252550982-GFI-Submission-Re-Credit-Suisse-QPAM-Waiver-Hearing, tymczasowy
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//-->December 28, 2014Office of Exemption DeterminationsRoom N-5700Employee Benefits Security AdministrationU.S. Department of Labor200 Constitution Avenue NW.Washington, DC 20210Attention: Application No. D-11819, Credit Suisse AG Exemption Hearing.Via email to: moffitt.betty@dol.govRE: Public Hearing on Proposed Individual Exemption Involving Credit Suisse AGTo whom it may concern,This letter constitutes a formal request by Heather Lowe, Legal Counsel and Director of Government Affairsat Global Financial Integrity, to testify at the above-noted Department of Labor Hearing on January 15,2015. Global Financial Integrity is a 501(c)3 organization dedicated to curtailing the flow of illicit funds fromdeveloping countries. To that end, Global Financial Integrity engages in the development of laws andpolicy surrounding money laundering, tax evasion and corruption at both the national and internationallevels (such as the OECD and FATF).Global Financial Integrity opposes the granting of an exemption/waiver that would allow Credit Suisse AGand/or its relevant affiliates (Credit Suisse) to continue to enjoy the privileges of QPAM status.In support of this position, we incorporate herein by reference the text of the letter dated October 7, 2014from Bartlett Naylor, Financial Policy Advocate at Public Citizen, to the Office of Exemption Determinationsof the Employee Benefits Security Administration of the Department of Labor requesting that a hearing beheld regarding the Department of Labor’s (DoL) determination to grant this waiver to Credit Suisse.1In addition, we would like to make the following points:1. The DoL’s approach and inquiry is inappropriate given the codified protections of the publicinterest that will be over-ridden by this waiver/exemption.The DoL has asked potential witnesses to testify as to the “effect that the proposed exemption, if granted,will have on employee benefit plans; including whether the proposed exemption is in the interest of plans1Available at1100 17th Street, NW, Suite 505 | Washington, DC | 20036 | USATel. +1 (202) 293-0740 | Fax. +1 (202) 293-1720 | www.gfintegrity.orgPresident: Raymond BakerManaging Director: Tom CardamoneBoard: Lord Daniel Brennan (Chair), Dr. Rafael Espada (Vice Chair), Dr. Lester A. Myers (Secretary-Treasurer), Dr. Thomas Pogge, Raymond BakerPage2of11and of their participants and beneficiaries, and whether the safeguards in the proposed exemptions areadequate to protect the rights of the participants and beneficiaries of such plans.”This set of questions misrepresents the purpose of the regulations in question. DoL regulations clearlystate that a company cannot qualify for QPAM if it or any of its affiliates has been convicted of a variety offelonious activities (all of which, we note, are crimes of moral turpitude). This regulation exists because theDoL has determined that it is not in the public interest to allow companies that have been convicted of afelonious crime of moral turpitude to continue to handle investments and administration related to pensionfunds – which are the funds on which Americans plan to retire. This is a critical public interest issuesbecause if those funds do not exist, those Americans will become reliant on Federal, state and localgovernment-funded programs to survive. It is therefore a significant risk to individuals, the government,and taxpayers to allow criminals to manage these critical funds. That is the point of the regulation.“Criminals” may seem like a very strong word to use in a letter like this, but weare talking about convictedfelons. If you cringed when you read it, you should cringe when you think of giving Credit Suisse the abilityto continue to engage in high-risk investment activities related to these funds.The question that DoL should be asking, therefore, is what compelling public interest exists towarrant the granting of an exemption/waiver to Credit Suisse so that Credit Suisse can maintain apreferential, privileged status under U.S. law that outweighs the already identified, codified, andcritical public interest.Thereafter, the DoLmaygrant the waiver if it is “(1) administratively feasible, (2) inthe interest of the plan and its participants and beneficiaries, AND (3) protective of the rights of participantsand beneficiaries of such a plan.”2. In response to the specific inquiry posed, however, as to “whether the safeguards in theproposed exemptions are adequate to protect the rights of the participants andbeneficiaries of such plans,” we do have concerns.We appreciate that money laundering and many other forms of financial crime are generally outside thepurview of the DoL, but we note that the actual independence of outside audit firms engaged to