Bank whistle-blower stands trial

Swiss banker Rudolf Elmer said he wanted the world to know the truth about offshore accounts AFP

Whistle-blower Rudolf Elmer has appeared before a Zurich court to face charges of breaking Swiss banking secrecy laws.

It comes just two days after he handed WikiLeaks more client data.

Shortly after the trial began, Elmer admitted that he had sent anonymous threatening letters to his ex-employer, Julius Bär bank, following intimidation.

But he said bomb threats against the bank had not come from him.

“I was in an extreme situation,” he said. “It’s logical that I developed a defense strategy.”

Elmer’s public show of defiance drew the battle lines against the Zurich cantonal prosecutor, who will also attempt to prove in court that the former Swiss banker tried to defraud Julius Bär .

On Monday, Elmer handed over two CDs to WikiLeaks founder Julian Assange in front of the world’s media. Elmer claims the data contain details of some 2,000 offshore bank accounts belonging to as yet unnamed multinational companies and famous individuals in the world of business, entertainment and politics.

Elmer’s appearance before a Zurich court on Wednesday is related to earlier stolen data that was published on WikiLeaks in 2008. The court will hear allegations that he threatened Julius Bär employees and demanded money from the bank before handing the data over to the whistle-blowing website.

Speaking at the London news conference on Monday, Elmer said his objective had always been to “educate” people about the murky role that offshore banking plays in tax evasion and money laundering.

“My vision is to teach people how the offshore [banking] secrecy business works,” he told swissinfo.ch.

Death threats

However, Julius Bär sees things differently, claiming that Elmer has always been motivated by a desire for revenge after being sacked in 2002.

“After his demands (including financial compensation) in connection with the dismissal could not be satisfied, Mr Elmer embarked in 2004 on a personal intimidation campaign and vendetta against Julius Bär,” the bank said in a statement.

“To back up his campaign, he also used falsified documents and made death threats against employees,” the statement added.

In 2008, the Julius Bär succeeded in having WikiLeaks’ United States website closed down only for the decision to be reversed on appeal in a legal exercise that proved costly to the bank’s image.

Opinion of Elmer is divided between portraying him as hero or villain in Switzerland. Swiss media outlets would not publish the stolen data he initially presented and several doubts have emerged about his motives and the authenticity of the material he has produced.

This week’s developments come hard on the heels of a coordinated global crackdown on tax evasion that has placed Switzerland under increasing pressure since the outbreak of the financial crisis.

Extortion or whistle-blowing?

Many Swiss people, particularly in the banking community, have felt under siege from perceived jealous rival states seeking to end Switzerland’s competitive financial competitive advantage.

The German and French governments have paid for stolen Swiss banking data to assist their investigations into tax evasion. Some of the data was sold by a former employee of HSBC private bank in Geneva and suspicions persist that Elmer was after a pay off initially.

“It is understandable that [Elmer] wants to portray himself on a personal level as a whistle-blower, but it is quite clear that at the beginning he was demanding money,” economic crime expert Christof Müller told Swiss television news.

In London, Elmer rejected the criticism as a smear campaign designed to portray him as “a paranoid or mentally ill person”. “I assume these are tactics, a strategic move, to silence me,” he said.

Trust in justice

However, Elmer told swissinfo.ch that he still retains faith in the impartiality of the Swiss judicial system. “I do not have any indication that it will be an unfair trial. I still trust Swiss justice. We will find out on Wednesday.”

If Elmer is found guilty he faces a possible eight-month suspended prison term and a SFr2,000 ($2,085) fine. He claims he already spent six months in Swiss custody during an earlier investigation into banking-secrecy breaches, but moved to Mauritius after being released.

According to Elmer’s website, Julius Bär may also ask the court to make Elmer liable for all the bank’s losses incurred as a result of his whistle-blowing. An additional charge of $1.2 million (SFr1.15 million) to pay for the bank’s surveillance measures plus undisclosed compensation from Julius Bär employee Curtis Lowell may also be billed to Elmer, according to the website.

The Rudolf Elmer case

Rudolf Elmer, 55, worked for nearly two decades at Swiss private bank Julius Bär until 2002.

In 1994 he transferred to the bank’s Cayman Islands branch where he became Chief Operating Officer.

During this time Elmer claims that he tried to bring evidence of offshore account abuses to his bosses, which he says were ignored.

Elmer was sacked by the bank in 2002 after the discovery that client data had gone missing.

Three years later Elmer approached media agencies with his evidence, but details were never published. He has also filed a complaint against Swiss banking secrecy at the European Court for Human Rights.

In December 2007, Elmer handed over his data to WikiLeaks that began publishing the following month.

Julius Bär succeeded in getting WikiLeaks’s US operations shut down, but the court order was over-ruled on appeal. In march 2008, Julius Bär dropped its lawsuit against WikiLeaks.

Elmer will appear before the Zurich District Court on Wednesday, January 19, accused of violating Swiss banking secrecy laws, industrial espionage and coercion of bank employees. The hearing is expected to last one day.

Swiss whistle-blowers

Elmer joins a group of whistle-blowers that includes Christoph Meili and Bradley Birkenfeld.

Christoph Meili was a Swiss security guard who saved Holocaust-era bank documents from the shredder at UBS bank in 1997.

Meili, who was then working for an outside security firm, gave the documents he saved to a Jewish organisation. The disclosure led to the Zurich authorities opening a judicial investigation against Meili on suspicion of violating banking secrecy.

Bradley Birkenfeld, a former UBS private banker who disclosed the bank’s secrets, has been in jail in the United States since January 8. He is sitting out a 40-month sentence for conspiracy to defraud.

Birkenfeld cooperated with a US investigation into wealthy Americans who used Swiss bank accounts to evade federal taxes.

(With input from Andrew Littlejohn in London)