UN Seeks Swiss Private Banker Funding for Geneva FaceliftGiles Broom
Geneva’s private banks could burnish their image by helping to fix leaky roofs and remove asbestos from their hometown’s United Nations buildings, according to Michael Moller, who’s in charge of raising renovation funds.
Moller is tapping private banks busy rebuilding their reputations after the global crackdown on offshore tax evasion. They could volunteer to stump up part of the 837 million Swiss francs ($928 million) needed to renovate the UN’s main center for diplomatic talks as member countries are unwilling to foot the entire bill, he said.
Helping rebuild the Palace of Nations, which has cemented Geneva’s reputation as a center of peace talks, would be the right thing for the banks to do for the city that hosts them, Moller, acting director-general of the UN’s Geneva office, said in an interview. Less than two miles away in the city center, more than 4,000 asset managers, advisers and 120 banks have helped Switzerland amass $2.3 trillion of cross-border wealth.
“The banks are going to have to re-brand themselves,” Moller said, speaking in his office inside the complex, known locally as the Palais. “It’s their joint responsibility to do this, and it’s in their interest.”
The Danish diplomat is trying to raise funds for the project, which the UN aims to start in 2017. He’s also targeting other companies that might want to name part of a building or a room in the 80-year-old hilltop complex that hosted political deals such as the withdrawal of Soviet troops from Afghanistan in 1989.
Moller, 61, who started a 12-month term in November overseeing the UN’s second-largest hub, wants contributions for the site that in the past nine months hosted diplomatic talks on Syria’s civil war and Iran’s nuclear work.
The 193-member organization approved an overhaul of its headquarters in New York in 2006. The cost of that project has increased to $2.14 billion from an initial estimate of $1.88 billion.
Geneva’s Palais was constructed between 1929 and 1937 to host meetings of the League of Nations, the UN’s defunct predecessor. The buildings contain 34 conference rooms and 2,800 workspaces, which isn’t enough to house all the UN staff, 1,200 of whom work in rented offices elsewhere in Geneva. The reforms will add 700 workspaces.
Offices are stifling in summer without air conditioning and some roofs leak. Parts of the complex don’t meet safety standards, with inadequate access for fire trucks, insufficient escape routes for the disabled and electrical cables that don’t comply with regulations as they could release toxic fumes. Asbestos, the heat-resistant material that was phased out of construction sites because it can damage the lungs, still lingers in walls throughout the site, according to the UN.
It won’t be easy to dredge Swiss banks for donations. Switzerland is under “heavy pressure” because of the proportion of client assets originating in developed economies where authorities are trying to recoup undeclared funds stashed in Swiss banks, Boston Consulting Group said in a report last month.
Banks have been closing accounts of Americans and Europeans who don’t come clean on unpaid taxes as their governments target advisers that opened hidden accounts for them. Low interest rates and unstable trading income have also curbed profits since the financial crisis.
Geneva’s wealth-management industry helped the city place ninth in a global ranking of financial centers published by Y/Zen Group in March, Geneva Financial Center said in its 2013 annual report.
Moller, who has worked more than three decades in the UN, said he’s campaigning to persuade skeptics to maintain the Palais’s role in international peace resolution.
Diplomatic workers in Geneva are often envied more for their Swiss-franc salaries that are exempt from local taxes and flight allowances than for the UN’s policy achievements such as the Millennium Development Goals and attempts to protect human rights. Some UN officials have access to a duty-free store with liquor, champagne and cigarettes.
Moller’s appeal for corporate donations comes as Switzerland plans to eliminate special tax rates offered to foreign multinational corporations.
Caterpillar Inc.’s Swiss office helped it save more than $2.4 billion in U.S. taxes, according to a U.S. Senate report in March. Cincinnati, Ohio-based Procter & Gamble Co. is Geneva’s third-biggest private-sector employer.
Moller declined to name companies he is targeting to help pay for the renovations, or say what his career plans are after his one-year mandate as acting director-general ends.
In the meantime, to seek funds for the Palais he’s developing a network of millionaire bankers from Geneva’s oldest financial dynasties, including Ivan Pictet, a former senior managing partner at the city’s biggest bank Pictet & Cie. Group SCA, and the chairman of the investment committee of the $54.2 billion UN Joint Staff Pension Fund.
It’s in everyone’s interest to maintain Geneva -- a city that hosts 30 international organizations, 250 international non-governmental organizations and 172 states represented by a permanent mission -- as the “preeminent” center for peace talks, Moller said during the interview.
“Everybody is here,” he said. “They are all here because everybody else is here. Together, they are able to have a much greater impact.”
It’s also important to alter the image of a city that is too expensive as a location for diplomats to hold more than 11,000 meetings a year, Moller added.
“There’s a perception that it’s all sitting around the lake eating cheese and chocolate,” he said. “We are working on global public good. The very identity of Switzerland is what we do here.”
(A previous version of this story corrected Michael Moller’s title.)