The Swamp: June 2008 Archives
The Swamp
Chicago Tribune
Posted June 30, 2008 6:38 PM
The Swamp

by Andrew Zajac

This can't be good for the campaign of the presumptive Republican presidential nominee John McCain.

The IRS is trying to serve a summons on Swiss bank UBS AG seeking information on U.S. taxpayers who may have used the bank to gin up records to avoid billions in taxes on offshore investments.

Top McCain economic advisor Phil Gramm is vice chairman of UBS' U.S. division which already has drawn unflattering scrutiny for writing off big losses in subprime mortgage-backed securities.

Gramm, the former Texas senator and presidential candidate, was registered to lobby Congress last year on mortgage securities issues on behalf of UBS.

There's no indication that Gramm has any involvement in the tax-avoidance scheme, but his presence in the pilothouse of a global finance company under fire from U.S. regulators is precisely the sort of special interest coziness that McCain insists he represents a break from.

At least five top McCain aides have left the Arizona senator's camp because their lobbying or business involvements were judged to be more than a maverick, tell-it-like-it-is campaign could bear.

The RNC was quick to point out today that has his own ties to UBS in the person of Robert Wolf, CEO of UBS Americas, who is a major fundraiser for the Illinois Democrat.

But Gramm's involvement in problematic economic policy issues benefiting UBS run to more than lobbying in the midst subprime mess. (Gramm successfully advocated defeat of a bill that would have given bankruptcy judges the clout to rewrite mortgage terms to prevent homeowners from losing their houses.)

As a senator he sponsored legislation that knocked down the regulatory wall separating commercial and investment banks, which in the view of some critics exacerbated the mortgage meltdown.

As a UBS lobbyist in Texas, he proposed selling so-called "death bonds", a complex financial product which would have allowed the ailing state teachers retirement system to take out life insurance policies on members and make money if they died prematurely.

Here's a copy of today's Justice Department's announcement of action against UBS:

Continue reading "Records sought at McCain advisor's bank" »

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