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30 September, 2022
 
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Historic leak of Swiss banking records reveals unsavory clients

Problematic accounts held over $8 billion in assets

Source: Organized Crime and Corruption Reporting Project

Despite two decades of pledges by Credit Suisse to crack down on illegitimate funds, data leaked from the bank reveals that it catered to dozens of criminals, dictators, intelligence officials, sanctioned parties and political actors with outsized wealth.

Credit Suisse is not the only culprit. Many major banks and financial service firms have faced similar scandals over the years. Many have then pledged to reform.

Key Findings

-Accounts identified by journalists as potentially problematic held over $8 billion in assets.

-Compliance experts who reviewed journalists’ findings said many of these customers should not have been allowed to bank at Credit Suisse at all.

-Asked why so many of these accounts existed, current and former employees described a work culture that incentivized taking on risks to maximize profits.

-Journalists and experts say Switzerland’s draconian banking secrecy laws effectively silence insiders or journalists who may want to expose wrongdoing within a Swiss bank. A Swiss media group was unable to participate in the Suisse Secrets investigation due to the risk of criminal prosecution.

A Yemeni spy chief implicated in torture. The sons of an Azerbaijani strongman who rules a mountainous territory as his own private fiefdom. Bureaucrats accused of looting Venezuela’s oil wealth and hastening its descent into a humanitarian crisis.

They come from all over the world, each associated with a different corrupt, authoritarian regime and each enriching themselves in their own way. But there is one thing that unites them: Where they kept their money.

After its luxury watches, snow-capped mountains, and superior chocolates, the Alpine nation of Switzerland is perhaps known best for its secretive banking sector. And at the heart of that sector is Credit Suisse, which over its 166-year history has become one of the world’s most important financial institutions.

With nearly 50,000 employees and 1.5 trillion Swiss francs in assets under management for 1.5 million clients, this banking behemoth is still just the second-largest bank in Switzerland, a testament to how central the banking sector is to this wealthy and comfortable nation.

But, as a new global investigation spearheaded by the German newspaper Süddeutsche Zeitung and OCCRP reveals, this glittering success has its murky side.

Journalists have obtained leaked records identifying more than 18,000 accounts belonging to foreign customers who stashed their money at Credit Suisse. The records are nowhere near a complete list of the bank’s clients, but they provide a revealing glimpse behind the curtain of Swiss banking secrecy.

Over 160 reporters from 48 outlets spent months poring through the data — and found that dozens of the accounts belonged to corrupt politicians, criminals, spies, dictators, and other dubious characters. These are not obscure names, their misdeeds often identifiable through a simple Google search. And yet, their accounts — which held over $8 billion — remained open for years.

The accounts in this story are denominated in Swiss francs. Since the value of the franc has fluctuated over time, we have converted the account holdings to their historic U.S. dollar equivalents.

Credit Suisse’s clients included the family of an Egyptian intelligence chief who oversaw the torture of terrorism suspects for the CIA; an Italian accused of laundering criminal funds for the infamous ‘Ndrangheta criminal group; a German executive who bribed Nigerian officials for telecoms contracts; and Jordan’s King Abdullah II, who held a single account worth 230 million Swiss francs ($223 million) at its peak, even as his country raked in billions in foreign aid.

Venezuelan elites accused of plundering the state oil firm funneled hundreds of millions of dollars into Credit Suisse accounts. The money flowed during a period when widespread looting from government coffers precipitated an economic collapse that has prompted six million people to flee the country and driven others into near starvation. The bank kept its Venezuelan clients’ accounts open even as global media exposed corruption cases against many of them.

Compliance experts who reviewed OCCRP’s findings said many of these people should not have been allowed to bank at Credit Suisse at all.

“People should not have access to the system if what they are carrying is corrupt money,” said Graham Barrow, an independent expert on financial crime. “The bank has a clear duty to ensure that the funds it handles have clear and legitimate provenance.”

Credit Suisse is not the only culprit. Many major banks and financial service firms have faced similar scandals over the years. Many have then pledged to reform. And yet — as projects like this one reveal — they have continued to allow dodgy clients who have enriched themselves in countries with poor legal systems and lax oversight to safeguard their wealth in some of the safest and most secure places in the world.

“The irony is that Switzerland has become the place for dirty money to go because it is pure, well-managed, reliable,” says James Henry, a senior adviser to the U.K. charity Tax Justice Network who has studied tax evasion at Credit Suisse. “The business model of taking money out of poor countries is the problem.”

Asked to comment on the findings of the Suisse Secrets project, Credit Suisse said that risk management was “at the very core of our business.” While refusing to discuss individual customers, the bank said that they were “predominantly historical” and that an “overwhelming majority” of problem accounts identified by journalists “are today closed or were in the process of closure prior to the receipt of the press inquiries.”

“As a leading global financial institution, Credit Suisse is deeply aware of its responsibility to clients, and the financial system as a whole to ensure that the highest standards of conduct are upheld,” it added.

TAGS
Cyprus  |  Switzerland  |  corruption  |  business  |  world

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