U.S. sets ultimatum in Swiss bank tax dispute: reports (Reuters)

ZURICH (Reuters) – The United States has written to Switzerland to demand it hands over detailed information this week on its citizens using Swiss accounts to dodge tax or see Credit Suisse and nine other banks face charges, newspapers reported on Sunday.

The letter, quoted by two Swiss Sunday papers, was sent by U.S. Deputy Attorney General James Cole on August 31 and demands detailed figures on tax evasion at Credit Suisse by Tuesday and also seeks information from nine other smaller Swiss banks.

In the letter, Cole demands that Switzerland quickly deliver a significant number of client accounts, the SonntagsZeitung reported, adding that U.S. authorities are also ready to examine a Swiss offer to settle the dispute.

Mario Tuor, a spokesman for the Swiss department for international financial affairs, would only say that Switzerland was in contact with the United States but declined to comment on the letter.

"We are seeking a solution on the basis of existing laws," he said.

Switzerland last month made a proposal to try to kickstart talks to settle its impasse with U.S. authorities, offering to hand over data on groups of clients under a pending new bilateral tax treaty despite strict bank secrecy.

A long tradition of bank secrecy has helped Switzerland build up a $2 trillion offshore financial industry, but the country has agreed in recent years to do more to help hunt tax cheats amid a global crackdown on tax havens.

US SEEKS THOUSANDS OF CLIENT NAMES

The United States is pushing for Switzerland to hand over thousands more bank client names as it did last year when it allowed UBS to bend bank secrecy and reveal the details of around 4,450 clients to avoid criminal charges.

"They won't be contented with less than in the UBS case," former U.S. Justice Department investigator Peter Henning told the NZZ am Sonntag newspaper.

He added that the U.S. Internal Revenue Service felt betrayed because many UBS clients had shifted their assets to smaller Swiss banks rather than declaring them.

The SonntagsZeitung quoted Swiss sources close to the talks as saying Washington is seeking details of all U.S. clients with accounts worth at least $50,000 between 2002 and 2010 at banks including Credit Suisse, private banks Julius Baer and Wegelin as well as the Zurich and Basel cantonal banks.

That could imply tens of thousands of accounts, the paper said, far more than Switzerland could deliver under a double taxation agreement with the United States that it approved in 2009 but is still awaiting ratification by the U.S. Senate.

Switzerland is keen to find a solution that would not need approval from parliament, seen as likely to block any new breach of bank secrecy after only reluctantly agreeing to the UBS treaty under emergency law last year.

If Switzerland does not comply, the United States could issue a subpoena against the banks to force them to hand over data, as it did in the case of UBS, the SonntagsZeitung and NZZ am Sonntag reported.

"This will be much more expensive as with UBS that had to pay a fine of $780 million," one banking source told the SonntagsZeitung. "We expect that the Swiss banks will have to pay a fine of up to 2 billion Swiss francs ($2.6 billion) and deliver much more client data than in the UBS case."

Henning said the United States would probably launch criminal charges against a smaller Swiss bank rather than Credit Suisse as it was too critical to the global financial system.

Last month, Switzerland struck deals with Germany and Britain to tax money kept by their residents in secret Swiss accounts and also introduce a withholding tax on future interest earned, a proposal rejected by Washington.

($1 = 0.783 Swiss Francs)

(Editing by Yoko Nishikawa and Jon Loades-Carter)

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Regulators balk at demands for foreclosure reports (AP)

WASHINGTON – Banking regulators refused to commit to releasing details of their investigations into illegal foreclosure practices by the nation's largest banks.

Appearing before a Senate panel Thursday, Federal Reserve Chairman Ben Bernanke and Acting Comptroller of the Currency John Walsh said they had not decided whether to release reports on illegal practices by individual banks

Sen. Robert Menendez, D-N.J, had pressed them to release the reports, banks' individual action plans and agreements with the consultants that investigated the banks. Menendez cited a report by the Associated Press this week that said banks are continuing to foreclose without doing the necessary paperwork, eight months after they had promised to stop.

