense to me.
One way to look at what happened is to parallel the whole thing to a spy story. Just imagine you’re a guy like Kevin Downing, working for a big government intelligence agency. You’re a mid-level career guy, not the big boss, but not just some street agent either. Along come these two attorneys acting as go-betweens for a guy who says he’s very high up in the Russian FSB (what they now call the KGB spy agency in Moscow). And this spy-client of theirs says he knows all the Russians’ deep dark secrets and he’s prepared to go turncoat on his own intelligence agency and give you everything. Jesus, this could be the thing that makes your entire career! You’ll be a hero, get a medal! Hell, the president will congratulate you …
If the spy is the real deal, of course. So what do you do? If you’ve got half a brain in your head, you welcome him. You tell his go-betweens that you’d very much like to meet him and see what he has to say. You encourage them, you set up a meeting. Of course you’re cautious, but very courteous, very respectful. You don’t want to scare this guy off ’cause he just might be bringing you the secret launch codes for the whole Russian nuclear arsenal. You want to seduce him, make him feel good, get everything out of him that you possibly can. Hell, you might even send him back into Russia to get you more information!
Cautiously, before you meet him the very first time, you ask his go-betweens what he wants in return. You’re stunned when they tell you, “Nothing. He just wants to make things right and make sure the Kremlin pays for their crimes.”
Really? Sounds too good to be true. But hell, you go for it. That’s your job. Truth, Justice, and the American Way. Right?
Unless the biggest thing you fear, your worst nightmare, is that this Russian traitor is going to spill all kinds of secrets that might come back around and bite you in the ass. What if he tells the ugly truth about some very powerful people in your government, who happen to be very good friends of your boss? What if some of this Russian agent’s secrets are nasty things about some of your mentors, friends, or the powerful people upstairs who cut your paychecks? What if whatever he reveals to you, you know you’ll have to report on, and it’ll cost you your job? What if you suspect that many of the people who rule over you are in fact colluding with the Russians, because they care only about money and power, and not so much about Mom and apple pie?
So basically, instead of being thrilled about this turncoat spy, you’re scared shitless. He’s going to say things you don’t want to hear. Best thing to do is to scare him away, and if you can’t do that, charge him with something and put him away for as long as possible—until everyone forgets about him. By the time he sees daylight again, you’ll be retired from government service and raking in cash as a privateer. The perpetual “revolving door” at the DOJ.
That’s the analogy, the parallel world that explains Downing’s outrageous behavior. As far as I am concerned, the only possible way it made sense. Nothing else fit the picture.
But I hadn’t reached all these conclusions just yet. I hadn’t yet had the “pleasure” of meeting Kevin Downing and Karen Kelly. I knew they were talking to my attorneys as if Hector and Moran were a couple of Baltimore drug dealers, but I figured that was just part of their “bad cop” routine, and the “good cops” would come out later. I couldn’t assess them until we met face-to-face. Once I look into someone’s eyes, I know. And that was about to happen.
In June 2007, Geneva was sliding into the most beautiful time of the year. All those thick gray clouds over the Alps were dissolving, the lake was calm and crystal blue, and the girls in the streets were shedding their heavy coats and strolling around in micro skirts and tight blouses. It was summer outside, but winter in my head, full of thunderclouds and doubts about what the hell I was doing. A mental downpour hammered at my logic.
What’s the matter with you, dumbass? Saint-Tropez’s not good enough anymore? Haven’t had enough thrills in your life yet? Want to wind up in prison somewhere? Gotta get revenge now instead of just getting laid?
Well, I guess the answers to those three self-examinations were “I’m still a hammer looking for nails,” and “No,” “No,” “No,” and “Yes.”
So I packed my bags, along with a briefcase full of files, backups on CDs, and something I called my “NOC” list, after the Non-Official Cover list of secret agents from the Mission Impossible films. Those were my aces in the hole, the names of the illicit depositors. Now, I had no intention in hell of turning that list over unless I got some guarantees first, but I had to be ready if the sun shone. And if you think I’d been careful before, now I was super cautious. If somehow the Swiss got a line on what I was doing, they might toss my flat while I was gone, so I swept it clean of any evidence, opened a safe-deposit box at a boutique bank, and locked up full copies of my treasure trove, with duplicates at Poncet’s office too.
Once again I told no one where I was going, not my friends or Thais or my maid, and I didn’t book a ticket to Washington. The Geneva airport was only fifteen minutes from my flat. I took a cab and bought a ticket to Boston again, to throw anyone in Geneva off the scent, and I paid cash.
The US Department of Justice resides in an enormous stone building on Pennsylvania Avenue NW in downtown Washington, DC. The entrance is adorned with four fifty-foot columns topped by majestic Roman scrolls, and the whole thing looks like some ominous temple to omnipotent gods. Paul Hector, Rick Moran, and I trotted up the wide slate stairs in our best suits. The lawyers were hauling respectable, overstuffed briefcases and breaking a sweat, but I was going in “light,” with nothing except business cards, a small notebook, and a pen. We passed through the magnetometers, and just inside the department’s Great Hall, I spotted this towering art deco statue of a half-nude woman, the “Spirit of Justice,” wearing a toga with her arms raised to heaven. She’d been sculpted with one full breast exposed, except it wasn’t exposed anymore, because the department had spent eight thousand bucks on fancy drapes to cover up that wayward nipple. I should have known right then and there that this tight-assed temple was no place for a Birkenfeld.
