that point where we can actually prevent, treat and cure alzheimer's. that is our goal and we are going to get there. thank you very much. [applause] .. her statements and comments

this morning the speaker when asked about the plans asked about the details and i believe he said blah blah blah. [laughter] do you feel like you are begin their cut before you unveil your plan and giving the remarks where does this stand? >> i don't think we cannot afford to wait. i can't settle for an economy that grows at 2%, settle for high employmen unemployment andt able to live on their own. a declining wages for the middle class. we need to be the party of growth and opportunity, restoring the american dream and this is something americans have hunger before. we have an obligation. i put up this draft so that we could engage the american people on this and i think this is some of that as i travel the country

and through the hearings i've had this is something that is very much to move forward. >> the new c-span.org website makes it easier than ever to keep tabs on washington, d.c. and share your findings via facebook, twitter and other networks. easy search functions let you access daily coverage of events and new tools make it easy to create a short video clips and share them with your friends over facebook, twitter and other social networks trade or you can send links to your video clips through e-mail. find the shared tools on the video player or look for the green icon link throughout the site. watch washington on the new c-span.org and if you see something of interest, click it and share it with your friends. the head of the swiss bank said today he regrets the financial institutio institutioe

u.s. clients avoid paying taxes. that was part of a hearing today on offshore banking. it's next on c-span2. ahead of the federal reserve will testify on capitol hill tomorrow morning the senate subcommittee investigation accused the swiss bank of trying to hide the accounts of 22,000 u.s. citizens so they could avoid paying taxes. the panel headed by carl levin is called from the justice department to force the bank to

hand over the names of u.s. citizen good morning everybody. the permanent subcommittee on investigations will come to order. the american public is angry about offshore tax abuse, efforts by well-off americans to ebay to their u.s. tax obligations by hiding money offshore. at today's hearing follows up on a hearing that the subcommittee held five years ago in 2008 when we presented evidence that well-known international banks located in secrecy jurisdictions were deliberately hoping u.s. clients cheat on their taxes by opening offshore accounts never reported to the irs despite a

u.s. law requiring the disclosure. the hearing focused in part on the largest bank in switzerland which at one time had 52,000 with customers with swiss accounts holding $18 billion of hidden assets, and which back then had a practice of sending swiss bankers wanted to u.s. soil to service the secret accounts. and on the first day of those hearings in a germanic animation, ubs acknowledged that the bankers had been up to and committed to the bank to stop the abuses. seven months later, they find a deferred prosecution agreement with the united states justice department and paid a 780 million other fine and promised to close all undeclared swiss accounts for u.s. clients.

as part of that agreement, uvs turned over 250 secret accounts of u.s. clients names and after john doe summons proceedings it took another year, ubs coughed up for accounts for the total of about 4700 accounts. the action sent a powerful signal that u.s. tax cheats using offshore accounts better pay up or face prosecution. thousands of americans with undeclared accounts allowed with the u.s. account holders with accounts in other offshore secrecy jurisdictions ended up joining a voluntary disclosure program established by the ins. altogether, 43,000 taxpayers have paid back taxes, interest and penalties, totaling $6 billion to date before expected. the tax evaders acted to avoid

being prosecuted. it is as simple as that. the breaking of the swiss secrecy also signaled a seismic shift in the offshore world. suddenly, switzerland as well as otheother secrecy to the fictios declared they would no longer use the law to facilitate tax evasion. the flurry of tax information exchange agreements were signed around the world promising some new transparencies. the g. 20 world leaders declared the era of bank secrecy is over. well it's five years later into the sad truth is that the era of bank secrecy is not over. bank secrecy has been discredited and condemned but it isn't gone. billions in unpaid taxes remain uncollected thanks to the tax evaders use of bank secrecy and we have a great concern that the battle to collect those taxes on

hitting offshore assets seemed stalled. our investigation chronicles the uneven and halting progress made in identifying u.s. taxpayers who cheated uncle sam using offshore accounts. the bipartisan report that we are releasing today cites chapter and verse of the failure to collect taxes owed and hold accountable the u.s. person to ebay to do their tax obligations and the tax havens who helped them. the report uses a detailed case study involving the credit suisse. after the ubs scandal broke in 2008, the subcommittee asked credit suisse as well as several other swiss banks whether they had been engaged in the same type of conduct as ubs. credit suisse admitted to the investigators that they had that it was going to clean up after seven credit bankers were

indicted by the justice department in 2011 week check-in again and found the bank had not yet closed thousands of undeclared accounts held by u.s. taxpayers. so we decided to take a closer look. what we found is that credit suisse had been holding back about how bad the problem was that the bank. at its peak in switzerland, credit suisse had over 22,000 u.s. customers with accounts containing more than 12 billion swiss banks which translates into ten to 12 billion u.s. dollars. nearly 1500 accounts were opened in the name of offshore companies to hide u.s. ownership. another nearly 2,004 open. credit suisse's own little private bank.

almost 10,000 were serviced by a special credit suisse branch at the zuirch airport that enabled the clients to fly into their banking without leaving the airport ground. although credit suisse policy was to concentrate its u.s. client accounts in switzerland at a swiss desk that had about 15 bankers trained in u.s. regulatory and tax requirements, that policy was largely ignored. in 2008, over 1800 bankers spread throughout the bank in switzerland handled more than one u.s. account. one u.s. client told the subcommittee about visiting the bank's main offices in zurich. the client was ushered into a remotely controlled elevator with no pretense and escorted to a room wife walls dramatizing to focus on secrecy. the client opened an account after being told the bank did

not require completion of the w. nine and without that form, the account was not reported to u.s. authorities and in the later visit the money was offered cash withdrawals and credit cards to draw from the swiss account while in the united states and the client always signed a formal ordering that the credit suisse account statements be immediately shredded. it was a classic case of bank secrecy and bank facilitation of u.s. tax evasion. but the swiss bankers didn't stay in switzerland. credit suisse thinkers traveled across the united states. ten bankers alone took more than 170 u.s. troops from 2001 to 2008 to look for new clients and service existing accounts. credit suisse arranged for them

to host tables at the annual swiss ball in new york and cold torments in florida to prospect for wealthy clients. some also met with as many as 30 to 40 existing u.s. clients in a single trip to attend to their banking needs. we learned of one swiss banker who met with a u.s. clien the ut over breakfast at a u.s. luxury hotel and slept the clien clienf bank account statements in between the pages of a sports illustrated magazine. although none of the swiss bankers were registered with the u.s. securities and exchange commission, then he provided a broker-dealer investment advisory services for u.s. clients, resulting in the $196 million fine that credit suisse paid last week. some swiss bankers also advised u.s. clients on how to structure cross transactions to avoid filing reports of cash transactions over $10,000 as