"We will have to evaluate the individual documents and see if there is anything that would be of a confidential, supervisory nature," Walsh said, adding that his agency will release "some information."

Bernanke said the Fed plans to release a report that "will explain what the findings were and what the proposals were and what the reactions were." But he said he must consult with his legal team before releasing any information about individual banks.

Citing a legal opinion by his staff, Menendez said the regulators are permitted to release the information if doing so was in the public's best interest.

"It is not acceptable to violate the law, and it is not acceptable to do robo-signings," Menendez said.

County officials in at least three states say they have received thousands of mortgage documents with questionable signatures since last fall, suggesting that the practices, known collectively as "robo-signing," remain widespread in the industry, the AP reported Monday.

Last fall, the nation's largest banks and mortgage lenders, including JPMorgan Chase, Wells Fargo, Bank of America and an arm of Goldman Sachs, suspended foreclosures while they investigated how corners were cut to keep pace with the crush of foreclosure paperwork.

Since then, suspect paperwork has been filed not only with foreclosures, but also with new purchases and refinancings. Critics there is a systemic problem with the paperwork involved in home mortgages and titles. They say banks and mortgage processors haven't acted aggressively enough to put an end to widespread document fraud in the mortgage industry.

Bernanke and Walsh were testifying before a hearing to mark the one-year anniversary of a sweeping overhaul of the rules governing the financial system.

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Quake jolts northeast Japan, no reports of damage (Reuters)

TOKYO (Reuters) – A strong earthquake jolted on Sunday the same area of northeastern Japan that was hit by a massive quake in March, but there was no sign of further damage along the coast or to the crippled Fukushima nuclear power plant, officials said.

The Japan Meteorological Agency lifted a tsunami alert for the region before noon after initially urging residents in the disaster area to stay clear of the coast.

The U.S. Geological Survey estimated the magnitude of the earthquake at 7.0 and said it had occurred at a depth of 18 km (11 miles) off the northeastern coast of Japan just before 10 am local time.

Four months ago, the same area was hit by a massive earthquake and tsunami that left at least 21,000 dead and missing. The March 11 disaster cut power to the Fukushima power plant and triggered a radiation crisis.

"It started as a small side-way tremble, then it grew gradually stronger," said Nobuyuki Midorikawa, an official at Iwaki City, Fukushima prefecture.

"Having experienced that much devastation in March, this latest earthquake and tsunami alert made me feel we cannot let our guard down against tsunami," Midorikawa said.

Tokyo Electric Power said workers closest to the coast at the Fukushima power plant were briefly evacuated to higher ground before returning to work.

The utility said there was no immediate sign of further damage at the nuclear plant where workers have been struggling to keep an improvised cooling system operating to stabilize the reactors and control radiation. The cooling system was not interrupted by the quake, the company added.

Tokyo Electric said there was also no damage to the massive barge moored just offshore from the Fukushima nuclear power plant that has been used as a temporary storage depot for radiated water for any damage.

The March 11 earthquake that struck off the coast of northeastern Japan had a magnitude of 9.0 and caused a tsunami that caused extensive damage along the coast and measured about 14 meters at the Fukushima nuclear plant.

The resulting loss of power at the Fukushima nuclear plant took out cooling systems and caused fuel in three of the plant's six reactors to melt down. Subsequent hydrogen explosions scattered radioactive debris over a wide area.

About 80,000 nearby residents have been forced to evacuate because of the radiation and Japan's government has come under fire for its handling of the disaster, putting pressure on unpopular Prime Minister Naoto Kan to resign.

One concern has been the strength of the building supporting what remains of the No. 4 reactor at Fukushima, and a Tokyo Electric spokesman said the utility expects that the structure would hold up in an earthquake stronger than the one that struck Sunday.

