Rudolf Elmer

Rudolf Elmer (born 1955/1956)[1] is a former employee of the Swiss bank Julius Bär. He worked for the bank for close to two decades, and in his last position, he managed the bank's Caribbean operations for eight years until his dismissal in 2002.[2][3] He came to prominence as a whistleblower in 2008 when he gave secret documents to WikiLeaks detailing the activities of Julius Bär in the Cayman Islands and its role in alleged tax evasion.[4] Before that, he had been arrested in 2005 and held for 30 days.

In January 2011, he was convicted in Switzerland of breaching security laws and other offenses. He was rearrested immediately thereafter for having again distributed illegally obtained data to WikiLeaks. Julius Bär alleges that Elmer has doctored evidence to suggest the bank engaged in tax evasion.[4]

Dismissal and initial activities

According to US tax authorities, when it was discovered that internal data had been stolen, the bank required every employee to take a lie detector test for involvement. Elmer did not take the test the first time around due to his health and then later failed. He was then released from employment on these grounds, although he was still in possession of backup copies of data. According to the bank it was "data theft committed with criminal intent".[5][6]

After his resignation, he sent documents to various media, whereupon the bank called for an investigation of him and his family. In 2005 Elmer traded a Swiss business newspaper cash for a CD with 169 megabytes of customer data but was arrested shortly afterwards in Zurich due to the suspicion of his violation of Swiss banking secrecy. He sat 30 days in custody. Soon after his parole he started a website for whistleblowers.[7]

Elmer moved temporarily to Mauritius but since January 2010 has lived in the Canton of Zurich. The ‘’Journal of International Tax Review’’ both in 2011 and 2012 listed him among the 50 individuals and organizations that had the biggest influence on international tax affairs.[8][9]

Statements

At a press conference hosted by Alternative List, Elmer gave a report entitled To throw light on the dark side:[10] He said:

I am a critic of offshore business by banks and multinational companies. Offshore centres have multiplied since the 1960s to the present, increasing from 10 to 80. Trusts as in the laws of Commonwealth countries are – despite being legal – illegitimate. Privacy protection is important for banking and I am not against bank secrecy but companies abuse this secrecy. I have never received money from tax authorities. I want to change the system.

Work with WikiLeaks

On 3 March 2008 the German magazine Der Spiegel revealed that Elmer was the source of documents that appeared some weeks earlier on WikiLeaks; Der Spiegel referred to them as partly authentic and partly fake.[11]

A California judge had the service provider of WikiLeaks block the site's domain (wikileaks.org) on behalf of Julius Bär on 18 February 2008, although the bank only wanted the documents to be removed (WikiLeaks had failed to name a contact person).

According to Der Spiegel and the Swiss television documentary show "Rundschau", on 2 March 2008,[12] Elmer accused his bank of evading taxes in Switzerland by declaring bank work to have been carried out in the Cayman Islands, whereas the work was actually done in Switzerland.

On 17 January 2011, Elmer staged a press conference with Julian Assange to hand over two discs of data in front of reporters. He told reporters:

As a banker, I have the right to stand up if something is wrong [...] I am against the system. I know how the system works and I know the day-to-day business. I wanted to let society know how this system works because it's damaging society.

He added that he had tried to approach universities with his data but that they had not responded. Likewise, attempts to attract the attention of the Swiss media had failed, with Elmer being dismissed as "a paranoid person, a mentally ill person". Elmer began to lose hope, "but then a friend of mine told me: 'There's WikiLeaks.' I looked at it and thought: 'That's the only hope I have to [let] society know what's going on.'"[13]

Publications on WikiLeaks

In 2008 Elmer released internal bank documents with customer data and other sensitive details to the Wikileaks website. With these he accused the bank of tax fraud, evasion and systematic aid to do so. According to these allegations, Julius Baer held their customers funds by funneling through investment frameworks of offshore accounts to increase profits for themselves and circumvent the Swiss tax authorities.[14] Julius Baer refuted this in a statement, claiming that all of its activities in the Cayman Islands are legal and are in no violation of Swiss banking regulations .[6]

