Exhibit 10: In 2003, Brad was sailing on the yacht, Destination, as the main UBS sponsor of the St. Barth’s Bucket Regatta. Photo Credit: Bradley C. Birkenfeld
Exhibit 11: Jack Manning, the billionaire real estate businessman, and his second wife, Lyle Howland, on the island of Nantucket. Photo Credit: Bradley C. Birkenfeld
Exhibit 12: Igor Olenicoff’s 120-foot yacht Rusalka. In 2004, Olenicoff invited Mario Staggl and Brad along with a host of his college friends on a one-week tour of Central America.
Exhibit 13: Igor Olenicoff’s business card. Photo Credit: Bradley C. Birkenfeld
Exhibit 14: Igor Olenicoff and his son, Andrei, are all smiles in front of his megayacht in Florida. Photo Credit: Bradley C. Birkenfeld
Exhibit 15: On June 19, 2007, Brad wowed the Department of Justice with privileged information on Abdul Aziz Abbas, a UBS private client with over $400,000,000 in secret numbered accounts. Photo Credit: Bradley C. Birkenfeld
Exhibit 16: Never a man to lose his sense of humor, Brad presented the Department of Justice with its own Monopoly “Get Out of Jail Free Card” after he was arrested. Photo Credit: Bradley C. Birkenfeld
Exhibit 17: On August 27, 2012 the IRS Whistleblower Office awarded Brad $104 million, the largest payout in history. After he paid his federal income taxes, Brad took home almost $76 million. Photo Credit: Bradley C. Birkenfeld
Exhibit 18: Brad was honored with the international Guinness World Record certificate, which required the establishment of an entirely new category: whistleblowing. Credit: Bradley C. Birkenfeld
Exhibit 19: On February 28, 2007 Igor Olenicoff paid the government $52,018,460, dated two days after Brad’s birthday. Photo Credit: Bradley C. Birkenfeld
Exhibit 20: Jeff Bauman as Brad’s guest in his skybox at TD Banknorth Garden during a Boston Bruins hockey game. Jeff Bauman was a hero of the Boston Marathon who lost both legs in the attack but managed to positively identify the bombers to the police, giving law enforcement authorities an enormous early break in solving the case. Most of those surrounding Jeff in the photo are members of the Boston Police Department. Brad is at his side, wearing his #40 Boston Bruins jersey. Photo Credit: Douglas Birkenfeld
READING
GROUP GUIDE
Q. After living through the latest banking crisis and learning of the questionable ethics and practices of bankers, were you surprised by the intrigue, action, and corruption depicted in Lucifer’s Banker? What was the most surprising element of the story, and why? What part of the story made you the most uncomfortable?
Q. Swiss banking laws protect the secrecy of account holders. When Brad flies to North America to get wealthy people to open accounts at his bank, he says it’s not his job to check up on how these Americans file their taxes. Do you agree? Have you known of an instance of someone not declaring every bit of income on their taxes? Is there a difference between neglecting to declare thousands (cheating a lot) and neglecting to declare a few hundred dollars (cheating a little)?
Q. Who is hurt the most by wealthy tax-dodgers?
Q. When Brad first starts out at Credit Suisse, he’s amazed at how easy it is to do his job of signing on new clients to secret Swiss accounts; plus, the pay is great. Perhaps you thought: Gee, maybe my son/daughter/spouse/self should do that for a few years, build up a nest egg, live in the Alps … Who wouldn’t love the rich and carefree lifestyle—dining, dancing, driving Ferraris? Would you enjoy this work and lifestyle? Why, or why not?
Q. Would you be happier if you had more money? Would you be tempted to put it in a secret tax-avoiding account? Is there such a thing as having too much money? Or would you like to give it a try and report back in a few years?
Q. The writer has a wry and relentless sense of humor—the way he describes people; the colorful phrases he uses, such as “useless as a screen door on a submarine.” What humorous parts did you most enjoy?
