Florida is the craziest state

And this darn Florida over and over again

Those who report from America are spoiled for choice. Preconceived ideas and plans quickly turn out to be outdated. Contrary to expectations, I was drawn to Florida several times because of the tax dispute, the astounding renaissance of the Space Coast and the fascinating demographic development. A lot of music will continue to play there in the future.

When I took over the post of NZZ economic correspondent in the American capital Washington in late summer 2014, I looked forward to an in-depth examination of the almighty Federal Reserve System, the institutions of Bretton Woods and the renowned US think tanks. I assumed that Barack Obama's baton in the White House would pass to Hillary Clinton. That would have meant continuity in economic policy and thus left more freedom to report from the vast United States more and more from off the beaten track about the country, its people and the economy.

I didn't have the state of Florida specifically in my sights. In the next six years, with the exception of the DMV region (District of Columbia - Maryland - Virginia), I was not to spend as much time in any other state as in the Sunshine State on the south-eastern tip of the country. The fact that the family liked to go on vacation there due to the climate was one thing. But I did not expect that I would be drawn there again and again for the NZZ.

Economy also means white-collar crime

I was also surprised at how much I had to mutate as a US business correspondent into a court and justice correspondent. In the fall of 2014, contrary to the expectations of the USA, the case with the file number 08-CR-60322 against the former UBS top banker Raoul Weil did not lead to an out-of-court settlement but to a court case. Before that, I had always tried to avoid the subject of the tax dispute between Switzerland and the USA. Not because it is unimportant, but because I viewed the dispute as a lost war for Switzerland, in which I did not want to interfere as well.

But the Weil process had to be followed and covered. That is why in autumn 2014 I traveled three times in quick succession to Fort Lauderdale, the “Venice of America”. Why Fort Lauderdale in Florida? The city, located around thirty kilometers north of Miami, is home to the US federal court responsible for the Southern District of Florida. Raoul Weil was charged there because, according to the US authorities, UBS had made an important part of its aid to tax fraud in South Florida, including Art Basel in Miami. Overall, the indictment said, Weil may have contributed to US citizens hiding around $ 20 billion from the IRS over the years.

The story of the process is quickly told. The American prosecutors were unable to present the American jury with any solid evidence that Weil, as head of the wealth management business, was responsible for the black money strategy of the big bank in the USA together with other “conspirators”. The trial began on October 14th and ended on November 3rd with Weil's acquittal. But that was dramatic for the reporting, because nobody could have guessed that it would only take the jury an hour that Monday afternoon to come to the verdict.

In the right place at the right time

It was absolutely a matter of luck that I was still in front of the courthouse when suddenly it was said that the verdict was about to be read out. Actually, I would have wanted to be back in the hotel room to write my report on the closing arguments and to point out to the NZZ readers that the jury has now withdrawn for an indefinite period of time. Instead, I hurried back to the courtroom, and while the verdict was being read out, I packed up my notes and sprinted back to the hotel, as no laptops were allowed in court. So I managed to announce the news of Weil's acquittal in the print edition just in time for the last editorial deadline.

The double surprise - that there was a trial at all, followed by a quick acquittal - led to a turning point in the tax dispute. After the failure in the prosecution of Raoul Weil, the US judiciary largely stopped its hunt for Swiss bankers; There was an initial collective sigh of relief among asset managers with US affiliations. The dossier was of course far from over. It took until January 27, 2016 for the Ministry of Justice (DoJ) to announce the last settlement with a Swiss category 2 institute, and until December 29, 2016 for the completion of the audit of the category 3 and 4 banks to be announced .

The largest payments in the US tax dispute

Institute buses Date of announcement Group*
Credit Suisse260020.05.20141
Julius Baer54705.02.20161
Bank Leumi40023.12.20141
Union Bancaire Privée (UBP)18806.01.20162
Bank Lombard Odier & Co ***105,131.12.20152
Crédit Agricole (Suisse)99,2115.12.20152
Zürcher Kantonalbank9813.08.20181
Bank J. Safra Sarasin85,823.12.20152
Coutts & Co78,4823.12.20152
BNP Paribas (Suisse)59,7819.11.20152
Hyposwiss Private Bank Zurich49,727.01.20162
Edmond de Rothschild (Suisse) and Edmond de Rothschild (Lugano)45,2518.12.20152
Vaudois Cantonal Bank41,6723.12.20152
Deutsche Bank (Suisse)31,0224.11.20152
EFG Bank European Financial Group, Geneva, and EFG Bank29,9803.12.20152
Dreyfus Sons & Co, bankers24,1615.12.20152
Maerki Baumann & Co23,917.11.20152
KBL (Switzerland)18,7919.11.20152

Between March 2015 and January 2016, the DoJ reached an agreement with eighty category 2 banks on a non-prosecution agreement and collected fines totaling $ 1.36 billion. Between July and December 2016, five Category 3 institutes received confirmation that they were not a target of US law enforcement (Non-Target Letters), while Category 4 (Fatca conformity) never materialized. The US judiciary has not yet completely finished with Category 1. After the steep comparisons with UBS, CS or Julius Baer, ​​Bank Hapoalim came to the till in May 2020 as the last of these banks for the time being; What remains are the Geneva private bank Pictet and the Zurich Rahn + Bodmer Co.

