Hervé Falciani, the HSBC employee who exposed the existence of tens of thousands of tax evading accounts held at the bank in Geneva, is back in France where he will this week give evidence in closed session to MPs who are helping draw up a new law on tax fraud. In an interview with Mediapart, below, Falciani says the Swiss authorities, who want to question him over breaching banking secrecy, tried to buy his silence early last year with the offer of a non-custodial sentence. After that attempt failed, the former IT man was arrested in Spain in July 2012 pending possible extradition to Switzerland. On May 8th the Spanish courts refused the extradition request.
French-Italian citizen Falciani, 41, who had originally fled to France in December 2008 after writing to tax authorities in France, Britain and Germany offering details of the accounts held with the Swiss arm of HSBC’s private banking operations, has recently been under the protection of the Spanish police. Now back in France with his wife and daughter, he is under the protection of the French gendarmerie.
The whistleblower has also told Mediapart that he has already been questioned several times by examining magistrates Renaud Van Ruymbeke and Charlotte Bilger who in April this year began a formal investigation into the HSBC affair in France, targeting the practices of the HSBC Private Bank in Geneva in connection with its subsidiary in France. They are examining claims of unlawful direct selling of banking or financial products or conspiracy to do so, conspiracy to launder money obtained from illegal direct selling of banking or financial products and 'conspiracy to launder the proceeds from tax fraud'. The bank has denied any wrongdoing.
Acting on a request from the Swiss authorities, in January 2009 French police searched Falciani’s new home in southern France, and found data concerning 127,000 HSBC accounts, including those of 8,231 French tax exiles.
All of the information found in Falciani’s possession was passed by the Nice public prosecutor’s office to the budget ministry. In 2009, the then budget minister, Eric Woerth, publicly revealed that he had in his possession a list of 3,000 French citizens who had evaded tax through their Swiss accounts. He invited all those who believed they may be included on the list to voluntarily contact the French tax authorities to settle their affairs by December 31st or face consequent penalties and prosecution.
Falciani had joined HSBC’s private banking operations in 2000, and was based in Geneva from 2006 where he served as an engineer for the bank's computerized data systems. He claims that from that same year, he alerted the Swiss authorities about HSBC’s alleged involvement in a sophisticated system of tax fraud by its clients. He is wanted in Switzerland for alleged ‘violation of banking and commercial secrecy’, ‘unlawful extraction of data’, and ‘economic intelligence’. Below is Mediapart's interview with him.
MEDIAPART: You returned to France a few days ago. Can you describe the circumstances of your return? How is your protection being organised?
Hervé Falciani: I have the right to the best that can be given in France; there's some good aspects but also some discrepancies. I am sure that things will improve. My return was just like the last five years of my life: lots of sudden twists in a context where the only certainty is that one has to fight for everything, including to ensure getting this protection.
As for the circumstances of my return, I knew nothing about the arrangements until the moment I set foot on French soil. We had prepared a plan B, helped by the Spanish police's Special Units [editor's note, who looked after his security in Spain]. My protection is organised through my lawyers who are in contact with the ministry of the interior, but I can't say more than that. To be effective the security arrangements must remain secret.
MEDIAPART: You speak of “discrepancies”. What do you mean?
H.F.: The security measures taken when I am in Paris are not the same as when I leave.
MEDIAPART: You seem to suggest that France does not know how to protect whistleblowers.
H.F.: In France the fight against corruption does not make provision in concrete terms for the protection of witnesses, those who are called whistleblowers. Yet a whistleblower offers a unique point of view on the threats that are being carried out behind the scenes. Not to protect a whistleblower, not to support them, is to refuse to use this opportunity. Holding up lists, that's just for show, leaving things to get forgotten over time.
MEDIAPART: What has your life been like on a daily basis since your return to France? Do you still work for the same institute that you've worked for since 2010?
H.F.: Keeping my job is a daily struggle. I have a duty to ensure that my experience of tax evasion and tax fraud are made use of, without up to now having had any guarantee that it will be. At the same time, as well as my physical security I have to ensure my family's financial security.
Every time I make a trip, whether it's to talk to judges or MPs, it's at my cost. When during the last six months I working with the anti-corruption authorities in Madrid, I was at the same time doing a second day's work remotely for my employer. I was able to do it thanks to the goodwill of some brave people who persuaded officials to permit me to do it, even though it was only distance work.
Under the previous [French] government, that of [prime minister] François Fillon, my employers came under pressure not to hire me. There was an intimidating attitude, things were put in jeopardy, there were obstacles to overcome. Recently, after my return to France, I saw my boss. He said to me: “Thank you for not having named our business.”
Even worse, in the week that followed the broadcast of the TV programme Cash Investigation on France 2 [editor’s note, a programme on the Falciani affair shown on June 11th] my wife lost her job. My problems began when I started to work with the French authorities. Me, my family and the people who wanted to help us found ourselves in a more and more precarious situation, we were more and more exposed – and this for simply helping the common good. You can see that the consequences of one simple report can be very dramatic.
MEDIAPART: During your extradition hearing on April 15th 2013 in Spain, the Spanish prosecutor Dolores Delgado reported that you were in Switzerland in February 2012 at the request of the Swiss legal authorities, even though they had issued an arrest warrant against you. Why did they make such a request?