overseecompliance programs mandated by the Department of Justice and state regulators pursuant to deferredprosecution agreements or other settlement arrangements in the money laundering realm is a significantconcern that is coming under increased scrutiny. The reason for this scrutiny is that there is a very clearconflict of interest created by the company subject to the oversight being responsible for paying theauditors, and that very often the company subject to the audit has had some historical, professionalrelationship with the audit firm.2Credit Suisse is likely to have worked with every audit firm qualified toprovide the type of oversight that would be mandated and would be responsible for paying for the services.The DoL proposal does not appear to overcome these basic conflict of interest issues.If Credit Suisse is to incur costs related to their disqualification, those costs should be the costs of migratingplans that they are no longer qualified to administer to QPAMs that are qualified to do so. There areQPAMs that have not been convicted of felonies who should reap the benefits of additional businessbecause they have not broken the law. We should be creating the correct incentives when we have theopportunity to do so.See, e.g., Silver-Greenberg, J. and Protess, B. “Doubt is Cast on Firms Hired to Help Banks”New York Times Dealbook,Jan.31, 2013, available at221100 17th Street, NW, Suite 505 | Washington, DC | 20036 | USATel. +1 (202) 293-0740 | Fax. +1 (202) 293-1720 | www.gfintegrity.orgPage3of113. In addition to the felony conviction for which Credit Suisse seeks a waiver, Credit Suissehas a significant history of investigation, fines, and settlements involving regulatoryauthorities regarding practices of the kind described as disqualifying under the ProhibitedTransactions Class Exemption, including conflicts of interest regarding financialtransactions.The DoL has appropriately determined that Credit Suisse no longer meets the QPAM qualificationstandards because of qualifying felony conviction, and requires a waiver/exemption if they are to retain thatpreferential, privileged status. In determining whether Credit Suisse should be granted an exemption orwaiver, however, the DoL should take into consideration other regulatory actions against Credit Suisse that,while they may or may not have resulted in an actual conviction, did result in deferred prosecutionagreements, fines, monitoring, and other activity by U.S. and foreign regulators that indicate seriousproblems with the conduct of their financial activities.Credit Suisse, the DoL will find, is no stranger to such activity. To give but one example, then AssistantAttorney General Lanny Breuer made the following comments about Credit Suisse in a 2010 speech at anAmerican Bar Association – American Bankers’ Association conference:Last year, for example, Credit Suisse admitted to systematically evading – over the course of a decade –U.S. sanctions against Iran, Sudan, Burma, Libya, and Cuba. Credit Suisse set up a system – some mighteven call it a business plan – to deceive the United States by disguising its U.S. dollar clearing on behalf ofcountries that the United States had banned from our financial system. The bank’s actions ranged fromstripping out the word “Iran” from payment messages, to substituting code words for Iranian customernames, to hand-checking payment messages from Iran to ensure that they had been formatted to avoid U.S.sanctions filters. Credit Suisse even advised and trained the sanctioned entities on how to avoid automatedfilters at U.S. banks. In essence, evading our banking regulations was a service offered by Credit Suisse tosanctioned countries. As a result, Credit Suisse illegally moved hundreds of millions of dollars through theAmerican financial system.As part of a deferred prosecution agreement with the Justice Departmentrelating to this conduct, Credit Suisse forfeited $536 million dollars to the government.3We remind the DoL that the activities which will render a company ineligible for QPAM status areconvictions for “Any felony involving abuse or misuse of such person’s employee benefit plan position oremployment, or position or employment with a labor organization; any felony arising out of the conduct ofthe business of a broker, dealer, investment adviser, bank, insurance company or fiduciary; income taxevasion; any felony involving the larceny, theft, robbery, extortion, forgery, counterfeiting, fraudulentconcealment, embezzlement, fraudulent conversion, or misappropriation of funds or securities; conspiracyor attempt to commit any such crimes or a crime in which any of the foregoing crimes is an element; or anyother crime described in section 411 of ERISA.”4Attachment A hereto is the summary of Credit Suisse’s “Corporate Rap Sheet” as researched by PhilipMattera at the Corporate Research