A global media investigation revealed on February 20, that dozens of international entities, including heads of state, intelligence officials, drug lords and sanctioned businessmen, publicly known for their involvement in human rights abuses, drug trafficking, corruption, money laundering and other serious crimes, stashed away millions of dollars in dubious wealth in one of the world’s biggest banks, Credit Suisse, headquartered in Zurich, Switzerland.
Switzerland has often found itself associated with hidden fortunes of some of the wealthiest individuals in the world, who hold accounts in the nation’s banks that function under a rigid banking secrecy law.
The law, introduced in 1934, prohibits banks, their employees or insiders from revealing client banking information to foreign countries. The law was recently bolstered to virtually include any individual who “reveals” or “exploits” confidential information of a Swiss bank. The violators of the law could face imprisonment up to five years. Observers say that the arbitrary language of the statute has Swiss journalists fearing repercussions if they involve themselves in investigative reportage.
The workings of Swiss financial institutions were expected to become more transparent after 2018, when the country’s tax agency signed an agreement to exchange bank account details with tax authorities of foreign countries. However, many developing countries were left out of the information exchange system.
What is ‘Suisse secrets’?
‘Suisse secrets’ is an investigation conducted by 163 journalists, working with 48 media outlets across 36 countries, who united under the investigative consortium Organized Crime and Corruption Reporting Project (OCCRP) to analyse data leaked more than a year ago to German newspaper Süddeutsche Zeitung.
The data leaked by a self-described whistleblower had the details of 18,000 bank accounts linked to 30,000 clients of Credit Suisse, together holding more than $100 billion at one point. OCCRP described the information as the “only known leak of a major Swiss bank’s client data to journalists”.
The leak comes after the Panama paper leaks of 2016, followed by the Paradise Papers in 2017 and the Pandora Papers leaks last year, revealing secretly held offshore wealth of prominent figures, including Indians.
While the data does not reveal information of the bank’s current operations, it contains details of bank accounts that were open from the 1940s until late into the past decade.
As for the methodology of the investigation, the journalists checked the data against other available sources, “including company records, official gazettes, court files, and criminal investigations,” and interviewed “knowledgeable insiders.”
While opening an account in a Swiss bank, per se, is not illegal, banks are supposed to perform due-diligence, checking the backgrounds of entities and avoid fostering wealth belonging to those with problematic histories.
After the publication of the investigation, the bank’s spokesperson said in a statement, “Credit Suisse strongly rejects the allegations and insinuations about the bank's purported business practices”.
Commenting on the duration when the leaked accounts were open, the bank said, “The matters presented are predominantly historical, in some cases dating back as far as the 1940s,” adding that many of the accounts mentioned in the leaked information had already been closed and the bank had carried out its “due diligence” on the rest.
Who are some of the controversial figures named in the leaks?
One of the world’s longest-serving monarchs, King Abdullah II of Jordan, who is still in power, is named in the leaks for having stashed away personal wealth in six accounts in Credit Suisse, one of which at its peak, held a balance that exceeded $224 million. The leaks also names the monarch’s wife, Queen Raina, as holding another account in the Swiss bank.
The leaked database also names the sons of Egypt’s former dictatorial leader Hosni Mubarak, whose presidency lasted three long decades until 2011, when the Arab Spring revolution dislodged him. Mr. Mubarak’s sons, Alaa and Gamal, who had business empires in Egypt, together held six accounts in Credit Suisse, the first one being opened in 1993. By the year 2010, just before popular revolts ousted Mr. Mubarak, one of the accounts belonging to his sons held $196 million. The former dictator and his sons were in 2015, sentenced to three years imprisonment by the Egyptian Court on charges of corruption and embezzlement, which they later settled with the country’s government by paying $17.6 million.
The leaks also name at least 15 spies or intelligence agency officials and their kin from countries such as Pakistan, Egypt, Yemen, Jordan and Iraq that aided the United States in its war on terrorisom and were accused of financial misdeeds or torture.
