Rudolf Elmer Launches website

Rudolf Elmer, the key source in the Wikileaks/BJB story, has created a website Swiss Whistleblower. Some of the information he’d been posting at Wikileaks will now be posted to the new website.

I’m still unable to make any better judgments of it; I’m not an accountant, and have no experience in financial journalism. Elmer testifies, as he did in the Wikileaks article, that Zurich made investment decisions and then directed the Cayman office to enter them into the computer as if they’d been done locally– which, according to Elmer, disqualifies the transactions from being exempt from Swiss taxes. Granted, who can blame them, when Elmer describes the Cayman office like so:

[T]he motivation of most of the staff was to make money and as much of it as possible, made easier by the relatively light workload at Julius Baer’s at the time. The clients paid a huge premium for obvious reasons in order to maintain their business with Julius Baer in the Cayman Islands. On the other hand, staff was not truly loyal, since teamwork as such did not exist. It was more about completing the job as quickly as possible and then leaving the office. The source of that misery in the Company office was to do with personal motivation at the helm, the forced staff turnover (close to 60 % in 2000, due to mobbing, and immediate terminations of contracts) which created an unstable working environment. It goes without saying that such an environment bred disgruntled staff members, inefficiency and inadequate quality of work. The bottom-line was that there was certainly no “commitment to excellence” instead personal, especially financial, motivation thrived. 

I’m unable to put this into the perspective of financial firms in general, though Elmer points out that this was far worse than any other he has had in his 33 years of working in offshore financial institutions in 6 countries.

More of his BJB documents have been posted to Wikileaks, among them, Shape CreInvest excellence funds. Some of the documents have Elmer’s name in them– literally, as he was appointed to be the director of the shell company. It should be interesting to hear him explain the larger shell game.

As predicted, stateside and blogside interest in this story has fallen to zero once the first amendment battle was adjudicated. I’m curious whether any journalist is working on this besides Lucy Komisar. Short of a sex scandal, it is hard to see this story making a dent in the U.S. media/blogosphere (Elmer tells me he has a couple of TV appearances in Switzerland this weekend). Thus I’ll nominate a few unique publishers who may have a larger megaphone than most:

  • Herb and Marion Sandler, founders of Golden West Financial, are dedicating $10M/year to ProPublica, an independent nonprofit investigative journalism project. The Sandlers were frequently lauded by the business press for their effective management, growing the company from $4 million in 1963 to $24 billion in 2006, when it was sold to Wachovia. That year Golden West was ranked by Fortune as the #1 most admired company mortgage (incidentally, ranked #2 was Countrywide, which has imploded in the subprime lending fallout). Joe Nocera interviewed the couple for the Times magazine last Sunday: “What the Sandlers want, clearly, is investigative journalism that leads to change in public policy or finds, as Herb put it to me, ‘the next Enron.’ (‘Get the bastards,’ he said to me excitedly at another point.)” Look no further?
  • Mark Cuban, the billionaire blogger and basketball baron, has been known for radical jounalism experiments. He’s been employing journalist Chris Carey to dig up shady public companies and publish his findings at— but not before Cuban decides whether to short their stock. Also, while Cuban tells people that he is a libertarian, he’s a softie when it comes to taxes. Following Warren Buffet’s lead, he blogged in December: “I would be perfectly fine paying a higher percentage of income, both in federal income taxes and as part of a consumption tax on luxury items.” Cuban’s only caveat is that the government become more transparent. He should be all over the tax haven story. Lastly, he went on a blistering attack against blogging-as-journalism this past week for its perceived lack of standards (under the logic that it takes one to know one). I don’t suppose he’d be a fan of Wikileaks, either, given their standards.
  • The Sovereign Society is a website/newsletter supporting offshore banking & tax havens (“Feel the Freedom of Total Wealth”). They detail the ways that Uncle Sam is hypocritical on tax policy (plausible) and assert that “tax competition” is good for the global econonmy (questionable). They also fiercely maintain that offshore investing is a legitimate business. In that ,they should find a kindred spirit in Rudolf Elmer, who proclaims on his website: “I strongly support the offshore business when it abides by ethical rules.” Clearly they should have the fortitude to exorcise the bad apples in their industry. Former Congressman and Sovereign Society general counsel Robert Bauman is lenient on LGT Bank of Lichtenstein, pointing out that a bank employee had stolen banking records on 1400 individuals and sold them to prosecutors in Germany. But their whistleblower, Heinrich Kieber, has now gone underground in Germany. Elmer is taking a very public stand here, and his case ought to receive some considerations– even by the tax haven cheerleaders.

Certainly some parts of Elmer’s story still needs checking out. I’m going to be speaking to him further. But there is enough of a hook (“Remember that Wikileaks court case…?”) that financial journalists ought to give it some deeper attention.

This was the U.S. “Exclusive” for this story, though it was reported it reported in Der Spiegel: “Schweizer Ex-Banker startet Website für Informanten.”