Project. We believe that it provides sufficient information and links toevidence to demonstrate that Credit Suisse has a significant and very concerning history of severeregulatory infringement and conflicts of interest in the conduct of various aspects of its many businesses inthe financial services industry. The activity for which Credit Suisse finally plead guilty is the latest in a longAssistant Attorney General Lanny A. Breuer Delivers Keynote Address at Money Laundering Enforcement ConferenceWashington, D.C., Tuesday, October 19, 2010. Available at101019.html.4Notices, Department of Labor, 47 FR 56945-01, (December 21, 1982).31100 17th Street, NW, Suite 505 | Washington, DC | 20036 | USATel. +1 (202) 293-0740 | Fax. +1 (202) 293-1720 | www.gfintegrity.orgPage4of11string of serious regulatory problems that the U.S Government could no longer meet with a fine and a slapon the wrist. The U.S. likely held out for a conviction in this case because enough was enough, and CreditSuisse needed to understand that there are serious repercussions for this kind of activity.Those repercussions include losing privileged status to provide certain financial services under U.S. law.By granting Credit Suisse a waiver/exemption, the DoL is undermining the Department of Justice’sprotection of the American people, and indeed people around the world whose livelihoods are put injeopardy by Credit Suisse’s actions.4. The U.S. taxpayer should not be bearing the cost of the DoL resources that would have tobe allocated to overseeing the proposed independent auditor and later determinations ofwhether the audit was sound, whether the audit results indicate that Credit Suisse has beencompliant, and whatever steps need to be taken if they were not.We repeat that QPAM is a privilege, not a right, and U.S. taxpayers should not be paying for the U.S.Government to bend over backwards to ensure that a convicted entity and its affiliates get to enjoy aprivileged status under U.S. law.Thank you for your consideration of our submission.Kind regards,Heather A. LoweLegal Counsel & Director of Government Affairs1100 17th Street, NW, Suite 505 | Washington, DC | 20036 | USATel. +1 (202) 293-0740 | Fax. +1 (202) 293-1720 | www.gfintegrity.orgPage5of11Attachment ACredit Suisse: Corporate Rap Sheet5Published onCorporate Research ProjectHome> Credit Suisse: Corporate Rap SheetCredit Suisse: Corporate Rap SheetCredit SuisseBy Philip MatteraCredit Suisse, which used an alliance with First Boston to become a force in U.S. investment banking,has in recent years been caught up in a variety of scandals involving its role in helping wealthy U.S. andGerman customers evade taxes, its apparent violations of U.S. laws prohibiting dealings with countriessuch as Iran and Sudan, and its involvement in selling toxic subprime mortgage securities to investors. In2014 it pleaded gulity to a federal criminal charge related to the tax issue and was forced to pay a penaltyof $2.6 billion.Founded in 1856, Credit Suisse functioned during its early decades largely as a source of venture capital,thproviding financing to new industrial enterprises, railroads and insurance companies. In the early 20century it focused more on commercial banking as well as stock underwriting and brokerage. During the1960s it became one of the leading players in the Euromarket by forming an alliance with the U.S.investment bank White Weld.In the late 1970s Credit Suisse faced a scandal when managers of its branch in Chiasso were found tohave diverted more than $1 billion of the bank's money into off-the-books investments for their personalbenefit. The bank recovered the assets and prosecuted the managers.In 1988 Credit Suisse, along with the other major Swiss banks, was embroiled in a controversy involvingmoney laundering. The banks were reported to have been used by a Turkish-Lebanese drug ring tolaunder some $1 billion in cash, which was said to have arrived in suitcases at Zurich airport and takendirectly to the banks (seeWall Street Journal,November 7 and 9, 1988). The banks denied doinganything wrong. Credit Suisse also played arole[1] in the Reagan Administration’s Iran/Contra scandal.A decade later, the Swiss banks were also hit withlawsuits[2] filed in the United States by relatives ofHolocaust victims who had been unable to access assets held by the banks for decades because of alack of documentation. There were also charges that the banks profited by receiving deposits of fundsthat had been looted by the Nazis. In 1998 the banksagreed[3] to pay a total of $1.25 billion inrestitution. The judge in the case lateraccused[4] the banks of stonewalling in paying out the settlement.A Rocky Alliance with First Boston5Available at1100 17th Street, NW, Suite 505 | Washington, DC | 20036 | USATel. +1 (202) 293-0740 | Fax. +1 (202) 293-1720 | www.gfintegrity.org [ Pobierz całość w formacie PDF ]