required by u.s. law. other swiss bankers helped u.s. clients set up offshore corporations to hold their accounts and to hide the ownership trail. some bakers lied on the visa applications when they entered the united states saying the purpose of the visit was to resent, when in fact it was business. the bottom line is that credit suisse was in as deep as ubs aiding and abetting u.s. tax evasion, both in switzerland and on u.s. soil. once ubs misconduct was exposed, credit suisse initiated a series of so-called exit projects to close its u.s. client accounts in switzerland. those projects took five years until 2013 to complete. in the end, the bank verified account for about 3500 out of

the 22,000 u.s. clients as compliant with u.s. tax law meaning they were disclosed to the irs. the bank closed accounts for the other 18,900 u.s. customers. it is clear that the vast majority of the 95% were undeclared, meaning hidden from uncle sam. so where are we now? unlike ubs, the u.s. enforcement action against credit suisse has stalled even though the bank got a target letter three years ago in 2011. while seven of the bankers were indicted by guest prosecutors in 2011 none have stood trial and none have been the subject of a u.s. extradition request. less than a handful of the tax payers in the accounts have been indicted. that's not much accountability for the bankers or u.s. clients.

the taxes owed on the leaves of dollars on the offshore assets remain uncollected. to collect those unpaid taxes and hold u.s. tax evaders accountable, the critical first step is to get their names. the prospect of the united states getting the names is what produced the ubs affect, the rush of u.s. offshore account holders making so-called account disclosures to the irs and pay them what they go to avoid embarrassment. but getting names is where the whole story goes bust. there is a chart i've ask we put up. it's a chart of the 22,000 u.s. clients with swiss accounts and credit suisse. the total accounts with the swiss to the united states over

five years it's a grand total of 238. that's that little green sliver. that's 238 out of 22,000, about 1%. other swiss banks with thousands of u.s. clients in switzerland have as far as we know this closed no names at all. the reason for this nearly total failure is the swiss insisted on being secrecy, and the united states letting them get away with it. when the united states department of justice issued grand jury subpoenas to credit suisse to get u.s. client names and account information in switzerland, the swiss government inserted itself into the criminal investigation to stand between the bank and our department of justice. it told credit suisse that it

could deliver documents directly to the united states but have to fumble them through swiss officials first. despite the grand jury subpoenas outstanding against credit suisse, the department of justice did not attempt to enforce those subpoenas in the u.s. courts nor did the department of justice turn to the irs to issue a john doe summons to the bank, even though it was a john doe summons that caused the ubs to turn over 4500 account, the largest single production from switzerland. rather than using those proven u.s. tools that could be enforced in the courts, the department of justice reversed the course from the approach. for five years the department of justice has voluntarily limited its request for documents including the names of tax evaders to request under a u.s.

swiss tax treaty despite that highly restricted slow and unproductive process. in 2011 the department of justice said that a treaty request for u.s. client names and account information from credit suisse and told the swiss government that the department of justice solve the request as a test case of switzerland's willingness to produce critical documents. at the end of the torturous process that took two requests, two court decisions and nearly two years in the summer of 2013, the department of justice was rewarded with the 238 accounts that included u.s. client names. to me, getting 238 in five years out of the universe of 22,000, less than 1% is more than an

embarrassment. it advocates the home-court advantage of using u.s. courts. remember the law which is accepted almost everywhere including in the united states is that if a bank chooses to do business in a foreign country, it must accept and operate under the law of this country by restricting itself to the treaty process the department of justice essentially handed over control of u.s. information request to the swiss regulators and swiss courts that will on how they would be handled and regularly update the bank secrecy over big disclosures, but the roadblocks didn't end there. in 2009 rate after the ups battle, switzerland agreed to amend the u.s. space tax treaty

to replace its highly restrictive tax fraud standard but the somewhat less restrictive relevant standard but the swiss also insisted the less restrictive disclosure standard be used only for information requests regarding swiss accounts that existed after the amendment were signed on september 23, 2009. u.s. negotiators went along and produced a new treaty standard that maybe useful prospectively but can't be used for potentially tens of thousands of swiss accounts and deployed for u.s. tax evasion before 2009. the end result is the tax evaders of the swiss banks that helped them make it a away with wrongdoing. in 2012, the swiss passed legislation electing another roadblock, the u.s. efforts to

acquire u.s. client names. the legislation says that to get the names of a swiss banks u.s. clients, the u.s. treaty request must establish that the holder of the client information, in other words the bank, told, significantly contributed to the pattern of misconduct by those unnamed account holders. in other words, the department of justice will have to prove that a bank is guilty of facilitating misconduct by a group of account holders before it can even get the account information needed to prove the misconduct. and even if the department of justice wanted to meet its new w standard, it would have to do so in a country that prizes being secrecy and whose banks have made a fortune from that secrecy. it's still a game. during the same time period,

switzerland pressed the department of justice to create a program to enable most of its banks other than the 14 large banks under active department of justice investigations to obtain nonprosecution agreements or non- target letters in exchange for providing limited information and monetary funds but still without producing any u.s. client names. in response, the department of justice in 2013 announced an unprecedented program to give prosecutorial amnesty to hundreds of swiss banks without requiring they disclose a u.s. client name. giving up on getting the u.s. client names contradicts u.s. policy of demanding full cooperation from parties excused

from prosecution. and it sets a bad precedent for how the department of justice will handle other tax haven banks. the department of justice program allows the banks to give u.s. prosecutors bits and pieces of information that include it might help the united states instead of a straightforward list of u.s. clients with swiss account that existed before august, 2008 bodies uncovered. the united states was then told to piece the clues together, go on a church or junta to identify accounts with using again very limited information while swiss banks get immediate immunity from prosecution. to make the situation even more difficult, in january the swiss

court turned down a u.s. treaty request for client names ruling that the fact that a swiss account was undisclosed, hidden from u.s. authority it wasn't enough on its own to justify the swiss secrecy law. again they found preserving banks the christie more important than supporting u.s. efforts to prosecute tax evasi evasion. after the department of justice overcame the swiss secrecy obstacles to obtain 4700 accounts with u.s. client with the u.s. client names than many predicted the swiss secrecy wih no longer emptied u.s. prosecutions. in 2008, testimony before the subcommittee in that testimony that justice officials pledged to act energetically.

