The interstate Commerce Commission is obligated to continue its reassessment and reform of truck regulations, agency Chairman Daniel O'Neal said yesterday.
O'Neal responded to a recent letter from the chairman of the House Public Works Committee and its surface transportation subcommittee.
The letter from those committee heads had asked the ICC ot stop its efforts to deregulate the truck industry until Congress can study the issue, may have entered into a pattern of transactions with other Citibank branches outside Switzerland, notably Nassau, designed solely to reduce Zurich's holdings at the close of the day. This action reduces the amount of money the bvank must keep tied up in interest-free deposits with the government.
The Zurich branch would accomplish this, the audit reported, by selling currency postitions to another branch on one day, and having that branch sell the same amount of currency back to Zurich on the next day at the same price.
"The result," the audit said, "is that the Zurich branch would not have to increase its interest-free deposit at the Swiss National Bank."
Several other transactions described by the audit were similarly structured in what might have been efforts to understate profits so as not to put the bank in violation of Swiss profit reserve requirements.
While the auditors said that Swiss counsel hired by Citibank concluded that many of these transactions were designed only to serve Citibank's internal reporting requirments, the Swiss "the (Swiss) authorities may question their compatibility with Swiss law."
The audit also criticized the bank because, at times, currency transactions that had been made on one day were not entered on tthe branch's accounting records until the following day in an apparent effort to understate profits.
"The failure to record transactions until the following day," the auditors warned, "is not consistent with Swiss accounting principles. Furthermore, (the method of establishing reserves departs from conventional methods recognized in Swiss tax and accounting principles."
The possible back tax bill facing Citibank stems from the Zurich branch allegedly shifting profits from its books to the books of its Nassau branch. By selling dollars to Nassau, and then buying them back at a higher price, the Zurich branch would declare a loss on its books, and the Nassau branch-which pays no income tax-declares a profit.
But what could potentially be the most damaging aspect of the Swiss Citibank probe, according to foreign bankers here, is that by getting caught shifting funds to dodge taxes, the entire operation of Citibank-and all other foreign banks operating here will come under the careful scrutiny of Swiss banking authorities.
Traditionally, these banks have savored the shroud of secrecy that cloaked their activities.