H.F.: The request was put to my lawyers via my Swiss lawyer. Some Swiss prosecutors wanted to meet me. Everyone that I consulted about the matter opposed me going, fearing a trick. But I went there, accompanied by my lawyers.
MEDIAPART: So you went to Switzerland without a prior guarantee that you could return freely?
H.F.: Yes. It was only at the Swiss border that I was given a safe conduct pass, letting me leave again after the meeting. It was about finding common ground and a way out that would suit both parties. So we found ourselves in the VIP lounge at Geneva Airport. We met two prosecutors, the federal prosecutor Laurence Boillat and the prosecutor-general Carlo Buletti. For several hours they outlined their position on an amicable agreement that would allow me to come out of it guilty and convicted, but with no jail time. In brief, I could have helped to bury the affair, thus avoiding the risk of reprisals. I chose not to be quiet, even if it means paying a heavy price.
What is quite absurd is that over the years the Swiss justice system, right up to its extradition request, has always claimed I was not contactable and that it was difficult to work with me. That's untrue. I have always been contactable by telephone as well as by the address that I took care to communicate to the Swiss authorities. As proof they were able to locate me in their international request for help [editor's note, from the French legal authorities] and the subsequent search made at Castellar [Falciani's home in southern France] at the start of 2009. Today, still, they can contact me by phone...but I've never had a single demand for additional information for their investigation. Yet they were so impatient to get me extradited so they could question me!
MEDIAPART: As Mediapart has disclosed, the former budget minister Jérôme Cahuzac was in a position to meet you while he was president of the Finance Committee at the National Assembly (February 2010 to June 2012), but never did so. Yet he had been alerted about this very early on by one of your lawyers, Patrick Rizzo, and by the socialist MP Arnaud Montebourg.
H.F.: In fact in 2010 Arnaud Montebourg spoke with me at Rizzo's offices in Nice. It was a moving moment right in the middle of all this silence and secrecy. It was an opportunity to meet someone who has for years fought as hard as he can. He did all he could for me, without anyone taking notice. Other attempts were made to speak with this Monsieur Cahuzac, who had such a senior position, to the point of waiting in vain for him at a discreet café near the National Assembly.
MEDIAPART: In France the examining magistrates Renaud Van Ruymbeke and Charlotte Bilger have been put in charge of a judicial investigation. Have you been questioned by judge Renaud Van Ruymbeke?
H.F.: Yes, we've already met. It's the start of important and positive work. I hope that several countries will join him in his task, first of all Spain which is already ahead of the game. It's about re-establishing the facts and brushing aside attempts to obstruct French justice by seeking to suggest doubts through a possible tampering with evidence. The judges are working after years of investigation on a wide-ranging case. I'd like to think my insights will be useful to them.
MEDIAPART: The judicial investigation was opened against persons unnamed for conspiracy to commit tax fraud but above all for illegal selling of banking and financial products. It's certainly the HSBC Private Bank of Geneva in association with its French subsidiary that is targeted. What do you know about these supposed activities?
H.F.: I was witness to an industrialisation of the management of client relations and its network of intermediaries. Not only do the structures play an important part in the selling, but obviously the insufficient procedural controls also accentuate any abuses, including in illegal selling of banking and financial products. If you don't ban in very precise circumstances even the sharing of Excel files, you are allowing parallel accounting. You don't need to be very technically minded, the absence of monitoring is enough. Your possibilities are only restricted by what IT can do: carrying out a transfer, including of money that is undeclared and comes from illegal activities, and without the client even knowing, becomes as simple as a single click.
MEDIAPART: You worked for months with the anti-corruption prosecution authorities in Spain. What form did this collaboration take? Can it continue now you're in France?
H.F.: We worked on evidence, making sure that it is usable and ensuring that the investigators understand how the bank works. During the course of cases we were able to certify the accuracy of evidence and confirm certain mechanisms. One has to understand how the bank is based around a multitude of IT tools and people whose roles are decisive, like, for example, those of intermediaries. Since my return to France I'd like to believe that the Spanish and French investigators are trying to join forces and that contacts have taken place between the [examining] magistrates from the two countries.
MEDIAPART: Have you been contacted by other countries' judicial authorities?
H.F.: Yes, I'll soon be interviewed by the Belgian justice system. Collaboration between different justice systems is crucial to get one step ahead of the banks. And for the moment that's not the case!
Each occasion time is granted for the application of a new law I can assure you that a bank such as HSBC has the resources to adapt to it. For example, the more one moves towards automatic exchange [editor's note, the exchange of data on people's income between different tax authorities] the more the most opaque of tax havens benefit. If the Swiss sign up for automatic exchange it's because they have covered their backs by preparing an additional level of intermediaries. Swiss banks are increasingly going to manage accounts that are no longer in Switzerland.
MEDIAPART: On June 1st 2012, just before you went to Spain, the Americans came to see you. In what context?
H.F.: That took place in the context of an international request for assistance, at the criminal investigation department of the gendarmerie in Paris. There was an American prosecutor and the French prosecutor in charge of the case, François Carrère. It concerned going over some points that had previously been worked on and continuing to collaborate on the activities of the private bank in general. The request was blocked for a year-and-a-half for reasons I don't understand. But I imagine that the investigation under way today will allow the obstacles and the roles that various people played to be brought to light.
-------------------------------------
English version by Michael Streeter