The Abacha scandal, which put Swiss banks in the spotlight for harbouring the less than savoury deposits of the late Nigerian dictator Sani Abacha, dented the reputation of the prestigious Swiss banking sector. Now it faces a further test with the announcement that the Swiss Banking Commission is to conduct an enquiry into the conduct of five banks with links to Peru's former intelligence head, Vladimiro Montesinos.
The banks named by a Commission spokesperson are UBS, Credit Suisse subsidiary Bank Leu, two Israeli banks, Leumi and Fibi, and Credit Agricole Indosuez. It's not good news for Credit Suisse in particular, already indicted last year for accepting part of the estimated US$600m in Abacha-related funds which were frozen in Swiss bank accounts. According to a report in the Swiss newspaper "Tages Anzeiger", Switzerland’s biggest bank, UBS, is at the hub of the Swiss investigation, having handled US$40m in suspect funds.
In this latest investigation, Montesinos is suspected of misappropriating funds during his time as Peru's intelligence head. It is believed that accounts held by the five named banks, which were opened in the names of people close to Montesinos, contain the dubious funds. Consequently, the Swiss justice authorities have frozen a total of US$70m in 17 accounts held at the banks.
Most of the money is suspected to have come from payments of commissions for arms trading between Russia and Peru. The Swiss now join Peru in getting to the bottom of the Montesinos affair, the Peruvians having asked Switzerland for legal assistance in conducting their own investigation into Montesinos.
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