Nick Shaxson ■ Why the Swiss case against whistleblower Elmer may hurt the bankers
Rudolf Elmer, the Cayman-based Swiss whistleblower who went to prison after spilling secrets relating to the Swiss bank Julius Baer, has long been victimised not only by the Swiss banking establishment, and Switzerland’s courts (which as we’ve extensively documented, seem to have played fast and loose with the law in order to nail him) – but also by much if not most of the Swiss media. In Switzerland he’s been demonised as a traitor and a criminal, and jailed too.
Such is the fate of the offshore whistleblower.
Elmer’s case rumbles on, and a verdict is expected to be announced publicly at the Higher Court of Zurich on August 23, at 14.00 PM.
To understand what’s going on here, take a look at our earlier blog How Switzerland Corrupted its Courts to nail Rudolf Elmer, and a subsequent article in The Economist which says “He argues that Switzerland has corrupted its court system to frame him.”
The case against Elmer hinges on the question of whether or not he broke Swiss banking secrecy law, and our blog provides reams of documents as first-hand evidence that demonstrates that his whistleblowing fell firmly outside the scope of that law. In short, to fall foul of the secrecy law, the whistle-blown data has to come from a Swiss bank — but the Julius Baer entity in question wasn’t a bank, and it wasn’t Swiss either. (It was a Cayman-based non-bank entity, whose name was “Julius Baer Bank and Trust Company Ltd., Cayman Islands.”)
Swiss courts and judges have (apparently wilfully) ignored a lot of evidence in their quest to pursue him. As Elmer told TJN earlier this year:
“I really think that Zürich’s financial centre and Zürich’s justice wants me to be cruficied at Paradeplatz in Zurich, in front of UBS, Credit Suisse, Julius Baer and HSBC, in order to threaten other bankers.”
It’s heartening to see, at last, a mainstream Swiss newspaper, Sonntagszeitung, taking a refreshingly different tack from most of the Swiss media. In a recent article (web translation here) the newspaper agrees with the gist of what we wrote in our blog and concludes:
“So Elmer cannot have broken [Swiss] banking secrecy.”
Strikingly, they also accuse the public prosecutor of malpractice.
The article focused on two of Elmer’s court trials at the High Court in Zurich, on June 23rd and 24th, which we wrote about. This two-day event was a peculiar combination of two cases against Elmer: one, for handing data to the Swiss authorities; and a second one, for apparently handing over data to Julian Assange of Wikileaks in 2011. The evidence shows that in neither case did he break the Swiss banking secrecy law — but the Swiss courts went after him in any case.
Elmer has written to TJN again, adding that the recognition of these facts (by Sonntagzeitung, and to a certain degree by the public prosecutor) is significant, and even potentially explosive:
“This is not only a banking scandal but also a judicial scandal which is now about to unfold in the state of Zurich.”
The Prosecutor, Dr. Peter C. Giger, stated in his plea in court on June 24th:
“it is an oversight and regrettable that the signed Cayman employment contract of Rudolf Elmer is not a part of the case files presented to the courts.” (translated from: “es sei ein Versehen und es sei bedauerlich, dass der Cayman Arbeitsvertrag nicht in die Prozessakten enthalten sei.”)
In other words, Elmer writes, the prosecutor himself admits that not only the Prosecution Office, but also Julius Baer bank, have either deliberately or accidentally hidden crucial evidence from the judges of the Lower Court and the Higher Court of Zurich — and this, for over 11 years.
The case has other strange aspects too. In the Swiss legal system, prosecutors are part of the executive branch of government, while judges of the high court are part of the judiciary. But in Elmer’s case, there appears to have been a blurring of the lines. There has been a re-investigation of the facts of Elmer’s case (involving 20 binders full of evidence, including international legal assistance requests, and an expert report by the Institute of Comparative Law about Cayman and Swiss Banking Laws.) This investigation was supposed to be carried out by the executive body, but instead it was, Elmer writes, “guided and supervised by the judges of the High Court of Zurich.” This may seem arcane but it penetrates the very bedrock of the separation of powers between the executive, the legislative and the judiciary.
The whole case, Elmer says, should not even have been initiated back in 2005: it was clear from the outset that he wasn’t working for a Swiss bank when he blew the whistle, and thus wasn’t covered by the Swiss banking secrecy law. If you don’t believe us, go and review the hard evidence (with more on Elmer’s blog)
But there’s a note of optimism in here too. The concessions by the prosecutor, and a possible change of mood and attention by the Swiss media, suggest that Elmer may eventually win his case. As he put it,
Rudolf Elmer “could become the first whistleblower in Switzerland who cannot be found guilty under the Swiss banking secrecy laws after releasing information about the dubious practices of Swiss Private Banking.
. . .
It is hoped that Causa Elmer will also serve as a wake-up call for clients of banks domiciled in Switzerland holding criminal assets in Swiss banks – because whistleblowing is possible in Switzerland, and criminal clients cannot rely on the protection of Swiss Bank Secrecy any more.”
Here’s hoping that this case will do lasting damage to the Swiss secret banking establishment.
Tax Justice Network’s French podcast: LA TRANSPARENCE FISCALE ÉVOLUE EN AFRIQUE, MAIS LES DÉFIS À SURMONTER DEMEURENT IMPORTANTS #42
EU proposal sets ambitious goals for Anti-Money Laundering supervision
REGRAS DE TRIBUTAÇÃO GLOBAL DEVEM SER DECIDIDAS NA ONU #39: the Tax Justice Network Portuguese podcast
Crooked Crook Ltd: company registration scandals on the Tax Justice Network podcast, the Taxcast
July 2022 Spanish language tax justice podcast, Justicia ImPositiva: Los desafíos que enfrenta Gustavo Petro en Colombia
Tax Justice Network Arabic podcast #55: مؤتمر المناخ والعدالة المناخية في مصر
The Tax Justice Network’s French podcast: LA TRANSPARENCE DEMEURE UN OBJECTIF POUR LE SECTEUR EXTRACTIF ET LES ADMINISTRATIONS FISCALES EN AFRIQUE #41
Amazon’s tax challenge: the Tax Justice Network podcast, the Taxcast
Registro global de ativos pode acabar com sigilo financeiro: the Tax Justice Network Portuguese podcast
Taxation, illicit financial flows and human rights – Submission to UN Expert
29 June 2022