Switzerland struggles to rid itself of crime networks

A federal study of organised crime was ordered following the resignation of Elisabeth Kopp (centre) Keystone Archive

Switzerland remains a favoured haunt of organised crime networks, despite the best efforts of the authorities.

An Organised Crime Observatory is being created in Geneva to set up a massive commercial database on international crime networks, as a way to fight crime.

According to a study funded by the federal authorities, Switzerland is not only widely infiltrated by mafia networks, but the Swiss themselves also often play a key role in them.

The study, “Organised Crime and Corruption in Switzerland”, was published late last year. It looked at the period from 1986 to 1996. But its author says things have not improved, despite a raft of legislation aimed at cracking down on money laundering, tax evasion and helping other countries track down looted national assets.

The Federal Police office refused to comment, saying it did not respond to the findings of private studies, whether state-funded or not.

According to the OECD’s Financial Action Task Force, Swiss legislation to combat money laundering is among the most advanced in the world. The Swiss insist that their banking secrecy laws do not protect criminal activities.

Laws not applied

“There are a few loopholes, but generally the legal situation is now OK,” says Nicola Giannokopoulos, the author of the study.

“However, we are not seeing results. We have good laws, but they are not applied,” he told swissinfo. He said there was a lack of strategy, and a lack of means for those combating organised crime on the ground, and a lack of political will.

He said Geneva’s cantonal prosecutor, Bernard Bertossa, who has become one of the champions of the fight against dirty money, is the exception that proves the rule: “At times, it seems as though Geneva is the only island of resistance.”

Bertossa has attempted to bring a number of prominent foreign figures to justice for money laundering and corruption. The former senior Kremlin official, Pavel Borodin, is being investigated in connection with the alleged laundering of kickbacks paid by two Swiss firms in return for lucrative contracts.

But the collapse of the trial in 1998 of an alleged Russian mafia boss, Sergei Mikhailov, and the record damages awarded to him, were a major blow, which Giannakopoulos believes marked a watershed in the fight against organised crime.

Integrated strategy

He says the Swiss legal system – like that of most countries – is suited to dealing with individual criminals, not large criminal structures.

“To my knowledge, the only example of cracking down on a whole criminal structure, was under Giovanni Falcone in Italy,” he added. Falcone, who was killed in a car bomb attack in 1992, was the driving force behind Operation Clean Hands, and the mass trials of mafia suspects.

“To get results we need a strategy. And there is no integrated concept on tackling organised crime – from the beginning of a criminal inquiry to the eventual conviction,” he said, pointing out that the battle has to be international.

Giannakopoulos’s research was hindered by the less than cooperative attitude of certain cantons. Ticino failed to respond to his requests for help, while a minister in Zug stated that he “wasn’t concerned with those kinds of problems”.

Kopp Affair

The study was ordered as a result of the 1988 Kopp Affair, when the justice minister, Elisabeth Kopp, was forced to resign after it emerged that she had informed her husband that the Swiss-Lebanese bank of which he was vice-president was being investigated for money-laundering. This led to evidence that the Federal Prosecutor’s Office and Federal Police had not pursued international money laundering activities as actively as they should.

Giannakopoulos’s study showed that a number of Swiss officials were implicated in these criminal structures. Criminals know that to establish their business activities in a particular canton, they have to ingratiate themselves with the decision makers there.

“Once you have entered this circle, everything is open to you,” he says.

Part of the aim of the study was to understand the structures of criminal organisation, and better understand how they compare.

“Switzerland is the perfect place to see this,” Giannakopoulos says. Switzerland is like a melting pot of mafia activity, with criminal organisations from all over the world flourishing.

The study identified 32 major Italian crime networks, 17 Russian ones, 16 from the USA, 13 Colombian and 10 Belgian. There was even one that was entirely Swiss. Four of these networks had over 500 people on their pay roll.

Legitimate businesses

These mafia-type organisations do not only come to Switzerland for the superb financial services. Many are involved in prostitution and smuggling contraband goods. But several have invested in the real economy, establishing legal enterprises as a front to their criminal activities.

“When a criminal comes here with a lot of money to invest, it can either be seen as a problem, or as business as usual. Officially it is regarded as a problem. But in reality, it is not always seen as a problem,” Giannakopoulos says.

“There are many ways of managing organised crime – you can never really defeat it – but you have to decide whether you are going to accept it or oppose it,” he adds.

Observatory

Giannakopoulos is the driving force behind the Organised Crime Observatory. The aim is to pool the knowledge of specialists from all over the world to create a massive commercial database on international crime networks.

One of the areas it has examined recently is the network of financial institutions that finance Islamist terrorism. But Giannakopoulos says it has proven much harder to identify the boundary between legitimate and illegal activities in this area than with classic organised crime groups.

“There is a problem with defining what a terrorist network is,” he explains.

by Roy Probert