WASHINGTON, July 11 (Reuters) - Two computer discs that a Swiss banker handed over to WikiLeaks founder Julian Assange with public fanfare last winter and that contributed to his arrest days later contained no secret banking data at all, two of the banker's associates have told Reuters.
At a widely covered news conference in London in January, Rudolf Elmer, former head of the Cayman Islands office of Switzerland's Julius Baer private bank, gave Assange what he said were two discs containing information on about 2,000 offshore banking clients. After the press conference, Elmer returned to Switzerland, where authorities in Zurich Canton soon detained him.
At the time of his arrest, Zurich police and prosecutors issued a joint statement saying they were "checking to see whether Rudolf Elmer has violated Swiss banking law by handing the CD(s) over to WikiLeaks." The Zurich prosecutor's office confirmed on Friday that Elmer was still being detained without charge while an investigation continues.
But two of Elmer's associates who were present at the London press conference now say the discs Elmer handed over to Assange contained no confidential banking data.
Martin Woods, a former Scotland Yard detective and bank compliance officer who helped put Elmer into contact with WikiLeaks and to organize the press conference, said Assange told him months ago that the discs contained no bank secrets.
Assange "said to me one disc was blank and the other disc had no banking information on it whatsoever," Woods told Reuters.
Assange did not respond to a detailed e-mail from Reuters, sent via an associate, requesting comment. He is not known to have said a word in public about the discs since January.
ELMER SAID TO BE UNDER MENTAL STRAIN
But Woods said that when he last talked to the WikiLeaks founder, Assange expressed "genuine concern about what had happened" to Elmer after he handed over the discs. Woods also said that Assange told him that Elmer had done what he did because he was under mental strain.
Assange is scheduled to appear at the High Court in London on Tuesday for the latest hearing on his appeal against an extradition request by Swedish authorities for his questioning in a sexual misconduct investigation.
For several years, Elmer has been circulating allegations of improprieties by Julius Baer to journalists and tax agencies, and earlier this year he was found guilty of breaching bank secrecy laws and threatening a Baer employee. It's not clear why he would put himself at risk by publicly declaring that he gave Assange secret banking data, when in fact he did not.
"I am a critic of the system and want to tell society what happens in these murky oases," Elmer, who ran the Cayman Islands branch of the Swiss bank dedicated to wealthy clients until he was fired in 2002, told a news conference before the verdict in the earlier case.
Woods said that, in addition to his conversation with Assange, he had personal knowledge that the discs "were blank and contained no information whatsoever" about confidential banking activities or offshore bank accounts.
'OUT OF ORDER' FOR ELMER TO BE HELD
Jack Blum, a U.S. lawyer and former congressional investigator who has represented Elmer and other offshore-banking whistle-blowers, told Reuters that it was also his understanding that "there was nothing" on the discs.
Blum said it was "completely out of order" for Swiss authorities to detain Elmer without charge or trial for more than six months. "In civilized places, you don't hold people without evidence and without charges," Blum said.
Blum said he understood that the most recent Julius Baer data Elmer could have had access to dates from 2002, and that it came from the Cayman Islands, not Switzerland.
Corinne Bovard, spokeswoman for the Zurich prosecutor's office, confirmed to Reuters that Elmer was still being held without charge by cantonal authorities. She said that earlier this month, a judge gave prosecutors authority to continue to detain Elmer, at the prosecutors' discretion, until October 1, although he has the right to appeal to higher courts.
Bovard acknowledged that Elmer's detention was prompted by his public hand-over of the discs to Assange. She said that one of the grounds on which authorities continue to detain him is suspicion that if he were released, he might destroy evidence.
Bovard said that prosecutors and the courts would not have sought or authorized Elmer's continued detention without charge unless they had some evidence that he violated Swiss law.
Julius Baer, Elmer's former employer, is a major presence in the Swiss banking industry. As of April 2011, its total client assets amounted to 271 billion Swiss francs, ($323.1 billion). Baer employs a staff of over 3,500 worldwide.
After handing over the two discs to Assange at London's Frontline Club, Elmer flew back to Switzerland where he was scheduled to face trial on several charges, including making threats against bank staff (including a bomb threat), extortion and violating bank secrecy law.
Elmer denied violating Swiss bank law and most of the other charges. He acknowledged sending confidential bank information to tax authorities and admitted writing anonymous e-mails in 2005 which threatened that confidential client information would be sent to tax authorities and the media if Julius Baer did not change its behavior.
A Swiss judge acquitted Elmer of making a bomb threat and of trying to extort money in return for data. The judge found Elmer guilty of breaching bank secrecy laws and threatening a Baer employee. But the judge rejected prosecution requests that Elmer be jailed for 8 months and instead fined him 7,200 Swiss francs (about $7,500), which was suspended for two years.
Hours after that case was resolved, Swiss authorities rearrested Elmer, and he has been in prison ever since.
Julius Baer had an earlier run-in with WikiLeaks. In February 2008, a federal judge in San Francisco ordered WikiLeaks website's to shut down after the bank complained that a "disgruntled employee" had given it stolen documents in violation of Switzerland's bank secrecy laws.
Free speech and media organizations challenged the injunction, and the court later reversed its ruling. Baer eventually withdrew its legal action against WikiLeaks.
(Reporting by Mark Hosenball; Additional reporting by Caroline Copley)