Photo: Julien Becker
“It was an affair that never should have begun.” André Lussi, entrepreneur
ANDRÉ LUSSI
The end of the affair At a recent Executive Club meeting at the Hotel Le Royal, André Lussi’s buoyant reflections on “Clearstream Affair 1” proved he is a man who does not easily accept defeat In November the Executive Club had a very interesting guest speaker, Mr André Lussi, former president of Cedel International (which later became Clearstream). As is well known, André Lussi was dismissed in December 2001 following the aftermath of the publication Révélation$. The book was written by journalist Denis Robert with the assistance of Ernest Backes who had held a senior position at Cedel but was fired in 1983. It has been said of Lussi that he has been equally honoured and attacked, but on this evening he was in good company. Indeed, with hindsight, and after having endured five years during which his reputation was continuously at stake, the man whose ambition it was to realise a single European clearing house was happy to speak about, “an affair that never should have begun”. The Executive Club draws high-level speakers. Its members are invited to dine and freely debate with each other or ask the speakers pertinent questions. This evening was different in one respect – the level of curiosity generated by
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the man who held such an important executive role in Luxembourg but also was such a visionary, whether one agreed with his vision or not. Lussi calls himself an “entrepreneur” and this title is apt. Entrepreneurs who take the biggest risks and, therefore, from time to time, fall from the greatest heights. In Luxembourg, failure is a dirty word. Lussi said that the “Clearstream Affair”, or “dirty take over” as he also called it, is long finished as far as he is concerned. Yet he was happy to offer some basic lessons and diagrams – “while sticking to the facts and trying to be objective” – to explain why (in his opinion) it was impossible for the clearing house, which did not have bank notes – to launder money.
Who profited from the affair? There is an old adage that says, “When a crime is committed, look to who benefits for motive.” A member of the audience evoked this logic by posing two questions: who profited from this affair and who orchestrated it? In “Clearstream Affair 1”, the clearinghouse was accused of being
an international platform for money laundering and tax evasion. In the time leading up to the “affair”, Clearstream’s growth was enormous. The clearinghouse was processing billions of dollars a day, which translated into lucrative fees. In Lussi’s words, “When there is success, people are jealous. And countries. Relations became stressed with France and French circles. It was within this spirit that the book Révélation$ was released at the end of February 2001.” Everyone loves a juicy conspiracy theory. Révélation$ had all the trappings – the occult, secret accounts, money laundering. Lussi was compelled to read it. “I did not find one ounce of truth.” Perhaps his confidence that the book was nonsense contributed to his undoing. As a word of advice to the audience he said that whomsoever should find oneself implicated in any kind of affair should “get the best lawyers.” This is a lesson he learned the hard way. The book had a long lasting impact. Both Lussi and his wife were investigated for fraud and tax evasion. All charges were subsequently dropped, but after a long enough period that the damage was done and at what cost? According to Lussi, one of the biggest losses is what his consolidation plans would have done for the European clearing industry and what this would have brought to Luxembourg. Unfortunately, too many events occurred over which he had no control. In June of 2001 the international press widely speculated that Clearstream could no longer decide its own destiny. The “investigation” caused three senior officials, including Lussi, to temporarily step aside and this opened the possibility for Deutsche Börse, already half-owner of Clearstream, to buy the other half – a move that Lussi opposed. No one could have predicted September 11th 2001, or its affect on global markets. We are still feeling the repercussions today, as banking regulations and compliance enforcement grow more restrictive. Luxembourg’s efforts in the fight against money laundering are recognised as amongst the best in the world. If banking secrecy was once a pole of attraction, the financial centre has repositioned itself as a place of expertise, flexibility and innovation but also compliance, compliance, compliance. Transparency has replaced secrecy 100%. In July 2002 Deutsche Börse purchased the remaining 50% of Clearstream International for €1.6 billion. Deutsche Börse’s strategy was always to be a vertical securities silo where one institution provides front and back ends of securities trading. “It was an affair that should never have happened,” Lussi said: “Unfortunately I am no longer in a position to offer the promise that I made to my colleagues and to realise the vision I had imagined for Luxembourg. That is what I regret.” || Mary Carey