associate attorney general kevin o'connor testified despite the challenges posed by the bank secrecy we will not be detoured, we will pursue. we will pursue other formal and informal methods of obtaining the evidence we see comin come e said this includes the use of the science as well as the grand jury subpoena. that did not happen as promised. it's not too late to fulfill the pledge. the department of justice can still use the best tools including grand jury subpoenas and the john doe summons to get u.s. client names from the 14 targeted banks which include some of the largest banks. the department of justice can still make extradition requests for inviting the swiss bankers and tests sports or when's

willingness to cooperate with u.s. tax enforcement. the department of justice can still hold accountable the u.s. tax evaders and the tax haven banks that helped them if the department has the will. among the questions we will be asking today is why the department of justice slowed the investigations of the 14 banks through its failure to use u.s. legal tools why it accepted the swiss bank secrecy principles and the department of justice nonprosecution programs why it obtained only 238 accounts with u.s. client names in five years out of the tens of thousands of credit suisse accounts and how it plans to collect the unpaid taxes still owed on billions of dollars of credit suisse accounts. allowing americans to evade their tax obligations through hit in offshore accounts to

prize the government of needed revenue. and more than that, it deprives american taxpayers of something vital to the legitimacy of the tax system, fairness. of the law needs to be enforced to ensure that taxpayers aren't able to go offshore to cheat uncle sam and instead pay what they into the tax haven banks are held accountable for their action. i would like to thank my ranking republican john mccain and his great staff for their strong support and involvement in this investigation and for carrying on the bipartisan work that began in this case with so many other cases with senator coburn and his great staff. senator coburn is the ranking member of the full committee and we welcome him here today but we

will first call on the ranking member senator john becam. >> thank you for the comprehensive overview of this disturbing situation and i think you and the staff for their hard work on this issue for a long time. the bipartisan investigation focuses today on credit suisse, switzerland's second-largest bank and the investigation has revealed another unfortunate example of a foreign bank coming to the compensation over compliance and uncovered for years that greatly profited by helping u.s. clients hide billions of dollars of taxable asset from the u.s. treasury by undermining u.s. tax in the security log into taking advantage of the banking practices.

the bank became a safe haven for the tax evasion pure and simple. today's hearing will examine instances of the misconduct, highlight how they delete meaningful compliance as long as possible and to consider how the department of justice and effective response allowed this to persist in how the bankers hope the u.s. clients hide their assets and keep them hidden from the view of u.s. tax authorities was a courageous. as the chairman mentioned that bank orchestrated a wide range of meetings with u.s. clients on both sides of the atlantic remotely controlled elevators leading to hidden rooms and the headquarters and magazines in american hotel lobbies and even family events were all used by bankers to unsuspectingly conduct business with u.s. clients. credit suisse bankers reportedly stated on the customs forms they

were traveling to the united states for tourism purposes but instead of sightseeing they would meet with clients, a violation of u.s. security law and in one instance the credit suisse bank traveled to the u.s. to attend the wedding of a clients child. however in addition to enjoying wedding festivities banker also took advantage of the social occasion to secretly briefed his client on the status of the undeclared credit suisse account. these instances of illicit banking practices belong in a spy novel not at one of the world's top banks. banks. the swiss banking secrecy provisions that enable to such practices went largely unchallenged until 2008 when the subcommittee conducted an investigation and held public hearings in offshore tax evasion practices.

indeed, credit suisse prospered by not requiring its u.s. clients to be tax compliant. while it made some changes to its internal policies it was low to ensure sufficient compliance by its u.s. account holders. even today the bank must answer for decades of ill-gotten profits. coincidentally or not five days ago with its hearing on the horizon of the credit suisse agreed to a regulatory settlement with the sec where it would admit wrongdoing and agreed to pay $196 million for providing banking services in the united states without registering with the regulator. this fine however pales in comparison to the severity of the full extent of credit suisse's misconduct. the justice department and other federal regulators shouldn't sit by and give these banks a free

pass for their role in enabling the u.s. tax evasion. concealing billions of dollars in tax revenue entities seeking the u.s. government and the american people. in the time of the hardship the justice department appears to have willingly given up on using the tools it has to collect taxes owed should the u.s. government. in 20080 2008 alone the justice department obtained information on u.s. tax evaders from a swiss bank leading to 72 prosecutions. but from 2009 to 2013, the department seems to have abandoned its efforts issued and no summons and enforcing no subpoenas against the banks. in fact i'm sure the justice department will probably dispute that. but facts are stubborn things. the justice department issued no summons and enforced no subpoenas against swiss banks.

in fact even though in 2011 the justice department indicted a handful of individual credit suisse bankers for engaging in illicit banking practices today it failed to prosecute these indictments but since 2011. instead the justice department opted to play the role of the diplomat helping to negotiate with the swiss government creation of a program that allows the banks to voluntarily disclose their tax evasion practices without the risk of prosecution in the u.s.. as a result of the program some banks may not even have to admit wrongdoing for the misconduct. ndb's executions will simply pay the fines on the list of accounts they hold, a slap on the wrist for their role in concealing billions from the u.s. treasury and a payment that may be deemed by banks wishing to engage in the wrongdoing as

an acceptable cost of doing business. as a result of the practices by the credit suisse and other institutions as recently 2011 it has been estimated the united states has been deprived of $337.3 billion in potential revenue, the largest amount of revenue lost during tax evasion in the world. with this in mind, the justice department should be relentless in continuing its investigations in the foreign banks such as credit suisse into that reflect the severity of the wrongdoing and of their wrongful gains and make the tax payers whole and effectively deter the misconduct in the future. it's past time to expose how the offshore tax haven banks help account holders evade paying

their taxes. i want to thank the witnesses for appearing before the subcommittee today and i look forward to the testimony and thank the senator for his incredibly important efforts in this investigation and his work. thank you mr. chairman. >> thank you. as i mentioned this has been a lengthy investigation lasting over two years and until january of last year the ranking member of the subcommittee was doctor coburn said he and his staff made a -- played a major role in the investigation, very important part of the investigation so i call on him as the ranking member of the full cavity but the ranking comg member of the subcommittee, welcome. >> i have a statement for the recorrecord irecord i've asked t consent play would make an observation for the american public when you have a justice department that enforces the law

rather than carries out the oath to enforce the law you have problems like this that occur and we don't just see it in this case, we see it across the broad array of the laws that are selectively enforced to the detriment of undermining the glue that holds this country together which is the rule of the law and my disappointment in the actions of the justice department in this case are great but not greater than what i see in the leadership in the justice department of a leader who doesn't take his oath seriously, doesn't it do what is necessary to enhance the glue that binds us together. i want to thank senator levin and mccain. these are thorough

investigations. this one has been extremely difficult in terms of getting information. and the report is comprehensive. i also want to thank the leadership of credit suisse for admitting culpability, coming to testify and being open and honest with us and the final point i would make is that the tax treaty that has been negotiated needs to be completed in a band we need to put the pressure on to enhance further improvements to that. >> we will now call our first panel for this morning's hearing. and it is likely that i want to

discuss the timing of the hearings. the second panel is to go to the white house, so what we will do if this panel finishes, when this panel finishes, we will have to adjourn but it depends on how long the panel last. the second cannot start until after 12:30 and it will last until at least then so the likelihood is we will be in recess approximately from one to three when we would begin the second panel. i say that is the likelihood because we don't know when the panel will be over and if it goes peon told:30 or one we will continue with this panel until it is concluded. i don't know if that came out clearly that the best i can do at the moment if we will now call on the first panel.