The bank took legal action against WikiLeaks, and a California judge ordered on 18 February 2008 for the website block this data. Later, the judge reordered the injunction on Wikileaks since it was still accessible via alternate portals in other countries. The bank sought further action in 2008[15] and stated that they did not want to block the entire portal bought simply sought for certain sensitive documents to be taken down. The documents were, according to the bank, stolen and forged documents, selected so as to give the bank a deliberate negative outlook.[16][17]

On January 17, 2011 Elmer met with Julian Assange of WikiLeaks at a press conference at London's Frontline Club to hand over two disks in public view of reporters and media. The records included information on 2000 account holders and came from three financial institutions, including Julius Baer. Assange said the data would be reviewed and published in full.[18][19] A month later, Elmer stated in court that the disks were empty and would thus contain no bank customer data. In July 2011, related parties that had participated in the press conference in London confirmed this. One of them claimed to have received the information directly from Assange.[20][21]

In a 2013 film about Elmer's story titled ‘’A Leak in Paradise’’ was announced.[22][23]

First arrest and trial

On 19 January 2011 Elmer was ordered to answer before the Zurich District Court for breach of banking and business secrecy laws as well as a charge of coercion. Elmer was accused several times by bank employees to have harmed "by violence and the threat of serious consequences" and supposedly a bomb threat against the main building of the bank . In addition, he was tried for 2004 accusations of attempting to blackmail the bank of 50,000 USD, which did not respond to his offer. The publications on WikiLeaks were not part of the prosecution.[24][25][26]

According to certain news agencies, Elmer admitted in court that he had threatened bank employees in writing. However, he claimed this was only after the bank had released him and then attempted to intimidate him into silence. He is quoted: "I was in an extreme situation...it [was] logical that I developed a defense strategy". He denied any claims to have issued a bomb threat against the bank. However, he had threatened to reveal information about clients in tax havens to authorities in Switzerland, the United Kingdom and the United States. The prosecutor demanded a prison term of eight months without parole and a fine of 2,000 Swiss francs.[27]

Elmer was sentenced to probation for a period of two years and fined about 5600 euros on multiple counts of attempted coercion, threats and breaching of banking secrecy. He also was ordered to pay three-quarters of the court fees in the amount of 5,000 francs (about 3,900 euros).[27] Elmer and the Attorney General [28] appealed against the judgment .[29][30]

According to the Court, the threat against an employee of Julius Baer was the worst offense that Elmer had committed. He was acquitted of the bomb threat against the bank, because the prosecution could not provide any convincing evidence for it. The presiding judge believed that Elmer had not become a whistleblower for ethical reasons, but for personal revenge : " You...were for many years part of the banking world and have benefited from it ". Elmer had acted as such reportedly because he had not been promoted and had several disagreements with his superiors.[27]

On the same day of his conviction Elmer was arrested on renewed suspicion of violation of Swiss banking secrecy. Elmer had two days earlier handed over two disks with data of suspected bank customers to Julian Assange of WikiLeaks for publication as well as remanded data collection, which was published on WikiLeaks. On January 22, 2011 Elmer was brought into custody on the grounds of urgent suspicion and risk of collusion. Elmer appealed to the Supreme Court of the Canton of Zurich against the detention order. Elmer was summoned on 16 February 2011 before the court and testified that the disks were empty and thus contained no bank customer data. The court found Elmer's presentation as "totally unbelievable" and rejected the appeal due to the danger of collusion. In July 2011, the remanding was extended until October 2011. On July 25, 2011 Elmer was released from custody .[29][31]

After he left court he was re-arrested in connection with handing data to WikiLeaks[26] only two days earlier, a move that was described by the prosecutor of the first case as contempt of court. On 25 July 2011, Elmer was set free.[32]

