Last night the Radio Télévision Suisse program « Toutes taxes comprises » covered the issue, already discussed here at IBS, of Swiss banks sharing information about their employees with US authorities.
Two of the interviews conducted during the program are especially of interest, and I have made partial transcripts of them in English. Once again, I am not a professional translator; I cannot guarantee 100% accuracy and completeness.
Eric Delissy (Senior Management at HSBC 1988-2003): “I have taken legal action because I want to restore my honor and reputation”.
Voice: “The employees are caught in the current and mistreated, and are very upset.”
Delissy: “It is treason. [My] Employer has betrayed the confidence of the 1’200 employees whose names were turned over to US authorities. This is unacceptable.”
Voice: “[The same] is the case for 4’000 employees of Credit Suisse, 2’500 of Julius Baer, and for 5’000 employees of other banks. What error have they committed?”
Delissy: “I never had dealings with American clients. I never even saw them at the bank. I was head of the legal department and general secretary, which are ‘Back Office’ functions.”
Voice: “So why is it that you are on a list?”
Delissy: “Because I signed all of the meeting minutes for the board of directors, and of the executive management committee of the bank.”
Voice: “The banks have transmitted all of the documents regarding American clients, meeting minutes, email, telephone lists, as well as all of the copies sent to concerned persons. What is the situation of these numerous employees who are now accused?”
Delissy: “They are all revolted, there have been dramatic cases, people were fired when their new employer found out that they were on the HSBC list.”
Anonymous interviewee “Olav” who was a manager in Asset Management at HSBC: “In Switzerland, we have all become pariahs, which will seriously restrict our ability to find work within the Swiss banking sector… It is not only me who is affected, but also the lowly secretary and the man in the back office, who have done absolutely nothing, who will continue to find themselves in a situation where they will probably end up unemployed.
Voice: “For him (“Olav”) the majority of the 10’000 employees have sacrificed, pure and simple.”
“Olav”: “I think that I am on the list with 90-99% innocent people, simply because the bank’s strategy is to bury things and protect the guilty, while hoping to provide a ton of documents to the US and thus receive a reduced fine. HSBC, all it wants it to protect itself, while selling mother and father out, in order to reduce the fine. “
Voice: “We have contacted HSBC who denies any wrongdoing and claims that they acted within the rules of professional conduct, and that documents were transmitted per authorization given by the Federal Council and the FINMA (Swiss Financial Market Supervisory Authority). HSBC said “The American authorities can take unilateral and severe measures to force cooperation. [See letter visible at 04:14 of the video]. For the gentlemen [bank employees] what has happened is also the fault of the Federal Council.”
“Olav”: “The Swiss government has acted pathetically in what it calls ‘negotiations’. We should not say negotiation, because in the definition of negotiation, each party gains something. But in the case of the Federal Government [of Switzerland] we can speak of unconditional surrender. We [Switzerland] let our panties down. So a government who has prostrated itself and that has no pride is thus an insult to the pride of the Swiss People.”
Voice: “Today the 10’000 employees cannot travel outside Switzerland without taking the risk of being extradited to the United States.”
Guest: Douglas Hornung, attorney representing 40 bank employees.
Interviewer: “Of the 10’000 employees on the lists, why are there so few who are defending themselves?”
Hornung: “A good portion are afraid, or they are still employed by the same bank, or if they are at a different bank, they are afraid that if they are seen to take action that their new employer will not appreciate it. “
Interviewer: “There are also the court and attorney costs, for example, how much are you charging in attorney fees?”
Hornung: “I am not asking for anything… for those that participate in the lawsuit there is a fixed charge of 5’000 francs or 10’000 francs for those that earn more than 100’000 francs, but for the others it is free.”
Interviewer: “For the employees who are on these lists, the damage has already been done, what are you seeking to obtain?”
Hornung: “We are really looking for them to have the possibility to be covered. They need to know what information has been transmitted. Many know because they have been able to look, but the banks still refuse to give copies of the transmissions. So we are trying a test case with the 40 employees to force the banks to provide copies of the transmissions. If the employees have any trouble they would at least have a copy and could say “look here, this was all it was.”
Interviewer: “You have clients from several different banks, are there differences in treatment between the banks, do some banks let you see more easily what has been transmitted?”
