IT whistleblower says lawyer took advantage of him

Philipp Hildebrand, former chairman of the Swiss central bank

ZURICH, SWITZERLAND – Swiss central bank chairman Philipp Hildebrand, age 48, has just resigned, effective immediately, but the scandal over the theft of private bank data and the financial transactions of Hildebrand’s wife is not likely to die down quickly.

He had worked for the bank since 2003 and was named the youngest ever chairman in January 2010.

Hildebrand said at a press conference last Thursday, 5 January, that he would remain in office as long as he had the support of the Swiss Federal Council, the cabinet. He called for reform in the wake of the scandal, including greater transparency on the part of central bank governors about their own financial transactions. Full text of HIldebrand press conference presentation (pdf)

He denied wrongdoing, saying that the CHF60,000 profit on currency transactions from August to October 2011 was his wife’s responsibility; a Bank Council investigation as well as one done by PricewaterhouseCooper’s support his claim. Hildebrand’s wife is a former currency trader who now owns a Zurich art gallery and the transactions were reportedly on behalf of her business.

But observers including a number of politicians have said in the past week that even if the central banker respected the letter of the law, and even if the law needs to be changed, he acted irresponsibly. Bloomberg/Business Week quotes Peter Kunz, head of business law at the University of Bern, as saying it’s “absolutely incomprehensible” that the relatives aren’t included in the regulations. “‘From a legal point of view, Ms Hildebrand’s dollar trade isn’t problematic,’ he said. “From the point of view of morality, experienced economic experts like the Hildebrands should know that a spouse’s trades are not without problems.’”

Kashya Hildebrand’s purchase of $500,000 in August, and sale of them in October, came during a period when the Swiss franc continued to climb against the dollar and the euro. Her husband had responsibility for Swiss monetary policy and capped the over-valued franc.

The banker is scheduled to issue a statement and copies of documents at 15:15 Monday, shortly after announcing his resignation. He was earlier scheduled to appear before parliament Monday afternoon to answer questions and share documents. Parliament still has a press conference scheduled for 18:00.

The unfolding story over the weekend centred, not around Hildebrand, but the man who stole the data, who contacted three Swiss media to say he has been abused.

UDC, lawyer and IT employer tell different tales

The 39-year-old IT worker says he turned to a lawyer with the information about Hildebrand’s accounts, not because he wanted to be a whistleblower or to have the information widely published, but because he wanted to understand the significance of the information he had viewed.

The man, who lost his job at Bank Sarasin after turning  himself into police, copied data from the private accounts of Hildebrand and shared it with an old childhood friend, now a lawyer and cantonal politician in Thurgau, Hermann Lei. The man who is being investigated for taking the information has been hospitalized and is under surveillance in a psychiatric unit for fear he will try to commit suicide.

But the details of what happened differ depending on the source: the IT worker and Lei, through his lawyer, both say they met with Christoph Blocher, former head of the rightwing UDC People’s Party, who has had an abrasive relationship with Hildebrand. Blocher has remained silent on the affair, but the UDC denies such a meeting ever took place.

The IT employee says he did not give Lei permission to turn the material over to Weltwoche, a Swiss political weekly magazine that published details a week ago, information that Lei’s lawyer denies.

SNB rules tightened Saturday, but parliament wanted more answers

The Bank Council, which oversees the Swiss National Bank, announced after an extraordinary meeting Saturday that it was tightening rules to include family members of the governing board and to reduce to CHF20,000, effective immediately, the amount of foreign currency board members can trade without advance clearing.

See also: GenevaLunch background stories on Hildebrand and the SNB

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