Prosecutors hope the high profile trial of a Zurich private banker that ended Friday will send a message to Europe and beyond: Switzerland -- where there was no law against bribing foreign public officials until a decade ago -- is getting tough on corruption
Prosecutors hope the high profile trial of a Zurich private banker that ended Friday will send a message to Europe and beyond: Switzerland -- where there was no law against bribing foreign public officials until a decade ago -- is getting tough on corruption.
The prosecution told Switzerland's highest criminal court that Oskar Holenweger took 1 million Swiss francs ($1.2 million) to create anonymous bank accounts for French engineering company Alstom SA to use in bribing foreign officials.
The company wasn't a defendant in the weeklong trial and didn't immediately respond to an Associated Press request for comment Friday. Holenweger's defense said he isn't guilty and will ask for huge damages if acquitted. A verdict will be announced next Thursday.
The Swiss case began in 2003 when a Colombian druglord alleged that Holenweger was a money launderer for South American drug cartels.
While the prosecutors couldn't link Holenweger to the South American drug cartels they came across evidence they say shows he helped Alstom funnel as much as 80 million francs in "black funds" -- money undeclared to Swiss or foreign tax authorities -- through his private bank to officials in exchange for infrastructure contracts in Brazil, Indonesia, Singapore and Venezuela.
Prosecutors say Holenweger opened 163 different accounts in his Zurich-based private bank and in some European commercial banks to deposit money for Alstom between 1997 and 2002. The Swiss government froze Alstom's money that Holenweger deposited in Swiss commercial banks and in the private bank that he founded in 1998.
The trial tested how far Swiss prosecutors would go to pursue complicity in corruption.
"Corruption can be fought efficiently only if you stop the black money before it reaches its destination -- usually officials, politicians, the so-called PEPS, Politically Exposed Persons," prosecutor Lienhard Ochsner told the Federal Criminal Court, near the Italian border. "A conviction for complicity in corruption would mean an important first for Switzerland."
Alstom, a French heavy engineering giant based near Paris, makes electric generating power plants as well as railway rolling stock, including France's famed TGV high speed trains. It was saved from bankruptcy in 2004 when French President Nicolas Sarkozy -- then the finance minister -- organized a state bailout.
Alstom's British subsidiary has been investigated for related allegations of corruption, bribery and money laundering. Two of its executives in Britain were released without charge last year. A related French judicial inquiry was opened in November 2007, based on information from Swiss authorities.
Though prosecutors say Alstom was involved in the case, the company wasn't on trial. Alstom did not immediately respond to a request for comment Friday. The company has said its policy is not to comment on ongoing investigations and noted that no legal action for corruption has been started against it.
Ochsner proposed a 30-month conviction for Holenweger, partially suspended, and a fine to be set by the court later. Holenweger was charged with bribery, money laundering, falsifying documents, mismanaging client assets and attempting to corrupt foreign public officials.
Holenweger opened his defense asking for the case to be dropped on grounds it was based on unreliable initial evidence from the drug lord. Defense lawyer Lorenz Erni said Holenweger's life was ruined by prosecutors who relied on evidence gathered illegally through the undercover agent.
Holenweger was held in police custody for 49 days between December 2003 and January 2004 as the investigation got underway.
Taking the stand, Holenweger, 66, said he didn't know money flowing through the many anonymous accounts he set up in his private bank was laundered or funneled illegally.
"As the owner and CEO of Tempus Bank, I had no right to know the whereabouts of the money," he told the court. "I had simply to trust the ones I worked for as a trustee."
Bribes to officials in developing countries were once common practice for big European firms. The Organization for Economic Cooperation and Development called for the practice to be outlawed in 1997, which France did in 2000.
But starting in 2000, Switzerland began tightening its corruption laws, adopting a new one against the bribing of foreign public officials.
James Nason of the Swiss Bankers Association wouldn't comment specifically on the Holenweger case. But he said the nation has a long history of fighting money laundering and its banks -- whose reputations are their greatest assets -- have been obliged since 1977 to verify the identity of their clients.
"The banks' main obligation is to know their customers," he said. "Secondly, they are forbidden by law to accept any funds that they know or must assume come from a crime.
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