By Douwe Miedema
WASHINGTON, Feb 26 (Reuters) - U.S. senators will grill both sides in a five-year-old conflict over Swiss bankers helping Americans dodge taxes, questioning U.S. law enforcers and Swiss bankers in a hearing on Wednesday.
In what may set the tone for the session, the Senate Permanent Subcommittee on Investigations on Tuesday alleged new misdeeds by Switzerland's Credit Suisse and accused the U.S. Justice Department of dragging its feet.
The Justice Department is probing 14 Swiss banks five years after UBS, the Alpine nation's largest bank, admitted to helping U.S. taxpayers hide money from the tax man, and agreed to provide client information.
Chaired by Democrat Carl Levin, one of Capitol Hill's toughest questioners, the panel said in a report on Tuesday that Credit Suisse opened Swiss accounts for more than 22,000 U.S. customers, with combined assets of as much as $12 billion.
Bankers secretly traveled to the United States, sometimes on tourist visas, to recruit clients, the report said. One former customer said he once met a Credit Suisse banker at a hotel over breakfast, and was handed bank statements tucked into the pages of an issue of Sports Illustrated magazine.
Four top Credit Suisse executives, including Chief Executive Brady Dougan, are scheduled to testify, along with two top Justice Department officials.
The bank's officials are expected to stress that only a small group of Swiss-based private bankers had helped clients evade taxes and that it was not a widespread practice, according to a person familiar with the bank's thinking.
Credit Suisse last week settled charges levied by the U.S. Securities and Exchange Commission, admitting to wrongdoing and paying $196 million in fines. But a settlement with the Justice Department is not imminent, a person familiar with the matter has told Reuters.
Switzerland has amassed assets worth trillions of dollars from foreigners over the past decades, aided by its tight bank secrecy laws. However, two small banks, Frey & Co and Bank Wegelin, have folded after U.S. authorities started targeting the country's banks over tax evasion.