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Credit Suisse Leaks Indicate Clients Had Corruption, Drug Trafficking Ties

Credit Suisse
Credit Suisse managed accounts for clients involved in corruption and drug trafficking, Sunday’s “Suisse Secrets” data leak shows. Credit: Plaza Financiera/CC BY 2.0

Credit Suisse managed accounts for clients involved in corruption and drug trafficking, Sunday’s “Suisse Secrets” data leak showed.

A self-described whistle-blower leaked data on more than 18,000 bank accounts, collectively holding more than $100 billion, to the German newspaper Süddeutsche Zeitung. The newspaper shared the data with a nonprofit journalism group, which relayed it to 46 other news organizations around the world, including The Guardian and The New York Times, in a global investigation.

The data covers Credit Suisse accounts that were open from the 1940s until well into the 2010s — but not the bank’s current operations. The Guardian reported that some of these accounts remain open today, a claim The New York Times hasn’t confirmed.

The people listed in the “Suisse Secrets”

The people listed as holding amounts worth millions of dollars in Credit Suisse accounts includes King Abdullah II of Jordan, and the two sons of the former Egyptian strongman Hosni Mubarak.

Other account holders, including a Pakistani intelligence chief who helped funnel billions of dollars from the United States and other countries to the mujahedeen in Afghanistan in the 1980s, and Venezuelan officials ensnared in a long-running corruption scandal, indicate Credit Suisse opened accounts for — and continued to serve — not only the ultrawealthy but also people whose problematic backgrounds would have been obvious to anyone who ran their names through a search engine.

Soon after the stories were published, Credit Suisse issued a statement, saying it “strongly rejects the allegations and insinuations about the bank’s purposed business practices.” It went on to state that the information is “based on partial, inaccurate, or selective information taken out of context, resulting in tendentious interpretations of the bank’s business conduct.”

Credit Suisse leaks raise questions about banks

The “Suisse Secrets” leak follows the so-called Panama Papers in 2016, the Paradise Papers in 2017, and the Pandora Papers last year. All of these shed light on the secretive workings of banks, law firms, and offshore financial-services providers that allow wealthy people and institutions — even some accused of crimes, in a number of examples — to move huge sums of money, largely outside the purview of tax collectors or law enforcement.

The new disclosures are likely to intensify legal and political scrutiny of the Swiss banking industry and, in particular, Credit Suisse.

With its ironclad bank-secrecy laws, Switzerland has long been a haven for people who are looking to hide money. In the past decade, that has made the country’s largest banks — especially its two giants, Credit Suisse and UBS — a target for the authorities in the United States and elsewhere who are trying to crack down on tax evasion, money laundering and other crimes.

Key revelations in the “Suisse Secrets”

Among the biggest revelations is that Credit Suisse continued to do business with customers even after bank officials flagged suspicious activity involving their finances. For instance, Venezuela’s former vice minister of energy, Nervis Villalobos, who was criminally charged by the US Justice Department in 2017, was an account holder.

Even though employees in Credit Suisse’s compliance department had reason to be wary of doing business with him — a 2008 report, which the bank obtained, detailed corruption allegations involving Villalobos and Venezuela’s state-owned oil company, Petróleos de Venezuela — they nonetheless opened an account for him in 2011.

All told, there were 25 Credit Suisse accounts, containing a total of about $270 million, that belonged to people accused of being involved in a wide-ranging conspiracy surrounding Venezuela’s oil company, The New York Times reported. The accounts remained open after the scandal started to become public, but were closed by the time criminal charges were filed.

Credit Suisse also kept accounts open for a Zimbabwean businessman who was sanctioned by U.S. and European authorities for his ties to the government of the country’s longtime president, Robert Mugabe, with accounts staying open for several months even after the sanctions were imposed.

Leaks raise questions about fortune sources

The leaked Credit Suisse bank information included many accounts linked to government officials across the Middle East and beyond. The data raises questions about how public officials and their relatives accumulated vast fortunes in a region rife with corruption.

The sons of former President Hosni Mubarak of Egypt, Alaa and Gamal Mubarak, held a total of six Credit Suisse accounts at various points, including one in 2003 that was worth $196 million.

King Abdullah II of Jordan, one of the few officials in the leaks who still remains in power, had six Credit Suisse accounts, including one with a balance that exceeded $224 million.

Jordan’s Royal Hashemite Court said in a statement that there had been no “unlawful or improper conduct” in relation to the Credit Suisse accounts. They held portions of the king’s private wealth, which was used for personal expenses, royal projects to help Jordanians and the maintenance of Islamic holy sites in Jerusalem, of which he is the custodian.

Senior intelligence officials and their offspring from several countries that cooperated with the US in the war on terrorism also had money stashed in Credit Suisse.

As the head of the Pakistani intelligence agency, General Akhtar Abdur Rahman Khan helped funnel billions of dollars in cash and other aid from the US and other countries to the mujahedeen in Afghanistan to support their fight against the Soviet Union.

In 1985, the same year President Ronald Reagan called for more oversight of the aid going into Afghanistan, a Credit Suisse account was opened in the name of three of General Khan’s sons. (The general never faced charges of stealing aid money.) Years later, the account would grow to hold $3.7 million, the leaked records show.

The whistle-blower speaks out

The leaked Credit Suisse records were provided to Germany’s Süddeutsche Zeitung more than a year ago by an unidentified whistle-blower. Dozens of news organizations collaborated on the project, but none were based in Switzerland because a 2015 law restricted journalists from writing articles based on internal bank data.

The whistle-blower said in a statement to the media consortium that Swiss bank-secrecy laws were “immoral,” adding that, “The pretext of protecting financial privacy is merely a fig leaf covering the shameful role of Swiss banks as collaborators of tax evaders.”

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