zanotowane.pl doc.pisz.pl pdf.pisz.pl charloteee.keep.pl
//-->December 28, 2014Office of Exemption DeterminationsRoom N-5700Employee Benefits Security AdministrationU.S. Department of Labor200 Constitution Avenue NW.Washington, DC 20210Attention: Application No. D-11819, Credit Suisse AG Exemption Hearing.Via email to: moffitt.betty@dol.govRE: Public Hearing on Proposed Individual Exemption Involving Credit Suisse AGTo whom it may concern,This letter constitutes a formal request by Heather Lowe, Legal Counsel and Director of Government Affairsat Global Financial Integrity, to testify at the above-noted Department of Labor Hearing on January 15,2015. Global Financial Integrity is a 501(c)3 organization dedicated to curtailing the flow of illicit funds fromdeveloping countries. To that end, Global Financial Integrity engages in the development of laws andpolicy surrounding money laundering, tax evasion and corruption at both the national and internationallevels (such as the OECD and FATF).Global Financial Integrity opposes the granting of an exemption/waiver that would allow Credit Suisse AGand/or its relevant affiliates (Credit Suisse) to continue to enjoy the privileges of QPAM status.In support of this position, we incorporate herein by reference the text of the letter dated October 7, 2014from Bartlett Naylor, Financial Policy Advocate at Public Citizen, to the Office of Exemption Determinationsof the Employee Benefits Security Administration of the Department of Labor requesting that a hearing beheld regarding the Department of Labor’s (DoL) determination to grant this waiver to Credit Suisse.1In addition, we would like to make the following points:1. The DoL’s approach and inquiry is inappropriate given the codified protections of the publicinterest that will be over-ridden by this waiver/exemption.The DoL has asked potential witnesses to testify as to the “effect that the proposed exemption, if granted,will have on employee benefit plans; including whether the proposed exemption is in the interest of plans1Available at1100 17th Street, NW, Suite 505 | Washington, DC | 20036 | USATel. +1 (202) 293-0740 | Fax. +1 (202) 293-1720 | www.gfintegrity.orgPresident: Raymond BakerManaging Director: Tom CardamoneBoard: Lord Daniel Brennan (Chair), Dr. Rafael Espada (Vice Chair), Dr. Lester A. Myers (Secretary-Treasurer), Dr. Thomas Pogge, Raymond BakerPage2of11and of their participants and beneficiaries, and whether the safeguards in the proposed exemptions areadequate to protect the rights of the participants and beneficiaries of such plans.”This set of questions misrepresents the purpose of the regulations in question. DoL regulations clearlystate that a company cannot qualify for QPAM if it or any of its affiliates has been convicted of a variety offelonious activities (all of which, we note, are crimes of moral turpitude). This regulation exists because theDoL has determined that it is not in the public interest to allow companies that have been convicted of afelonious crime of moral turpitude to continue to handle investments and administration related to pensionfunds – which are the funds on which Americans plan to retire. This is a critical public interest issuesbecause if those funds do not exist, those Americans will become reliant on Federal, state and localgovernment-funded programs to survive. It is therefore a significant risk to individuals, the government,and taxpayers to allow criminals to manage these critical funds. That is the point of the regulation.“Criminals” may seem like a very strong word to use in a letter like this, but weare talking about convictedfelons. If you cringed when you read it, you should cringe when you think of giving Credit Suisse the abilityto continue to engage in high-risk investment activities related to these funds.The question that DoL should be asking, therefore, is what compelling public interest exists towarrant the granting of an exemption/waiver to Credit Suisse so that Credit Suisse can maintain apreferential, privileged status under U.S. law that outweighs the already identified, codified, andcritical public interest.Thereafter, the DoLmaygrant the waiver if it is “(1) administratively feasible, (2) inthe interest of the plan and its participants and beneficiaries, AND (3) protective of the rights of participantsand beneficiaries of such a plan.”2. In response to the specific inquiry posed, however, as to “whether the safeguards in theproposed exemptions are adequate to protect the rights of the participants andbeneficiaries of such plans,” we do have concerns.We appreciate that money laundering and many other forms of financial crime are generally outside thepurview of the DoL, but we note that the actual independence of outside audit firms engaged to overseecompliance programs mandated by