"Spying" in Switzerland

Secrecy in Switzerland is a big business, encased in laws that carry stiff penalties for violations like breaking the shroud of anonymity around numbered bank accounts. Sometimes, though, Swiss secrecy gets in the way of enforcement of other countries' laws. In one current case, the aftermath has been both bizarre and tragic; it includes the jailing of a former executive of a giant drug company, the suicide of his wife and a threat to have two high officials of the European Economic Community (Common Market) arrested if they set foot in Switzerland.

Ironically, the drug executive, 47-year-old Stanley Adams, was doing what he thought was right, and the EEC officials -- Willy Schlieder, the EEC's director general for competition, and Albert Borschette, an EEC commissioner -- were only doing their jobs. Their saga began two years ago when Schlieder and Borschette opened an investigation into pricing policies of Adams' employer, Hoffmann-La Roche & Co., the giant Basle-based pharmaceutical company. The EEC was curious as to why there were wide country-to-country variances in prices for livestock vitamins and two popular Roche tranquilizers, Librium and Valium. Officials suspected Roche of violating several articles of the Treaty of Rome, which governs trade between Common Market countries. If so, the company would also be in violation of a separate trade agreement between the EEC and Switzerland, which is not a member of the Common Market.

Early in the investigation, Adams, then a Roche marketing executive who was having differences with his bosses, decided to tell what he knew. He flew to Brussels for a day of conversation with EEC officials about Roche marketing practices, some of which he described as anticompetitive and aimed at fixing prices. A few months later, he left the company and moved to Latina, near Rome, where he started a pig farm.

No Charges. In mid-1974 the EEC investigators showed Roche officials copies of confidential company documents that they were questioning. Adams insists that he turned no documents over to the EEC, but Roche officials suspected him and alerted Swiss police. Says a Roche spokesman: "There were grave suspicions against this former employee." Last New Year's Eve as Adams, his wife and three young daughters were crossing the border at Lugano for a holiday visit with Adams' wife's family, Adams was seized on suspicion of breaking Swiss "industrial espionage" laws, which forbid any unauthorized communication of business secrets.

Adams was jailed for more than two months without being formally charged, an archaic holdover from the harsh Napoleonic code. He was released on $9,750 bail (paid by the EEC) two weeks ago, but while he was in prison in January, his depressed wife committed suicide; the Swiss would not let Adams out of jail for her burial. Roche lawyers also said they regard Schlieder, widely respected in boardrooms throughout Europe, and Borschette as accomplices in the "spying" case.

Thus far, no charges have been brought against Roche. But the Adams affair is an ill-timed embarrassment for the trade-conscious Swiss, who are heavily dependent on good relations with the Common Market, where half the nation's exports are sold. The franc has been under pressure from the recent weakness of the U.S. dollar, and the Swiss are seeking closer economic ties with their neighbors -- a thrust that is hardly helped by attempts to thwart the Common Market's policing authority. As one EEC official put it: "A lot of companies have their European headquarters in Switzerland. Something like this could happen every time we investigate one of them. Adams didn't turn the information over to a rival pharmaceutical firm. He gave it to the EEC, which was investigating a possible violation of Common Market law. If the Swiss want to protect that kind of information, what will happen when we start looking into things like tax havens?"

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