The Swiss branch of HSBC bank cost Tanzania, Senegal and the
Ivory Coast over 30% of their national health budgets, EurActiv France reports.
Between 2006 and 2007, 100,000 clients and 20,000 offshore
companies secretly channeled over €180 billion through HSBC accounts. This
extensive fraud, actively encouraged by the bank, had a devastating effect on
the budgets of developing countries, particularly in Africa.
According to information collected by the NGO One, the
losses incurred by Ivory Coast correspond to 0.58% of the country's gross
national product (GNP), or €169 million. This loss of capital is equivalent to
39% of the national health budget, or 14% of the education budget. In Senegal, the
Swiss Leaks documents revealed a loss of 0.90% of GNP, equal to 38% of the
health budget or 18% of the education budget. Tanzania's loss of 0.48% of GNP
would cover 17% of health, and 10% of education spending.
Despite being legally obliged since 1998 to make special
checks on high-risk customers, the bank provided accounts for clients
implicated in six notorious scandals in Africa, including Kenya’s
biggest corruption case, blood diamond trading and several corrupt military
sales.
One of the cases detailed in the leaked Swiss files involves
Kenyan businessmen Deepak Kamani and Anura Perera, whose accounts were kept
open by HSBC despite them being named in a highly publicised anti-corruption
report in 2006. Investigator John Githongo, who later fled Kenya after
ministers failed to support him, alleged the two men were the beneficiaries of contracts
signed off by Kenyan politicians. The HSBC files detail payments to their
offshore entities, called First Mercantile Securities Corporation, Midland
Finance & Securities Ltd, and Infotalent Ltd. Notes on Perera’s HSBC
records discuss a quarterly payment of “1mio” from the Kenyan government into
his account, apparently delayed because of a shortage of state funds. Separately,
Kamani’s notes show the bank kept his account open despite the allegations: “We
spent some time discussing the ‘compliance’ issue facing this account. The
clients again reiterated that there was no substance to the press reports that
have been appearing in the press over the past nine months. They mentioned that
only UBS and HSBC had raised the compliance issue in any meaningful way. “UBS
have now closed the accounts for the client and the clients seemed pretty upset
with this development. We explained to the clients that while we had discussed
with compliance the issue, we continue to operate the account as has been
normal over the past three years.” Swiss and Kenyan investigators are still
probing the deals.
In another African corruption case, HSBC handled £20m in
accounts controlled by Jeffrey Tesler, a small-scale London lawyer. Tesler, who
was eventually jailed in the US, was fronting for the then president of
Nigeria, General Sani Abacha, and other local politicians in a corrupt gas
plant deal. Tesler’s HSBC account for Tristar Investments Ltd had an obscure
address in the Seychelles. He was publicly named as a bribery suspect in 2004.
But in 2007, HSBC was still operating Tristar and Tesler family accounts.
The files show the bank provided services to a circle of
African diamond traders who broke the law. They included Emmanuel Shallop,
jailed for six years by an Antwerp court for importing illicit Angolan conflict
diamonds in 2001-02. Shallop, also alleged to have dealt with Sierra Leone
rebels, hid almost £2m in an HSBC account. Shallop had been named in connection
with illicit diamond trading activities as early as 2001, in a UN report on
conflict diamonds discussing his receiving payments “through a bank in Geneva”.
When he visited Geneva to switch cash into a Dubai-registered entity in 2005,
HSBC openly noted: “The customer is currently being very careful, because he is
under pressure from the Belgian fiscal authorities investigating his activities
in the field of diamond tax evasion.” HSBC also provided general accounts for
directors of Omega Diamonds, a Belgian firm named in the same 2001 UN report.
Two directors’ accounts contained at least £860,000 and £1.75m respectively. A
third Omega shareholder was linked to general accounts with values totalling
£47m. The company paid $195m (£126m) to Belgian tax authorities in March 2013
after being found to have shifted profits from the import of mis-valued
diamonds from Congolese mines and Angola into Dubai.
Fana Hlongwane – close to South Africa’s ANC government –
was named in 2008 by the Serious Fraud Office as a confidential BAE agent. The
SFO said in published statements sent to South African prosecutors that
Hlongwane received BAE money through disguised offshore intermediaries to
promote arms deals. The South African government decided not to pursue the
case. HSBC is now revealed to have operated Swiss accounts for Hlongwane as an
agent for three other US multinational companies. They contained more than $10m
in 2006.
In a separate arms case an Italian businessman of Syrian
origin, Fouzi Hadj, was accused in 2003 by the UN and Human Rights Watch of gun-running
for Liberian rebels. His Guinean company, Katex Mines, had an HSBC account in
which assets of more than $7m were hidden. The account was not blocked until
May 2005 and closed in 2006. Fouzi was arrested in 2011 and sentenced to six
years in Italy for a separate fraud.
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