Washington, July 28 - The group managing director of Australia-based Westfield Group, a major shopping mall group, refused on Friday to answer questions from a U.S. Senate subcommittee investigating international tax havens.
Peter Lowy cited his constitutional right to not give self-incriminating testimony when he was called to answer questions about his family's involvement with LGT Bank of Liechtenstein.
The Senate Permanent Subcommittee on Investigations is looking at LGT Bank as part of a larger inquiry into wealthy Americans who avoid taxes by hiding assets in Switzerland and Liechtenstein, a tiny European principality.
The practice deprives the U.S. government of $100 billion in revenues annually, according to lawmakers. Sen. Carl Levin, a Michigan Democrat and chairman of the subcommittee, said the Internal Revenue Service is investigating 147 U.S. taxpayers with LGT accounts.
According to lawmakers, Lowy and his father, Frank Lowy, hid $68 billion in a foundation formed by LGT.
At a hearing last week, an official from UBS AG testified the bank would overhaul its offshore private banking business and cooperate with the Internal Revenue Service to provide the names of U.S. clients with undeclared accounts.
The subcommittee said UBS has roughly 19,000 Swiss accounts for U.S. clients hiding $18 billion in assets from the IRS.
"The actions of a few to scam their way out of tax obligations hurt all Americans," said Sen. Norm Coleman, the ranking subcommittee Republican from Minnesota. "A privileged few believe they are entitled to shirk their obligations and heap their tax liability on the sagging shoulders of other Americans to make up for what they evade."
Lowy declined to answer any questions from the subcommittee. Lowy's lawyer, Robert Bennett, asked to make a statement to the subcommittee, but his request was rejected.
The subcommittee also subpoenaed Steven Greenfield, a toy importer from New York, to testify, but he also declined to answer any questions. Greenfield originally refused to testify, but appeared today after being threatened with contempt of Congress proceedings.
"The Greenfield and Lowy case histories unfold like spy novels, with secret meetings, hidden funds, shell corporations, captive foundations, and complex offshore transactions spanning the globe," Levin said.
LGT, which is not subject to Senate subpoena power, also refused to testify. LGT spokesman Michael Robinson said in a statement prepared for last week's hearing that the bank "strongly rejects any allegations of conducting, or assisting in, illegal activities."
The subcommittee is considering legislation aimed at curbing offshore tax abuses. On Thursday, the Senate Finance Committee held a hearing on offshore banking practices in the Cayman Islands. The committee was looking at over 18,500 companies that claim to have offices in a single building there.