Even if South Florida and the USA in general have become tough for Swiss banks: The Sunshine State remains central as a financial hub and is even gaining in importance. Miami connects South and North America with the Caribbean and Europe. In the Corona crisis, the Florida financial center seems to be profiting from Manhattan's density problem; Many talents banned from working from home are heading to the mild, tax-attractive south and setting up new business units there.

From Washington to Zurich

pfi. · From the effects of the financial crisis and the tax dispute to the diesel scandal to Trump's financial and protectionist trade policy: Martin Lanz (mla.) Reported on it with a great deal of detailed knowledge and analytical depth. After six years he ended his correspondent work with these personally tinged memories. At the editorial office in Zurich he will continue to follow events in the USA and work for “NZZ PRO Global”, our new digital offer for those with a global interest and decision-makers in business and politics.

A country without industry is not a country

It was also hard to expect how much I would grapple with the auto and aircraft industry - and with American space travel - during the six years. Donald Trump's urge to renegotiate the North American Free Trade Agreement in favor of the US auto industry and the constant threats to repel foreign - and not least German - vehicles and components with special tariffs forced us to better understand the value chains of the auto industry.

My research not only led me to San Luis Potosí in Mexico, where BMW opened a new plant for the production of the 3-series in 2020, but also to the locations of the world's most powerful BMW plant in Spartanburg (South Carolina) and the Mercedes Plant in Tuscaloosa, Alabama. The visits showed the important role the two German carmakers, with their thousands of employees, play in the reindustrialization and diversification of the southern US states, which have been plagued by structural change and globalization. But they also made it clear how dependent their sophisticated value chains are on open borders.

Once again, however, it wasn't the auto industry that brought me to Florida, but the amazing renaissance of American space travel. Brevard County, which is home to the installations of Cape Canaveral and the Space Coast in the broader sense, fell to the ground after the US space agency Nasa discontinued the space shuttle program in 2011. For some time now there has been a mood of optimism, if not a boom, and this is mainly thanks to the success of private providers such as Elon Musk's SpaceX.

As a journalist, I was supposed to attend the preparations for a mission to supply the International Space Station (ISS) in 2019, which SpaceX carried out on behalf of NASA. A year later, the new age definitely began. For years after 2011, the US had to send its astronauts into orbit in Russian rockets for expensive money. At the end of May 2020, the space shuttle “Crew Dragon” from SpaceX with astronauts Doug Hurley and Bob Behnken finally docked “American equipment” again at the International Space Station (ISS).

So far, the new chapter in US space travel has generated $ 2 billion in fixed asset investments and 17,000 new jobs, according to local business development agencies. A particularly prominent investor is Blue Origin, Jeff Bezos' space project. NASA itself is currently developing its own new space launch system on site with the help of Lockheed Martin, Boeing and Northrop Grumman. The idea is to land people on the moon for the first time since 1972 with the Artemis III mission in 2024.

While manned space travel is the most spectacular outgrowth of activity on the Space Coast, the industry's bread-and-butter business is satellite transportation, for both commercial and military purposes. According to the command of the 45th Space Wing, which secures the airspace over the entire east coast and without which nothing in US space travel works, a total of 53 missions are planned for 2021, which will take off from Cape Canaveral. In 2020 there were 31 missions. The 2021 program includes three manned NASA missions, two of which will be carried out by SpaceX and one by Boeing. In particular, SpaceX will regularly handle space transports in order to set up Starlink, Elon Musk's global satellite Internet.

Fascinating demographics

In addition to the beaches, the financial center, space travel and, once the pandemic is over, the Disney amusement parks again, demographic developments and their effects on American politics are probably the most important reason to keep an eye on Florida. Just before the 2020 presidential election, I visited The Villages again. Probably the world's largest retirement settlement in central Florida has been growing rapidly for years. The attraction to Americans living in the northeast and the rust belt, who want to spend the last phase of their lives playing golf under the Florida sun among like-minded people, is unbroken. This will ensure a steady flow of conservative voters for the foreseeable future - people who voted for Donald Trump in 2016 and 2020 and who helped him win the 29 electoral votes in Florida.

The retirement settlement is getting bigger and bigger

Population of The Villages (MSA), in thousands

The seniors are, of course, only part of the story; In the fall of 2020, it was the voters in South Florida from Cuba or Venezuela who tipped the balance in favor of Trump because they were warned that socialism would make its way under Biden and the Democrats. The rapidly growing Puerto Rican community is also politically active and could tip the scales in future elections. The strong population growth of the past ten years thanks to old age, domestic and international immigration is expected to bring Florida two additional seats in the US House of Representatives in 2022.

And if all that is not reason enough to follow up the development in Florida: After January 20, Donald Trump will be pitching his tents permanently in the Sunshine State. The extent to which crazy Florida serves as a safe haven and platform for a political comeback will be on his mind in America in the years to come.