Cut Birkenfeld a deal, not a check

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Bradley Birkenfeld, the UBS goniff who’s facing 40 months in prison for helping clients evade taxes, is displaying chutzpah that makes the Goldman Sachsians look like self-effacing monks: He wants a payoff of more than $1 billion for blowing the whistle on others.

His rationale — or I should say that of his lawyers — is that information be provided about UBS and its clients is enabling the IRS to collect billions in back taxes from folks with off-shore accounts — in addition to a $780 million fine levied on UBS. And under whistle-blower laws, he’s entitled to anywhere from 15% to 30% of the take.

What scares me is that lawyers seem to think he has a good shot at getting paid. Here’s how the New York Times lays it out:

Mr. Birkenfeld, a former private banker at the Swiss bank UBS, won the enmity of his peers by violating the omerta of Swiss banking: He divulged the tax evasion secrets of UBS, the world’s largest bank by assets, and its well-heeled American clients. As part of a deal with federal prosecutors, he admitted to, among other things, helping to smuggle diamonds in a tube of toothpaste.

Now, as thousands of wealthy Americans seek amnesty for keeping illicit, offshore bank accounts, Mr. Birkenfeld and his lawyers hope to use a new federal whistle-blower law to claim a multibillion-dollar reward from the American government. If they succeed — and legal experts say the odds are pretty good — it would be the largest reward of its kind.

How do I disagree with this? Let me count the ways…

First off, the guy did not provide names and account numbers. Some of those folks got spooked and came forth on their own. UBS itself is turning over some names and numbers. But blowing an anonymous whistle (I know, analogy doesn’t quite work, but you know what I mean) should not qualify for payback.

But most important, precedent has been set since long before anyone reading this was born — turn state’s evidence in exchange for a lesser sentence. Would I mind if he got 20 months instead of 40? Nah. Not my preference, but wouldn’t make me nuts.

This is a criminal who chose to work with the government. Give him consideration, not money.