Don't bank on Swiss accounts to hide ill-gotten gains

By , Staff writer of The Christian Science Monitor

The Swiss Federal Banking Commission made big news in Europe last week. It actually named 19 Swiss banks that accepted more than $660 million of funds from the family of the late Nigerian dictator Sani Abacha.

The "name and shame" decision is seen as a "landmark" by Frank Vogl, vice chairman of Transparency International (TI), a global coalition striving to curb corruption.

It's a sign, says Mr. Vogl, who helped found TI in 1993, that Swiss authorities are serious about tightening up on the use of Swiss banks to harbor criminally raised money, including proceeds of political corruption.

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Switzerland froze the Abacha accounts in 1999. Nigeria wants the money back, and is seeking perhaps billions more hidden elsewhere.

The report listing the Swiss banks was published only in French and German. And a press conference was cancelled. Perhaps that's why the action got little ink in the United States.

Nonetheless, by severely reprimanding in a public document Credit Suisse, Switzerland's second-largest bank, and other banks, Swiss authorities recognized that laundering of dirty money is "disturbing and damaging" to the reputation of their nation as a financial center.

Over the years, a long list of corrupt dictators have emerged as big customers of Swiss banks. These include Congo's Mobuto Sese Seko, Philippine President Ferdinand Marcos, and Haiti's Jean-Claude "Baby Doc" Duvalier.

Today's corrupt national leaders may see it as more difficult to hide their money abroad.

In Vogl's view, corruption is "a crime against humanity."

It slows economic growth and wastes public finances. It discourages foreign investment. It destabilizes political systems and institutions.

TI itself will make news Wednesday when it publishes its "corruption perception index."

This annual index tries to rank more than 90 countries in terms of the degree to which they are widely seen by business people as the home of corrupt politicians and public servants.

The index shines "an uncomfortable spotlight" on the most corrupt regimes in the world, notes Washington-based Vogl.

If a nation's rank sinks a few points down the perception list, it is likely to be highlighted by the press in that country. Credit-rating agencies in rich nations, trying to guide investors, take note of such changes. So do multinational firms.

Interestingly, the successor of Nigeria's General Abacha is Olusegun Obasanjo, also a founder of TI and chairman of its Advisory Council until becoming active in politics in late 1998.

At the time of Mr. Obasanjo's election in 1999, Peter Eigen, chairman of TI, said Obasanjo faces "a daunting task" in trying to cut corruption levels in Nigeria. Last year's index ranked Nigeria as the second-most corrupt among nations (after Cameroon). Corruption perceptions, though, do not change quickly. Nigeria's ranking is unlikely to change much in Wednesday's press release.

Obasanjo has been pushing new rules and regulations to discourage bribery and other elements of corruption. But Vogl says it is "highly improbable" that Obasanjo's campaign will succeed without stability and growth in Nigeria's economy.

Nigeria's ethnic and economic problems are so enormous that it needs foreign help, including relief from its $33 billion in foreign debts, says Vogl.

During his visit to Nigeria last month, however, President Clinton did not offer any debt relief.

Corruption is a serious problem in much of the world.

Russia gets only a minuscule amount of foreign investment because the nation is seen as burdened by lawlessness and corruption. Investors hope Vladimir Putin, the nation's new president, can gradually change that.

Indonesia has put former President Suharto on trial for corruption. Meaningful reform in Indonesia may not happen fast, says Vogl. But at least the new government is tackling the issue.

Opinion surveys in many nations show huge support for anticorruption measures.

That was reflected in Venezuelan elections earlier this year. Voters rejected establishment politicians, seen as corrupt, and elected Hugo Chavez president.

Corruption perceptions helped Vicente Fox Quesada win the presidency July 2 in Mexico.

TI also ranks rich nations for corruption. Despite a tough anti-corruption law, the US ranks No. 19 in last year's Bribe Payers Index. Sweden, Australia, and Canada were ranked as the three least corrupt

The well-to-do member nations of the Organization for Economic Cooperation and Development signed an Anti-Corruption Convention in 1997, and some progress has been made in its implementation, reckons Vogl.

Germany, for example, no longer allows a tax break on bribes made abroad.

(c) Copyright 2000. The Christian Science Publishing Society

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