The bombshell revelations of the Suisse secrets, reported by the Guardian and a number of international outlets, are a continuation of the path-breaking work of the Panama Papers and the Paradise Papers. In one sense, it’s the same old story over and over again. Every time journalists lift the financial sector’s curtain of secrecy, a web of corruption and nefarious activities is revealed, disproportionately from shady customers and families of dictators, with a smattering of seemingly respectable politicians in democracies caught in the net.
But this time, there’s something different. This time it’s not a small, obscure offshore island or a struggling developing country trying to figure out an alternative business model to drugs. It’s a major bank in the middle of Europe, in one of the most prosperous countries in the world; a country where the “rule of law” is supposed to reign supreme. Even more disappointing, given that the country and bank involved have made promises of transparency and doing better. And that’s the point: without more transparency, there can’t be accountability.
In fact, Switzerland’s position increasingly appears two-faced, with a legal framework that penalises those who attempt to pierce its secrecy. Countries around the world have passed whistleblower laws, recognising how hard it is to uncover untoward behaviour. Frances Haugen’s exposure of Facebook’s misdeeds probably wouldn’t have been possible without the US’s strong whistleblower laws. But Switzerland, one of the oldest democracies in the world, seems to have doubled down on its commitment to secrecy, regardless of the incentives it provides for bad behaviour, by threatening journalists and others who try to access data showing what is going on in the dark shadows of its financial system.
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What is the Suisse secrets leak?
Suisse secrets is a global journalistic investigation into a leak of data from the Swiss bank Credit Suisse. It comprises more than 18,000 bank accounts that were leaked to Süddeutsche Zeitung by a whistleblower who said Swiss banking secrecy laws were "immoral". The data, which is only a partial capture of the bank’s 1.5 million private banking clients, is linked to more than 30,000 Credit Suisse clients. The leak includes personal, shared and corporate bank accounts – holding, on average, 7.5m Swiss francs (CHF). Almost 200 accounts in the data are worth more than 100m CHF, and more than a dozen are valued in the billions. While some accounts in the data were open as far back as the 1940s, more than two-thirds were opened since 2000. Many of those were still open well into the last decade, and a portion remain open today.
The Guardian was among more than 48 media partners around the world including journalists at Le Monde, NDR, the Miami Herald and the New York Times. They spent months using the data to investigate the bank, in a project coordinated by Süddeutsche Zeitung and the Organized Crime and Corruption Reporting Project (OCCRP). They unearthed evidence Credit Suisse accounts had been used by clients involved in torture, drug trafficking, money laundering, corruption and other serious crimes, suggesting widespread failures of due diligence by the bank. It is not illegal to have a Swiss account and the leak also contained data of legitimate clients who had done nothing wrong. In its response, Credit Suisse said it "strongly rejects the allegations and inferences about the bank’s purported business practices".
Regrettably, but not surprisingly, no Swiss outlet was able to join the global journalism collaboration due to the danger of severe legal consequences under the country’s banking secrecy laws. But journalists in other countries should be given kudos too, for risking the possibility of Swiss authorities’ prosecution. Surely, Switzerland must know the chilling effect of its legislation: perhaps its very intent was to preserve its business models as long as possible, of taking a little slice of the ill-gotten gains of others, in return for providing a safe and secret place to hoard and store the geld.
The Suisse secrets have two particularly alarming aspects. The international journalistic collaboration only saw a small portion of the bank’s client data, but if in this tiny portion are already so many problematic customers, including dictators and their families, suspected war criminals, intelligence officials and chiefs, a human trafficker, sanctioned businessmen and human rights abusers – a true rogues’ gallery – what would we see if the window into the bank were larger?
Second, it appears the countries that suffer the most from the bank’s assistance to bad actors are developing countries and emerging markets. The revelation confirms what experts have warned of for a long time: Switzerland agreed to an automatic information exchange mostly with other advanced countries, but not with poor countries, and especially those that might be the home to these illicit activities. As a result, kleptocracy and corruption can still flourish.
It’s good to see that journalists believe in their duty to report, and that they fight for “the right to know” of the citizens of countries such as Switzerland, who can’t control what their politicians hide. Politicians in advanced countries are fond of making speeches condemning corruption elsewhere. But it is countries like Switzerland that are the key enablers: that provide the haven, ensuring the long-term returns.
We should be clear: Switzerland is not alone. It rightly complains that closing the door there will simply shift the activities to real estate and finance in Miami, London or other money-laundering centres. Still, there is something morally repugnant about those in the US, UK or Switzerland living off spoils stolen from those so much poorer. And those countries like Switzerland that have designed a legal code that makes this system flourish should be especially embarrassed.
How many stories, how many revelations, how many exposés, will it take for Switzerland, the US, UK and other countries to change their laws on secrecy in banking and real estate, and all the other activities that facilitate money laundering and promote crime and corruption? While this treasure trove showed Switzerland benefiting from a flow of money from poor countries, the system itself is corrupting: the rot of tainted money spoils all that it comes in touch with.
Hopefully, the Suisse secrets, this enormous achievement of honest and honourable journalism, will put to shame those who have resisted creating a more transparent financial and economic system.
Joseph E Stiglitz is a Nobel laureate in economics and a professor at Columbia University