US Department of Justice alerts Swiss OAG of corruption

“”, a branch of the Swiss Broadcasting Corporation, has published an extensive survey carried out by the Gotham City editorial staff on the Swiss-based company Sicpa SA, the incumbent TRA tax stamp solution provider.

The article shows how Sicpa struck a secret deal with relatives of ex-president Gloria Macapagal-Arroyo in 2006, hoping to land a contract in the Philippines. The United States Department of Justice alerted the Swiss authorities to this subject in 2014, causing the opening of criminal proceedings by the Office of the Attorney General (OAG)

The secret pact had been sealed just in time for the visit of the President of the Philippines, Gloria Macapagal-Arroyo, to the Davos World Economic Forum in January 2007. A few months earlier, at the end of 2006, Sicpa had hired an intermediary as discreet as well placed: Anthony Arroyo, the nephew of the president’s husband, José Miguel Arroyo.

The agreement made with this well-chosen consultant was to enable the Swiss-based firm to sign one of its very first cigarette market traceability contracts with the Philippine government. In addition to a salary of 5,000 US dollars per month, his compensation also included a “success commission” of 200,000 US dollars.

The details of this agreement are revealed in a survey carried out by the editorial staff of Gotham City and published on August 17, 2022 by Swissinfo. This article is based in particular on documents from the ongoing federal investigation of the OAG against Sicpa and on interviews with witnesses in the case.

A document from the OAG, in particular, describes the meeting of Anthony Arroyo in 2006 at the headquarters of Prilly with Maurice Amon, then co-heir and co-director of Sicpa with his brother Philippe. Maurice Amon died in 2019.

Anthony Arroyo and Maurice Amon were accompanied that day by Hans Schwab, a senior executive of the Swiss company and nephew of the founder of the Davos forum, Klaus Schwab. Within Sicpa, Hans Schwab was in charge of selling the firm’s latest tobacco traceability product, the “Sicpatrace” solution, in the Philippines.

According to the OAG document, dated September 2020, Anthony Arroyo’s mandate was to help SICPA “manage relations with his uncle and the presidency”. But there is something more serious: according to the federal prosecutor’s office, “it was clear at that time that part of the commission should go to José Miguel Arroyo”, then first gentleman of the Philippines.

A few months after this meeting in Prilly, President Gloria Macapagal-Arroyo joined the World Economic Forum in Davos.

On the evening of January 26, 2007, she was invited to a reception at the Hotel Belvédère organized by Sicpa and chaired by Maurice Amon. “Thank you, Mr. Amon, had launched the president in a brief speech before the service of starters. Thank you for the wonderful dinner that you organize and for your kind words. Even if we have not started eating yet, I am told that in terms of guest list this evening is the best of all the business meals on this forum. Thank you very much!’

Faced with intense lobbying activity from tobacco companies, Sicpa ultimately failed to sell its tobacco tracing solution to the Philippine government. The Swiss-based company came up against the powerful firm Philip Morris and Fortune Tobacco Corp, a local joint venture of Philip Morris founded with the Sino-Filipino billionaire Lucio Tan.

Hans Schwab spoke in the local press and before a parliamentary committee to defend the Swiss solution, without managing to raise the bar. The executive left the company in 2009.

Targeted by corruption charges, the first gentleman José Miguel Arroyo left the country that same year. His wife did not last much longer, stepping down from power in 2010. Gloria Macapagal-Arroyo was eventually arrested the following year, accused of electoral fraud and embezzlement.

Regarding the agreement made by Sicpa with Anthony Arroyo, there is nothing to say whether the success commission has been paid or not. Questioned by Swissinfo, neither the OAG nor the company commented on this subject.

The story could have ended there, if the US Justice Department had not intervened in this case by an unexpected twist. At the end of 2014, the Department of Justice (DOJ) sent a curious document to the Swiss authorities. The letter, the existence of which is reported in the OAG document dated September 2020, is presented as a “draft” request for mutual assistance.

Normally, the foreign authorities seeking Swiss assistance in legal investigations send a full request directly, which may be followed up with requests for further clarifications. In this case, however, the US Department of Justice didn’t go the whole way. In short: it was content with just providing Swiss AOG with information on SICPA’s activities.

The American missive is a bombshell. The Department of Justice reveals the meeting of Maurice Amon and Hans Schwab held with Anthony Arroyo a few months before the Davos forum of 2007. It describes all in the details: names, dates, places and the size of the “commissions” agreed between Sicpa and President Gloria Arroyo’ representatives.

On the basis of the information received from the United States, the Swiss OAG opened an investigation against Sicpa in early 2015 for “corruption of foreign public officials”. At this time, the procedure also targets Hans Schwab, as well as another employee of the Swiss company.

Unusually, however, the “draft” request for mutual assistance from the United States was never followed up with a formal request. According to our research, the US Department of Justice discovered Anthony Arroyo’s dealings with Sicpa as part of another investigation targeting him in the United States in connection with real estate matters.

Asked about this, the OAG confines itself to confirming that the investigation into Sicpa was triggered “on the basis of information from a request for mutual legal assistance”. The Swiss procedure was subsequently extended to Sicpa’s activities in 14 countries and, in June 2021, the investigation was extended to Mr. Philippe Amon, the owner and CEO of SICPA, who is investigated for corruption of foreign officials.

The OAG federal investigation is continuing. The presumption of innocence prevails, both for the Sicpa company and for its owner and director.

SICPA assures today that it is “fully cooperating” with the federal investigation, while denying any responsibility. “We dispute that our company was involved in or had knowledge of any unlawful conduct on the part of some of our external consultants, indicates the firm. We are confident that the procedure will establish that the criminal responsibility of our company and our general manager is not engaged.”

According to Sicpa, the OAG investigation would now be limited to four countries, including Brazil and Colombia (it does not specify the other two). The OAG confirms that Sicpa’s activities in these two markets are well targeted, but refuses to specify the exact number of countries currently under investigation.

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