‘Politicians can't be trusted to clean up HSBC’: Govt revenue chiefs grilled over tax evasion scandal

Amid global controversy over the bank’s alleged facilitation of industrial scale tax evasion and avoidance, Her Majesty’s Revenue and Customs (HMRC) chief Lin Homer will be questioned by Britain’s Public Accounts Committee in the House of Commons.

MPs on the influential committee will challenge Homer on why HRMC failed to take significant action against 6,000 former clients of HSBC’s Swiss operation, whose details were leaked to the tax authority in 2010.

Committee sources told The Telegraph that the hearing will prove challenging for Homer, who took up her role as HMRC chief in 2011. Previously, she held the position of Permanent Secretary of the Department of Transport.

Commenting on the HSBC scandal, Joel Benjamin, of UK-based ethical finance think tank Move Your Money, said the banking giant had yet again breached international law, and will consequently face criminal investigation.

He expressed little faith in Britain’s Financial Conduct Authority (FCA) or tax authorities to adequately handle the most recent allegations leveled at the scandal-ridden bank.

Edward Troup, HRMC’s second permanent secretary, is also due to give evidence to the accounts committee. The tax chief told parliament in 2012 that while criminal proceedings had only been brought against one of HSBC’s clients contained in the cache of leaked files handed to the HRMC, a further dozen were planned.

Another civil servant, Jim Harra, will also offer evidence on recent allegations brought against HSBC. Harra is HRMC’s director general of business tax.

The revolving door of #HSBC and the tax office. Cameron signed off taxman to work for tax avoidance bank http://t.co/F8jFEUTleC

— Saggydaddy (@Saggydaddy) February 10, 2015

Following the hearing, the accounts committee will decide whether to call one of Homer’s influential predecessors, Dave Harnett, to give evidence.

Harnett was HMRC’s chief executive when it dealt with leaked evidence of HSBC’s alleged tax dodging. He worked at the tax authority between 1976 and 2012.

Harnett told MPs in 2011 that the whole nation is probably aware that HRMC had in its possession a disc from the “Geneva branch of a major UK bank – with 6,000 names, all ripe for investigation.”

Following his departure from the government tax authority, he was hired by HSBC to head its newly formed in-house financial crime committee. As part of the role, Harnett was responsible for reporting to the banking giant’s board.

Harnett goes HMRC to HSBC. Green goes HSBC to Govt. Only 1 HSBC tax evader is prosecuted in UK? All seems very cosy at the top, doesn't it?

— Andrew Sharpe (@TMT_Lawyer) February 11, 2015

The bank founded the financial crime committee after it was forced to pay American authorities a colossal £1.2 billion, following allegations it facilitated the laundering of Mexican drug cartels’ ill-gotten gains.

Benjamin said Harnett’s transition from chief of Britain’s government tax authority to head of HSBC’s financial crime committee was a damning indictment of a revolving door culture that blackens British banking.

“The move highlights the rotten core of the UK’s financial services sector, and the all too cozy links between the government, the big four banks and accountancy firms,” he told RT.

As controversy over HSBC’s role in facilitating tax evasion and avoidance gathers momentum, the bank’s former chairman and chief executive, Lord Green of Hurstpierpoint, has come under increasing pressure to disclose what he knows. He has so far remained silent on the issue.

The Public Accounts Committee is due to hear evidence from Green on Wednesday.

The Treasury’s Financial Secretary, David Gauke, claimed on Monday that there was absolutely no evidence indicating that Green was “involved or complicit with tax evasion activities.” But the opposition Labour party is calling on Prime Minister David Cameron to make an official statement on the former HSBC’s chairman’s role at the bank, and his subsequent appointment as a minister in 2011.

Stephen Green earned £3m a year as the boss at #HSBC, then was appointed a minister in the House of Lords. http://ift.tt/1CMYsyE

— BBCPanorama (@BBCPanorama) February 9, 2015

Shadow Chancellor Ed Balls said the government appears utterly confused over the leaked HSBC documents.

Downing Street recently claimed no record exists of a government minister being told HSBC’s Swiss banking branch had facilitated wrong doing of any form. But the Treasury subsequently conceded the government became aware of allegations against HSBC in May 2010.

Joel Benjamin, of Move Your Money, says he has little hope that the accounts committee’s inquiry will prove fruitful.

“Our politicians can't be trusted to clean up HSBC, when tainted individuals like Lord Green are personally invited by David Cameron into the heart of the UK government,” he told RT.

“Rather than platitudes from MPs about getting tough on tax avoidance, it's high time something was done about it.”

HSBC has conceded it was “accountable for past control failures.” It claims it has now “fundamentally changed,” and is “cooperating with relevant authorities.”