mr. brady dougan. mr. romeo cerutti in cerutti switzerland. mr. hans-ulrich-meister .co head of the private banking asset management of credit suisse in switzerland and mr. robert shafir of private banking asset both management of the credit suisse ag in new york. we appreciate you being here this morning and look forward testimony pursuant to rule number 60 witnesses to testify before the committee are required to be sworn in and at this time i would ask you to stand and raise your right hand. do you swear the testimony you will get before the committee will be the whole truth and nothing but the truth so help you god?

we will be using a timing system for the witnesses today. be aware that approximately one minute before the red light comes on you will see the light change from green to yellow giving you an opportunity to conclude your remarks. while the written testimony is printed in the record in its entirety we ask that you limit your oral testimony to 15 minutes and if you need additional time beyond that, i'm sure we can find a way to provide it to you. please proceed. >> good morning chairman, ranking member mccain and members of the subcommittee. my name is brady dougan and i became chief executive officer in 2007. i'm joined by the general counsel of credit suisse since 2009 and five

hans-ulrich-meister and shafir who served as co- heads of the private banking division. i would like to thank you for the opportunity to appear before the subcommittee today. i would like to make a brief opening statement and ask that the longer prepared statement and return comments be included in its entirety in the record. my panelists will make brief oral statements holding on to bg wednesday developing to encroach somewhat on their time. i would like to begin by providing a little background about credit suisse. credit suisse. we operate in more than 50 countries and hav has over 45,00 employees including approximately 9,000 in 19 locations in the united states. in the u.s., credi credit suisss regulated by the federa federale and we have a new york branch supervised by the department of financial services and we also have three regulated broker-dealer subsidiaries. the primary u.s. dealer has been

designated systemically in putting financial institution under the dodd frank law. our bank has a deep substantial business in the united states. the management team also has strong ties and commitments to the united states. we are american citizens. i'm the first american ceo of the major swiss bank. romeo cerutti is an attorney asy admitted to the swiss and california to and hans-ulrich-meister has also worked in the united states. our bank has deep roots in the united dates and parts of today date back to the first boston corp. a u.s. firm that had its roots going back to the 18th century. there are a few key points i would like to express to the subcommittee at the outset today. in 2008 your subcommittee first held hearings highlighting abuse of the secrecy to hide on u.s. assets. that's challenged the entire

swiss banking sector and encouraged us to push forward, work hard and bring about the transformation in the swiss banking system. over the past five years, credit suisse has become one of the leaders encouraging legal, cultural and business changes to enable the united states to have transparent access about this client and enabled the united states to recover taxes that are still unpaid late american holding access a prada. i can assure you not all of the banks agree and many have privately and publicly opposed the positions we take but it's very clear that swiss banks can only hold assets that u.s. clients have established our compliant with u.s. tax law. seeking the customers that want to hide the assets and this is simply not acceptable. we are working daily to build a better reality for credit suisse

and the private banking model. we try to demonstrate leadership in a number of different ways. we supported the legal steps sts that here in switzerland that would enable the authority to attain information at the cover unpaid taxes from the client. we strongly support at every opportunity for supporting it up in the usa and switzerland working closely with the senate to make the law as effective as possible. while we supported it other banks opposed it. because we embraced it, credit suisse now has in place sooner than required procedures to make sure u.s. clients demonstrate compliance in u.s. tax law. in addition, credit suisse supports information exchange including the oecd efforts in the standards for automatic information exchange. we also supported the ratification of the protocol for

the double taxation treaty agreed to by the u.s. and the swiss government and approved by the parliament almost four years ago. credit suisse is ready to give account information that we are unable to do so because the senate hasn't yet ratified the protocol. we urge the senate to ratify the typical so that the banks can assist in the u.s the u.s. authn recovering the unpaid u.s. taxes. we have practically taken steps to require only those u.s. clients who establish compliance with tax law can be clients of our banks. in 2,008 by lee became the first swiss bank to become the focus of investigations by the justice department and the subcommittee and many clients left, other banks welcomed them.

won't be for investigations by u.s. authorities again on our own initiative move to address the issues highlighted by the situation. we want to do to ensure that all of the clients establish compliance in the u.s. law and prioritized based on what we understood wer where the key priorities of the u.s. government. overpass to five years we pushed forward with a significant and complex remediation exercise in addition to the dedicated staff we hired numerous outside experts, law firms, accountants and others to help check whether they might have a possible connection identified. they are required in the u.s. tax law if they want to remain clients of the bank. we hired one of the firms that analyze what we had done. in 2013 the firm confirmed he

hatheyhad identified the complee population of potential account relationships to the high level of confidence. the remediation has been extensive and demonstrable and the result of her presented to the subcommittee staff. we fully recognize that despite our efforts, credit suisse hasn't been free of its own problems. whether it would extend the employees violated the law or help the client do so. we commissioned an internal investigation by the swiss law firms that reviewed all aspects of the banks private thinking business with u.s. clients. the investigation identified evidence of the violation bank policy and u.s. law centered on a small group of private thinkers. the evidence showed these people went to great lengths to disguise their conduct from the

bank. we presented the subcommittee with the unvarnished results of our internal investigation. the management team regrets it ververydeeply that despite the industry-leading compliant measures be put in place we have some swiss bank private thinkers that appear to have violated the law. wireline dismayed by their conduct mr. chairman and i also believe that leadership requires taking the responsibility for what our employees did. let me conclude by stating once again that we made a decision some years ago to work hard and help bring about a transformation of the swiss banking industry towards the highest standards of compliance you try to demonstrate our leadership in the ways i discussed this morning and for me personally it's been my highest priority to get this fixed, to get it right an and id we've made significant progress towards that goal. with your permission i would like to turn over to romeo

cerutti, our general counsel. >> thank you very much. mr. cerutti. >> morning. members of the subcommittee my name is romeo cerutti and i served as the general counsel of credit suisse since 2009. i'm happy to appear here today to answer your questions. we have taken a hard look at this issue, and i will explain everything to the extent possible. before 2008, our bank like many tanks in switzerland at the time had the view that tax compliance was a matter that was between individual taxpayers. that approach with the bank on a double to abuse and swiss private bankers who wanted to hide assets and back then preventing u.s. accounts from holding these assets was not a

