The Gilt of Despots
For decades, a Swiss bank account
was the favored hideaway for assets
snaffled by the world's most kleptocratic leaders.
The roll of dishonor includes
presidents Marcos of the Philippines,
Mobutu of Zaire, Abacha of Nigeria,
and "Baby Doc" Duvalier of Haiti.
But these days Switzerland seems eager
to clean up its reputation:
last month authorities rushed to freeze the assets
of ousted Tunisian leader Zine al-Abidine Ben Ali
and Ivory Coast embattled president Laurent Gbagbo.
And just last week a new Swiss law took effect
that will make it easier to reclaim cash
plundered by Third World tyrants.
The recent show of good behavior is surely tied to
Switzerland's deep embarrassment two years ago
when the OECD put it on a "gray list" of tax havens
that failed to meet international transparency standards.
With financial services accounting for
more than 10 percent of the Swiss economy,
and with up to a third of all cross-border private investments
being handled by Swiss banks,
the country has been keen to reassure the globe
that its banks are experts in wealth management
rather than tax dodging.
But the new measures are unlikely to silence the skeptics.
Take the new law on returning stolen funds.
It will reverse the burden of proof from the victims
(who often spent years convincing the court of a despot's guilt)
to the former dictators,
who will now have to prove
that their frozen assets were earned legally.
But this law will apply only to failed states.
So Haiti qualifies-but not Tunisia.
And most experts agree
that dirty money is still reaching Swiss banks
despite their diligence.
Figures are hard to estimate,
but Swiss banks may be holding $150 billion in looted assets,
more than any other financial center,
according to Global Financial Integrity in Washington.
Says Daniel Thelesklaf
of the Swiss-based International Centre for Asset Recovery:
"Things have improved, but it is only the tip of the iceberg."
An iceberg that might still sink a country's reputation.