Switzerland: Banking Scandal

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Over the years, Swiss bankers have striven to create an image of them selves as the Alps of finance — solid, silent and snowy white. The effort has been successful. To the anonymous sanc tuary of their numbered accounts, the bankers have attracted nervous money from the world's teetering tyrants and the merely discreet rich. Swiss banks yearly draw more than $500 million in foreign capital, earn almost as much as the tourist industry. Lately, how ever, the reputation of the Swiss bank ers has become somewhat tarnished.

Britain's government leaders com plained that the "gnomes of Zurich" gravely aggravated last November's pound crisis by coldly dumping pounds.

The Algerian government has accused the Swiss bankers of harboring $12 million that a rebel sequestered from Premier ben Bella's treasury. Last week, in a far more serious affair, Switzerland was shaken by one of the worst scandals in the annals of Swiss banking. 'The government suspended from office the man most directly re sponsible for policing the country's banking integrity: Max Hommel, presi dent of the Swiss Banking Commission.

Up with Trujillo. Though no formal charges were placed against Hommel, Finance Minister Roger Bonvin said that "it is possible to suspect that the president of the Banking Commission had violated the duties of his office."

The Department of Justice launched an investigation of Hommel's affairs. Most ly, the investigators were interested in discovering just what, if anything, went on between Hommel and an acquaintance, Spanish Financier Julio Munoz.

One of the many foreign operators who have moved in to exploit Switzerland's free-and-easy financial codes, Munoz specialized in buying into Swiss banks and bringing to them huge sums of capital fleeing from Latin America and Spain. In 1962 he landed quite a client: Ramfis Trujillo, playboy son of the assassinated Dominican despot. Though at least one big Swiss bank had found Trujillo's millions too hot to handle, Munoz channeled the funds into two banks that he controlled, the Swiss Savings & Credit Bank of St. Gallen and the Geneva Commerce & Credit Bank. To invest the Trujillo hoard without attracting attention, Munoz set up obscure financial companies in such places as Liechtenstein and Panama, also opened or bought banks in Rome,' Beirut, Andorra and Luxembourg.

Down to Earth. Munoz pumped the Trujillo money, as well as other funds that he borrowed from his own banks, into highflying real estate schemes.' When European property markets sagged, the roof caved in. Late in April, Munoz' two Swiss banks applied for—and got—government permission to close down operations for a year. In May, his bank in Rome also was given a one-year moratorium. One of Munoz' cronies, Hermann Hug, president of the St. Gallen bank and a director of the Rome bank, was arrested on charges of swindling. Last week the Swiss police picked up Munoz on swindling charges. Then his friend Max Hommel was suspended by the government.