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Wikileaks Poised to Shatter Swiss Banking Secrecy

Wikileaks Poised to Shatter Swiss Banking Secrecy

Players in the world of Swiss banking, known for its heavy cloak of secrecy, may soon be facing unwelcome scrutiny: Wikileaks has the goods on all sorts of nefarious activities by rich and famous individuals -- as well as the august institutions that serve them -- and the whistle-blowing website's notorious founder, Julian Assange, has promised "full revelation."

By Mike Martin TechNewsWorld ECT News Network
01/18/11 5:00 AM PT

Bank secrecy is back in the news, this time as former Swiss banker Rudolf Elmer handed WikiLeaks founder Julian Assange two computer discs at a high-profile news conference on Monday.

Tax evaders, nefarious bankers, shady politicians, unethical business leaders, cheating celebrities, organized crime bosses: It's all on the discs, Elmer claimed, including information about Julius Baer, his one-time Swiss bank employer.

"We will treat this information like all other information we get," Assange told reporters amidst the intermittent glare of snapping cameras, in a rare public appearance since his Dec. 16 release on bail over a Swedish sex charge. "Yes, there will be full revelation."

Wheels in Motion

Any revelation could prove costly for tax evaders.

"Wikileaks just needs to reveal that a person has an offshore account, and voluntary disclosure protection could be off and prosecution begins," attorney Scott Michel of Caplin & Drysdale told TechNewsWorld. Michel handles the legal requirements for hundreds of UBS and Julius Baer offshore accounts.

No names will be released yet, Elmer said, in part to assure accuracy and in part to let "government authorities sort it out."

"We haven't seen the material," Assange added, noting that Wikileaks will vet it via a process that has so far posted only 2,444 of 250,000 diplomatic cables leaked in a scandalous worldwide sensation that has some U.S. government authorities calling for Assange's head.

Repeat Leaker

Claiming that he had previously tried providing the information to tax authorities and journalists, Elmer -- a balding bespectacled man who paced nervously during the disc handoff -- said Wikileaks was his "only hope to get society to know what's going on."

Painting the online leak factory as a last resort doesn't entirely square with Elmer's past, however. In 2008, he leaked files about his employer's offshore banking in the Cayman Islands, prompting a U.S. judge to temporarily shutter WikiLeaks. He's currently facing charges of violating strict Swiss secrecy laws.

However, the secrecy banks promote is the problem, "damaging society," Elmer said.

It's helped create a corrupt system that lets big shots squirrel away big bucks overseas and out of audit range: US$20 trillion is held offshore to evade taxes, said John Christensen from the Tax Justice Network, who attended the news meet at London's Frontline Club.

No Place to Hide

Wikileaks is a "game changer" because it's gradually taking away the ability of corporations, governments and wealthy people to hide from scrutiny, said Simon Fraser University assistant communications professor Peter Chow-White, an expert in new communication technologies and social media.

"The exposing of financial malfeasance is welcome in our world, where many people have no way of comprehending what goes on behind closed doors," added Simon Fraser University communications professor Richard Smith, who publishes the Canadian Journal of Communication. "We should be suspicious where theft of small amounts of food nets harsh punishment, and so-called 'white collar crime' either passes unnoticed or merits fines," he told TechNewsWorld.

To merit U.S. prosecution, Wikileaks Swiss bank documents will have "to demonstrate that individuals engaged in willful tax evasion," said white collar crime and corporate governance attorney Peter Zeidenberg, a partner in law firm DLA Piper.

"Moreover, it is a crime if U.S. residents fail to report the existence of overseas bank accounts," Zeidenberg told TechNewsWorld. "So, while merely holding a Swiss bank account is not illegal, U.S. residents must inform the IRS of the existence of these overseas accounts."

Will America Miss Assange?

Though he's facing the wrath of angry governments everywhere, Julian Assange can't stay out of the news. Even newly crowned Miss America, Teresa Scanlan, criticized what she characterized as his espionage-like activities.

Somewhat disheveled at his recent press conferences, Assange plays the part of the rumpled yet cunning professor well, and no one is counting him out.

"If Assange is extradited to the U.S., then things will most likely change for Wikileaks," Simon Fraser University's Chow-White told TechNewsWorld. "But even if Wikileaks is stopped by the courts or the government and Assange is convicted, I don't suspect we've seen the end of the Wikileaks phenomena."

Simon Fraser University's Smith agrees, but not because Wikileaks is some must-have, revolutionary new app.

"Despite the hoopla, Wikileaks is not that far out of bounds," Smith said. "The whole notion of 'whistle-blowers' has a long tradition, and many countries and states have explicit legislation protecting whistle-blowers."


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