A summer intern law student retrieved us and we walked a long hallway, past officious-looking government attorneys, federal agents, and slick-suited women clicking their heels on the marble. Then it was up an elevator to a higher floor and down another long hallway to the Tax Division, where the intern opened the door to a big conference room and ducked away as fast as he could.
Kevin Downing was in the chairman’s spot at the table’s bow, braced by Karen Kelly and a guy named Matthew Kutz who turned out to be an IRS criminal investigator, otherwise known as a Treasury Agent. I looked at Downing and it flashed through my brain: Uh-oh, this dude thinks he’s Elliot Ness— with his short brown hair, ice blue eyes, pug nose, heavy jaw, and snake lips. Karen Kelly was small and bulging from a Kmart brown suit, with tiny dark eyes and a permanent frown beneath a lifeless flat hairdo; she seemed dumb as a box of rocks. Matt Kutz was slim in a boxy, oversized pale blue suit, with a flattop haircut as if he thought he was a fighter. But more friendly faced, probably because he wasn�
�t a DOJ guy.
My attorneys put their cases down and smiled proudly. “Good morning, everyone,” said Paul. “We’d like to introduce you to our client, Mr. Bradley Birkenfeld.”
I nodded and smiled, but before I could get a word of greeting out, Karen Kelly, almost rising out of her seat in anger, jabbed a finger at me and snapped loudly, “You’re no whistle-blower! You’re nothing but a tipster!”
I jerked my head back, stunned.
Excuse me? Did we have some horrible one-night stand I don’t remember?
Rick pulled out a chair for me as I whispered to him, “What the fuck is this? This is the kind of meeting you brought me to?”
“Just relax,” he muttered. “We’re already here. Opening shots is all.”
But he was wrong. Downing glared at me as if I’d just shown up at his barbecue carrying a dead skunk. I sat down with my lawyers and took a deep breath.
“All right, let’s start with your name again,” Downing grunted. “Spell it for us.” I spelled it. Then he said, “Your attorneys have been claiming you’ve got some sort of information we might be interested in, Mr. Birkenfeld.”
“Yeah,” Karen Kelly sneered. “A once-in-a-lifetime case.”
I was already thinking I’d like to dive over the table and choke the stupid bitch, but I ignored her. I reached into my calmest spot and kept it cool.
“You should be interested, Mr. Downing,” I said, “since it involves one of the largest banks in the world, which has been defrauding American taxpayers for decades.”
“And which bank is that again?”
“UBS, AG. The Union Bank of Switzerland.”
Something flickered across his face, like a mental gulp.
“And you’ve been helping them do it,” Kelly snapped.
I leaned back in my chair and cocked my head, letting my “I’ll eat you for lunch” smile crawl across my lips.
“If you don’t want to hear it, just let me know. I’m sure someone else will find it fascinating.”
“I’d certainly like to hear it,” said Matthew Kutz.
Well, I thought, one brain out of three.
“Okay, Mr. Birkenfeld,” said Downing. “Tell it.”
And I did. Over the next two hours, I recounted all my career moves, how I’d started at Credit Suisse, moved to Barclays, and then hit the top of the pyramid at UBS. I told them about how UBS had trained us all on soliciting North American clients, as well as on how to avoid scrutiny by federal agents such as themselves, and I told them about my scores of hunter-gatherer trips. By noontime my mouth was bone dry and my stomach was rumbling, but all they’d offered us were glasses of lukewarm water, as if we were in some sort of interrogation cell. I wondered if the portrait on the wall of current Attorney General Alberto Gonzales had a camera stuck in one eyeball, or maybe the whole room was bugged, because all they did was take some notes.
Finally Downing looked at his watch and started packing up his papers.
“All right, Mr. Birkenfeld,” he said. “Send over all this documentary proof you allegedly have, and we’ll look it over.”
“No offense, Mr. Downing,” I said, “but you won’t understand it without a translator. That would be me, so I’ll deliver it personally and go through it all with you.”
His expression curdled, but Matthew Kutz touched his sleeve and nodded. The IRS guy knew what kind of stuff I was talking about. Rick Moran broke in.
“May we discuss immunity for Mr. Birkenfeld, and a subpoena?”
Downing looked at me. “Requesting such things is usually indicative of guilt.”
“I don’t need protection from you,” I said. “I need it from the Swiss. I’m already breaking every Swiss law on the books just by being here.”
“Well, you’re expecting too much,” he said. “And way too early.”
Karen Kelly snapped at me again. It seemed to be her only means of communication. “We know the only reason you’re here is to get some kind of whistle-blower award.”
That really pissed me off. I got up from my chair and my attorneys came to their feet as well. Maybe they thought I was going to stab my Montblanc in her eye.
