For more than half a century the Alpine nation of Switzerland has built a reputation as the world´s centre for tax evasion, fraud accounting, money laundering, racketeering, safe haven and above all a staunch ally of corrupt third world leaders and a great beneficiary of third world corruption. Various categories of persons including Popes, presidents, prime ministers, corrupt dictators, wealthy business men, and drug dealers have all used and benefited from the banking secrecy laws of Switzerland. As a result her economy has been described in various terms as underground economy, deposit box for dirty money and dirt-driven economy.
Over the last couple of years countries such as United States, Germany and France have argued that they have become victims of Swiss illegal financial activities and as result have stepped up campaign to get Swiss authorities to cooperate in fighting tax evasion, fraud and money laundering. The campaign has even brought a row between the German Finance Minister Mr. Peer Steinbrueck and members of Swiss parliament. These nations claim they are losing billions of dollars annually through tax evasion and other illegal financial activities. In 2009 action by the US Justice Department against the Swiss Banking giant UBS earned the United States close to $1 billion. In 2001, the United States learned that the Swiss had protected the bank that handled finances for Osama Bin Laden. One of them, the Bahrain International Bank, had funds transiting through non-published accounts of Clearstream, which has been qualified as a "bank of banks" and was involved in one of Luxembourg's major financial scandals.
Western governments have argued that dirty money which come in many forms welcomed by Switzerland without due diligence allows the proceeds of corruption, money laundering, embezzlement, drug trafficking, racketeering and terrorism to tag alongside and deny the world´s poor the chance to escape poverty. Swiss banks are reputed to be holding an estimated 35% of the world's private and institutional funds (or 3 trillion Swiss francs).
However, of all the victims of Swiss banking secrecy laws and her shady banking practices, developing countries in general and Africa in particular seem to have suffered the most. The global infrastructure of international financial secrecy with headquarters in Switzerland has helped bleed trillions of dollars in illicitly generated money out of Africa and the rest of the developing world. The activities of Swiss banking institutions and real estate companies have plunged Africa and other third world nations into debts, poverty, misery, malnutrition, diseases, economic meltdown, infrastructure decay and political instabilities through the help they give to corrupt politicians, civil servants, the business elite and corrupt multinational corporations who collude and connive with the corrupt entities to loot and hide the proceeds of their ill-gotton gains in Switzerland.
Many third world countries especially those in Africa lack the infrastructures needed to run successful economies. They lack schools, hospitals, roads, harbours, rail infrastructure, irrigation facilities, electricity, clean water, telecommunication, and sanitation facilities because of the loots. Many children are orphaned and malnourished and many do not have access to education and healthcare because money meant for all that are stolen and are sitting in Swiss banks such as UBS and Credit Suisse. There has not been a single corrupt politician or dictator in Africa, Latin America and Asia who has not had dealings with the banks in this secretive alpine country. While third world countries continue to struggle to provide the basic necessities of life Swiss economy is awashed with money that could save millions from hunger, starvation and diseases.
Every year since the year 2000 developing countries receive about $100-billion in aid annually from rich countries with about $10-billion going to Africa. But these rich countries headed by Switzerland receive about $900- billion from these poor countries ($150-billion from Africa) in the form of tax evasion, embezzlement, fraud accounting, debt servicing and corruption. The World Bank´s Stolen Asset Recovery initiative estimates the cross-border flow of proceeds from criminal activities, corruption and tax evasion at between $1 trillion and $1.6 trillion per year, about half of which come from developing and transitional economies.
Global Financial Integrity agrees with World Bank and says, "$900-billion is secreted each year from underdeveloped economies, with an estimated $11.5 trillion currently stashed in safe havens. More than one quarter of these hubs belong to the UK, while Switzerland washes one-third of global capital flight".
About 25 percent of the GDP of African States is lost to corruption every year amounting to more than $150-billion a year with most of it finding its way into Switzerland. The negative impact of that has been increasing the cost of goods by as much as 20%, deterring investment, holding back development and preventing the people from escaping poverty. The fact as pointed out by Global Financial Integrity is that most of the money that denies poor countries the chance to escape poverty sits in Swiss Banks.
The following few examples illustrate how Swiss banks and the economy have become parasites feeding on the economies of poor African and Third World countries.
Over the last couple of years a number of Swiss banks have been accused of accepting money from dictators like Sani Abacha, Mobutu, Lansana Conte, Gnassingbe Eyadema, Arap Moi, Omar Bongo, Obiang Nguema, Blaise Campore, Denis Sassou Nguesso, Eduardo dos Santos, Sadam Hussein, Ferdinand Marcos, Baby Doc Duvalier, Hosni Mubarak, Yoweri Museveni, Augusto Pinochet, Gaddafi and Ibrahim Babangida without questioning the source of their wealth.