Second trial

On 17 November 2011, an appeal hearing was held at the Supreme Court of the Canton of Zurich. The Court made no judgment and sent the indictment back to the prosecutor and that it must review the investigation and supplement if necessary. As justification, the court stated that besides Elmer and the Bank, no one knew if this data actually existed in reality on the disks. It was difficult to decipher what data was actually on the disks. The judgment depends on whether the data from Swiss customers are from Switzerland, or those of the Cayman Islands, where the Swiss banking secrecy rights could not be applied. Thus, the bank was asked to explain the exact content of the CDs, which it had not done before.[28] If Elmer is correct and dealing with "Cayman - data" he would be acquitted of charges of bank secrecy violation. Banking secrecy in the Cayman Islands is potentially punishable, although not per se in Switzerland.[33][34]

Furthermore, the court found that there was insufficient evidence that Elmer authored a "significant threat" against a legal services employee of the bank. In an e-mail from Mauritius, the sender threatened the employee, and claimed he was a killer and recognized him. It was not enough that Elmer had then lived and worked in Mauritius. It must be clarified where the email was sent directly from and who sent it. It is up to the prosecutor to obtain the necessary evidence.[33]

Elmer began a protest display outside the bank. While outside the bank he was routinely under surveillance by private detectives. It is alleged that the bank offered Elmer a monetary incentive to end his display.[35][33]

In May 2012, the Zurich High Court ruled in an interim decision that three CDs that Elmer is said to have sent to the tax authorities or the business newspaper "Cash" may be unsealed and evaluated by the prosecution. The court valued the interest in truth higher than the interest in confidentiality of Bank Julius Baer customers. The bank renounced the possibility of lodging an appeal against this decision.[36]

Reaction

The mainstream Swiss newspaper ‘’Der Sonntag’’ made very controversial claims in a December 2010 article that Elmer had confessed to having threatened several bank employees with death. Elmer said: "I have certainly made mistakes. My emotions have been out of control." The newspaper also alleged that Elmer had forged several documents, which would damage his credibility as a whistleblower. Also, the bank alleged that the wrong data about customers was reported to WikiLeaks. WikiLeaks had to apologize in at least one case to an individual involved. On his computer a letter to the right-wing party NPD in Germany was found, in which Elmer offered the party certain documents. Elmer reported the letter was never sent.[24][37]

According to Elmer, he gave the data to multiple media companies and to the Federal tax administration, after he had a falling out with the bank and had been dismissed. Even Elmer stated that the data from tax investigators in Germany, USA, UK, France and Greece was also used. In Switzerland an investigation was undertaken.[37]

According to researchers from the Swiss business magazine ‘’Balance Sheet’’, in January of 2011 Elmer was said to have passed on confidential information of another employer to the authorities and the media. After his release from Julius Baer in 2003 Elmer was employed as an Operations Officer at the Zurich hedge fund advisory firm ‘’Noble Investments’’ for several years and is said to have passed data collection to the United States. These included tax notices, confidential correspondence, attorney mail and internal audit reports. The data collection comprised about 10 megabytes of complex tax regulations and offshore structuring. This collection also reportedly included data from Ernst & Young and a large law firm in Zurich. The companies concerned had no knowledge of the data leak.[38]

The journalist Ralph Pöhner wrote in ‘’Time Online’’ that the case of Rudolf Elmer was very typical, and that he "exemplifies the layered designs that turn an employee to a whistleblower: Personal dissatisfaction , anger, escalating a dispute... sometimes greed combined with the realization that something is wrong in one's own company."[7]

The journalist Constantin Seibt wrote in the ‘’Tages-Anzeiger’’: " Rudolf Elmer is the model case of a whistleblower. He is no angel. Almost all whistleblowers are complex cases. They betray their companies not only from a sense of justice, but also for other reasons, such as wounded pride and grievances. And get caught up in it. The more that the case involves their lives, the more destructive is their struggle: dismissal, years of court cases, divorces, financial ruin - the impact of whistleblowing has similar consequences to a serious crime than a good deed".[39]

