By Alexia Eastwood

A month ago a journalist resigned from a prominent British newspaper, declaring that, “the coverage of HSBC in Britain's Telegraph is a fraud on its readers. If major newspapers allow corporations to influence their content for fear of losing advertising revenue, democracy itself is in peril.” (you can read his full blog post here)

Both official treatment of the HSBC leaks (or Swissleaks as they are better known), as well as press coverage on the story have been fraught with inconsistency and scandal all around Europe.This is nowhere more true than in Greece, where the trial of a former Minister is currently underway. Let’s start at the beginning.

Six years ago, French authorities obtained a large amount of HSBC data which former employee turned whistlebower Hervé Falciani, had stolen from the bank. The files reportedly showed that the bank had been helping wealthy customers evade tax and hide their money in secret Swiss bank accounts, and contained the account information of more than 100,000 wealthy customers of the private Swiss bank. When French newspaper, Le Monde, received this data, they took it to the ICIJ – the International Consortium of Investigative Journalists who have since been working through the data in collaboration with a team of 45 journalists.

The Lagarde list

The story of what happened to the names of individuals and companies with offshore accounts given to the Greek authorities has bordered on farcical. The first instalment of around 2,000 names of potential tax evaders in what was known as the Lagarde list was handed to Greek authorities by the French government through Christine Lagarde – then French finance minister, and the namesake of the list, in 2010. A CD containing the data was delivered to then Greek finance minister George Papaconstantinou, who later told a parliamentary enquiry that he had given the data to the head of the tax police (SDOE) and asked him to investigate. However the tax authorities did not proceed with the investigation, and when Papaconstantinou was replaced by Evangelos Venizelos in mid-2011, the CD mysteriously and conveniently disappeared.

Two years went by, and when the government failed to act, Greek journalist Kostas Vaxevanis published the names. Vaxevanis was promptly arrested for violating privacy laws, though later found not guilty at trial. Damningly, of the names on the list, one was a close adviser to the then Greek prime minister, Samaras, and another a former minister and member of his political party, New Democracy. The list also contained the names of some officials in the finance ministry. It was later discovered that 3 accounts belonging to Papaconstantinou's two cousins and their husbands had been omitted from the list that authorities began investigating in 2012, and the former minister is now facing trial.

Swissleaks: the latest instalment

As media outlets this month began to publish the findings of the ICIJ’s extensive investigation, dubbed Swissleaks, it has been revealed that they have uncovered another 86 names pertaining to Greece that weren’t contained in the original Lagarde list as these customers had listed their residences as outside of Greece. However, the names on the list are known only to the ICIJ’s local media partner, journalist Harry Karanikas who works for the newspaper Ta Nea. Ta Nea, though, has to date not published the names. Instead they featured a crypic quiz of tax evaders, publishing only vague hints as to who these individuals might be. This is particularly perplexing following Vaxevanis’ acquittal, which ruled that the publishing of the names on the original list was in the public interest. What we do know from Ta Nea’s coverage is that these additional accounts are some of the largest on the whole list and might represent the greatest potential recoup of funds for the Greek government.

The new findings also show much more than just the names of potential tax evaders; they prove that HSBC actively helped customers hide their accounts both from domestic tax authorities and the European Savings Directive.

HSBC is already facing criminal investigations and charges in France, Belgium, the US and Argentina, and Swiss prosecutors have now announced that theyare opening a money laundering investigation into HSBC’s Geneva based private banking subsidiary, and have raided their offices. The newspaper the Times of India have also reported that Indian tax authorities are expected to launch legal proceedings against the bank soon. Already in 2012, HSBC paid  a record $1.9bn fine to settle accustaions of money-laundering in the US.

So far French authorities have recovered around 200m euros in taxes and fines from names on the list, and Spain around 300 million. The UK meanwhile, having identified more than 1,000 tax evaders from the files, has recovered £135m but prosecuted just one individual from their list. Questions are also being raised in the UK about why HSBC chairman Stephen Green was appointed trade minister shortly after the government received the HSBC files from French authorities in 2010.

The chief executive of HSBC, Stuart Gulliver, last week apologised for the practices of the Swiss private bank, “I would say that a number of us, myself included, think that the practices at the Swiss private bank in the past are a source of shame and reputational damage to HSBC. Yes, I think shame is an appropriate noun,” but defended the fact that he himself had an account in Geneva.

Wider implications

This is a story not just about tax evasion and banking regulation but one with implications that go straight to the heart of democratic principles, bringing to light issues of freedom of the press, particularly in Greece (but not only in Greece), as well as the strong ties that exist between wealthy individuals and companies and politicians and government. Despite a fierce economic crisis, previous Greek administrations simply failed to tackle widespread tax evasion, particularly among the wealthiest. The revelation that many of the names are related to then governing politicians, if not actual family members, goes a long way towards explaining the inexplicable. There is of course the additional issue that some of the more well known names on the lists are powerful so-called Greek oligarchs, which in the past politicians have been loathe to take on.

As Peter Oborne states in his blog post, “A free press is essential to a healthy democracy. There is a purpose to journalism, and it is not just to entertain. It is not to pander to political power, big corporations and rich men. Newspapers have what amounts in the end to a constitutional duty to tell their readers the truth.” But as Owen Jones notes,  the media is so often there to serve the interests of the rich.

Likewise, governments owe the populations they represent the respect of ensuring that the very wealthy pay their way and contribute towards the society they live in, particularly now, when governments are implementing austerity policies that are putting the heaviest burdens of paying for the crisis on the shoulders of the poorest in society. The Guardian’s revelation that the conservative party in Britian has received over £5m from HSBC Swiss account holders, and the labour party over £500,000 looks very bad for the establishment and their independence to pursue effective tax regulation. Indeed Falciani himself in his new book has alleged that former Greek prime minister George Papandreou was blackmailed into signing Greece’s memorandum agreement because his mother’s name was on the list. Papandreou has firmly denied this, however.

The new Greek government have vowed to tackle tax evasion and have said they are not afraid to take on the Greek oligarchs. Panayiotis Nikoloudis has been appointed head of a new ministry for Combating Corruption, who are said to be already looking into various names on the Lagarde list as well as other lists in the government’s possession that identify potential tax evaders. As reported by the New York Times, Mr. Nikoloudis has 3,500 audits underway, amounting to €7 billion in back taxes, €2.5 billion of which he hopes to collect by summer. A further 22,000 cases, worth several billion euros, are next in line.