Switzerland: Secrecy Is Golden

The most valuable deposit in Switzerland's bulging banks is secrecy, which the Swiss have shrewdly used to lure shy money from all over the world. Any threat to this hush-hush, confessional quality is therefore a blow at the very center of the multibillion-dollar Swiss banking industry. By the same token, a nation or group that sets out to track down the wealth of teetering tyrants or the merely discreet rich frequently looks with frustration to the Swiss banks, with their anonymous sanctuary and numbered accounts. Last week secrecy and the desire for disclosure clashed in the Swiss courts — and the Swiss banks walked away the winner.

When Mohammed Khider, the treasurer of Algeria's ruling National Liberation Front party, quarreled with Strongman Ahmed ben Bella and absconded with some $12 million in party funds earlier this year, the Algerian government naturally turned to the Swiss banks for clues. Algerian agents went to work, soon became convinced that they had traced the missing money to four numbered accounts in Geneva's Arab Commercial Bank, which is incorporated and operating under Swiss banking laws. Algiers asked the Geneva authorities to take it from there. When Arab Bank Director Zouheir Mardam refused to disclose the identity of the four account holders, Geneva police clamped him in jail.

Last week the dapper Syrian was released after seven days behind bars and promptly announced that he would sue the canton of Geneva for $232,000.

Reason: the only circumstance in which Switzerland's strict Bank Secrecy Law can be breached is in a clear case of crime, and Algeria had never bothered to formally accuse Khider of any crime; it was too preoccupied with getting its' money back.

Whether Mardam will actually collect his damage award, or Ben Bella the lost money, is doubtful. But the banker's release pleased the Swiss banking community. After all, if the impression got around that the legendary Swiss sock was developing holes, the new and old rich might be tempted to start taking their loot elsewhere.