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Sunday, October 1, 2023

Credit Suisse leak shows it catered to criminals, dictators, ISI Generals – financial crimes enabled by Switzerland

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.

German newspaper Suddeutsche Zeitung and the Organised Crime and Corruption Reporting Project (OCCRP), a network of journalists from around the world that sifted through the data, obtained leaked records on more than 18,000 Credit Suisse accounts, the largest leak ever from a major Swiss bank. These accounts held in excess of $100 billion at their peaks. This is just a small subset of the bank’s overall holdings, but still found dozens of accounts of dubious characters.

Accounts identified as potentially problematic held over $8 billion in assets. The data covers accounts that were open from the 1940s until well into the 2010s but not the bank’s current operations. Compliance experts who reviewed journalists’ findings said many of these customers should not have been allowed to bank at Zurich-based Credit Suisse at all.

Asked why so many of these accounts existed, current and former employees described a work culture that incentivized taking on risk 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, OCCRP found.

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, the report said.

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 with a dark underbelly.

ISI general and other unsavory clients of Credit Suisse

General Akhtar Abdur Rahman Khan, ex-chief of Pakistan’s notorious spy agency ISI and one of Pakistani dictator Zia-ul-Haq’s closest aide, was named in the leak. Saudi Arabian and US funding for mujahideen fighters battling Soviet Union’s presence in Afghanistan would go to the CIA’s Swiss bank account, and the end recipient was ISI led by Gen. Akhtar.

OCCRP’s report stated that one of the two Akhtar family accounts at Credit Suisse — held jointly by three of Akhtar’s sons — was opened on July 1, 1985. That same year, US President Ronald Reagan would raise concerns about where the money intended for the mujahideen was going. By 2003, this account was worth at least five million Swiss francs ($3.7 million at the time). A second account, opened in January 1986 in Akhtar’s name alone, was worth more than 9 million Swiss francs by November 2010 ($9.2 million at the time).

Other senior intelligence officials and their offspring from several countries that cooperated with the US also had money stashed at Credit Suisse: 15 top-tier spy chiefs from around the world, or their close family members, held accounts, OCCRP reported. Some have been accused of financial crimes, torture, or both. This includes those from Jordan, Yemen, Iraq, Egypt, and Pakistan.  

Other clients included: two sons of the former Egyptian strongman Hosni Mubarak; family of an Egyptian intelligence chief who oversaw torture of terrorism suspects for the CIA; an Italian accused of laundering criminal funds for the infamous ‘Ndrangheta criminal mafia syndicate; a German executive who bribed Nigerian officials for telecom contracts; 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; an Algerian general accused of torture; the children of a brutal Azerbaijani strongman; a Serbian drug lord known as Misha Banana; a Hong Kong stock trader once sent to jail on bribery charges; a tycoon who ordered the murder of his Lebanese lover; a Filipino human trafficker; and dishonest politicians from Egypt to Ukraine.

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.

One Vatican-owned Credit Suisse account was used to spend 350 million dollars in an allegedly fraudulent scheme in London which is the focus of a criminal trial of several defendants, including a cardinal.

Switzerland enabled criminals and human rights abusers

The anonymous source who leaked the Credit Suisse data to German newspaper Suddeutsche Zeitung provided a statement explaining his or her motivations:

It reads, in part: “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. This situation enables corruption and starves developing countries of much-needed tax revenue.

“I want to emphasize the fact that the responsibility for this state of affairs does not lie with Swiss banks but rather with the Swiss legal system. Banks are simply being good capitalists by maximizing profits within the legal framework they operate in. Simply put, Swiss legislators are responsible for enabling financial crimes and – by virtue of their direct democracy – the Swiss people have the power to do something about it.”

This behavior of Switzerland is yet another example of Western hypocrisy, wherein Western nations harangue other nations to follow the ‘rules-based international order’ while flouting those very same rules.

British ‘overseas territory’ the Cayman Islands (a relic of colonialism whereby UK controls an island near Cuba), the United States and Switzerland do most to help the globe’s richest citizens hide and launder money, according to a ranking published in 2020 by the Tax Justice Network (TJN) – a group pushing for international financial reform.

TJN chief executive Alex Cobham said the “Anglo-American axis of secrecy” was exacerbating corruption and tax abuse. In its analysis, the study’s authors said the Cayman Islands was part of what it dubbed Britain’s ‘spider web’ of satellites, where London influences laws and the appointment of officials. Panama, the British Virgin Island (another ‘overseas territory’ of UK), Seychelles and Palau are some other tax havens that have come under scrutiny.

The study also singled out the United States for criticism, saying that although Washington had pushed other countries to reform, it had not done enough to stamp out illicit money flows at home, flagging secretive shell companies in some states. The Tax Justice Network put Switzerland in third place in its ranking behind United States, saying its bank secrecy reform to share financial information with foreign authorities applied largely to rich countries rather than poor ones.

(With IANS inputs)

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