My Naivety

In business, you cannot afford to be naive. That I believed one could set up a business like Scandinavian Capital Exchange in 1974, taking money away from the Danish banking establishment, was stupid and naïve. Moreover, play scorn on the fiscal authorities in a very socialistic society.

I totally ignored the power of the Danish financial and banking industry in general, but even worse, the power of the National Bank and the Ministry of Trade. These institutions had been very isolated and powerful prior to Denmark joining the EEC (EU). Denmark still had strict exchange control and a huge business bureaucracy with many restrictions protecting the Danish banking industry.

Worst I refused to work with the fiscal authorities, accept according to “the book”. The fact that there were no rules or laws as to several aspects in dealing with these people,

I should have acted “more respectful”. Specifically, when a senior tax chief comes along to our office and despite that, he looked like an anarchist and had just come from a communist party meeting. Yes, I should have known these peoples power. I even did not want him to sit down in one of our expensive chairs as he looked dirty – very stupid of me I should have offered my chair (see: “The Red Tax Troll”)

The fact that we had more than five years of harassment by the authorities did bring me around to think during 1979, that we had to accept “the power” in Danish society, therefore, I did have meetings to bring in a senior politician, who in fact later became a very successful foreign minister of Denmark. The discussion at the time was never advanced.

I had also meetings with some captains of Danish industry who were already a client of the companies, with the view of joining the board of Scandinavian Capital Exchange A/S. Again looking back, Bagmandspolitiet knew all this by listening to our telephone conversations, so perhaps all this was in vain, my companies and I was already the chosen target.

The Danish National Bank, the Ministry of Trade, the Company Register and Copenhagen tax authorities all conspired against Hauschildt and the companies whilst using the involvement of the Ministry of Justice, the Special Prosecution and the court as henchmen” 

-Advocate Folmer Reindel to the City Court and 8 years later in front of the 17 member’s judges of the European Court of Human Rights

Perhaps it was the fact that I had been living outside Denmark for sixteen years prior to going back to Denmark – all my adult life. Moreover, working in Switzerland, Luxembourg, Germany, Holland and the United Kingdom with financial services, all with relative advanced financial markets open to the international financial market, made me underestimate the “local” status quo in Denmark.

Witnessed Real Corruption

Later in life, I have been confronted with corruption and what really goes on in government institutions and politic. I have witnessed how local government works, how corrupted even highly respected institutions are and indeed how this is well known in big business which takes advantage of this fact.

I have witness corruption at the highest level of British political establishment, so I am not surprise when back in Denmark 35 years ago a property developer told me “that a little brown envelope will help the planning permission along”. Frankly, at the time I thought he was joking – but not at all.

Now I know that one of the largest property companies in the world will pay for the education and upkeep of people for 15-25 years just to place them as counsellors or in local planning departments – and one day receive the big pay-back.
So looking back, I was indeed ignorant of the level of the Danish financial services industry and the establishment’s protection with the National Bank and Ministry of Trade.

To make matters worse, I did not really know the Danish mentality and ” Janteloven” which came to play a major factor when the event took place. I was a sitting target when I think of it.

I truly ignore the Danish mentality and that 90% of all Danes irrelevant of their political convictions was proletarians (and socialist of some kind) but more importantly they drink out of the beer bottle; I keep this picture to remind me of Denmark and indeed the words of Jørgen Jacobsen six month after my arrest if I ever should need to be reminded.

The picture shows two prime ministers drinking beer, Anker Jørgensen and Poul Schlüter, one socialist and one conservative. The conservative I had met several times at Pheasant shooting before my arrest, even driving with him a long time, he became prime minister during my long pre-trial incarceration 1982 and served to 1993. He was the first conservative to hold office in Denmark since 1901. He retired as Prime Minister in 1993 after an inquiry found that he had misinformed the Danish Parliament. My actions during the more than five years prior to Bagmandspolitiet closing of the companies could be considered very provocative and stupid – looking back – especially towards the Danish National Bank.

In 1978, two years before the event I told the bank that they should place some of their people in our offices on their pay. At the time we had so many forms to fill in on every transaction we made and this had to be paid for by the companies, moreover, senior staff had to do this as everything was detailed scrutinised by the National Bank.

An advertisement from 1975 telling that the Swiss buy 17,5 tons of gold a week and asking the question – do they know something we do not?

SCE did take a provocative approach in these advertisements over the years, so what?

Notice the price of a Krugerrand of less than US$200 including a large sales tax.

I should not have been surprised that a senior member of the staff of the National Bank changed complete an article in a financial journal about our company Scandinavian Capital Exchange product. He did this since he was, unknown to us at the time, part of the editorial staff of the journal.

When you see today banks and other institutions having to pay millions on consultancy fees just to confirm their status to various authorities, I was indeed ignorant at the time as to real power.

Some years ago I saw that Saxo Bank had to pay millions of US Dollars for an outside firm to conduct various audits in order to satisfy the Danish financial regulators – I will still say outrageous! But that is the name of the game also in the US where such fees can amount to hundreds of millions of dollars.

