Money laundering trial follows political drama

Zurich banker Oskar Holenweger is in hot water RDB

The trial of alleged money launderer Oskar Holenweger finally got underway on Monday following an eight year hiatus of political intrigue and media frenzy.

The federal court in Bellinzona is hearing claims that the Zurich private banker helped French energy group Alstom set up multi-million dollar slush funds to bribe foreign officials. The charges also include bribery, falsifying documents and mismanaging client assets.

Holenweger opened his defence by asking for the case to be dropped on the grounds that the initial evidence of wrongdoing (from a convicted Colombian drug baron and an undercover sting) was untrustworthy.

The trial is being seen in some sections of the media as a make or break case to test the efficiency of the country’s prosecutors in clamping down on financial crimes.

The infamous Holenweger case began in 2003 with the sensational testimony of Colombian narcotics baron José Ramos that implicated the banker as a money launderer for South American drug cartels.

The subsequent years have read like the plot of a crime novel; involving a German undercover investigator, a battle between the Swiss state prosecutor and a government minister (with the prosecutor resigning), a parliamentary probe and the uncovering of industrial scale corporate corruption.   

Holenweger, who is alleged to have made almost SFr1 million ($1.1 million) from dubious activities, was practically consigned to the sidelines as the drama unfolded. But he now finds himself in the spotlight as the courts take over the case.

Unfit evidence

Central to the early proceedings was ambitious state prosecutor Valentin Roschacher, who launched an investigation into Holenweger based on the evidence of Ramos.

To gain more evidence, Roschacher used a German undercover investigator, known as Markus Diemer, to pose as a drugs dealer looking to hide money. Holenweger is said to have taken the bait and accepted €830,000 (SFr1 billion), but as some key evidence was deemed to be unfit for court, it remains to be seen what part the sting will play in the trial.

Prosecutors could not establish a South American connection and no charges were ever brought.

As the investigation dragged into its third year, the influential Weltwoche magazine published an article claiming that Roschacher had been duped by the Colombian Ramos.

The embattled state prosecutor, who was also facing criticism relating to other events, found himself the subject of a parliamentary probe – ordered by then Justice Minister Christoph Blocher who was said to be a friend of Holenweger.

In the midst of the battle, Holenweger was arrested in Germany in possession of papers believed to have outlined a plot to overthrow the prosecutor.

Roschacher was forced to stand down in July 2006, but Blocher became the subject of a parliamentary inquiry into his role in the matter. He was eventually cleared of serious wrongdoing but was censured for mishandling the affair, damaging his political reputation.

Offshore accounts

The state prosecutor’s office failed in its bid to connect Holenweger with South American drugs cartels, but its investigation did uncover evidence that the banker had been funneling Alstom bribery funds through his Tempus bank to various offshore accounts.

This evidence was handed over by one of Holenweger’s personal assistants and has now come to form the basis of the banker’s prosecution in Bellinzona.

It also led to a major ongoing investigation of Alstom by the Swiss and French authorities into an alleged wide ranging system of bribery to secure projects in Brazil, Venezuela, Singapore and Indonesia.

Holenweger vigorously denies all the charges and has shown that he intends to put up a spirited defence in court.

Whether or not he is found guilty (for offences carrying punishments of several years in prison), it is clear that the case has significant ramifications beyond one individual and Swiss borders.

Holenweger case chronology

Summer 2003: Swiss state prosecutor Valentin Roschacher launches an investigation into Zurich banker Oskar Holenweger after allegations of drug money laundering by convicted Colombian narcotics baron René Manuel Ramos.

In that same year, Holenweger allegedly accepts €840,000 from an undercover German investigator posing as a drug dealer.

December 2003: Holenweger is arrested and locked up for seven weeks as the investigation proceeds.

March 2004: Investigating judge Ernst Roduner takes over as head of the investigation.

June 2006: Justice Minister Christoph Blocher orders an investigation into the state prosecutor’s office after several controversial actions, including the Holenweger case.

July 2007: Roschacher resigns as state prosecutor.

September 2007: A parliamentary commission criticises Blocher for the way he handled the Roschacher affair. Three months later, Blocher is voted out of ministerial office by parliament.

December 2009: The original investigation into Holenweger’s alleged connection to South American drug cartels is closed.

May 2010: Based on evidence gathered in connection with Alstom, the state prosecutor charges Holenweger with money laundering, bribery, falsifying documents and misuse of client funds.

April 11, 2011: The trial of Holenweger begins at the federal court in Bellinzona.

(With input from Gerhard Lob)