In July 2012, the Swiss Press Council has received a complaint from Rudolf Elmer in the weekly magazine ‘’World Week’’. ‘’World Week’’ journalist Alex Baur dubbed Rudolf Elmer as a "thief" and " blackmailer" and sought to confront him.[40][41]

Support

Jack Blum, an American lawyer and outspoken critic of tax havens and, at an unknown time, Elmer's lawyer, told the British newspaper ‘’The Guardian’’ in February of 2009 that what “Elmer is doing is extremely valuable in the process of educating people of the need for major reform. This is a system for enabling a certain class of people to avoid their societal duty, which is to pay taxes."[42]

In January 2011, the journalist Yvonne Kunz and Christof Moser of the ‘’WOZ’’ stated that the bank behaved contradictory to bank secrecy rights. In a 2006 appeal, before the bank hoped to bar the release of the CD-Rom with customer data to the Swiss tax authorities, the bank emphasized that this would break Cayman Island secrecy laws. Elmer's attorney, on the other hand argued that the bank contradicted itself, on one hand filing charges against the data release, and on the other demanding they be accessed for their viewing.[43]

The journalist Carlos Hanimann wrote in the weekly newspaper ‘’WOZ’’ "The story of Rudolf Elmer is that of a whistleblower, a man who, for whatever motives, has sounded the alarm, with his knowledge he turned to the public and challenged the combined power of the financial center and his assistance has been noticed. Much about Elmer has been written about his motives, his mistakes, his psyche - especially in Switzerland. His efforts were largely ignored by major media as they covered more of his legal tensions rather than what he revealed. The financial journalist Gian Trepp, stated that he knew about Elmer’s exploits since 2005 and has reported in the ‘’LAT’’ several times that his story is the “story of a little man who stood up against the banking power. And now he was an example of the law”[44]

