Newspaper article The Christian Science Monitor

Test of Swiss Anticorruption Drive ; Prosecutors Want to Extradite a Former Yeltsin Aide Arrested Last Week in the US. Russia Objects

Newspaper article The Christian Science Monitor

Test of Swiss Anticorruption Drive ; Prosecutors Want to Extradite a Former Yeltsin Aide Arrested Last Week in the US. Russia Objects

Article excerpt

Tarnished by repeated disclosures that dictators and crime kingpins were storing ill-gotten gains in its banks, Switzerland has been working to restore its reputation.

For more than a decade, this Alpine banking redoubt has taken steps - including establishing a federal office to track money- laundering and setting aside some of its famously strict bank- secrecy rules - to convince the world that it will no longer turn a blind eye to questionable activities. Those found with vast, suspect accounts include the late Nigerian dictator Sani Abacha and Peru's disgraced former intelligence chief, Vladimiro Montesinos.

Former Swiss attorney general Carla del Ponte, now UN chief war crimes prosecutor, won renown investigating alleged corruption. In recent years, a tough chief prosecutor in Geneva, Bernard Bertossa, has taken up the often bumpy crusade. The effort received a boost last week, when a former top Kremlin official was arrested in New York by federal agents acting on an international warrant issued here.

Pavel Borodin's detention set off an international diplomatic scuffle. Moscow has called on the US to free Mr. Borodin - who had come to attend President George W. Bush's inauguration.

Borodin, a one-time aide to former President Boris Yeltsin and benefactor to current President Vladimir Putin, denies any wrongdoing. Swiss officials say he has promised to return to Geneva to answer investigators' questions if the warrant is withdrawn. He is being held without bail pending a hearing set for Jan. 25.

The Swiss are watching carefully, to see how other nations support their efforts in the case. "This is a test of how serious the world is in tracking down corruption," says Carlo Lombardini, a Geneva lawyer who specializes in money-laundering cases. "The Swiss are serious; let's see if the Americans are serious. If Borodin is not extradited, it means that no one really cares about what happens here."

The Swiss have reason to be skeptical. As part of their effort, they have blocked more than $1 billion in suspect funds in recent years. Since most of the accounts involve foreigners, the Swiss - not infrequently - are forced to unfreeze them for lack of evidence from other nations that the money is the product of illegal activity.

The resignation last year of the entire federal money-laundering office - complaining about overwork and underpay - was a further blow to Switzerland's efforts. But the Swiss say they will press ahead because - economically and politically - Switzerland cannot afford to be seen as a haven for dirty money.

"Over the last 10 years, Switzerland has recast its anti-money- laundering laws by strengthening the penal code, self-regulation, and stepping up international cooperation. We recognize that no financial center can, in the long run, live off dubious monies," says James Nason, spokesman for the Swiss Bankers Association in Basel.

After a two-year investigation into alleged money-laundering and bribes involving renovations of Kremlin buildings, Swiss authorities were flummoxed last month when Russian officials announced they were dropping the inquiry because of insufficient evidence against Borodin. …

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