Lawmakers get ready to hear from Echegaray and bank executives next week
The bicameral commission established to investigate HSBC’s supposed illegal manoeuvers threatened to use the police to force the bank’s main representatives in the country to testify next Wednesday alongside AFIP tax bureau head Ricardo Echegaray.
The commission held its first official meeting yesterday and asked HSBC’s president Gabriel Martino, vice-president Miguel Ángel Estévez and director Antonio Losada to report about the illegal schemes used to help more than 4,040 Argentine citizens and companies evade taxes by stashing money in secret Swiss bank accounts.
“If they don’t want to come, we can ask the Judiciary to use the police and force them. They attended a hearing at the English Parliament and we aren’t a second-class country. They have to come and explain themselves,” Kirchnerite lawmaker Roberto Feletti, appointed as the commission’s president, said. “They work here with an authorization from the Central Bank so they must come.”
The commission has now 90 days, which could be extended another 90, to analyze the HSBC’s actions. It was formed by Kirchnerite lawmakers Feletti, Pablo González, Luis Cigogna, Graciela de la Rosa and Rodolfo Urtubey, Carlos Heller of Nuevo Encuentro, Ricardo Buryaile and Mario Cimadevilla of the Radical party and Roberto Basualdo and Marcelo D’Alessandro of the Renewal Front.
The main account holders that were included in AFIP’s list could also be summoned to testify, including former Central Bank chief Alfonso Prat-Gay and former YPF head Sebastián Eskenazi as well as representatives of Clarín Group’s Cablevisión, power distributor Edesur and cement manufacturer Loma Negra. The full list of accounts has yet to be disclosed but commission members have warned they could decide to make it public at some point during its investigation.
“The public needs to know the names of the people included in the list. Nevertheless, the commission has to vote to do that. We have to move carefully and not jump to conclusions,” Carlos Heller told the Herald yesterday. “If Argentina hadn’t seen such a level of capital flight, we would now have a much better fiscal situation and a larger number of Central Bank foreign currency reserves.”
AFIP’s accusations against HSBC are based on an encrypted CD Echegaray received from the French government containing information on 4,040 undeclared bank accounts of Argentine origin. The original source of information was whistleblower Hervé Falciani, who worked as an IT engineer at the HSBC Swiss branch for seven years before becoming one of the most famous whistleblowers in the world denouncing what he saw as systematic tax evasion.
The tax bureau filed a complaint against HSBC over its supposed illegal scheme, which is now being investigated by Judge María Verónica Straccia. AFIP has asked HSBC to repatriate the US$3.5 billion it is thought to hold of Argentines in Swiss accounts and is seeking to get more information over the accounts as it only has the 2006 and 2007 records. Straccia has already sent summons to Switzerland to access the data.
The big picture
All members of the commission agreed that after looking at the specific case of HSBC, the objective will be to analyze whether the supposed illegal scheme is something that has been carried out by other banks and financial firms. The commission will be entitled to make suggestions, based on its analysis, on changes needed to the financial regulation in Argentina.
“Our objective won’t be to replace the judiciary, AFIP or the Central Bank. We want to know it there was a systemic behaviour of foreign banks in Argentina to help people evade taxes,” Feletti said. “HSBC took advantage of being able to work in Argentina on the same terms than local banks to take money out of the country illegally. Instead of capturing savings and using it to boost production, the bank told its clients how to evade taxes.”
Renewal Front economist Martín Redrado said he opposed the commission yesterday because Congress “is taking the role of the courts,” an argument Feletti quickly rejected. At the same time, Redrado said it’s important to move forward with more transparency of the financial system but only through investigations of the judiciary.
With a few exceptions, there was little in the way of arguments between commission members yesterday, who all seemed to be willing to work together. Feletti said there will be “no problems” regarding their joint work and that any party who seeks to win the upcoming elections has to understand that HSBC’s supposed illegal scheme represents “a serious problem” for the country. For is part, Heller said there were “no reasons to be worried” about the opposition’s support for the ruling Victory Front on the issue.
Source: Buenos Aires Herald