Nick Shaxson ■ Tax haven whistleblowers: where are the human rights organisations?


Rudolf Elmer

Update: here’s another whistleblower victim of tax haven practices for human rights organisations to help defend. Antoine Deltour, of Luxleaks fame. 

We are big fans of human rights organisations, generally speaking, but we’re going to say some uncomfortable things about some of them here.

Yesterday we noted that Rudolf Elmer, the Swiss whistleblower who has been persecuted for years by the Swiss tax haven industry, via the Swiss courts and other arms of Swiss state, collapsed in court during a trial where he is accused of breaking Swiss banking secrecy laws. He has already spent five months in prison and he faces more: read the background here.

The Swiss establishment and media has mostly focused on Elmer the man, rather than the wider issues: many powerful people in rich and poor countries were implicated in the leaks.

Elmer’s case is complex and he has made some mistakes, but ultimately this is the case of a tax haven showing its long claws and sharp teeth and attacking those who bring transparency. Large numbers of powerful people in rich and poor countries are implicated in this.

All this is troubling enough in itself. But the next question we want to ask is this: where are the human rights organisations on his case?

Why are they not jumping up and down about these issues? Why are they not putting pressure on the Swiss government, and providing moral and material support to Elmer? He has complained privately to us that he cannot get the international support he needs. If there is one kind of organisation that should be engaging on cases like his, it is human rights organisations (and the likes of TJN too, of course, but our resources are pitifully small, and unable to cope with such a project).

Elmer is not the only Swiss tax haven whistleblower. There is Hervé Falciani, who blew the whistle on the financial crimes of HSBC Switzerland, and is now in hiding in Spain: news of renewed persecution emerged today. See this interview to get a flavour. Have human rights organisations weighed in to support him? We don’t think so, but we will also provide them with opportunities to comment and disagree with us (get in touch: write us a guest blog!), and on cases such as Christoph Meili (who exposed appalling Swiss banking Nazi gold crimes) or Bradley Birkenfeld, the UBS whistleblower.

And it’s not just about Switzerland, nor, to be honest, is this just about whistleblowers.

When, for example, did a human rights organisation complain about the fact that the Cayman Islands has a law where you can go to prison not just for revealing confidential private sector information, but merely for asking for it? (And Cayman is far from the worst offender.) When have they taken large accountancy firms to task for their roles in setting up complex schemes that suck billions of dollars in revenues from developing countries, depriving their citizens of basic rights like water and healthcare?

Large human rights organisations (see a long list of large and small ones here) seem to have gone AWOL in the case of many tax haven-related abuses. A few lesser-known groups are, it is true, starting to engage in this field – see our Human Rights webpage for more details of the first flowerings in this area – but the big hitters do not seem to be there yet. We are at the beginning of a long road.

Now here comes the particularly harsh question, and commentary.

Tax havens involve, or are protected by, some of the most powerful countries in the world. See Britain’s role here, for instance, or that of the United States.

Human rights organisations are extremely good at criticising the governments of poor countries around the world – and rightly so. But are they prepared to take on the bruisers in the West: to challenge those governments in rich countries that are also substantially funding them?

We at TJN think this is a big test of their mettle.

Take Africa, for instance. Large human rights groups have weighed in very effectively on the looting of that continent, on many occasions. They have even criticised western multinational corporations where they have been complicit.

But have they criticised those countries and law and accountancy firms that are helping shelter the funds looted from Africa? Have they commented widely on the secrecy that breeds political impunity that enables Africa’s wealthiest and most powerful élites to loot their countries and get away with it?

There’s been a bit of it, but we have not yet seen the level of engagement that is now required.  We are confident that it will come: the arguments are, well, unarguable.

In fact, a great opportunity exists here for human rights groups in this terrain, not just by virtue of the rich research and advocacy possibilities.

Governments in poor countries — particularly the repressive ones — tend to have a heavily conflicted relationship with human rights organisations. This is inevitable, and it is in one sense a measure of these organisations’ success in pointing fingers and speaking truth to power.

But it would also be useful for them also to find ways to have more collaborative engagements too. This agenda – tax havens – could be a way to create a basis for a new kind of relationship with the governments of developing countries. By pointing the finger at tax havens and the rich-world countries that protect them, they may well find that many people in the governments (and societies) of developing countries will start to see the potential for a shared agenda, where the corrupt oppressors aren’t just located in poor countries.