the Department of Justice and state regulators pursuant to deferredprosecution agreements or other settlement arrangements in the money laundering realm is a significantconcern that is coming under increased scrutiny. The reason for this scrutiny is that there is a very clearconflict of interest created by the company subject to the oversight being responsible for paying theauditors, and that very often the company subject to the audit has had some historical, professionalrelationship with the audit firm.2Credit Suisse is likely to have worked with every audit firm qualified toprovide the type of oversight that would be mandated and would be responsible for paying for the services.The DoL proposal does not appear to overcome these basic conflict of interest issues.If Credit Suisse is to incur costs related to their disqualification, those costs should be the costs of migratingplans that they are no longer qualified to administer to QPAMs that are qualified to do so. There areQPAMs that have not been convicted of felonies who should reap the benefits of additional businessbecause they have not broken the law. We should be creating the correct incentives when we have theopportunity to do so.See, e.g., Silver-Greenberg, J. and Protess, B. “Doubt is Cast on Firms Hired to Help Banks”New York Times Dealbook,Jan.31, 2013, available at221100 17th Street, NW, Suite 505 | Washington, DC | 20036 | USATel. +1 (202) 293-0740 | Fax. +1 (202) 293-1720 | www.gfintegrity.orgPage3of113. In addition to the felony conviction for which Credit Suisse seeks a waiver, Credit Suissehas a significant history of investigation, fines, and settlements involving regulatoryauthorities regarding practices of the kind described as disqualifying under the ProhibitedTransactions Class Exemption, including conflicts of interest regarding financialtransactions.The DoL has appropriately determined that Credit Suisse no longer meets the QPAM qualificationstandards because of qualifying felony conviction, and requires a waiver/exemption if they are to retain thatpreferential, privileged status. In determining whether Credit Suisse should be granted an exemption orwaiver, however, the DoL should take into consideration other regulatory actions against Credit Suisse that,while they may or may not have resulted in an actual conviction, did result in deferred prosecutionagreements, fines, monitoring, and other activity by U.S. and foreign regulators that indicate seriousproblems with the conduct of their financial activities.Credit Suisse, the DoL will find, is no stranger to such activity. To give but one example, then AssistantAttorney General Lanny Breuer made the following comments about Credit Suisse in a 2010 speech at anAmerican Bar Association – American Bankers’ Association conference:Last year, for example, Credit Suisse admitted to systematically evading – over the course of a decade –U.S. sanctions against Iran, Sudan, Burma, Libya, and Cuba. Credit Suisse set up a system – some mighteven call it a business plan – to deceive the United States by disguising its U.S. dollar clearing on behalf ofcountries that the United States had banned from our financial system. The bank’s actions ranged fromstripping out the word “Iran” from payment messages, to substituting code words for Iranian customernames, to hand-checking payment messages from Iran to ensure that they had been formatted to avoid U.S.sanctions filters. Credit Suisse even advised and trained the sanctioned entities on how to avoid automatedfilters at U.S. banks. In essence, evading our banking regulations was a service offered by Credit Suisse tosanctioned countries. As a result, Credit Suisse illegally moved hundreds of millions of dollars through theAmerican financial system.As part of a deferred prosecution agreement with the Justice Departmentrelating to this conduct, Credit Suisse forfeited $536 million dollars to the government.3We remind the DoL that the activities which will render a company ineligible for QPAM status areconvictions for “Any felony involving abuse or misuse of such person’s employee benefit plan position oremployment, or position or employment with a labor organization; any felony arising out of the conduct ofthe business of a broker, dealer, investment adviser, bank, insurance company or fiduciary; income taxevasion; any felony involving the larceny, theft, robbery, extortion, forgery, counterfeiting, fraudulentconcealment, embezzlement, fraudulent conversion, or misappropriation of funds or securities; conspiracyor attempt to commit any such crimes or a crime in which any of the foregoing crimes is an element; or anyother crime described in section 411 of ERISA.”4Attachment A hereto is the summary of Credit Suisse’s “Corporate Rap Sheet” as researched by PhilipMattera at the Corporate Research Project. We believe that it