Publications

References

  1. ↑ http://www.zeit.de/2010/02/CH-Banken?page=2
  2. ↑ Fantz, Ashley (17 January 2011). "Who is Rudolf Elmer, WikiLeaks' newest leaker?". CNN. Retrieved 17 January 2011.
  3. ↑ Browning, Lynnley (18 January 2010). "Swiss Banker Blows Whistle on Tax Evasion". The New York Times. Retrieved 17 January 2011.
  4. 1 2 Vulliamy, Ed (16 January 2011). "Swiss whistleblower Rudolf Elmer plans to hand over offshore banking secrets of the rich and famous to WikiLeaks". The Guardian. Retrieved 17 January 2011.
  5. ↑ Gestohlene Bankdaten Video in: Rundschau vom 2. April 2008, ab Minute 3:15
  6. 1 2 Brisante Bekenntnisse eines Bank-Insiders. auf: Spiegel Online. 8. April 2008.
  7. 1 2 Vom Banker zum Nestbeschmutzer. from: Zeit Online. 18. January 2011.
  8. ↑ International Tax Review am 2. November 2012: Rückblick auf 2011 Abgerufen am 11. November 2012
  9. ↑ International Tax Review am 5. November 2012: Bekanntgabe der aktuellen Liste Abgerufen am 11. November 2012.
  10. ↑ Press conference on January 19th 14:45hrs Tages Anzeiger, german
  11. ↑ Spiegel, 2008-03-03, German
  12. ↑ Rundschau documentary 2008-02-04, german
  13. ↑ Addley, Esther (17 January 2011). "Julian Assange vows to reveal tax details of 2,000 wealthy people". The Guardian. Retrieved 17 January 2011.
  14. ↑ Bank Julius Bär, die Cayman-Inseln und der Whistleblower Rudolf Elmer auf: parlament.ch, 19. März 2008.
  15. ↑ Klage gegen Wikileaks zurückgezogen in: heise.de vom 6. März 2008.
  16. ↑ Diese Dokumente bergen Sprengstoff. In: FAZ. 6. März 2008.
  17. ↑ Julius Bär lässt Webseite in den USA schliessen. In: NZZ Online. 28. Februar 2008.
  18. ↑ [Template:Toter Link Julian Assange unterstützt Banker Rudolf Elmer] Video In: NZZ Online. 18. Januar 2011.
  19. ↑ Schweizer übergibt Bankdaten an Wikileaks. In: DW-World.de, 17. Januar 2011.
  20. ↑ Discs Swiss banker gave to WikiLeaks held no secrets. auf: Reuters. 12. Juli 2011; Archiv-Version
  21. ↑ Elmers CDs entpuppen sich als Reinfall. In: Tages-Anzeiger. 12. Juli 2011.
  22. ↑ Film-Trailer in: YouTube (2:31 Minuten) vom 16. Januar 2011.
  23. ↑ Offizielle Website zum Film
  24. 1 2 Wikileaks-Star kommt vor Zürcher Gericht in: Schweizer Fernsehen vom 12. Januar 2011.
  25. ↑ http://www.tsr.ch/info/suisse/2905939-l-ex-banquier-rudolf-elmer-a-viole-le-secret-bancaire.html
  26. 1 2 "Swiss banker Elmer re-arrested over Wikileaks charges". BBC. 19 January 2011. Retrieved 19 January 2011.
  27. 1 2 3 Richter: Elmer ist ein Whistleblower aus Rache In: Tages-Anzeiger. 19. Januar 2011.
  28. 1 2 Fall Elmer: Schlappe für Zürcher Staatsanwalt. In: Schweizer Fernsehen vom 17. November 2011.
  29. 1 2 Ex-Banker legt Berufung gegen Urteil ein in: Schweizer Fernsehen vom 20. Januar 2011.
  30. ↑ Elmers Mission in: Der Sonntag vom 10. September 2011.
  31. ↑ Warum Elmer in U-Haft bleibt In: Tages-Anzeiger. 3. März 2011.
  32. ↑ Rudolf Elmer ist frei in: Der Sonntag vom 14. August 2011
  33. 1 2 3 Schlappe für Ankläger im Fall Elmer. In: Tages-Anzeiger. 22. November 2011.
  34. ↑ Kein Schweizer Recht auf den Cayman-Inseln. In: Neue Zürcher Zeitung. 19. November 2011.
  35. ↑ Elmer zieht Anzeige gegen Bank Julius Bär zurück. In: NZZ Online. 17. November 2011.
  36. ↑ Thomas Knellwolf: Der lange Weg einer Julius-Bär-CD. In: Tages-Anzeiger. 8. Juni 2012.
  37. 1 2 Der Mann, der Julius Bär verpfiff, muss im Januar vor Gericht in: Der Sonntag vom 4. Dezember 2010.
  38. ↑ Der zweite Streich. In: Bilanz. 2/2011 vom 28. Januar 2011, S. 11.
  39. ↑ Elmer und die Uiguren Bank of Switzerland. In: Tages-Anzeiger. 22. Januar 2011.
  40. ↑ Beschwerde Rudolf Elmers gegen «Weltwoche» teilweise gutgeheissen. auf: blick.ch, 12. Juli 2012.
  41. ↑ Nr. 29/2012: Wahrheits- und Berichtigungspflicht / Anhörung / Identifizierung / Menschenwürde (Elmer c. «Weltwoche») Stellungnahme des Schweizer Presserates vom 31. Mai 2012.
  42. ↑ Isles of plenty. In: The Guardian. 13. February 2009.
  43. ↑ Yvonne Kunz, Christof Moser: Das Zürcher Justizgeheimnis. In: WOZ Die Wochenzeitung. 4/2011 vom 20. January 2011.
  44. ↑ Carlos Hanimann: Geisel des Bankgeheimnisses In: WOZ Die Wochenzeitung. 7. Juli 2011.

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