It is a reality today that in most financial companies, their compliance department is the biggest and many companies employ more lawyers than marketing people – sadly. Such compliance department did not exist even 20 years ago, but certainly, no one in the financial industry 25-30 years ago would have forecast this development. The financial area has become a milking cow for lawyers not only in the United States and the UK but all over.

If you are followed daily by the police tailing you day after day, week upon week and month upon month, sooner or later you will get a ticket. Bagmandspolitiet, the Danish National Bank and the fiscal authorities followed me for more than five years prior to the event.

Confidentiality

Confidentiality is the word – unfortunately, this word is not to be trusted today. Even in 1980 in Denmark, I sadly found out that a lawyers’ confidentiality in Denmark at the time did not exist – you could not trust your own lawyer.

This is also now the case in many other countries, including the United Kingdom, where lawyers have become officers of the courts. At least this is not the case in the United States. It is a sad day when you can’t trust your confidential advisor and “Big Brother” has to know everything.

I did keep the information confidential about many people who I had advised and helped in Denmark, Sweden and Norway during the years 1970 – 1980. Some of these people got away from their country, others were able to benefit in a big way on fiscal savings at the time and in their future dealings. I did receive fees for my advice and introduction at the time.

Unfortunately, most of these people are dead today and their rich heirs do not know who helped them at the time, including establishing family foundations and operating companies in Liechtenstein, Dutch Antilles, in Bar and Zug (Switzerland).

None of these people appeared in any records or documents which Bagmandspolitiet found in Denmark at my arrest or afterwards, this did indeed upset Bagmandspolitiet and the fiscal authorities at the time. They had hoped to catch the bigger fish through our documentation and records when they raided our offices.

I was asked many questions with regards to this matter but I kept my mouth closed. It is interesting that it has taken more thirty years for the public to find out that the founder of IKEA has all his money in Liechtenstein (see: IKEA-100 Milliarder)

Finished in Financial Services

If I had been an industrialist, engineer, dentist or even a property developer, then I could start again somehow without the stigma of having a criminal conviction; but no, I worked in an industry where trust is everything.

Any doubt about someone in the financial field, stay away – that is what I used to advise clients. I ultimately ended up as a non-starter as far as financial services were concerned. Before the events in Denmark, I was with a few others, a co-founder of the Society of Technical Analysts, STA in London in the late sixties.

When I returned to London after my case in Denmark and we re-organised ourselves into a non-profit company and changed the name, I was asked to serve on the board of STA. Despite being heavily involved with the organisation which was closely associated with Market Technicians Association in the USA and that I had even designed their logo which STA still uses. This was before the age of the Internet, I had to tell them about my criminal conviction in Denmark and that I could never serve as chairman or on the board. The other co-founders all had a leading position in major banks and investment companies. When you are dealing with other peoples money, any smoke becomes a fire and trust is everything.

The Danish High Court Judge Holger Kallehague said to The newspaper Politiken (12th September 1982) that:

“I was subjected to the same treatment and “injustice” as the suspected witches five hundred years earlier. They would bind the poor women, put her into a sack and fill the sack with stones after which they would throw her into the water. If she drowned she could not have been a witch and was innocent, however, if she got free and came to  the surface, she must be a witch and was burned alive  at the stake”  

The injustices in Denmark, even later made me subject to blackmail, both directly and indirectly in several situations through the years, including when I was chairman for The Mayfair Trust, The Mayfair Society and acting chairman for the Resident’s Association of Mayfair in London. When you are fighting corrupt politician and wealthy landowners, the fight will be dirty. I even fought corruption in the London police.

Despite serving charitable aims and working with many prominent people in the British establishment, a reference to my “past” in Denmark came upon several occasions, specifically when dealing with critical issues where we otherwise had a strong position. Worst, all these people later received help by the Danish authorities to assist with an in-absentia trial in London, when I was seriously ill under treatment in South of France. (see Postscript)

I have shaken the hands and been in the company of kings, queens, presidents, prime ministers, princes and princesses, Nobel price laureates, ambassadors and captains of finance and industry, during the last 35 years I never found myself again after the terrible events in Denmark, I have lived as a changed person marked by the scars which the Danish State inflicted on me.
I did leave my isolation cell, but the solitary isolation has never left me.

Moreover, I had to go very quietly with the press and media, since my past could always be used against me and was always there to be exploited by the opposition. When inviting senior government ministers, ambassadors and royalty to events that I was in charge off, I always had to be concerned of possible awkward questions being asked as to my past, I am thankful the Internet than was only available to the few.

During the period 1986 – 2006, I was asked several times to go on the board of public companies, and each time I have had to say no and come up with some excuse. That is the reality and I have had to live with this true injustice all along. So have the people close to me, the ones I love, my family and indeed the clients of the companies in Denmark and around the world which lost out so many years ago – lost out due to the injustices by the Danish authorities.