It names three sons of General Akhtar Abdur Rahman Khan, a former head of Pakistan’s intelligence agency who allegedly channeled billions of dollars of U.S. aid money to the mujahedeen in Afghanistan to support its activities against the Soviet Union. The three sons had an account that was opened in the year 1985 and held $3.5 million in the coming years. Besides Rahman’s kin, other persons of interest from Pakistan also held accounts in the bank for different durations.
Saad Kheir, the head of Jordan’s intelligence agency from 2000 to 2005, opened a personal account with Credit Suisse which held $21.6 million at one point. Accused of smuggling oil, Kheir became the U.S.’s ally in its war on terror, running an agency that allegedly tortured prisoners.
The leaked records also show that alleged Serbian drug lord Rodoljub Radulović alias Misha Banana, who has been absconding for the last eight years, held two accounts in Credit Suisse, one of which had a balance of $3.7 million before closing in 2010.
The bank allowed Radulović to open his first account in 2005, despite the fact that he had already been indicted in the U.S. for security scams. According to documents obtained by the investigators, one of his accounts was being used to launder millions in drug money.
The data also mentions Venezuelan businessmen, government officials and bureaucrats who were implicated in corruption cases for siphoning off millions from the state-owned oil producer Petróleos de Venezuela (PDVSA) and were at the centre of investigations in the U.S. pertaining to the same.
One such case from 2009 involves two U.S. businessmen who bribed officials in Venezuela for profitable oil contracts. Venezuela’s former vice-minister for energy, Nervis Villalobos, also allegedly received the said bribes, and his account in Credit Suisse, the data revealed, had $10.3 million at one instance.
Credit Suisse’s history of scandals
The over 160-year-old bank, employing nearly 50,000 people and catering to 1.5 million clients, manages assets worth a total of $1.6 trillion. In the recent past, however, the bank has been ensnared in a string of scandals and has a corporate culture that insiders say, encouraged maximum risk taking.
Back in 2014, Credit Suisse had pleaded guilty in the United States in a conspiracy to help the country’s taxpayers to hide wealth from its revenue authority by way of filing false tax returns. The bank had paid a total of $2.6 billion in fines and penalties. This was followed by another scandal three years later, when the bank paid a $5.3-billion settlement to the U.S. Justice Department over the former’s marketing of mortgage-backed securities.
Last year, Credit Suisse pleaded guilty again, over its involvement in a kickback and bribery scam in Mozambique, agreeing to pay fines worth $475 million to authorities in the U.S and Britain. It had also managed to hide from the International Monetary Fund (IMF) a $1.4-billion loan it arranged for Mozambique.
Also in 2021, the bank lost $10 billion and $5 billion in two financial scandals — the collapse of British financier Greensill Capital and the default of U.S. hedge fund Archegos, respectively.
The bank had made a compliance pledge in the year 2000, after its involvement in a scandal pertaining to the bank’s handling of over $200 million siphoned off by former Nigerian dictator Sani Abacha and his family. After being fined by the Swiss Banking Association, Credit Suisse had pledged that it would accept “only those clients whose source of wealth and funds can be reasonably established to be legitimate.”
This has been followed by multiple such pledges over the past two decades in various lawsuits, but the bank continues to find itself at the centre of financial scandals, including the Suisse secrets investigation.
- ‘Suisse secrets’ is an investigation conducted by 163 journalists, working with 48 media outlets across 36 countries, who united under the investigative consortium Organized Crime and Corruption Reporting Project (OCCRP) to analyse data leaked more than a year ago to German newspaper Süddeutsche Zeitung.
- The data leaked by a self-described whistleblower had the details of 18,000 bank accounts linked to 30,000 clients of Credit Suisse, together holding more than $100 billion at one point. OCCRP described the information as the “only known leak of a major Swiss bank’s client data to journalists”.
- The over 160-year-old bank, employing nearly 50,000 people and catering to 1.5 million clients, manages assets worth a total of $1.6 trillion. In the recent past, however, the bank has been ensnared in a string of scandals and has a corporate culture that insiders say, encouraged maximum risk taking.