priority. that was a mistake. but since that time there has been a meaningful change and i should say one of the most important drivers of the change has been this very subcommittee and most particularly the report of july, 2008. once the report came out within a week we immediately decided he wouldn't take in the account first before leaving as a result of the regulations in that report. we also decided that we would identify and close the accounts that would not or could not prove tax compliance. we believe that our swiss bank private bankers serving the compliant or complying with our

policies. we were wrong. in fact as we later learned, we had a problem. certain bankers in the bank had violated u.s. law. as a bank we have taken a number of important steps to face up to the past and to guard against the recurrence of these problems. first we commissioned an investigation as to what happened and we provided detailed information to the u.s. authorities. we searched for the truth of what happened with a view that we need to take responsibility. second, we worked hard to get the u.s. authorities the necessary information they wanted. this hasn't been easy given that we need to comply with the united states and switzerland

and they are sometimes directly conflicting. a third. the efforts included urging both the swiss parliament and the u.s. senate to adopt the 2009 particle to the double taxation treaty. while the parliamen parliament e protocol a long time ago it still awaits the ratification by the united states senate. we worked hard to close the u.s. accounts for the clients haven't demonstrated compliance in the reporting obligations. we contacted the current and former u.s. account holders and encourage them to participate in the full and fair disclosure program which enables them to recruit the unpaid taxes. we have made real focus

improving our compliance standards. for example, we prepared for the implementation of the accounts tax compliant act ahead of time and have been a vocal leader in switzerland and globally with the information about the u.s. accounts abroad. when we make mistakes we take responsibilities and hold ourselves to high standards. the last five years have been an important wake-up call for the private banking industry. at credit suisse, we have learned real lessons and to generally try to use the experience as an opportunity to meaningfully improve the banks compliance framework.

thank you. >> good morning ranking member of the came and members of the subcommittee. my name is hans-ulrich-meister along with my partner paul shafir i'm with the division at credit suisse. i've had the privilege of working in the country and had the opportunity to complete advanced management programs. i joined credit suisse in august of 2008. in that role one of the main tasks was to enhance him to drive the integration of the businesses including investment banking, asset management, private banking, the commercial

business. in august, 2011 i. became the chief executive officer of the private banking division into november, 2012, rob shafir and i were appointed to the newly and division called private banking and management. as a swiss person who has spent close to 30 years in the financial services industry there are two points i want to emphasize. first is the agreed swiss bank secrecy was abuse by some clients to hide tax money from their local tax authorities. we also recognized there were some swiss bankers who helped those clients to hide their money. i want to state that directly to

the committee this approach by some clients in some bankers is totally unacceptable. not everyone in switzerland wants to deal with this but in my view the swiss banks have to recognize this issue and accept their share of responsibility. the second point i want to make is that it's clear to me personally to the entire management team of the bank that the only way forward for the private banking business is to serve only the compliance in the law and this has been our goal for some years. in 2008 they left ubs. we have come to did a series of check that would allow the past

five years to check only u.s. clients who can demonstrate they have established compliance with u.s. tax law can be a client of credit suisse. we are doing this because we do not want u.s. clients that are not compliant in the law in the country. the banking industry worldwide not just switzerland has been going through a process of change for years in that direction to the transparency, international exchange of information in the working with the old world to enhance. as the responsible private banking and wealth management division welcomed the changes because they strongly believe that's the only way forward for the swiss financial center and the international private thinking community.

>> members of the subcommittee my name is rob shafir. i'm the cohead along with my partner hans-ulrich-meister. i joined the credit suisse in 2007 and have had a 30 year career in the national service but. i appreciate you giving me the chance to speak to the subcommittee today. in 2007 to 2012 by some that different times of the officer of the americas region and chief executive officer of the asset management business. i've been on the board since i joined. from the china debate coach time i joined credit suisse, i've expressed an unambiguous. we have a focus on control contd a strong and committed employees in various print functions who are ready to enforce the highest standards in the way we do business.

that commitment starts with mr. brady dougan and the board of directors and it's clear to the members of the executive board and the employees down the line in the united states, switzerland and the rest of the world. from outside you can see the compliance action in the concrete steps we take. the executive board as a focus on creating the compliance culture and has made significant progress in that direction. you can also see the other steps we've taken to support the transparency in the international banking on the double taxation treaty allowing for the mutual assistance in tax matters. we publicly supported the amount that the implementation that represents a major advance in international information sharing. even the official implementation has been delayed we proactively adopted requirements that exceed

what it will require and we've done so in a faster timetable than it is required by the irs. then and now we are committed to ensuring that our clients and businesses are compliant with u.s. legal requirements. ..

.. >> there is no value proposition to have clients that have not demonstrated compliance with u.s. law. these are the standards we have set for ourselves. where credit suisse is now and for the international banking industry. thank you for your time. >> we will have many rounds of questions. in your opening statement you pointed that credit cerise is willing to provide names of customers who held

swiss accounts pending ratification of the 2009 swiss protocol. that treaty will not facilitate the production of the account names and information that are closed before september september 2009, right? >> that is correct. it the account still open at that time, a lot of the accounts that were closed at that time went to other swiss banks. if you make this same request it would go to other swiss banks. >> the swiss parliament amended the law to have proof before we get the information from the other banks. bits and pieces are provided instead of the names instead of giving us the names to

collect the taxes instead you hide behind the swiss secrecy laws. we are interested in collecting taxes that has been debated we need cooperation of the banks to do that. because they won't sightseeing and swiss secrecy laws then we have to use our own domestic laws to force cooperation from the banks. you cite the swiss secrecy laws. he and you said you agree? >> i think our position is very clear we are ready to provided the information we can legally provide. the issue we have is two different legal jurisdictions therefore to break the law in one jurisdiction to provide it is difficult for us to do but from a reporter did you become not necessarily influence these

conversations and how they proceed we will provide any information to provide legally. 40 irs. >> it has its limits but it does not apply not for those that os many. -- a us money and that means with the tax collections is unacceptable. we will make this point that we will use several means.

the plays in which we can enforce our own laws. you could say you are caught between two countries' laws to use some bankers in the united states to set up office to help u.s. customers hide what they are doing. that is what you did. now the jig is up you want to cooperate but you can because of the swiss secrecy laws but those don't apply from the united states. sophie believe fed is fairly well accepted a round of world is if you operate in a country you must abide by the laws of this country and cannot hide behind the laws

of your country. we will put pressure on our justice department to enforce the laws here against you if you are not willing to do what we believe you are required to do. turn over the names of the people you aided and abetted with tax evasion. >> mr. chairman? >> let me ask you. have you urged us wisc government to change the laws to allow disclosure of names? of u.s. customers' names? have you urge the swiss government to change the laws? >> we have worked with all levels with the government, regulators and have been very public with our support with increasing the ability for transparency. >> that is not my question.