Q. When Brad loses his job at State Street Bank in Boston, he hires clowns with balloons to hand out flyers detailing the bank’s practices—proving he wasn’t one to go down quietly. In what way did this foreshadow his later decision to blow the lid off UBS and its questionable practices? Have you ever revealed a wrong in a public way? Did it work, or did it backfire?
Q. The author says when he decided to blow the whistle on UBS, he was considering the hardworking American taxpayer who has to pick up the slack left by the rich folks who avoid paying their share. But he was also peeved at Bovay, his boss, and UBS in general for their duplicity revealed in the “Three-Page Memo.” What do you think was the real reason for Brad’s decision to reveal UBS secrets?
Q. If you’d been in Brad’s shoes, what would you have done when your boss tried to cheat you out of your bonus, stole your secretary, and then played dumb when confronted about the Three-Page Memo?
Q. Brad was the only UBS banker who was sentenced to prison; his bosses and their bosses pled the Fifth Amendment and were allowed to return to Switzerland. In addition, the judge sentenced Brad to even more months than the prosecutor asked for. Do you think this was fair? Why do you believe the cases played out in this way?
Q. Clearly the Department of Justice’s Kevin Downing disliked Bradley Birkenfeld, and the feeling was mutual. Do you think Downing’s ultimate actions were justified from a legal standpoint, or do you think he allowed personal bias to cloud his judgment?
Q. Though it was a white-collar prison, the author was behind bars for thirty-one months, including a visit to solitary confinement. Would you have been willing to go to prison as he did? Did you think the outcome, taking down UBS and exposing so many tax-avoiding account holders, was worth the price Brad paid?
Q. While we all benefit from the actions of courageous whistle-blowers, they are frequently treated as pariahs and marginalized from society. Many ills have been exposed over the years—medical experiments, coal mining practices, nuclear power failures, human trafficking, political corruption, etc. Do you think whistle-blowers should be granted immunity from prosecution after risking so much? Do you think incarcerating one who comes forward, as Brad did, will have a chilling effect on future whistle-blowers going public? Or are there times when such punishment is fitting?
Q. Under subpoena, the author was forced to divulge those clients he’d signed up for new accounts at UBS, such as the gentleman at the car show in California. How would you feel if you’d been in that fellow’s shoes? What about the movie star and others revealed when Brad named names?
Q. When the author sought legal representation on his first trip to Washington, DC, he realized all the big firms were already on retainer by UBS—perhaps some actively working for the Swiss bank. Given what you’ve learned about UBS, do you think it’s harmless or somewhat reprehensible for an American law firm to earn substantial legal fees from companies like UBS?
Q. Who were your favorite players in the book? Most despised?
Q. If Lucifer’s Banker became a movie, who would you imagine playing Bradley Birkenfeld? How about his secretary, Valerie? Any other actors for specific roles?
Q. If you could sit down to a cup of Swiss coffee with Brad, what would you most like to ask him?
AUTHOR Q & A
Q. Bradley, congratulations on writing such a riveting book. What made you decide to tell your story in Lucifer’s Banker?
A. I wrote this book to share the untold story of how I destroyed Swiss bank secrecy. Swiss private banking conjures up images of wealth, privilege, and lavish lifestyles. With Lucifer’s Banker, I expose the dark side of private banking and my tortured journey that ultimately destroyed centuries-old Swiss bank secrecy. Without the veil of secrecy, terrorists, corrupt politicians, power brokers, influence peddlers, and the wealthy today face stronger barriers to financing indiscriminate attacks on the innocent, to corrupting elected officials and bureaucrats, and to shirking their tax obligations.
While I remain proud of my successful efforts to end Swiss bank secrecy, UBS and the Department of Justice aggressively attempted
to undermine my historic whistle-blowing every step of the way. I also wrote Lucifer’s Banker to share the story of how UBS and the Department of Justice misled and deceived the public for close to a decade. They perverted the course of justice to protect their conflicted interests and to shield from justice and public shame their powerful and influential benefactors who themselves held secret numbered accounts.
