Thailand's Protests Spur Talk of Dividing the Country

With the political confrontation between Thailand's Prime Minister Yingluck Shinawatra and anti-government protesters intensifying, pro-government supporters are considering an alternative resolution to the four-month crisis: Splitting the country in two. "Some pro-government leaders have called for the country to be divided, along north-south political lines," Reuters reported on Feb. 26. The chatter from Yingluck-backers comes as the prime minister faces renewed pressure to step down. "I never thought that this idea would be taken seriously," said Pavin Chachavalpongpun of Kyoto University's Center for Southeast Asian Studies. "But it seems that a number of people have supported the idea of splitting the country into two."

While extremely unlikely, the idea at least has a basis in geography. The anti-government People's Democratic Reform Committee (PDRC), led by former opposition Democrat Party politician Suthep Thaugsuban, is comprised primarily of southerners and urban elites, while Yingluck's base, known as "Red Shirts," are mostly poor, rural voters from the country's northern regions. 

Many Red Shirts believe the anti-government protesters are "using street protests, thuggery, armed militants, obstruction of election, judicial intervention, and a threat of military coup to cripple and eventually oust their elected government," said Brad Adams, Asia director at Human Rights Watch. As a result, the Red Shirts "are thinking about splitting the country," he said.

The murmurings of secession come amid escalating street fighting. Attacks on protest sites in Bangkok and eastern Thailand last weekend killed five people, including four children. The violence, carried out by unidentified armed assailants, came just a few days after clashes between police and protesters in the capital left four dead and at least 60 injured. After four months of relatively peaceful protests, both the movement's leaders and pro-government groups have signaled a new willingness to use force to achieve their goals.

At the same time, the protesters' efforts have been bolstered by a series of decisions by the country's judiciary. On Feb. 19, the Civil Court affirmed a previous ruling by the Constitutional Court that, despite evidence to the contrary, the protesters were unarmed and peaceful, limiting the government's ability to contain the demonstrations. On Thursday, Yingluck will face graft charges that could force her resignation. 

To be sure, the likelihood of any real move to secede is infinitesimal. The rhetoric seems to be more tactics than strategy, emboldening pro-government supporters to mobilize in support of the elected leadership. But whether the country actually splits in two or not, the divide is very real.

Manjunath Kiran/AFP/Getty Images


The No-Longer-So-Secret Swiss Bank Account

Bankers from Credit Suisse, one of the world's largest financial institutions, courted wealthy Americans in airports, at family weddings and on golf courses from Florida to the Bahamas with a simple pitch: We'll help you hide your money. The bankers shielded the funds using code names and shell companies. They even set up private airport branches clients could use to do their banking, as they flew in and out of Switzerland, without leaving a paper trail.

The effort worked: A Senate investigation this week found that the bank ultimately held $13 billion of American money in 22,000 secret accounts. On Wednesday, lawmakers hauled Credit Suisse's top management before the Senate Permanent Subcommittee on Investigations and delivered an equally simple pitch: Stop your behavior or risk serious penalties, including potential jail time. "You want to do business here, you've got to comply with our laws," said Michigan Democrat Carl Levin, the panel's chairman.

Credit Suisse is in talks with the Justice Department to settle an ongoing investigation by paying an $800 million fine, the largest ever for allegedly aiding tax evasion, according to the Wall Street Journal.

At the hearing Wednesday, senators from both parties accused executives from the Swiss bank of using "spy novel" tactics to help Americans hide billions of dollars. 

The Credit Suisse investigation is part of a broader U.S. crackdown on Americans who use offshore accounts to hide their income. In 2009, the largest Swiss bank UBS agreed to pay a record-setting $780 million fine and admit to facilitating tax evasion. The tax cheat dragnet has already compelled over 43,000 Americans with secret accounts to come clean through an amnesty program, a Justice Department official said at the hearing.

Credit Suisse has stopped accepting new American clients, unless they can prove that they are paying their taxes, bank officials said. In addition, Chief Executive Brady Dougan said his firm had investigated the problem on its own and shared with authorities what he said the law-breaking bankers had tried to keep hidden.

"The evidence showed that some Swiss-based private bankers went to great lengths to disguise their bad conduct from Credit Suisse executive management," Dougan said. Seven Credit Suisse employees have been arrested in connection with the tax evasion scheme, though none of them have been tried yet.  

Levin said he wants the bank to do more than just pay fines and make promises to do better. "Turn over the names of the people whom you aided and abetted in tax evasion," Levin said. He said the Swiss bank has given U.S. authorities the names of only 238 out of the 22,000 secret account holders. Credit Suisse officials said they hired outside accountants to go over their books, closed accounts and stopped certain lines of business to help ensure that customers aren't using the country's vaunted secrecy laws to shirk tax responsibilities. But Credit Suisse General Counsel Romeo Cerutti said Swiss laws won't let them disclose the names of their American clients.   U.S. Deputy Attorney General James Cole said Swiss secrecy laws were a problem, but the Justice Department had started a new program to encourage Swiss whistleblowers to share information with U.S. authorities. He said the program had been successful, but he couldn't share details about ongoing investigations. "Just because we can't disclose what we are doing, doesn't mean we are not actively pursuing these cases," Cole said at the hearing. Senators directed their ire not just at Credit Suisse, but also at the Swiss government for frustrating U.S. investigations by not allowing Swiss banks to hand over more information about their American clients.

"Any real idea that the government of Switzerland is cooperating with us is a joke," said Sen. John McCain (R-Az.).

New laws and treaties could make it easier for American and Swiss authorities to work together. Until then, Swiss banks are in a tough spot.  Republican Senator Tom Coburn from Oklahoma said the contradictory laws present bankers with a choice: going to jail in the U.S. or Switzerland. "Where would you like to spend time?" Sen. Coburn asked the Credit Suisse's head lawyer. "That's a tough decision," Cerutti responded.