Switzerland’s judicial authorities are examining allegations that Swiss Attorney General Michael Lauber sought to improperly disburse $800 million (CHF725 million) in frozen money connected to the imprisoned daughter of a former Uzbek leader.This content was published on August 6, 2020 - 09:43
The supervisory body charged with overseeing Lauber is set to appoint a special prosecutor to look into the claims, which were part of a complaint submitted by a Zurich law firm last month, Swiss judicial officials have told the Financial Times.
The complaint alleges that Lauber, Switzerland’s most powerful law-enforcement official with authority over all legal cases, entered into an “unlawful collaboration” with the Swiss government in order to boost the country’s interests in Uzbekistan.
Lauber, who has been fighting allegations of wrongdoing since last year, is already the subject of a criminal investigation initiated last week by special prosecutor Stefan Keller over his office’s long-running probe into corruption in world football.
Now the AB-BA, the body that supervises Lauber’s work, has asked Keller to look into the new allegations concerning the Uzbek money. If Keller declines, a second prosecutor would be appointed to investigate the matter separately.
Under Swiss law, a prosecutor is required to make a formal legal determination over whether criminal allegations are substantial enough to be escalated into a full criminal investigation.
Lauber’s office said they had no knowledge of the new complaint or the AB-BA’s current deliberations. Lauber’s office did not comment further.
The charismatic Lauber submitted his resignation last month after the AB-BA said he had “seriously violated his official and legal duties” by holding secret un-minuted meetings with Gianni Infantino, president of FIFA. However, Lauber is expected to remain in office until the end of the year.
The new legal complaint was filed by a Zurich law firm acting on behalf of creditors to Zeromax, a $5.6 billion bankrupted Swiss holding company allegedly controlled by Gulnara Karimova, daughter of Uzbekistan’s former president Islam Karimov.
Zeromax, the largest conduit for foreign investment into Uzbekistan until it collapsed in 2010, was used to fund the lavish lifestyle of Karimova and those close to her, documents made public following the bankruptcy showed. Hundreds of millions were taken out of the company in the weeks before it collapsed.
A powerful socialite and aspiring diplomat during her father’s 27-year dictatorship, she fell from grace in the later years of his regime and was found guilty in 2015 of stealing as much as $1.6 billion through tax evasion, embezzlement and illegally appropriating state assets. She was sentenced to 13 years in jail in Uzbekistan in March.
The new criminal complaint against Lauber alleges that he sought to subvert Zeromax creditors’ legal claims in Switzerland to a portion of the $800 million held in private banks in Geneva linked to Karimova.
It alleges that Lauber used evidence obtained improperly from Uzbekistan in order to rule that Karimova was not the ultimate controlling party of Zeromax, despite Switzerland’s federal police having established that she was. US and Swedish courts have also found Karimova to have used Zeromax as one of her main financial conduits.
In making that ruling, the federal prosecutor’s office was able to deny the claims of Zeromax’s creditors to Karimova’s Swiss accounts.
The complaint alleges that Lauber and his representatives helped to facilitate a secret deal with the Swiss and Uzbek governments that was brokered in an unofficial trip to Tashkent in 2017.
The claim targeting Lauber characterised the alleged secret deal as an “unlawful collaboration between the Federal Council and the Office of the Federal Prosecutor . . . [a] tangible violation of the principle of separation of powers”.
Switzerland sought to return the $800 million to Uzbek authorities in exchange for Uzbekistan’s recommitting to Switzerland’s voting block at the IMF, the complaint alleges. Switzerland’s friendly policy towards Uzbekistan is longstanding and publicly acknowledged by Bern.
The Swiss government has since the early 1990s sought to leverage its power in international financial institutions by allying with Central Asian countries, providing economic and developmental support in exchange for votes. The policy has helped keep Switzerland on the board of the IMF.
Uzbekistan's justice ministry in June confirmed it was in negotiations with Switzerland to return assets owned by Karimova, and that the proceeds would be returned to the Uzbek budget.
The government of Uzbekistan, the country's foreign ministry and its embassy in Berlin, which represents the country in Switzerland, all did not respond to requests for comment.
A spokesperson for the Swiss foreign ministry said a decision had been taken by Switzerland’s government in 2018 to return the $800 million to Uzbekistan.
“Throughout this process, the respective legal competences of the Federal Department of Justice and Police and of the Federal Department of Foreign Affairs are being respected. The process described above complies with Swiss law and the asset recovery strategy adopted by the Swiss Federal Council,” it said in a statement.
Copyright The Financial Times Limited 2020