my question is has chris reese urged the swiss government to change the laws so you can turn over the names of your customers fryer to the year 2009? >> we have the same goal. >> no. it is a very specific question had to urge the government to change the laws and you could cooperate with us to collect taxes federal wing to us? >> yes. >> you can provide those names? >> we have encouraged them publicly and supported that goal. >> other banks have not? >> no. the goal could be achieved through the treaty that gives the bits and pieces. not names. the treaty says we will tell you generally what accounts

were transferred to what other banks. you can go to those other banks said in the parliament to say under that new treaty you will have to show to work with and is it guilty. to talk about the new treaty because the value is very limited. i want to ask you this question. have you urged the government the parliament of switzerland to allow you to give us the names of your customers that you aided and abetted to evade taxes fryer

2008? gimmicky yes we have. as the bank's general counsel by of questions about grand jury subpoena. is it correct 2011 the department of justice issued to grand jury subpoena to credit suisse seeking information from the bank? >> correct estimate those subpoenas ask for u.s. claims and account information going back january 2000? >> correct. >> is the correct weld credit suisse produced some business records from switzerland it did not produce any account information disclosing he was calling the names? >> direct. >> the reason was the swiss secrecy laws? >> correct. the bank must have known the u.s. case law in the bank of nova scotia that if a bank

is based in a secrecy jurisdiction to do business in the united states with the grand jury subpoena if u.s. interest in criminal prosecutions that the bank must produce the requested information. are you aware? >> guess i am. >> you knew today employ come with the bank may be subpoenaed in switzerland. but in storage -- instead of enforcing the subpoena in the west court with the client names that the department of justice put the subpoena on hold in september 2011 filed a treaty request instead. is that true?

>> it took two different request to court decisions to years ending up with 2308 accounts. is the correct? >> correct the tritium was request was made under the 1996 treaty as soon as the new treaty is ratified by and convinced he will get many maybe thousands of account names. >> there were 1500 accounts organized in the same way? those that were set up in the third country jurisdiction with a shell corporation? >> you are talking about entity accounts the federal court has set up conditions they consider the fall under tax ride and only 238

interviews. >> again they've made the decision to deny us the names of accounts in switzerland opened by show corporations many of which your people helped to set up. we will get into the elevator. but a swiss court denied the names your account holders use shell corporations to cover up with the beneficial owners more. that is unacceptable. i just hope our department of justice understands when subpoenas were issued 2011 coming they sit there and unforced year after year after year and swiss secrecy laws of another country allow the subject to provide

information critical to the tax collection with the department of justice is taking an unacceptable position. we will do our best to change it. senator? >> i think the witnesses for being here. teeth 15th on dash mr. dougan is it true at its peak 2006 credit suisse had over 22,000 accounts for u.s. customers with assets exceeding 10 and $12 billion? is that roughly accurate? >> at the end of 200,822,000 accounts the total amount referred to is over 12 billion. >> debt is an accurate statement. >> tutus swiss law restrictions is it true that

credit suisse has turned over the names of only 230 of customers with hidden accounts? >> correct. >> we are talking about a miniscule number of individuals who have intentionally evaded that has been revealed to the justice department or department of treasury. are interested agencies. is that true? explained again what swiss law prevents you from providing that information? >> mr. cerutti? >> article 47 of the banking secrecy provision prohibits

us to furnish any client names to anyone within or outside of switzerland. without imprisonment or fines. >> so if there is any ideas that they are cooperating with us is a joke. anyone with the swiss government who alleges they are cooperating to track these people down contradicted by the facts. mr. dougan five years ago credit suisse settled and paid $82 million for disgorgement of profits. the sec settlement did not relate to the facilitation of tax evasion of u.s. client accounts in

switzerland. do you know, the profits from those accounts? do you have a general idea? >> sec? no. i don't take we have a good idea. i could perhaps lead you through. i don't think we have a precise idea. it was substantial given the number of clients given $12 billion in the account. >> with the importance of this business one of the issues that makes this an issue it was the small business about 1% of the

profitability of the global bank it was a small part. to avoid the behavior from the economic point of view. >> it depends how you look at it. 10% is very modest. >> that 12 billion is the important number we thought was worth spending time. >> you just responded between 10 and 12 billion. >> that was the accounts outstanding at the end of 2008. of that 5 billion with a fuller investigation to be fully tax compliance and not all 12 billion was not tax

compliance. 5 billion was. 2.2 billion was determined to not have the u.s. taxpayer connected with it. now down about $7 billion. >> that point is you made those profits even if it was a small percentage and it depends on where the other dollars could be from the credit suisse standpoint is not much but from most citizens it is a fair amount of money. with your statement will you accept responsibility that culpable officers and directors and key executives have been held accountable, i'd been fired. >> what we determined to do in 2009 particularly after

the actions of the subcommittee to highlight these issues is determined to shut this business down. over the course we basically reduced the size by 85 percent. >> how many were fired? >> so most were fired as part of shutting down the business so the vast majority laughed as we shut it down. >> mr. meister you are a high ranking official directly responsible for overseeing the division that oversees -- that would oversee many accounts. >> starting august 2011. >> there was an office in the zurich airport so that clients did not even have to enter the city. the with the interviews you said you were unaware that

branch was servicing fees undeclared accounts? >> in the interview because it was not clear at this time because i took over private banking august 2011. in the meantime in preparation i know there was a team seven or 810,000 clients and you can see with the balance between $75,000 most of them did not have securities. if they relationship here it is around 1,000 so there was

a specific service for u.s. residents who had a house use cash those securities accounts. >> related not mean much you had an office right there in the zurich airport. >> that is what i learned in the meantime. >> this error for office mr. meister has outlined the parameters in was in office of convenience. >> is certainly was. >> basically they held relatively small amounts with no active management and in our investigation that was very detailed we did not find any systematic

issues in that area. >> you conducted the internal review 2008 that included looking at primarily u.s. accounts your review found no wrongdoing. 2011 though the doj found enough evidence to indict several employees from that dusk. how do explain that you gave a clean slate the yet the doj found enough evidence to indict several employees from the same desk? >> we did the review we looked at our policies and

trading's and looked also at the audit reports and did determine we had a problem. retrospect. >> thank you to the witnesses. >> mr. dougan, in your prepared testimony you said credit suisse took the extensive internal investigation for potential wrongdoing. was there a formal report inside the bank with that investigation? >> it was a very extensive and long-running investigation. we were updated very frequently and had various discussions with regard to regulators here as well.