provides sufficient information and links toevidence to demonstrate that Credit Suisse has a significant and very concerning history of severeregulatory infringement and conflicts of interest in the conduct of various aspects of its many businesses inthe financial services industry. The activity for which Credit Suisse finally plead guilty is the latest in a longAssistant Attorney General Lanny A. Breuer Delivers Keynote Address at Money Laundering Enforcement ConferenceWashington, D.C., Tuesday, October 19, 2010. Available at101019.html.4Notices, Department of Labor, 47 FR 56945-01, (December 21, 1982).31100 17th Street, NW, Suite 505 | Washington, DC | 20036 | USATel. +1 (202) 293-0740 | Fax. +1 (202) 293-1720 | www.gfintegrity.orgPage4of11string of serious regulatory problems that the U.S Government could no longer meet with a fine and a slapon the wrist. The U.S. likely held out for a conviction in this case because enough was enough, and CreditSuisse needed to understand that there are serious repercussions for this kind of activity.Those repercussions include losing privileged status to provide certain financial services under U.S. law.By granting Credit Suisse a waiver/exemption, the DoL is undermining the Department of Justice’sprotection of the American people, and indeed people around the world whose livelihoods are put injeopardy by Credit Suisse’s actions.4. The U.S. taxpayer should not be bearing the cost of the DoL resources that would have tobe allocated to overseeing the proposed independent auditor and later determinations ofwhether the audit was sound, whether the audit results indicate that Credit Suisse has beencompliant, and whatever steps need to be taken if they were not.We repeat that QPAM is a privilege, not a right, and U.S. taxpayers should not be paying for the U.S.Government to bend over backwards to ensure that a convicted entity and its affiliates get to enjoy aprivileged status under U.S. law.Thank you for your consideration of our submission.Kind regards,Heather A. LoweLegal Counsel & Director of Government Affairs1100 17th Street, NW, Suite 505 | Washington, DC | 20036 | USATel. +1 (202) 293-0740 | Fax. +1 (202) 293-1720 | www.gfintegrity.orgPage5of11Attachment ACredit Suisse: Corporate Rap Sheet5Published onCorporate Research ProjectHome> Credit Suisse: Corporate Rap SheetCredit Suisse: Corporate Rap SheetCredit SuisseBy Philip MatteraCredit Suisse, which used an alliance with First Boston to become a force in U.S. investment banking,has in recent years been caught up in a variety of scandals involving its role in helping wealthy U.S. andGerman customers evade taxes, its apparent violations of U.S. laws prohibiting dealings with countriessuch as Iran and Sudan, and its involvement in selling toxic subprime mortgage securities to investors. In2014 it pleaded gulity to a federal criminal charge related to the tax issue and was forced to pay a penaltyof $2.6 billion.Founded in 1856, Credit Suisse functioned during its early decades largely as a source of venture capital,thproviding financing to new industrial enterprises, railroads and insurance companies. In the early 20century it focused more on commercial banking as well as stock underwriting and brokerage. During the1960s it became one of the leading players in the Euromarket by forming an alliance with the U.S.investment bank White Weld.In the late 1970s Credit Suisse faced a scandal when managers of its branch in Chiasso were found tohave diverted more than $1 billion of the bank's money into off-the-books investments for their personalbenefit. The bank recovered the assets and prosecuted the managers.In 1988 Credit Suisse, along with the other major Swiss banks, was embroiled in a controversy involvingmoney laundering. The banks were reported to have been used by a Turkish-Lebanese drug ring tolaunder some $1 billion in cash, which was said to have arrived in suitcases at Zurich airport and takendirectly to the banks (seeWall Street Journal,November 7 and 9, 1988). The banks denied doinganything wrong. Credit Suisse also played arole[1] in the Reagan Administration’s Iran/Contra scandal.A decade later, the Swiss banks were also hit withlawsuits[2] filed in the United States by relatives ofHolocaust victims who had been unable to access assets held by the banks for decades because of alack of documentation. There were also charges that the banks profited by receiving deposits of fundsthat had been looted by the Nazis. In 1998 the banksagreed[3] to pay a total of $1.25 billion inrestitution. The judge in the case lateraccused[4] the banks of stonewalling in paying out the settlement.A Rocky Alliance with First Boston5Available at1100 17th Street, NW, Suite 505 | Washington, DC | 20036 | USATel. +1 (202) 293-0740 | Fax. +1 (202) 293-1720 | www.gfintegrity.org [ Pobierz całość w formacie PDF ]