For example the Swiss economy was the main recipient and beneficiary of Sani Abacha´s $5-billion embezzlement of Nigeria´s oil money. When it was discovered that Abacha used the crook banks in Switzerland to steal the money, the country wanted to distance herself from the criminal enterprises run by her banks and benefited by her economy and her citizens. But in the end she had no choice but repatriate over $700-million to the government of Nigeria after five years of foot dragging. The banks in Switzerland that aided, abetted and provided shelter for Abacha´s stolen money are UBS AG, Zurich; UBS AG, Geneva; Union Bancaire Privee, Geneva; Credit Suisse, Zurich ; Bank Len, Zurich; Banque Barring Brothers, Geneva; Goldman Sachs and Company, Zurich; Gothard Bank, Geneva; Citibank Zurich; Banque Nationale De Paris, Basle; FIBI Bank (Schweiz) A. G. Zurich. Only heaven knows how much of Abacha´s loot still remain in these banks.
Again the Arab daily newspapers Asharq Al-Awsat and Al-Hayat reported that former Prime Minister Dr. Iyad Allawi told them in interviews that Saddam Hussein admitted he invested stolen Iraqi money-- which the Iraqi Governing Council estimates at $40 billion-- in Switzerland, Japan and Germany, among others, under fictitious company names. Directors of those shell companies would deposit 5% in company bank accounts, and the money was effectively laundered. Swiss and French lawyers did the paperwork.
One million Iraqis died during the oil for food programme while money that could have saved them was accepted by Swiss Banks and their corrupt counterparts in Japan and Germany.
Also after 18 years of legal wrangling Switzerland agreed to let the people of Philippines receive the $700m looted by Ferdinand Marcos and kept by her crook banks. Switzerland kept $700m while children were starving to death and hospitals were closing down for lack of medicines and electricity.
Furthermore, between August 2001 and 2004, Peru recovered nearly over $180 million stolen by her former spy chief Vladimiro Montesinos from several jurisdictions including Switzerland.
In May 2007, an agreement between the governments of the United States, Switzerland and Kazakhstan allowed for the repatriation of $84 million denied the people for many years. Again it took Switzerland 12 years to return $74m of the $110m stolen by Raul Salinas to the government of Mexico. Switzerland still has in her possession the money looted by the dictator ´Baby Doc´ Duvalier 24 years after he was chased away by the people of Haiti.
Additionally, when Mobutu died in 1997 Swiss newspapers reported that the country may be home to at least $5-billion of Mobutu´s stolen assets. The report was also confirmed by CNN World News in September, 1997. The whole world was shocked when Swiss authorities announced that Mobutu´s stolen assets in the country totalled something just under $8m and this was after they had sold his villa for $2-million. The shock sent a chill down the spine of DR. Congo´s president. He has still not recovered and has refused to show any interest in pursuing the money.
In recent years Switzerland has repatriated some of the monies her banks criminally accepted at the expense of poor nations and the political leadership is using it to score cheap political points instead of being ashamed of it. Mali has received just $2.5 million out of the estimated $5-billion deposited in that country by Mali´s corrupt political leaders among them former dictator Moussa Traore. Argentina has also received $4.5million from a bribery case.
It is believed that most of the $2 billion stolen by ex- President Arap Moi's family is stashed in Switzerland and her sister countries in the Alpine region. In 2003, investigation by the international risk consultancy firm Kroll on behalf of government of Kenya into allegations of corruption on the part of Arap Moi's government revealed a trail of corrupt practices by Arap Moi, his children, members of his government and their associates with most of their 24 years of ill-gotten gains hiding in Switzerland, Britain, Luxembourg and the Caribbean. Credit Suisse - Zurich and Citibank- Geneva came up several times as the banks where where most of the loots are being kept. "During the beginning of December 2003, Philip Moi made his move through Zara [his wife]. She [Zara] left the country [Kenya] for Italy, from where she visited Leichtenstein and Lugano located inside the Swiss canton of Tieino. It is believed that Tieino, though a remote area, consists of over 100 banks" and it was here that Philip Moi laundered the money he stole from Kenya including his USD750 million wealth. Source: Kroll Report, 2003. http://wikileaks.org/wiki/KTM_report#Target_3
Switzerland has mounted a fierce campaign to portray herself as a clean, responsible country. A senior Swiss diplomat says Switzerland no longer deserve its reputation as a safe haven for the ill-gotten gains of corrupt dictators. Speaking in Geneva Ambassador Paul Seger said the government had returned $1.6 billion (SFr1.9 billion) of stolen funds in recent years but admitted that "incidents such as the Marcos, Abacha or Montesinos affairs reinforce the international perception that there are still more assets to be returned". Source: Swissinfo.ch.
