by Paul Sagar

Wikileaks has been handed confidential information by banker Rudolf Elmer, which threatens to reveal Swiss banking complicity in tax evasion and other criminal activity.

Accordingly, Elmer is to go on criminal trial for breaking Swiss bank secrecy laws.

One thing you can expect to hear around the build-up to this case is that Swiss banking secrecy was enacted to protect Jewish assets from the Nazis during the 1930s.



This was the line repeatedly deployed in 2008, when US authorities unveiled systematic complicity from Swiss bank UBS in assisting American tax avoidance.

It would be nice for the Swiss if it were true; providing some sort of vague moral justification for the systematic undermining of the laws and revenue authorities of other states. But it’s not true.

From Treasure Islands, the new book by Nick Shaxson you should all read:

A pervasive story now exists that Switzerland put bank secrecy into place to protect German Jewish money from the Nazis. This myth dates back to a bulletin in 1966 from the Schweizerische Kreditanstalt (today’s Credit Suisse), and Swiss bankers have wielded it to great effect ever since. American officials negotiating a new tax treaty with Switzerland at that time lodged an official complaint after being frequently lectured about the supposed origins of bank secrecy as protection for Jewish money. A Swiss Federal Council report in March 1970 officially endorsed the story, and this was backed up in 1977 by a lurid book by a former Geneva newspaper editor outlining the fabulous story of Gestapo agents infiltrating Switzerland to worm out Jewish bank details. The problem with the story is that it’s not true Amid the Great Depression, Swiss farmers’ and workers’ movements began in 1931 to clamour for more control over the banks. Bankers feared state inspection of their hitherto closely controlled financial domain would risk secrets leaking out, and they pressed fiercely for a new law, to make it a crime to violate Swiss bank secrecy. By August 1931, the highly-influential right-wing daily Neue Zurcher Zeitung was attacking government oversight of the banks, and in February 1932 a top banker sent the government draft legislation with a clause making it a crime to violate bank secrecy. It was the French scandal [revelations that up to 4 billion francs were being lost to Swiss-facilitated tax evasion schemes] that October, however, which really spurred government into action. A new banking law was prepared and an official draft was ready by February 1933, just eighteen days after Hitler came to power and long before he had consolidated his grip on the German state or even gained control of all of Germany’s intelligence services. The Swiss law finally adopted in 1934 for the first time made it a criminal offence punishable by fines and prison to violate bank secrecy, and was almost unchanged from the original draft. In Germany the death penalty for having foreign accounts undeclared to the Third Reich only appeared in 1936. Even the Swiss Bankers’ Association has no records of the supposed activities of Gestapo agents coming to Switzerland to squirrel out information about Jewish money.

Of course, even if it were true that Swiss banking secrecy was originally adopted to protect Jewish assets (which it wasn’t), that wouldn’t justify the facilitation of tax avoidance and evasion today.

Instead, using of the legacy of the holocaust to provide cover for illicit financial skullduggery simply compounds the distasteful nature of what the Swiss tax haven operation involves.

Incidentally, Treasure Islands continues to pick up excellent reviews. Having started it over the weekend, I can confirm that it’s a cracking read. You should buy it.

Update: a video from the press conference

