Vast Leak Exposes How Credit Suisse Served Strongmen and Spies

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

However, after a new global investigation conducted by the German newspaper Süddeutsche Zeitung and also the Organized Crime and Corruption Reporting Project (OCCRP), the murky side of this shining success was uncovered.

Leaked records from the bank identified more than 18,000 accounts belonging to foreign clients stashing their money at Credit Suisse.

The investigation provided “a revealing glimpse behind the curtain of Swiss banking secrecy,” as described by OCCRP.

Despite two decades of promises to crack down on illegitimate funds, leaked records exposed the bank’s serving of dozens of criminals, dictators, intelligence officials, spies and corrupt politicians, with tremendous wealth, around $100 billion, The New York Times (NYT) said.

This is not all, the bank allegedly kept these accounts open even after the crimes of its customers were publicly revealed, OCCRP read on Sunday.

 

Serving Strongmen and Spies

Credit Suisse, the second-largest bank in Switzerland, has recently witnessed a dirty money scandal after managing accounts for human rights abusers, fraudsters and corrupt businessmen who have already been under sanctions.

The bank was accused of hiding vast wealth of clients involved in torture, money laundering, corruption, drugs smuggling and other serious crimes, Reuters reported.

About how these accounts were revealed, by an anonymous whistleblower, leaked data from the Swiss banking records were given to the German newspaper Süddeutsche Zeitung, which, in return, shared it with OCCRP and 46 other news organizations like The New York Times, The Guardian and France's Le Monde, according to the same source.

The investigations’ report was published on Sunday, February 20, 2022, with Credit Suisse’s denial of any wrongdoing, trying “to shake off a series of risk-management scandals and a 1.6 billion Swiss franc ($1.75 billion) loss in 2021 that has pummelled its stock,” Reuters wrote.

In fact, the leaked data covered more than 18,000 accounts holding more than $100 billion, according to NYT.

The latest revelations also shed light on Switzerland only a little more than three years after it got rid of a centuries-old culture of secrecy that had made it a peaceful “global no-questions-asked vault for the world’s rich,” under US pressure.

“For CS, even if the allegations are unfounded, this raises questions about its business practices in wealth management and should tie up management having to spend time fighting fires instead of moving forward,” Royal Bank of Canada (RBC) analysts said.

“Credit Suisse strongly rejects the allegations and insinuations about the bank's purported business practices,” the bank said in a statement on Sunday night, February, 20, 2022.

 

Unsavory Clients

Either opening or maintaining bank accounts for a panoramic array of high-risk clients across the world, the Swiss bank did not respect the treaties of cracking down on criminals and corrupt individuals. The list holds former dictators, spies and corrupt businessmen like a human trafficker in the Philippines, a Hong Kong stock exchange boss jailed for bribery, a billionaire who killed his Lebanese pop star girlfriend, and executives who stole Venezuela’s state oil company, in addition to many corrupt politicians from Egypt to Ukraine, The Guardian reported.

Not to mention the Yemeni spy chief who was implicated in torture, “the sons of an Azerbaijani strongman who rules a mountainous territory as his own private fiefdom,” according to the same source.

In fact, they all come from different countries, each of them was charged with a different crime, driving from a different authoritarian regime, and everyone was enriching himself in his own way.

However, the only thing that united them was: Where they kept their money.

Among the account holders were the sons of former Egyptian dictator Hosni Mubarak, Bashar al-Assad’s family and Jordan's King Abdullah II who had six accounts, one of which showed more than $224 million.

NYT revealed that the ruling couple, Abdullah and Ranya, were loyal customers of Credit Suisse.

Since 2011, King Abdullah has had at least six accounts in the bank, while his wife, Ranya, had at least one.

In a statement, the family's lawyers said the “related accounts are used for the acquisition of assets, investments, operating and personal expenses and general payments, including the financing of certain proprietary initiatives."

They insisted that the couple did not pick money from the treasury, public assets, or the government budget in accounts held abroad or for personal enrichment.

Following the leak, the Royal Court of Jordan accused, through a statement, the investigation of giving "inaccurate and outdated and misleading information,” aimed at “discrediting Jordan.”

Were they suspected or not, this will be revealed during the ongoing inquiry.

As for the notorious former intelligence chief, Omar Suleiman, during Mubarak rule, there is no need to prove his corruption and crimes.

In 2003, Suleiman's relatives opened a joint account using his name in Credit Suisse with more than $52 million; the account remained open even after his death, in addition to another account opened between 1996 and 2005.

Suleiman, who died in 2012, was a famous figure in supervising the torture of opponents at that time. He was later appointed vice president of Egypt before Mubarak's ouster.

After the leak, Paul Radu, co-founder of the OCCRP, said: “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.

“Our investigation exposes how these people can bypass regulation despite their crimes, to the detriment of democracies and people all over the world,” he added.

To see if they can clarify the reasons behind the risk taken by the bank to “protect” this category of clients, OCCRP talked to several former and current employees at Credit Suisse; none of them would talk on the record, unsurprisingly.

While some said the main reason behind this scandal was the “highly toxic corporate culture that incentivized taking on risk to maximize profits and bonuses,” OCCRP has found.

“The bank incentivizes a banker to look the other way with an account they know to be toxic,” said a former senior manager in private banking, stressing that “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 employees said that this has led to a culture in which there are “two sets of rules for two sets of clients: The rich and the ultra-rich,” according to the same source.

Very big accounts, in fact, are secretly kept hidden and only a few senior executives might know the real owners.

 

At Risk of EU Blacklist

Reacting to the Credit Suisse leak, The Guardian reported that the three largest parties in the European parliament are calling the EU to determine whether Switzerland should be classified as “a high-risk country for money laundering and financial crime,” if so, the country will be added to the money-laundering blacklist, as suggested by the main political grouping.

According to the British newspaper, experts said that the decision would be a catastrophe for Switzerland’s financial sector, linked, in a way or another, to rogue nations including Iran, Myanmar, Syria and North Korea.

Representing Europe’s center-right political parties, Markus Ferber, the coordinator on economic affairs for the EPP, said: “When Swiss banks fail to apply international anti-money-laundering standards properly, Switzerland itself becomes a high-risk jurisdiction.

“When the list of high-risk third countries in the area of money laundering is up for revision the next time, the European Commission needs to consider adding Switzerland to that list.”

Ferber added that there are close ties between EU and Swiss banks, which means that anti-money-laundering scarcity in Switzerland’s banking industry “also pose a problem for the European financial sector.”

On the other hand, Credit Suisse issued a statement in which it “strongly rejects the allegations and inferences about the bank’s purported business practices,” insisting that the latest revelations were “largely historical,” based on “selective information taken out of context, resulting in tendentious interpretations of the bank’s business conduct.”