There are a good number of experts who still believe Switzerland deserves her reputation. Richard Murphy, Director of Tax Research LLP says: "The idea that Switzerland has a clean economy is a joke; it is a dirt-driven economy". Her economy is dirt-driven because her financial institutions (a vital sector of her economy) have been implicated in a number of corruption scandals involving corrupt third world leaders and their associates. In fact Switzerland can best be described as economic vampire, parasite and predator feeding on the economies of poor third world countries.
The fact is that Switzerland has not been able to convince anyone that its banks still do not hold money for Omar Bongo, Lansana Conte, Obiang Nguemaa, Denis Sassou Nguesso, Eduardo dos Santos, Blaise Campore, Gaddafi, Hosni Mubarak, Arap Moi, Gnassingbe Eyadema, Ibrahim Babaginda, Jerry Rawlings all of them corrupt dictators with little to show for the billions of dollars that they received for oil, gas, gold, diamond, cocoa, timber and other resources.
During the trial of the disgraced Elf executives, they claimed that they paid Omar Bongo $40 million a year for concession rights in his oil rich but economically impoverished country.The executives claimed the millions of dollars were transferred into Bongo's Swiss bank accounts. But we have not heard any comment from Switzerland regarding that money and now that Bongo is dead there is no doubt that what Democratic Republic of Congo went through (with Mobutu's loot) will be the fate of Gabon should the authorities there make any attempt to retrieve the money.
Where Swiss leaders do not get it is that their past and present actions have led millions of people who could have lived to die in poverty, malnutrition and diseases. Whereas more than 800 million Indians live in poverty and squalor, with little access to education, health, water, housing and sanitation, the BJP party estimated during the May 2009 election campaign that the nation has lost close to $1.4 trillion most of it stashed in foreign banks notably in Switzerland.
In 2007 Swiss federal prosecutor abandoned an investigation into suspected money laundering involving the former prime minister of Madagascar. As a result a Swiss bank will refund SFr2.8 million ($2.3 million) to Tantely Andrianarivo, a move that has "disappointed and shocked" the Madagascan government, which has demanded the money back" to be used to help millions of people languishing in poverty. Source: Swissinfo.ch.
It is common knowledge that Denis Sassou Nguesso of Congo, Dos Santos of Angola, Obiang Nguema of E. Guinea --like their old friends the late Omar Bongo of Gabon, Abacha, Mobutu and Conte on Guinea-- have billions of dollars stashed in Swiss Banks.
The sad thing about this parasitic behaviour is that it is supported by almost all the citizens of that country. An investigation by Swiss Bankers Association claims that 80% of Swiss support the banking secrecy laws, revealing a society deeply embedded in a culture of impunity and exploitation, where the licit acts as a shield protecting the illicit in a terribly respectable manner.This law is the foundation of all the corruption, embezzlement, tax evasions, fraud and all the criminal enterprises that we see in the world.
But Switzerland has had it both ways with her hypocrisy and double standards. Her politicians condemn corruption in Africa and the third world while her banks make fortunes off that corruption. She claims to be a champion of democracy and development but the actions of her banks and companies like SGS, UBS have proven other wise. In fact if there is any justice in the world her banking executives should have been put on trial by the International Criminal Court for crime against humanity because there is no difference between those who use guns to kill and those who kill millions by accepting money that could be used to save them from hunger, starvation, malnutrition, diseases and to provide them with medicines, food, water, shelter, schools and electricity.
The cost of Switzerland collusion and connivance with the corrupt entities in Africa and the third world fall primarily on the poor people in those countries who are denied every opportunity to escape poverty. Many live in squalor with no access to health and sanitation facilities, water, electricity, housing and even food. Over one million people in those poor countries die of malaria, 90% of them from Africa with most of the victims being children due to absence of mosquito nets, and other effective drugs. Millions of others also die from starvation, hunger, malnutrition, polio, mizzles, tuberculosis and the six killer diseases due to absence of proper health facilities.
As monies meant for development are stolen and stashed in Swiss Banks, the poor are left on their own to fend for themselves with aid agencies being left to pick the pieces with them. Millions have died, millions are starving and many more are suffering as a result of the role play by Swiss banks, real estate agencies and other companies. Such suffering cannot go on forever.
It is time for Switzerland to act as a responsible member of the global community,tear down her banking secrecy laws and her corrupt financial infrastructures. It is time for Switzerland to stop her banks from accepting looted funds from Africa and the third world that make so many face starvation, hunger and death. And it is time for Switzerland to turn words of fighting corruption into action and deeds and repatriate all the stolen money to its rightful owners and stop parasiting on poor African and third world countries so they can also escape poverty like most citizens of Switzerland have.
By Lord Aikins Adusei
Political Activist and Anti-Corruption Campaigner. He blogs at www.ghanapundit.blogspot.com