We at TJN have been very successful in changing perceptions of corruption in exactly this way: this was one of the purposes of our Financial Secrecy Index, which was designed partly to counter traditional corruption indices that point to African countries as the “most corrupt” and countries like Switzerland and the United Kingdom — both vast repositories of illicit, corrupt African loot — as the ‘cleanest.” Our index effectively turns those indices – and perceptions of corruption to boot – upside down. (There’s a new book on this coming out soon too.)

In fact, human rights organisations will find instances of oppression and human rights abuses in tax haven after tax haven. Take Jersey, for example, the most British of all tax havens, and the most important single haven to Britain. Here’s an excerpt from a plea made by politicians in Jersey, not so long ago:

““Our island’s ‘justice’ system has become a tool of oppression rather than arbiter of fairness and protection for all ordinary citizens.  Complaints alleging corruption being brought to a number of politicians can now simply no longer be ignored. The reported abuses are as diverse as the members of the public bringing them to us.”

Then, from the press release itself:

“Our Law Office has become the tool of choice for the clique at the apex of power to try to silence and, if necessary, drive from office or ruin those who dare challenge the established order.

This is not bombast. Go to Jersey, speak to financial dissidents, and you will see what we mean. This island feels very British indeed, but under the surface it is a different creature altogether, with a silent stream human rights and other abuses beneath the surface.

There is work to be done here. Whether it is supporting whistleblowers like Rudolf Elmer, of working on UN sanctions, or on an ocean of economic crimes committed around the world, it is time to roll up the sleeves and get stuck in.

Tax justice and human rights: watch this space.

And do read our Human Rights edition of Tax Justice Focus, our newsletter.



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Comments • 6

  • December 11, 2014 - 10:10 pm

    You provide your own answer – resources are pitifully small, and most human rights organisations are unable to cope with such a project. That’s the problem. Global Witness is a good candidate and does tie investigations to Western structures but can only be in so many places at any given time.

    • Nick Shaxson
      December 12, 2014 - 11:31 am

      We disagree. Large human rights groups have resources that are orders of magnitude larger than TJN’s. We have four and a half core employees. What the Elmer case reveals is the ferocity of the fightback by the big banks and large states in protecting criminal activities. While many human rights projects focus on individual countries, or even individuals, these cases have global systemic relevance. An argument that they are ‘too busy’ to take an interest doesn’t wash.

  • Matti Kohonen
    December 12, 2014 - 3:02 pm

    The issue probably is that human rights organisations do not yet see that there are issues of civil and political rights in rich coutnries such as Switzerland, and really how harmful tax havens are in relation to wider human rights issues. Tax havens allow for human rights abusers across the world to get away with crime by hiding their money, embezzlement and grad scale theft. This is probably a problem of blindness to HR abuses in rich countries – and the perception that HR abuses happen somewhere “out there” rather than closer to hom – and both are absoultely equally serious and interlinked.

  • December 14, 2014 - 1:23 pm

    Good points. Related to your confidence that there will be an engagement by the human rights organisations in the future, what kind of impact do you think their engagement would/will have on the debate and on the kinds of reform proposals? How do you see the spectrum of proposals for transforming global tax regime say ten or thirty years from now? Cheers, Teivo Teivainen (University of Helsinki/State University of Rio de Janeiro).

    • Nick Shaxson
      December 15, 2014 - 9:39 am

      Those are huge questions, and the answers can only be speculative. I think that if whistleblowers are better protected, then a range of good things can flow from that. Protecting one whistleblower may seem like protecting just one person, but they often challenge entire systems that have ramifications in multiple countries, rich and poor. Not the specific reply you were hoping for, but still.

  • Kate Donald
    December 15, 2014 - 4:04 pm

    This is an important challenge, thanks Nick. Honestly, I think this issue is not getting as much attention as it should because it ‘falls down the gaps’ between different types of human rights organisations (HROs). The HROs that pay attention to economic policy/tax issues tend to be small (with concomitant meagre capacity and resources) and focused on social and economic rights/development/poverty. The HROs that focus on political repression and violations of due process rights tend to not be so engaged in tax or economic issues, and therefore may miss these cases. (I’m oversimplifying by describing two discrete silos of HROs, but it’s real problem nonetheless.) You’re right that there are many giant HROs with far far greater funding than TJN, and issues like this should certainly be on their radar – these are basic questions of civil and political liberties after all. I know that all HROs worth their salt have constant internal debates about what types of cases they should be focusing on / how far they can stretch their mandate, resources and expertise (there are after all a plethora of human rights violations and threats vying for their attention) and hopefully your challenge will help cases like these gain some traction. I would say that HROs of all sizes and shapes are starting to pay more attention to global systemic issues and corporate power, so perhaps the terrain is fertile…

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