“Gentlemen, and lady,” I said with perfect control. “I started this process a year and a half ago, long before the reward you speak of existed. When I began whistle-blowing, internally at the bank, I was risking everything. The only reward I might have gotten was hard time in a Swiss prison. If such a monetary reward exists here now, it’s your doing, not mine.”
“All right.” Downing waved a dismissive hand. “We’ll see you soon.”
Out on the street, I tore open my tie. We tried to hail a cab, but it was lunchtime in the capital, so we started hoofing it back over to my lawyers’ office.
“Well, that wasn’t so bad.” Paul was trying to put a rosy blush on a corpse.
“It fucking sucked,” I said.
“They’re just playing hardball,” said Rick. “You’ll see. They’ll soften up.”
We walked for a while in silence, and I was thinking about how wrong these two guys might be. The whole DOJ reception still tasted like curdled milk in my mouth. Their attitudes just didn’t make sense.
“What’s the status on this whistle-blower award thing?” I asked.
“The IRS is saying it’ll be fifteen to thirty percent of any illicit monies recovered as a result of inside information.”
We’d actually discussed this brand-new regulation when it first showed up on the radar, back in December 2006. But what I didn’t realize was that Hector had then discussed it with Downing, prior to their first meeting. He’d even suggested that the DOJ start their own whistle-blower award program. Forced error! It appeared that Paul was totally ignorant of the anti-whistle-blower dynamic pervading Washington, so all he’d done was to infuriate the same people he was bringing my case to. That’s why Karen Kelly was already on a slow burn even before our first encounter took place.
I, however, understood right away that such a program was pretty much a teaser, meant to lure people into talking. Even if UBS were to be prosecuted, any recoveries were a long, long way off. The odds were I’d get thirty percent of zero. But still, I figured the attraction might kick my attorneys into higher gear.
“Tell you what. File for it. If you get it for me, you’ll get twelve percent of whatever I get. We’ll add that to our agreement.”
They liked that idea.
I hate to admit it, but I spent that night in my hotel room brooding. The Four Seasons isn’t exactly a Motel 6, so shelling out six Franklins to sit alone in my room, drinking and muttering to myself, seemed exorbitant, but I had to figure this one out. It didn’t make sense that these DOJ people were so hostile, when I was ready to deliver a slew of touchdowns to their team. Then I remembered how in Boston those white-collared FBI clowns had reacted to me in much the same way. Maybe Downing and Kelly just didn’t like people they regarded as “snitches.” Or maybe they thought of me as a threat to their careers; somebody who could pull off a coup they’d been failing at for decades. Clearly, at the very least, Karen Kelly thought I was some sort of carpetbagger, in it just for the money. But Downing: I couldn’t figure him out. That one would take me a while longer.
Then I recalled how once, as military cadets at Norwich, we had to ford a river, holding our rifles above our heads. The water got deeper and deeper, and when it surged above our chests and reached our throats, some of the guys started to panic and turned back. I never did. I came out the other side, soaked and breathless but with my honor intact. This thing with the DOJ was looking very similar. “Forge ahead,” I said to myself. “It’s a test.”
But the next meeting in that stuffy conference room wasn’t much better. Downing had a puss on like his mommy had tossed out his favorite pajamas, and Karen Kelly looked like she’d slept in that bulging suit without washing her hair. Only Matt Kutz seemed fresh, calm, and nonjudgmental. The Treasury agent was sincerely interested in following the money, rather than swaying wi
th any political winds.
Page by page I showed them sheaves of UBS documents, all solid evidence of the bank’s intent, operations, snubbing of American laws, and urgent email to us private bankers demanding greater results. I detailed the processes of opening numbered accounts and how they were maintained, something that surely no US government agent had ever been privy to before. I even sketched layouts of our underground vaults, and exactly what kinds of treasures were secreted down there by North American clients: jewels, cash, bearer bonds, artwork, even gold and silver bars worth many millions of dollars.
Yet in response, Downing’s questions sailed off on absurd, irrelevant tangents. He wanted to know how much money I made, how I made it, how often, and intimate details about my personal lifestyle, as if he were comparing his government bureaucrat salary and suburban lifestyle to mine. It was like a frickin’ audit. Matthew Kutz, however, took copious notes and asked pertinent questions about trust structures, client fees, and the banking products UBS pushed on its secret account holders. But after four hours, Downing’s ignorance of international finance made me think the guy could barely balance his own checkbook. And Karen Kelly seemed dumb as a fence post, repeating her mantra of the day before.
“Let’s be honest, Mr. Birkenfeld. You’re only here for a payoff.”
“That’s right,” I said. “I’m hoping for the Nobel Peace Prize.”
Rick Moran toed me under the table.
“All right,” Downing said as he pushed my four-inch pile of documents aside. “Let’s talk about some of these client names.”
“Let’s talk about immunity and a subpoena for Mr. Birkenfeld,” said Paul Hector.
“I think we’ve made our position clear on this,” Downing growled. “What we’ve got here so far is flimsy at best, and—”
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