Data leak exposes corruption at major Swiss bank

by mcardinal

Chris Lieberman, FISM News


The Swiss bank Credit Suisse was left reeling on Monday after a months-long investigation following a massive data leak revealed that the bank managed accounts for criminals, dictators, spies, and human rights abusers.

The reports originated from a whistleblower, who leaked information on over 18,000 accounts worth over $100 billion to the German newspaper Süddeutsche Zeitung. The whistleblower aimed to use the leak to expose the corruption of Switzerland’s secrecy laws, saying in a statement, “I believe that Swiss banking secrecy laws are immoral. The pretext of protecting financial privacy is merely a fig leaf covering the shameful role of Swiss banks as collaborators of tax evaders.” 

Following the leak, Süddeutsche Zeitung and the Organized Crime and Corruption Reporting Project (OCCRP) coordinated with over 40 news organizations worldwide, including the New York Times and the Guardian, to investigate the accounts. The OCCRP released their report on Sunday, finding that the bank’s clients included a human trafficker in the Philippines, a Yemeni spy accused of torture, a Vatican account being investigated for fraudulent investments, the sons of former Egyptian dictator Hosni Mubarak, and even Jordan’s King Abdullah II.

“I’ve too often seen criminals and corrupt politicians who can afford to keep on doing business as usual, no matter what the circumstances, because they have the certainty that their ill-gotten gains will be kept safe,” said OCCRP co-founder Paul Radu. “Our investigation exposes how these people can bypass regulation despite their crimes, to the detriment of democracies and people all over the world.”

Swiss law prohibits banks from receiving money related to criminal activity. However, the law is mostly unenforced, and the OCCRP report revealed that Credit Suisse’s workplace culture placed profit over due diligence, encouraging employees to turn a blind eye to accounts that could be illegal.

“The bank incentivizes a banker to look the other way with an account they know to be toxic,” a former senior manager in private banking told the OCCRP. “If you close a toxic account, especially a large account in excess of $20 million, the banker finds himself in a deep hole. A deep hole that is almost impossible to get out of.”

Credit Suisse pushed back against the report. “Credit Suisse strongly rejects the allegations and inferences about the bank’s purported business practices,” said the bank in a statement. “The matters presented are predominantly historical, in some cases dating back as far as the 1960s, including at a time where laws, practices and expectations of financial institutions were very different from where they are now.”

While it is true that some of the accounts in the leak go as far back as the 1940s, more than two-thirds have been opened since 2000. The bank also claimed that 90% of the accounts in question either have been closed or are in the process of being closed, with 60% having been closed by 2015, and that they are “comfortable” with the vetting of the remaining accounts.

This report is only the latest in a series of scandals to rock Credit Suisse. In 2014, the bank was fined $2.6 billion for helping U.S. clients evade taxes, and in 2018 the bank was chastised by a Swiss banking watchdog for failing to do enough to prevent money laundering. Last year, the bank was forced to pay $475 over a bribery scheme in Mozambique. The bank’s chairman resigned last month after breaking Covid-19 regulations.

These revelations have also led some to call for a review of Swiss secrecy laws, which make it easier for criminals to store illegally acquired money without oversight.