Whistle-blower re-arrested over WikiLeaks CDs

Outside Zurich's district court Elmer admitting making mistakes Keystone

Whistle-blower Rudolf Elmer has been arrested for breached banking secrecy by giving data to WikiLeaks, just hours after he was found guilty of another secrecy offence.

The arrest by Zurich police on Wednesday followed Elmer’s appearance in a Zurich court, in which he was hit with a SFr7,200 ($7,500) suspended fine. He was found guilty of threatening his former employer and breaking Swiss secrecy laws.

In a widely reported event on Monday he handed over two CDs to WikiLeaks founder Julian Assange in London. Elmer claimed the data contained details of some 2,000 offshore bank accounts belonging to as yet unnamed multinational companies and famous people in business, entertainment and politics.

“The state prosecutor’s office is checking to see whether Rudolf Elmer has violated Swiss banking law by handing the CD over to WikiLeaks,” the Zurich cantonal police and state prosecutor said in a joint statement issued on Wednesday night.

Elmer helped bring WikiLeaks to prominence three years ago when he used it to publish secret client details.

In Wednesday’s trial at a Zurich district court, Elmer, an ex-Julius Bär employee, was also found guilty of threatening former employees of the Swiss-based bank.

Elmer was ordered to pay most of the case’s SFr5,000 court costs but escaped the eight month jail term that prosecutors were demanding. He was cleared of making a bomb threat against a Julius Bär Zurich branch and denied taking money in return for secret data. 

Prosecutors alleged that Elmer stole client data after being fired from his job at the bank’s Cayman Islands branch, and then tried to extort money from the Swiss-based bank and its senior executives.

“Big mistakes”

During Wednesday’s trial Elmer said in his role as head of the Cayman Islands branch, he witnessed activities that were “immoral, unethical and verging on the criminal”. This moved him to “act against the offshore banking system”, he told the court.

He admitted sending threatening letters to Julius Bär employees and making a threat to the bank that he would pass on stolen data. He carried out the latter threat by giving the data to the tax authorities, the media and finally WikiLeaks.

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

He added that the threats were made after the bank had subjected him to a campaign of “psycho-terror”.

But Elmer denied making bomb threats against the bank or trying to blackmail his former employer.

“I made big mistakes, I admit that,” Elmer told reporters before the verdict. “I wouldn’t say I’m a hero, but also not that I’m a traitor.”

In his defense, his lawyer told the court Swiss banking secrecy laws did not apply for data originating from the Cayman Islands.

Elmer was not the only one to appear in a bad light. During the proceedings, the court heard that Julius Bär had hired up to 11 private detectives to spy on Elmer’s family around the clock. 

Defense strategy

The prosecution said Elmer had cultivated the image of whistle-blower only later in his dispute with the bank as a defense strategy.

Julius Bär has maintained that Elmer was acting out of revenge at being sacked in 2002. A lawyer for the bank said they were satisfied with the outcome.

In delivering the suspended sentence, judge Sebastian Äppli said Elmer had been “a part of the banking world” for years and had “profited”. 

His motive was not to fight against tax evasion, rather he was driven by his dismissal from Julius Bär, the judge said.  

He added that the verdict shouldn’t be seen as a move in favour of offshore centres, but the issue of banking secrecy needed to be tackled by parliament not a court.

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

Opinion of Elmer has been divided between protraying him as a hero or villain in Switzerland. Swiss media outlets did not publish the stolen data he initially presented and doubts have emerged about the authenticity of the material he has produced.

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 appeared before the Zurich District Court on January 19, accused of violating Swiss banking secrecy laws, industrial espionage and coercion of bank employees.

(With input from Matthew Allen)