updating progress on that. our view is this continues to be to make sure ray looks through the bank to insure compliance but obviously we have been involved with less and slurred -- learned. >> but to your chief executive here is the summary of what happened. >> no formal report. >> is that unusual or for legal purposes? >> no. at our firm and certainly in my 32 years in the industry i have never seen a project with as much focus, resources, time spent as this issue. over the past five years fussing golfing that has been the highest focus for

us as a management team. it is discussed very reagan survey, executive board, virtually every week, outside board meetings. it is an integral part of what we have done. from our point of view i am not sure we have viewed it as a positive but a project a report to summarize but what we continue to work with on a daily basis. >> business that is the longer happening was there one individual the head of that scheme where they held accountable? >> with that historic

behavior was a group that comprised between 10 and 15 accounts concentrated in decker for we admit there was behavior that we think is egregious. all the adjectives used by the subcommittee here. that is the group that was involved in that activity. the managers who orchestrated that who did not see any knowledge and all those individuals or benny were part of the justice indictment many are gone for a long time.

that was the small focus group clearly not behavior brief would any way countenance or defend. >> mr. cerutti, if the justice department fully carried out what they could carry out in this country, would you comply with the subpoena? >> senator, that is difficult under swiss law of we would face criminal indictment and prison term to give client names without the permission of the swiss government. the ubs matter mentioned at the beginning 4,500 names that ultimately turned over as a consequence of the treaty with balanced assets

under the new double taxation treaty then i urge you many more accounts. >> if the justice department would find you to not comply with the subpoena? >> yes. >> double jeopardy? where would you like to spend time? [laughter] >> tough decision.

>> the psi report found 1800 scrap it cerise employees of credit suisse only 10 at 1800 were disgruntled is that an accurate statement? we have a concentration of clients in areas in the area period we have seen the systematic behavior that had a specific focus on u.s. accounts. the 1800 number quoted quoted, those are throughout the bank so if there was an extract so uh bast accounts

we did not find any systematic abuses. >> one other question credit suisse started to identify noncompliant accounts. how many non compliant were identified? >> do you want to answer? >> if i may. we tried to identify the ones that were compliant to identify 6,600 and another

1,900 if you add that up 8,500 not part of the 22,000 in addition of those 9,000 that had left $10,000. then 6,300 x pat, americans that live abroad that need an account and a guest to because most six banks are shut for business for u.s. persons everyone is so afraid at this point. >> for the complaint? with u.s. tax law? >> we look at the population starting 2012 we are hoping to do that there was a delay

bet now goes into effect july 1, 2014. from the perspective of assets under management to the larger extent, and i don't have the exact numbers but many are compliant. >> that is an issue that your policy today is the u.s. accounts are compliant with u.s. tax law it does not matter those assets but those accounts. i would admonish if that is your policy it should be installed vigorously throat. >> perhaps i could had another way to state it to understand the process our top priority is to get to a

point where these accounts were compliant. as part of that we made decisions around restructuring the business. many parts we just exited. we did not spend a lot of time if they were or weren't we just closed the accounts. that is how you go from down by 80 percent with the foot print. that was never a priority. every account has to be compliant as our most important goal. that is what we focus on. >> thank you. senator? >> mr. cerutti the baby the best person to the answer howard you determine if it is compliant? >> senator we put the requirements in place so

looking is someone is u.s. person is a nationality, a green card, a substantial presence, they have to sign documents and look at dual citizens because often in europe people born in the u.s. so we look at all these people. now they are signing waivers and the w-9 then can it submit to the irs. then as it entered into with the united states. >> so they sign waivers and the w-9 so everybody knows they have an account there a and the yen, is reported like any other bank. >> now starting july 1st.

somebody would be a fool to sign all love and at and not pay their taxes. >> what is difficult of the 230 accounts where we've received the names what is unique that they are supplied. >> historically switzerland made a difference between tax fraud and tax evasion. with the treaty's in the past it was only under the fraud standard. courts have determined the accounts of the tax fraud standard for a failed. not all 22,000 are tax compliant but assume they

would qualify for tax evasion covered by the new treaty because switzerland agreed the tax fraud requirement and tax evasion requirement as was mentioned by the chairman, once this was signed the irs could send out these requests. >> 238 accounts were determined fraudulent how was that determined? how do swiss authorities determine they were engaged with fraudulent activity? >> a very good question. we have several court decisions that have set the standards for fraud.

typically ntt accounts like offshore heidi behind the offshore entities. said governance was violated with u.s. securities those are the three main qualities >> how are they targeted? how were they investigated? we did not know their name. swiss authorities open an investigation? >> yes. there was a request from the irs going to the swiss and affords to us that credit suisse then we have to identify these accounts that qualified with the criteria. we sent them in and it was a larger group than 238 but they decided in their view was qualified.

then forwarded to the irs. some appealed in those cases were decided by the swiss administrative court. >> mr. meister you mentioned some clients and some swiss bankers were involved in the fraudulent transactions. that is your testimony. i would like to review the economy. the swiss economy is between six and a $700 million? correct? anybody know? those are the figures i have. >> it sounds right. >> i see the banking sector between six and 12 percent of that so $75 billion?

the report is that profitability? total assets under management are higher. >> i think that would be profitability. yes. >> why would the u.s. investor invest in joyce was bank? what is the motivation? >> one is that because of the talent what we can provide as a service with attractive it returns. >> historically had you had higher returns than other banks? >> largely in line is different with different years but not systematically >> if u.s. investors have

invested $12 billion that is a small portion. isn't credit suisse have $1 trillion of assets? you have investors from all over the world. >> absolutely. >> they invest in switzerland because? why? seventy-five misunderstood your comments with equity if you talk about the asset base that is over 1 trillion swiss francs under management it is a combination of a rare ability good service, competitive returns as a client and provide lending and particularly

obviously a comprehensive business and some of wholesale banking services. >> and stability of the country because the swiss franc is very stable. >> trying to get to the obvious point. what is the obvious reason people take their money from the united states or brazil or england or russia into switzerland? state the obvious. >> first of all, we have a global business so that $1 trillion of assets a lot are here is the united states. >> i am just talking about the switzerland banking sector. why do people take money out

of country of origin. >> switzerland as a country? >> historically there has been it has been highlighted with the ability to shelter assets and income to pay taxes but that is decreasing but going forward that is not the future of the industry or i were a business model or any bank model with the arrangements taking place with other developments that is not and advantage of the swiss banking system has to wait for word. it has to offer services superior to what they can put their money. >> i appreciate that answer because it is good to get the obvious reality on the

table. that is what is secrecy is about. from the u.s. perspective we want to make sure switzerland opens it up to make it transparent so taxpayers cannot shelter income. of we want to invest with great returns we have the right but not to shelter income. >> we completely agree. understood we are in the same place. >> you may be in the same place but the swiss government is not that you cannot release the names of the accounts. you cite that for not complying with the subpoena. so maybe you're banking is in that position. for future deposits it sure does not reflect where the swiss government is.

