When some account-holders’ names emerged during the financial crisis, the narrative of banks helping the wealthy avoid taxes fueled political tensions, especially in Europe where many governments were preaching austerity and slashing social services.
Investigators in various European countries have said the information in the leaks has helped them collect billions of dollars in unpaid taxes. The IRS, which according to French officials also received the HSBC depositors lists, has declined to say how much in unpaid taxes it has recovered from HSBC depositors. In 2013, however, HSBC reached a $1.9 billion deferred-prosecution deal with the Justice Department to resolve claims it enabled Latin American drug cartels to launder money.
Royal Accounts
The ICIJ report also found that HSBC was a popular bank among royalty. Its clients included King Mohammed VI of Morocco, dozens of members of the Saudi royal family and Prince Salman bin Hamad Al Khalifa of Bahrain.
Chakib Laroussi, a media affairs adviser at Morocco’s court, said he wasn’t authorized to comment. On Wednesday, le360.ma, a Moroccan news site seen as aligned with royal perspective, published Le Monde queries about the king’s accounts and cited a foreign exchange regulator saying they are “perfectly legal and authorized.”
Bahrain and Saudi Arabia have no taxes to avoid, and it’s legal in both places to hold foreign accounts. A spokesman for the Bahraini government said the crown prince’s only connection to the HSBC account was through a minority investment in a regional hedge fund that deposited money there. He didn’t control the fund’s financial activities, and the Swiss account didn’t provide any tax advantage, the spokesman said.
Industrial Espionage
Falciani has become a divisive figure in Europe and is called “the man who makes the rich tremble” by the French press. The Swiss government accuses him of trying to sell the purloined account information in Lebanon and is attempting to extradite and prosecute him on charges of industrial espionage and violating bank secrecy laws. Falciani has said his prosecution was part of an “agenda” by the Swiss government to protect banks.
The ICIJ, which partners with publications around the world, said it got access to the depositor list through its collaboration with the French newspaper Le Monde, which obtained them from sources in the French government.
HSBC now accepts that part of its responsibility as a bank is to help ensure that its clients are law abiding and paying taxes and to close the accounts of those who aren’t, according to its statement.