Venezuela put billions of public funds into secret Swiss bank accounts, according to data released Monday by the International Consortium of Investigative Journalists and leaked by an HSBC whistleblower.
According to the data, Venezuela had $14.8 billion in HSBC accounts in Switzerland between 1998-2007. That was more than any other country except Switzerland ($31.2 billion) and the United Kingdom ($21.7 billion).
The vast majority of the funds appear to be linked to Venezuela’s Treasury Office, which became an HSBC client in 2005. The office held as much as $11.9 billion in the account at one point, according to the ICIJ and reporters who had access to the data. By 2006-2007, however, the office held three accounts with $698 million.
The official listed on that account is Alejandro Andrade, who started off as a bodyguard for the late Venezuelan President Hugo Chávez and rose through the ranks to become National Treasurer from 2007-2010. Andrade was also president of the Economic and Social Development Bank of Venezuela (Bandes) from 2008-2010. During his time at the financial institution, the U.S. Attorney for the Southern District of New York charged four Bandes officials in a kickback scheme that generated $66 million revenue for a Miami brokerage, but Andrade was not named in the suit, according to the ICIJ. Andrade lives in Wellington, Palm Beach County and is said to be a horse aficionado.
It’s not illegal to have accounts in Switzerland, which is known for its banking secrecy, but it raises questions about the transparency of public funds, particularly at a time when Venezuela is struggling to keep its economy afloat.
Opposition Deputy Andrés Velásquez said the administration needed to provide answers.
“As a citizen and deputy I want the government to explain where those deposits of public funds that were in Swiss bank accounts went,” he wrote on Twitter.
The details were provided by whistleblower Hervé Falciani, a former HSBC employee who turned the data over to the French government in 2008. The French newspaper Le Monde obtained the information and shared it with the ICIJ, which assembled an international group of reporters to analyze and disseminate the data. The information covers the accounts of more than 100,000 clients from 200 countries.
Requests to the ICIJ to review the raw data for Venezuela were not immediately acknowledged.
The revelations about HSBC (which has a presence in South Florida) have rippled around the world as they’ve shown that the bank hid millions of dollars for drug traffickers, politicians, arms dealers and celebrities, who may have been trying to dodge taxes. Among the top-shelf names were musician Phil Collins, actor Christian Slater and Italian motorcycle racer Valentino Rossi.
“The bank repeatedly reassured clients that it would not disclose details of accounts to national authorities, even if evidence suggested that the accounts were undeclared to tax authorities in the client’s home country,” the ICIJ said in its report. “Bank employees also discussed with clients a range of measures that would ultimately allow clients to avoid paying taxes in their home countries.”
The Latin American personalities that made the list include politicians, business moguls and sports stars.
Alvaro Noboa, Ecuador’s richest man and a former presidential candidate, reportedly had up to $92 million in HSBC accounts. President Alvaro Correa has called him a tax cheat in the past.
Mexican billionaires Carlos Hank Rhon and Camil Garza are also on the list. In 1999, an investigation leaked to the press tied the Rhon family to the Tijuana Cartel. Janet Reno, the attorney general at the time, disavowed the report. In 2001, Rhon paid a $40 million fine for violating banking laws when he purchased Laredo National Bank in Texas.
Garza, a developer, often makes the society pages in Mexico, but his name has also appeared in the media linked to corruption scandals, most recently in 2013 when he was named as the consultant who allegedly paid bribes on behalf of the German company Siemens to Mexico’s state-run Pemex oil company. Garza has denied the allegations.
Uruguayan soccer star Diego Forlán, who became an HSBC client in 2006 while he was playing for Spain’s Villarreal, was also on the list.
Many of the details had been disclosed in 2012 when HSBC was fined by U.S. authorities for allowing criminals to use its branches for money laundering. But Monday’s information suggests HSBC took an active role in helping the wealthy hide their money from authorities, the Associated Press reported.
“HSBC has been complicit in clear tax evasion and law breaking rather than legitimate tax avoidance,” Crawford Spence, a professor of accounting at the University of Warwickhe, told the AP.
HSBC told the agency that the documents were from eight years ago and said it has since implemented initiatives designed to prevent its banking services from being used to evade taxes or launder money.
Franco Morra, CEO of HSBC’s Swiss subsidiary, told the AP the new management had shut down accounts from clients who “did not meet our high standards.”
“These disclosures about historical business practices are a reminder that the old business model of Swiss private banking is no longer acceptable,” he said in a statement.