While my efforts were rewarded by the largest whistle-blowing award ever—$104,000,000—the world deserves to know the truth about this scandal. I am satisfied that Lucifer’s Banker has been able to expose what the US government failed to expose, and that my revelations have been a catalyst for ongoing investigations into corrupt private banking activities across Europe and around the globe.
Q. Readers often love tell-all books, even though we imagine the writer took great risks to disclose so much. How worried are you about revealing so many intimate details of your case? How about the details of other people’s financial lives?
A. I’m not worried about revealing what really happened and why. Rather, it’s UBS, the Department of Justice, and the many wealthy Americans with secret Swiss accounts who are worried … and for good reason. I now welcome the opportunity to expose the corruption on the other side of the Atlantic and around the globe.
Q. You speak so fondly of your father, a medical doctor, and your mother, a former-model-turned-parent. Clearly they raised a strong, smart son! What did they think of your career when you were raking in big bucks at UBS? Did they know any of the details, such as how you were helping Americans avoid paying taxes?
A. UBS, Credit Suisse, Barclays, and the many other private banks operating out of Switzerland for generations prided themselves on providing discreet financial services for the wealthy. Many respected, law-abiding families availed themselves of their services. My role at each of these firms was to provide access to stable and attractive investments, as well as discretion, to these clients. It was not our role, nor our responsibility, to address our clients’ tax responsibilities. While we may have wondered whether or not our clients were meeting their local tax obligations, just as with making cash payments to cab drivers and other service providers, it was not our responsibility to ensure our clients were making appropriate income tax declarations.
Coming back to your question, my parents were certainly happy for me to have landed positions with such reputable firms after finishing my MBA in Switzerland. The fact that the positions would leverage my interpersonal skills and love of travel in supporting clients’ financial needs around the world convinced them I had found the perfect career. I was providing banking services to clients, not tax advice.
The Swiss private-banking model began to unravel when private bankers offered financial services during client visits in domiciles where they were not properly licensed or registered to offer such services, or when bankers actively facilitated clients’ tax-evasion schemes. Financial rules and regulations tend to be highly technical and complex, particularly in cross-border situations. Operating in the many markets we did, we relied on internal and external legal and compliance resources to ensure our business practices were not running afoul in any of the markets where we did business. What we did not fully understand was that our firms were aggressively interpreting local regulations, and in some cases crossing the line, with many business practices exposing us to legal risks. What triggered my eventual whistle-blowing at UBS was the uncovering of a policy document (the “Three-Page Memo”) where the firm defined as prohibited many of the activities we bankers were charged and incentivized to perform. The firm, while enjoying the fruits of our efforts, was ready to disavow our activities in the event of any legal trouble. They were not going to stand behind their “rogue” bankers.
Q. It was amusing the way you first described how easy it was, when you started at Credit Suisse, to solicit new money from wealthy individuals. Was it really that simple? Or did you underplay the financial acumen that one needs in that job? In other words, was that MBA important to this line of work?
A. Financial services is a highly competitive industry with many players competing for a limited amount of investor dollars. At the end of the day, what differentiated one from the next was the quality of the client service effort. While the MBA was important for understanding the inner workings of the many complex products and services we offered, it was not enough to distinguish you in the field. I suppose I made it sound easy because it actually was for me, as I have a natural talent for developing an engaging rapport with most people I encounter. I genuinely enjoy people, and, on the flip side, my clients appreciated my positive and professional approach and were truly engaged with my company.
Q. While the turning point for you at UBS was the day you saw the “Three-Page Memo” that practically denied permission to solicit American money, in fact when you were at Credit Suisse you came up with the idea of wining and dining the rich—something it sounded like the bankers there weren’t already doing. Was Credit Suisse just slow to pick up on the game that UBS players were already experts at?
