American Millionaires Plead Fifth Before Congress on Tax Dodging Allegations

July 25, 2008— -- Two of America's wealthiest businessmen refused to answer questions today about secret bank accounts in Liechtenstein, invoking the fifth amendment in an appearance before the Senate Permanent Subcommittee on Investigations.

Though the allegations of tax dodging against the men -- Peter Lowy, a California resident who heads the U.S. division of the Westfield Group, one of the largest shopping mall chains, and Steven Greenfield, a New York-based toy importer -- have been compared to the stuff of spy novels, their testimony lasted just minutes.

But even if today's hearing was somewhat anti-climactic, the committee's investigation has already led to a turnaround from Swiss bank UBS AG which pledged during a hearing last week to stop selling secret accounts to American clients -- a move that even surprised the senators.

UBS' turnaround "provides a dramatic example of how congressional oversight can help stop offshore abuses," Sen. Carl Levin (D-Mich.), chair of the subcommittee, said today.

The hearing was part of a wide-ranging investigation by the subcommittee into how bank secrecy laws have allowed thousands of U.S. citizens to shield their wealth from tax collectors.

In addition to UBS, the investigation has focused on LGT, a private bank owned by the royal family of Liechtenstein. Though LGT officials met privately with congressional staff, they refused to speak publicly about the bank's practices, other than issuing a statement that the bank's practices have changed. "Count me skeptical that LGT has stopped selling secrecy to its clients," Levin said.

Both Lowy and Greenfield had tried to avoid the reach of the committee last week when it held its first hearing on the investigation, Levin said. Lowy apparently left the country just before the U.S. Marshalls could issue him a subpoena but agreed to testify today. Greenfield simply refused to comply with the congressional subpoena ordering his testimony last week, but changed his mind after senators threatened to hold him in contempt.