Chapter 11 Part 2: The Twilight Zone - Deeper Down the Rabbit Hole
Birkenfeld was supposed to testify before the Senate. Instead, he watched the whole thing from a couch with a beer.
Blocked From His Own Show
The Senate Permanent Subcommittee on Investigations, led by Senator Carl Levin, was about to hold public hearings on Swiss bank tax abuse. Birkenfeld had done all the groundwork with investigator Bob Roach. He expected an invitation to testify. Instead, his lawyers called with bad news: the DOJ blocked him from appearing.
Why? Because if Birkenfeld testified on live TV, the whole country would see that America’s biggest banking whistleblower was about to be sent to prison. That would be embarrassing for the prosecutors. So they kept him home.
The C-SPAN Show
July 17, 2008. Birkenfeld watched the hearings on C-SPAN. Senator Levin opened with a dramatic statement about how tax havens cost the US Treasury $100 billion per year. He mentioned Birkenfeld by name, but led with the fact that he had pled guilty. Not that he had voluntarily come forward and handed the government everything on a silver platter.
The hearings revealed something wild. Liechtenstein’s LGT bank also had a whistleblower. That guy had shipped twelve thousand pages of evidence to the US government. But now he was on Liechtenstein’s most-wanted list with a $10 million bounty on his head, living in a witness protection program. He appeared on screen in silhouette, but his bald head, big ears, glasses, and distinctive accent made Birkenfeld shake his head. Any neighbor watching C-SPAN would recognize him instantly.
The Senator With a Secret
Then Senator John Kerry walked in. Birkenfeld nearly fell off the couch.
Four years earlier, Birkenfeld had sat in Kerry’s office after the 2004 election. He had raised half a million dollars for Kerry’s presidential campaign from contacts in Switzerland. The guy who connected them? Jack Manning, Kerry’s best friend, a billionaire real estate mogul.
Here is the kicker: Jack Manning was one of Birkenfeld’s private clients with a secret Swiss numbered account at UBS. And now Kerry was sitting on the dais, acting outraged about secret Swiss banking.
Kerry swooped in, grabbed the spotlight, talked about his own past investigations, and left. Classic.
The Fifth Amendment Fiasco
The real jaw-dropper came when Martin Liechti, Birkenfeld’s former UBS boss, took the witness stand. The DOJ had been holding Liechti in a luxury Miami hotel for four months. They had even cut a secret non-prosecution agreement requiring him to cooperate and answer all questions.
Liechti sat down and pled the Fifth. Refused to say a word.
The DOJ prosecutors sitting right there said nothing. They had a signed deal requiring Liechti to talk, and when he refused, they just let it happen. Senator Levin did not even know the deal existed. He shrugged and dismissed Liechti as uncooperative.
UBS then sent their new CFO, Mark Branson, a Brit who had worked in Japan and could honestly claim he was not involved. Branson admitted to every piece of evidence Birkenfeld had provided but insisted UBS management was “appalled” and had no idea. When asked if anyone at UBS Americas knew about the illegal practices involving thirty thousand US employees, his answer was: “I have no knowledge.”
The Quiet Escape
A few weeks later, while Congress was on their August recess, Kevin Downing quietly put Martin Liechti on a plane back to Switzerland. No prosecution. No consequences. It did not even make the papers.
When Birkenfeld’s lawyer called Downing to ask why he released the key witness, Downing laughed and hung up the phone.
The whole hearing was a dog-and-pony show. Senators got their cameras. UBS got a slap on the wrist. And the one person who made it all possible sat on a couch in Massachusetts, watching his own evidence being presented by people who wanted to put him in jail.
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Part of the Lucifer’s Banker Uncensored series