A. Credit Suisse, at the time, had not developed as sophisticated an asset-gathering operation as UBS had. Much of the business on the books came from clients with other relationships across the bank (banking, commercial lending, trading, letters of credit, etc.). While at State Street, we bankers had ample opportunities to actively cross-sell other services to our clients. My efforts at Credit Suisse were simply introducing new business opportunities to existing and prospective bank clients. As at UBS, my efforts at Credit Suisse were completely transparent and under the firm’s legal and compliance umbrella.
Q. Upon graduating from Norwich University, a military academy in Vermont, you considered a career in the military, but ended up back in finance, where you’d worked during summer breaks. How did your academic and military training at Norwich impact your life, or even dictate the way you reacted to the battle you embarked on as a whistle-blower?
A. My experiences at Norwich University, America’s oldest private military academy, battle-hardened me for the challenges and struggles the future had in store for me. Diligence, perseverance, and self-confidence were all instilled in the cadets at Norwich, and I benefited from that environment. I needed all of these traits—and more—for the ultimate battle against UBS and the Department of Justice.
Q. Speaking of the military, is what you did patriotic? What about the years before you turned in those bankers—when you were signing up more and more rich people to Swiss numbered accounts? Was that patriotic?
A. This is a tough question. I don’t believe patriotism has any bearing on what I may or may not have done. Opening up accounts for US and other foreign clients in Swiss bank accounts was my job, as it had been for hundreds of other private bankers across Switzerland for decades. I performed my job with the understanding that the firm was not asking us to violate laws in their name.
The question of whether clients shirking their tax obligations are being unpatriotic is also a curious one. There are many cash-based service industries in the United States and elsewhere where large proportions of revenues are not declared to tax authorities. Are all of these “non-declarers” unpatriotic? Are the clients of these providers unpatriotic for not “outing” their providers for not fully disclosing their income, or worse, complicit for not reporting cash payments to tax authorities? Or do these people have moral standing for refusing to pay taxes to a government with lax spending controls and discipline? These are complicated, value-loaded questions.
My feelings on the subject have evolved over time. As I explain in the book, it was easy to turn a blind eye to questionable activities when you believed these were sanctioned and vetted by your firm. Unquestionably, it was also easy to turn a blind eye when you were young, invincible, and the money was rolling in. As the years wore on, however, you recognized that what may or may not be legal was not always ethical. Was it right for our clients to shirk their tax obligations, and thus leave the less sophisticated an
d less wealthy to shoulder a heavier share of the tax burden? You might ask why I didn’t act on these ethical instincts earlier. Good question, but the same applies to most of us. Many of us have been exposed to similar ethical quandaries. These are tough situations to face, let alone fix.
In the end, the problem was solved for me when I confirmed through the “Three-Page Memo” that many of my job responsibilities had crossed the line. At that point I realized the game was over. I could have just walked away, but instead I had the courage to take on the most powerful bank in the world as I brought their illegal and unethical activities to light.
Q. Looking back at your State Street days in Boston, when you were fired for refusing to illegally wiretap conversations with your clients, what do you think of your coworkers who went along with business as usual? Did you find it hard to keep relationships with your buddies who quietly toed the (unethical) company line?
A. My focus during the State Street Bank scandal was on the perpetrators of the wrongdoing more than on the knowing bystanders. Furthermore, none of my buddies at State Street were engaged in the wrongdoing. I realize that some people who were there, like many who work for large financial institutions, did not want to risk their futures by standing up to corporate wrongdoing. They made their choices, and I made mine by going to the authorities.
There is a curious parallel between the State Street case and the way the Swiss private bankers executed duties in violation of the laws of countries where they operated. State Street traders may have accepted the wiretap under the assumption or hope that the firm had properly vetted the legal and compliance ramifications. They did not believe it was up to them to make those determinations. But just as I later did in Switzerland, once I confirmed the wrongdoing, I duly reported the transgression.
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