Hornung: “All of the banks refuse to provide copies because it is contrary to the agreement that they have with the US authorities. This is completely against Swiss law, but the banks aren’t interested in Swiss law. There are some differences between banks. HSBC, for example, allows lawyers to assist their clients in viewing the documents that were transmitted. Credit Suisse disallows the assistance of a lawyer, considering that the documents are confidential—which is quite surprising, and the Cantonal Banks provide a copy if the employee is still employed with the bank under condition that the copy stays at the bank.”
Interviewer: “You are behind the famous lawsuit against the Federal Council that has been refused [by the Swiss attorney general], in the meantime the Swiss Federal Commissioner for Data Protection has ordered the banks to cease transmitting names, is this directive being respected, or do you think the banks are continuing to provide names to US authorities?”
Hornung: “For the moment it is being respected. HSBC made a list of 250 new names about ten days ago, which what is got the Data Protection Commissioner upset. For the other banks, as far as we know, there have been no new names transmitted.”
Interviewer: “Are we not exaggerating the consequences of the whole affair, is there paranoia, or are there really 10’000 people who are not able to travel freely, or are we exaggerating a bit?”.
Hornung: “They are completely free to travel. The problem is that we have absolutely no idea what the American authorities will do with the names. We could say of course that those that had direct contact with American clients (very few of the 10’000, barely 2%) should prefer not to leave Switzerland. For the others it is easy to say “go ahead, there is no risk”, but if they do have a problem one day and need help then they wouldn’t even have the copy of what has been transmitted, so they would take certain risks…[Interviewer speaking at same time: ‘to defend themselves in such conditions’]”
Interviewer: “We have also talked a lot about the risks people have for the continuation of their careers. Have you specific cases of people who have been fired because they are on the lists?”
Hornung: “Yes there are specific cases, but then again there is still the fear of speaking to the press, even if we say ‘speak up, even anonymously’ but they don’t want to speak…”
Interviewer interrupts: “but if they have already been fired, they have nothing more to lose.”
Hornung: “But they are still trying to find a new job and they say to themselves that if someone figures out who they are it would be an additional reason not to employ them because people would say ‘that person, they might do something with the press again, we don’t want that’.”
Interviewer: “As we saw in the report, the banks are turning over names of their employees in order to reduce the fines, can we put exact figures on this?”
Hornung: “This is the subject of negotiations in the US, there is much talk of a global agreement, but these particular banks are already targeted by the US so they are not interested in the global agreement, they are interested in specific agreements for them with the US.”
Interviewer: “The fines could be how much?”
Hornung: “UBS, in a similar situation in 2009 had to pay 780 million to get free of the claws of the US. Because the American government is particularly angry with banks like HSBC, Credit Suisse and others, as they say that these banks accepted clients that left UBS, we can expect that especially HSBC and Credit Suisse would pay in excess of a billion.”
Interviewer: “Are certain banks going to disappear, like Wegelin, they can’t pay these fines?”
Hornung: “There is a risk, but what the Americans are interested in is money and a billion is not a petty sum, even for the US, and they don’t really want to bankrupt a bank. So it would be in proportion to the capacity of the banks. I remind that the director of Credit Suisse indicated in an interview with a Swiss francophone newspaper that he would save one billion over a year and that there is already a contingency fund of 300 million for this affair. So if he has to pay a billion, there is no problem, he can still pay the same dividends to stockholders.“
Interviewer: “[Thank you, we will continue to follow the events, next week there will be a program dedicated to the banking crisis…]”
UPDATE 4.9.12 Here is the follow-up program on TTC that just came out. The report covers the diminishing confidence the Swiss have in their banks, the situation has been brewing for a decade: http://www.rts.ch/video/#/video/emissions/ttc/4243403-les-banques-dans-la-tourmente.html
In the light of these interviews, and especially the question of not feeling it is safe to travel, I would like to pingback to the comment just posted by Innocente on our earlier discussions of the children of Swiss bankers who were detained upon entry to the US:
Swiss radio, DRS, reported yesterday that the Treuhandverband (fiduciary association) and Anwaltsverband (attorneys association) are cautioning some of their members on trips to the US. Members of the Treuhand/ Fiduciare association would include accountants, auditors, tax advisors and also property and asset managers. The US authorities are apparently focusing on the asset managers segment. Fiduciaries have confidentiality requirements under Swiss law.
Newspaper article (German):
Radio broadcast (German):