Credit Suisse data leak reveals Swiss banks are home to scores of criminals’ loot

Switzerland remains a safe haven for despots

(Image credit: © Alamy)

published 26 February 2022

A massive data leak from the Swiss banking giant Credit Suisse has revealed details of 18,000 bank accounts, and 30,000 account holders, stretching back decades and holding more than $100bn in all. Some of the account holders are individuals, others are corporations, and 160 nationalities are represented. The sums involved are vast: the average account held about CHF7.5m at its largest point (about £6m, or more than $8m), and more than a dozen held more than $1bn. The anonymous leaker, who is a current or former employee of the bank, approached the Suddeutsche Zeitung journalists behind the Panama Papers and Pandora Papers data dumps over a year ago. Since then a team of journalists from an international consortium of newspapers (including The Guardian and The New York Times) has been investigating and checking the data – and this week published a selection of findings.

What did they discover?

That scores of criminals, kleptocrats and other assorted shysters have been accepted by Credit Suisse as clients. Eduard Seidel, a top executive with Siemens in Nigeria, had accounts containing tens of millions of Swiss francs, and still had them almost a decade after he was exposed in a major corruption scandal. Ronald Li Fook, the chairman of the Hong Kong stock exchange, opened an account a decade after being jailed for taking bribes. Rodoljub Radulovic, a boss of one of eastern Europe’s biggest cocaine-smuggling cartels, was allowed to open an account despite a long history of financial scandals in the US, and used it to launder drug money, according to Serbian prosecutors. Muller Conrad Rautenbach, a corrupt mining magnate subjected to US and EU sanctions, was given a Credit Suisse account even after the UN flagged up his involvement in corrupt deals. Other clients included the sons of Egyptian dictator Hosni Mubarak and Nursultan Nazarbayev, the kleptocratic leader of Kazakhstan. This is probably not surprising. But it’s still grim that a major financial institution lets clients stash away laundered or stolen assets. The anonymous leaker specifically blames Swiss legislators for permitting an “immoral” situation that “enables corruption and starves developing countries” of tax.

It rejects allegations of wrongdoing or lack of due diligence and says that the matters raised are “predominantly historical”. It says that around 90% of the bank accounts covered by the leaks are now closed or “were in the process of closure prior to press enquiries” – and that 60% of those were closed prior to 2015. Yet the “Suisse Secrets” are far from the only scandal involving the bank in recent years. Earlier this month, for example, it became the first Swiss bank in the country’s history to face criminal charges. In a 500-page indictment, the bank has been accused of failing to conduct adequate checks on members of a Bulgarian mafia and drugs smuggling gang who used the bank to launder millions of euros between 2004 and 2008.

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The tradition dates from the late 17th century, when France’s Catholic kings began using the banks in Geneva – a French-speaking city-state just across the border – to conceal their dealings from France’s own Protestant-dominated banking system. By 1713, the city authorities in Geneva had developed rules banning bankers from revealing details of their clients. That centuries-old code of silence was enshrined in law by the modern Swiss state in 1934, with its infamous Banking Law, which compels bankers to keep schtum. That law was originally designed to contain mounting international concern over Switzerland’s involvement in tax evasion. But it had the effect of attracting despots, thugs and tax evaders for decades to come. The law is still in place today, and breaches carry a five-year prison term. Indeed, in 2015, the law was actually strengthened, so that it now applies not just to bankers and other insiders, but to any third party who “reveals” or “exploits” a secret from within a Swiss bank. That’s got journalists spooked, and no Swiss papers risked publishing this week’s leaks.

Up to a point. In its statement rejecting the leaker’s claims, Credit Suisse says the leaks are designed to discredit both the bank and “the Swiss financial marketplace, which has undergone significant changes over the last several years”. The changes referred to are those agreed in 2014, and enacted in 2018, when Switzerland agreed to join around 100 countries to sign up to a global exchange of information about their respective taxpayers for the first time. In signing up to the so-called common reporting standard (CRS), Switzerland was bowing to years of concerted international pressure (and gigantic fines from US regulators) that had intensified since the financial crisis of 2007-2008. The move all but ended the allure of Swiss secrecy for tax-evaders from rich developed countries. But there’s an important caveat.

More than 90 countries, including many lesser-developed economies, are not part of the deal. For them, “nothing has changed”, according to Sebastian Guex, a banking professor at Lausanne. “Swiss bankers are still helping the wealthy in those countries to hide their assets form the tax authorities in their own countries.” Banking secrecy is not dead, argue critics – it has merely morphed into a so-called “zebra strategy”, in which Swiss banks are closing the door to dodgy money from rich industrialised nations, but left the door open to the rest of the world. Meanwhile, other financial centres that offer significant secrecy benefits to the super-rich have grown in importance – such as Singapore, dubbed “the new Switzerland” by Andy Xie, the ex-Morgan Stanley chief Asia economist, and London. Switzerland has been famed for discreet bankers for more than 300 years. But these days, it’s one player among many.

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Simon Wilson’s first career was in book publishing, as an economics editor at Routledge, and as a publisher of non-fiction at Random House, specialising in popular business and management books. While there, he published Customers.com, a bestselling classic of the early days of e-commerce, and The Money or Your Life: Reuniting Work and Joy, an inspirational book that helped inspire its publisher towards a post-corporate, portfolio life.

Since 2001, he has been a writer for MoneyWeek, a financial copywriter, and a long-time contributing editor at The Week. Simon also works as an actor and corporate trainer; current and past clients include investment banks, the Bank of England, the UK government, several Magic Circle law firms and all of the Big Four accountancy firms. He has a degree in languages (German and Spanish) and social and political sciences from the University of Cambridge.