your bank uses the swiss government position against the enforcement of subpoena so it puts you in a difficult position. you come to this country governed by this country's law is almost universally accepted yet you hide behind the swiss law even though you operate here in that will not cut it. the justice department has been deterred by the swiss government that you cite year after year with subpoenas not being enforced to get the names we have got to have to enforce tax laws allowing -- bowling to the united states. it is a huge issue does it

continue to have on its books to not release the names of the account holders? is it true? >> yes. >> they have not changed their laws. >> a anderson and the business of treaties and i know the holes. one is heard today with the foreign relations committee. you have a lawsuit under that treaty because under swiss law passed by parliament is a defense to prove the bank the funds have been transferred is violating and contributing contributing, aiding and abetting a the burden of proof. we want the names of the americans have accounts there to get the names of the united states.

there is a big loophole that we should ratify it. but the key point is swiss laws still requires going through hoops to get the names of people hiding assets. that is the bottom line. instead of a direct response, listen, we're bound by your laws in your country and we will comply and take on the swiss government if they take us on the as a country where we do business we take on the swiss government. do you thank you will be convicted in the swiss court will the swiss government prosecute if you comply with our laws to turn over names? is that your fear?

>> yes. absolutely. >> in that case let's be clear what we talk about you are not cooperating with us us, hiding behind a law that applies in switzerland but not here but you want to do business here. that is not the way the international law is applied. if you want to do business here you have to comply with our laws. going back to the so-called investigation coming in answer to the question and i believe it was mr. dougan who responded. you have an internal investigation to aid in a bet -- aiding and abetting tax evasion conducting interviews and looking at documents. there will not be a written report.

how could you have something as serious and not have a written report. that is your testimony under oath there is no written report. >> i said not yet we have a summary report because we view this as the ongoing process. >> we have asked for those ongoing written reports? have we not? >> i think we have had many sessions with the subcommittee on the progress. the report today chronicles in great detail through many pages all the efforts we made over the past five years to get at this problem >> back to my question. you have some written reports but not a summary? we have asked for those written reports you do have. is that correct? >> believe we have provided

on the ongoing basis. >> those that you do have. have we asked for those reports? >> mr. chairman we have been asked. >> the written reports? the detailed investigation you have undertaken? you describe this says the major investigation. >> absolution. >> that is what you just said. debut make those written reports available? >> i believe we have shared those with the subcommittee. >> we have shared the conclusions but not the reports for other regulators some are confidential and cannot be shared with this committee. >> give us a list of what we have vast for the you have

not shared and the reason. for the record. not now. even the you have not shared i want to ask you whether you can tell us of what you have found. for instance have you found bankers repeated the traveled to the united states to get prospective u.s. customers to serve existing customers in violation of their own policy? limit guess with a limited group of people. we did find that. >> did you find some swiss bankers advised customers to secure transactions under $10,000 to avoid triggering cash transaction reports? >> we found some

conversation so there may have been some activity. >> is that limited? >> it was. >> did you find some credit suisse bankers advise them with u.s. assets to shell companies then treat them as for an account holders with the books? >> we did see activity with the private bankers referring to outside arrangers. they came back onto our books. >> think about that. your banker referred customers to create shell

corporations that those corporations would deposits those funds in their account under the name of the shell corporation? >> that is just as egregious as you think so. >> who was fired? >> was anyone fired who did that? >> those that and engage in that egregious act where they fired for the purpose to have the save money go to a shell corporation? do you know, ? >> i don't know. >> i don't know anyone fired

specifically because of that. >> but the issue as you know, , we begin the exit 2008 of this business. we exited over the next two years. by the time we found this behavior, just as unacceptable as you do, by that time most of those people we're gone. >> were those people all in slan with that egregious conduct? >> i don't know. i am over time. >> mr. dougan let's go back to my line of questioning.

historically go back. people round the world the positive money into swiss banks as a swiss long dash safe haven. sure they'll us someplace that there is the oppressive regime to move money out of that terrible country to put into a safe haven? >> what we see around the world is customers have interest to be completely tax complaint with no issues but to diversify the jurisdictions where they hold their money. >> that conundrum from the swiss government the united states is concerned about not collecting taxes, tax fraud and sheltering in, now

they have to open an information that puts at risk to track those deposits. correct? >> our view is us as an institution in the country has to go to a complaint framework. there is no other choice. i think it can be competitive on that basis. i don't think it is necessary to have the ability to not pay taxes on money for the system to be successful. i think we would be better off with a completely compliant and transparent framework. >> i agree. that makes sense. credit suisse has tried to work and encourage the swiss government to be transparent it is in your best interest as a global banking company.

because there is still value to have of switzerland as a stable and neutral country as a safe haven destination. >> we think that is exactly right to invest interest of the foot swiss financial system and our best interest promoted that publicly, regulators, and the government that is the right direction for switzerland. >> i may be going to the foreign relations hearing later. mr. cerutti how do we strengthen that treaty to not have those loopholes? in the interest of transparency so the swiss banking sector can operate what is required? >> thank you for your question. it is a pretty good treaty that goes far based on the

standards to allow for a group request. i think what the chairman is afraid of the irs looks at the and this behavior of the bank. given the doj has issued the program for the swiss bank, over 106 have filed, i would assume at this point all the category ii banks all the behavior is established just to be category ii summit will generate thousands and thousands of account names. that is my hope. >> we understand the chairman's concerns and i am sure there is ways to make that treaty stronger and better.

this has been approved for years and a good first step is approved in the senate so we can get the vast information requested. with that treaty approval it would allow us to satisfy the bulk of that request from the u.s. authorities. we have been working very hard to get it approved in our view is the first and important step to get these issues resolved and provide the information we would like to revive it -- provide. >> how you determine compliance filling out w-9 w-9, what prevents you from having every client sign those waivers? >> today senator, every person who wants to keep for

open an account at credit suisse has to sign the waiver. >> explained that. >> on the one hand there is the w-9 with an interest on u.s. securities so we can file the information starting july 1st. >> what complicates that? shell corporations? >> a brand new law implemented taking effect the was surprised last night to see contains loopholes but it is a huge administrative project.

up to now spend $100 million because it is not just switzerland or the private bank buddies asset management globally and we continue to expect quite an amount of money. . .