Report criticises cabinet in Hildebrand affair

Members of the parliamentary control committees, led by Ruedi Lustenberger (centre) presenting the recommendations Keystone

A parliamentary committee has accused the cabinet of mishandling a scandal involving the former National Bank chairman, Philipp Hildebrand, more than a year ago. The government rejects the criticism.

It is the latest step in an ongoing political and legal procedure to shed light on a controversial foreign currency transaction made by Hildebrand’s wife in 2011 and a suspected breach of banking secrecy rules by the strongman of the rightwing Swiss People’s Party, Christoph Blocher.

The control committees of both parliamentary chambers on Monday said the cabinet overstepped its mandate when it launched its investigation. Instead, the government should have involved the bank’s governing body.

The parliamentary panels drew up ten conclusions, calling on the cabinet to improve its crisis management and examine the legal responsibilities of a major issue at an early stage.

In a statement, the cabinet dismissed the accusations, saying it acted within its constitutional rights and there was no infringement of the central bank’s independence.

Micheline Calmy-Rey, a now retired former foreign minister who held the rotating post of Swiss president in 2011, also rejected the criticism in a comment she wrote for Tuesday’s Neue Zürcher Zeitung newspaper. In line with the cabinet statement, she stressed the legality of her actions.

She added it had been key to verify the rumours about Hildebrand before involving a wider circle of people to avoid damage to the central bank and Switzerland.

The report by the committee was unanimously approved, including by members of the People’s Party.

People’s Party strongman

Blocher said the committee got sidetracked in its investigation and failed to examine the role of Hildebrand. However, the control committee said its mandate was limited to probing the role of the government and the administrative authorities.

The People’s Party had been a strong critic of Hildebrand’s exchange rate interventions in 2009 and 2010.

In a related development, the House of Representatives on Monday rejected a proposal by the People’s Party to set up a special parliamentary inquiry with broad powers to look into the issue at large.

At the level of the judiciary, investigations are pending into at least three people, including Blocher, over suspected violations of banking secrecy rules. Parliament last June decided to lift his immunity from prosecution, a decision contested by Blocher.

At the centre is a document provided by an alleged whistleblower from a bank in Basel showing details of the currency transactions of Hildebrand’s wife.

She allegedly benefited from insider knowledge as she carried out a currency transaction.

Accusation

Hildebrand denied accusations of insider trading, but admitted that he should have cancelled his wife’s transaction. He added he was the victim of a “smear campaign”.

Hildebrand stepped down in January 2012 after nine years as member of the Swiss central bank’s directorate. A report in March by a leading international audit firm found no breach of regulations occurred in all financial transactions by all members of the bank’s governing board.

The former central banker currently serves as vice chairman of the New York-based investment management firm, BlackRock.