(Writing by Kevin Krolicki, editing by Miral Fahmy)

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Feds: Mine faked reports before fatal W.Va. blast (AP)

By TIM HUBER and VICKI SMITH, Associated Press Tim Huber And Vicki Smith, Associated Press – 1?hr?6?mins?ago

BEAVER, W.Va. – Coal company managers pressured miners to generate a second set of reports omitting chronic safety problems to mislead inspectors before an underground explosion killed 29 men last year, federal regulators said Tuesday.

Kevin Stricklin, coal administrator for the Mine Safety and Health Administration, said top management at the Upper Big Branch mine was required to countersign safety inspection books that collect miners' daily reports on conditions. The mine was owned by Massey Energy until Alpha Natural Resources bought its rival this month.

"The investigation team concluded that the managers were aware that chronic hazardous conditions were not recorded," he said during a briefing on the federal investigation. Testimony from some of the 266 witnesses MSHA has interviewed also "indicated that management pressured examiners to not record hazards in the books."

Federal investigators first revealed they had found two sets of books — one focused on safety, the other on production — during a private meeting with the victims' families Tuesday night. It's one of the few revelations to come from the ninth briefing since the investigation began last summer into the deadliest U.S. coalfield disaster in four decades.

Alpha Natural Resources spokesman Ted Pile said Wednesday the company was hearing about the faked reports for the first time.

"It's a claim I'm sure we'll look into as we conduct our own review of what happened," Pile said in an email to The Associated Press.

In a public briefing Wednesday, Stricklin showed side-by-side comparisons of records that purported to document the same shift on three different dates in the month before the accident. In each case, the official book that inspectors would have seen showed few, if any, hazards, while the production reports indicated various problems with faulty machinery, explosive methane gas and bad roof conditions.

"If a coal mine wants to keep two sets of books, that's their own business," Stricklin said. "They can keep five sets of books if they want. But what they're required to do is list all the hazards in the official book.

"This is the book that not only MSHA looks at ... but it should be the book that miners and other people who are going into the mine should look at so they would be aware of any conditions in the mine before they go in," Stricklin said.

On April 5, 2010, the day of the blast, a pre-shift inspection report identified very few hazards. But Stricklin says other documents showed six of 10 conveyor belts needed to be coated with pulverized limestone to prevent coal dust from exploding, and five belts needed cleaning.

Bobbie Pauley, the only woman who worked underground at Upper Big Branch, said she was not surprised by MSHA's revelation.

"You put in an inspection report what you wanted the inspectors to see," said Pauley, who lost fiance Howard "Boone" Payne in the blast.

"Zero, zero, zero deters MSHA from coming back. If they see a potential problem recorded in a book, then they're going to come back and investigate it time after time after time," she said. "Well, no coal operator wants to be pounded by MSHA every day.

Pauley returned to Upper Big Branch only briefly after the explosion and now works aboveground at another former Massey operation bought out by Alpha. She was among some 200 people attending Wednesday's briefing.

MSHA has drafted its final report but told victims' families it likely won't be delivered until October.

The explosion also remains the subject of a criminal investigation by the U.S. Department of Justice, and MSHA has said it won't release some information to avoid hindering that probe. It largely reiterated its past public statements, offering more detail but no new theories.

So far, only one Massey employee has been indicted. Security chief Hughie Stover is charged with three federal crimes for allegedly lying to the FBI and MSHA and obstructing justice by ordering a subordinate to throw away thousands of pages of security documents from the mine.

MSHA contends the explosion started with a small, naturally occurring release of methane or natural gas that was then fueled by coal dust into a devastating inferno that tore through the mine in a series of explosions over a few minutes. The agency has blamed a poorly maintained cutting head on a piece of mining equipment for sparking the blast and a malfunctioning water sprayer for failing to douse it.

An independent investigation commissioned by former Gov. Joe Manchin reached the same conclusion last month.

That study accused Massey of ignoring the most basic safety practices in the industry, allowing highly explosive coal dust and methane gas to accumulate, and failing to provide either enough fresh air flow or enough pulverized limestone on the mine's walls to render coal dust inert.

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