Chapter 16 Part 1: The French Connection - UBS Scandal Goes Global
Birkenfeld showed up at a French courthouse handing out free copies of his own book. An armed guard told him to stop selling. “I’m not selling them,” he said. “They’re free. Want one?” The cop hid a copy inside his body armor.
France Enters the Chat
After UBS survived the US Senate hearings, they thought the worst was over. Nope. The French government found forty thousand illegal offshore UBS clients. They wanted Birkenfeld as their star witness.
It started in 2014. Birkenfeld discovered another UBS whistleblower in France, Stephanie Gibaud. She had been a marketing executive at UBS Paris, got disgusted with the bank’s shady operations, went to authorities, and was promptly fired. France has no whistleblower protections or awards. She was broke, blacklisted, and raising kids alone.
Birkenfeld flew her to the States, and they spent four days going through his documents. Same UBS tactics, same players, just different country. He gave her cash, sent her home, and found a French law firm to represent him.
The Subpoena Trick
The DOJ still had Birkenfeld on probation and would not let him travel internationally. So he called his French lawyer with a plan: have the French magistrates issue a federal subpoena through the French embassy in Washington.
A diplomatic pouch landed on his attorney’s desk. Birkenfeld then told his lawyer to call the DOJ and say: either let me fly to Paris to help a US ally, or the Washington Post runs a story about your obstruction of justice tomorrow.
It worked. First class Air France to Paris. He testified for ten hours before French magistrates, then held six back-to-back media interviews at his hotel. The story hit every major French newspaper.
Fun detail: the CIA had him under surveillance the entire trip. French intelligence caught the American agents watching Birkenfeld and reported it to the French court. Not a great look for the CIA spy school.
Round Two With UBS Lawyers
A week later, UBS demanded to cross-examine Birkenfeld. The DOJ again refused to end his probation. So the French issued another subpoena, forcing the DOJ’s hand again.
This time six UBS attorneys were waiting for him. They tried to discredit him as a convicted criminal. Birkenfeld demanded to see their credentials first. Spent twenty minutes butchering their French names out loud before answering anything.
When the lead attorney challenged his character, Birkenfeld dropped a bomb. He laid out on the record how President Obama took millions in campaign contributions from UBS, how Hillary Clinton’s State Department cut a deal to let UBS off the hook while Bill Clinton collected inflated speaking fees, and how Attorney General Eric Holder had previously represented UBS in private practice.
The magistrates were grinning. The cross-examination scheduled for six hours was canceled after thirty minutes.
The Trial and the Verdict
A couple years later, the trial finally happened. Birkenfeld launched the French edition of his book at a three-star Michelin restaurant. He had women outside the courthouse handing out free copies from popcorn trays. Trucks circled Paris with book cover billboards, parking right outside UBS headquarters just to annoy them.
The trial lasted three weeks. The verdict: guilty. The fine: an unprecedented five billion euros. UBS had to deposit 1.4 billion in escrow. They refused to settle because that would require a guilty plea. The Swiss supreme court later ruled UBS had to surrender the names of all forty thousand French clients.
Swiss banking secrecy was officially dead.
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Part of the Lucifer’s Banker Uncensored series