* Birkenfeld's bumper payout follows jail time
* U.S. guilty of double standards -Swiss MP
By Martin de Sa'Pinto and Andrew Thompson
ZURICH, Sept 12 Many Swiss are fuming after a
whistleblower, who helped prosecute Swiss bank UBS for
helping rich Americans avoid taxes, was paid a record $104
million by U.S. authorities after being jailed for his own part
in the affair.
Ex-UBS banker Bradley Birkenfeld, who confessed to smuggling
diamonds hidden in a tube of toothpaste for a client, was a key
witness in U.S. prosecutors' case against UBS, Switzerland's
largest bank by assets.
UBS agreed to pay a fine and hand over the names of some
4,500 U.S. clients, a landmark step in eroding the Alpine
state's much-vaunted bank secrecy.
"It's the height of hypocrisy if the U.S. is one day
sentencing the guy to 40 months in prison and the next give him
the highest reward," Pirmin Bischof of the centre-right
Christian Democrats and a member of parliament's upper house
Eleven other Swiss banks including Credit Suisse
and Julius Baer are also under U.S. scrutiny for
aiding U.S. citizens suspected of dodging taxes.
With negotiations to end the long-running tax dispute still
ongoing, the Swiss Bankers Association and a government
spokesman both declined to comment. Privately, some expressed
surprise at the size of the payout, while others were scathing
at what they saw as double standards.
Powerful right-wing MP Christoph Blocher, who is under
investigation for his role in the leaking of former central bank
chief Philip Hildebrand's bank account data, also stressed the
double standard: "The Americans give a traitor $104 million,
after putting him in jail. Let's see what we give those, who
uncovered the Hildebrand affair," media reported.
Hildebrand quit following an uproar over a currency trade
made by his wife.
The mass-market Blick and 20 Minuten both published news of
the payout prominently. The Tages-Anzeiger ran a commentary
saying U.S. officials were pursuing an "equally opportunistic
and controversial policy". An editorial in Le Temps termed the
move "a defeat for Switzerland".
"It is even more hypocritical if they do it targeting a
small country like Switzerland when at the same time they
tolerate tax havens and money laundering within their own
borders," Bischof said.
The Wachovia Bank unit of Wells Fargo & Co agreed to
pay $160 million to settle charges it laundered Mexican drug
money via Miami.
Switzerland is trying to get the ongoing investigations into
the 11 banks dropped in return for the payment of fines and the
transfer of U.S. client names and is also seeking a deal to
shield the remainder of its 300-odd banks from U.S. prosecution.
Germany, Austria and Britain have also struck deals with
Switzerland to claw back money from tax cheats.
Rudolf Elmer, a former Julius Baer banker who helped put
WikiLeaks on the map when he used it to publish bank documents
to expose tax evasion, said the level of Birkenfeld's payout
sent the wrong message.
"Compensation should be based on what people and their
families went through," said Elmer, who was jailed twice in
Switzerland and remains under investigation for leaking account