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BUSINESS
sunday, may 16, 2010
CAPITAL BUSINESS
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MARKETS
A slide at the finish
U.S. markets lost ground Friday, tempering a rally after Europe’s $1 trillion rescue. 5
YTD: Dow NASDAQ S&P 500
+1.8% +3.4% +1.8%
FAST FORWARD To compete with cellphones, these cameras try to do it all G3 | IN OUTLOOK How to sue an oil company? Consider these tips from a veteran of the Exxon Valdez disaster. B5
A Swiss banker’s saga offers a cautionary tale:
For spilling secrets to the government, you could be richly rewarded or sent to prison. Or both.
BY DANIEL STOLLE FOR THE WASHINGTON POST
F
ver wonder why most of your credit card mail comes from South Dakota? The answer is the 1978 Supreme Court decision in Marquette Nat.
Bank of Minneapolis v. First of Omaha Service Corp. At issue
was one word in the 1863 National Bank Act that would decide how credit was regulated: Did “located” refer to the location of the bank, or the location of its customers? The court went with the bank.
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That meant a bank could locate in the least-regulated state while selling to customers in the most-regulated ones. What happened next was predictable enough: Citibank offered to
by David S. Hilzenrath
ormer Swiss banker Bradley Birkenfeld had secrets he was burning to tell, secrets so profound they could change lives and fortunes, beginning with his own. ¶ They could make him rich, and they could send him to prison. They could expose thousands of Americans who had hidden money from the In- ternal Revenue Service, and they could implicate one of the world’s most powerful financial institutions in a far-reaching
fraud against the U.S. government. They could topple Switzerland from its vaunted position as secret banker to the world. ¶ The question was how to tell them. ¶ How could the Massachusetts native strike a blow against the malefactors and claim a potentially astronomical reward without destroying himself in the process? ¶ Three years ago, communicating with his Wash- ington lawyers from Swiss hotels and pay phones to avoid discovery, Birken-
feld began a delicate and dangerous dance with the U.S. government. He wanted to stake a claim under a new federal whistleblower law that offers informants up to 30 percent of the tax revenue they help the IRS recoup. Before spilling his se- crets to federal investigators, he also wanted immunity from prosecution for his participation in the cross-border scheme. ¶ Birkenfeld’s story turned into a cautionary tale for would-be informants and a test of the U.S. government’s atti- tude toward them. Should people who come forward with inside knowledge of a crime be rewarded, punished — or both? Can the government simultaneously woo such whistleblowers with financial enticements and threaten them with in- carceration? ¶ By now, results of the famous case have reverberated around the world. UBS, Switzerland’s largest bank, admitted to helping Americans dodge taxes, and it agreed to pay the U.S. government $780 million. In a departure from its own legal standards,
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Kagan’s candor could shape Supreme Court’s future
EZRA KLEIN
Economic & Domestic Policy
move to South Dakota, bringing much-needed jobs and tax revenue, if the state would let it write new credit card regulations. “Citibank actually drafted the legislation,” recalls Bill Janklow, then-governor of South Dakota. “Literally, we introduced it, and it passed our legislature in one day.” If the Supreme Court had interpreted one word another way, credit card regulation in this country would be entirely different. It’s a reminder of the power of the court, and potentially, of Elena Kagan. Recent political tussles
notwithstanding, the Supreme Court considers more than abortion, affirmative action and, occasionally, civil liberties. The court’s stunning rejection of limits on corporate spending on political campaigns in the Citizens United case was a wakeup call to the broad authority the court could
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Plan now for the care of your aging parents
MICHELLE SINGLETARY
The Color of Money
they are thrust into caring for an aging parent or other relative. My husband and I have just joined this group of caregivers. We recently began taking care
T
ALEX WONG/GETTY IMAGES
Elena Kagan, if confirmed as a Supreme Court justice, could help shape issues including immigration and entitlement programs.
of my father-in-law, a fiercely independent, 81-year-old ex-military man. He’s mentally competent, but his basic living needs — walking, cooking, bathing and cleaning his house — have become too hard for him. So for now, he’s living with our family of five. My father-in-law would rather be living on his own. We are trying to make that happen, but
he time has come. As the nation ages, millions of adults will find
he can’t move back into his home without a lot of daily help and supervision. I recently participated on a panel on elder care hosted by Volunteers of America, a nonprofit that provides human service programs nationwide to seniors, veterans and families. I had no idea when I accepted the invitation that the conversation would hit so close to my home. It was a sobering discussion when you consider that by 2020, 12 million older Americans will need long-term care. And when they need that care, they will realize that they and the caregivers they will have to lean on are woefully unprepared for the cost. “As a baby boomer myself with parents in their 80s, I find it hard to face the reality of preparing,” said Vicki Bendure, a spokeswoman for Volunteers of America. “They’re in relatively good health at the moment, but we have yet to discuss the
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