The Coastal Post - August, 1998

The Swiss And Nazi Gold

By Edward W. Miller

The World Jewish Congress, feeling their oats after extracting a half-hearted apology from the Holy See (whom they accused of neglecting their Holocaust), are now aiming their guns at the Swiss bankers in their mountain strongholds. Lead by Canadian liquor baron Edgar Bronfman, the WJC shifted its public-relations machinery into high gear, enlisting, amongst others, the U.S. Under-Secretary of State, Stuart Eisenstat, Paul Volker, and lawyer Mel Weiss.

As an opening gun, the WJC accused the Swiss banks of illegally concealing billions of illicit gold entrusted to them before WWII by Jewish families since cremated in Hitler's death camps. To bring these supposed crimes into focus, the WJC suggested some of the gold had been extracted from Nazi victims' teeth. Bronfman added color to the media onslaught by accusing the Swiss of playing footsie with the Nazi war machine, of turning away Jewish refugees seeking asylum, of acting as a clearinghouse for fine art looted by the Nazis and permitting trains loaded with Italian Jews bound for Auschwitz to cross Swiss territory.

Our Senator Alphonse d'Amato, Banking Committee Chair, openly threatened in the Senate to revoke the right of Swiss banks to operate in the United States, and toward the end of 1997 New York City actually imposed sanctions against the Union Bank of Switzerland, but later dropped them (NY Times, March 25). Bronfman, swinging wildly, demanded the Swiss come up with an initial $3 billion before a WJC-imposed March 31 deadline, and then, on March 20, he upped the ante to $40 billion, demanding, in addition, the Swiss "cough up all German money deposited in Swiss banks." Bronfman suggested the Swiss probably "owed at least 10 times those German deposits." (Spotlight, April 6) About this time Swiss Federal council President Jean-Pascal Delamuraz complained publicly of "blackmail," while Switzerland's ambassador to the U.S., Carlo Jagmetti, who had referred to the WJC campaign as "war," resigned under pressure.

Meanwhile, American banking interests, realizing the tremendous bulk of international money invested in this country by Swiss banks, demanded the WJC soft-pedal its campaign, and Rabbi Schwartz of the American Neturei Karta ran an ad in the New York Times stating, "The true Torah Jews have no part in the affair against the Swiss...for we are opposed to boycott threats, coercive tactics, insults and humiliations."

Totally unprepared for this media onslaught, the Swiss, at first flabbergasted, were then angered by the ascending violence of the WJC threats. Zurich appointed Thomas Borer to head a "Swiss Holocaust taskforce." Borer, however, made an initial public relations error by assuming such an anxious face and apologetic manner on the Lehrer News Hour that the Spotlight labeled him "Bronfman's whipping boy." To reduce international media pressures, the Swiss banks set up a $200 million fund, sending the first checks in September '97 to impoverished WWII survivors in Latvia.

Though the Nazis have been vilified for other reasons, history tells us that seizing the assets of the conquered is hardly a singular crime, especially since assets were often the reason for the war. Our President Wilson returned from Versailles, ashamed at the post-WWI sacking of an already devastated Germany by our WWI Allies, and the Bonn Government today is demanding the return of treasures seized by Stalin's army. Egypt even wants back antiquities removed from Cairo by Napoleon.

In WWII, the Swiss bravely managed a neutral position though surrounded by Hitler's Germany, Mussolini's Italy, and after France fell, by Vichy France. Swiss President Andrew Koller, addressing the Swiss Confederation on March 5th of last year, quoted Sir Winston Churchill, who declared in December, 1994, "What does it matter whether Switzerland has been able to give us the commercial advantages we desire, or has given too many to the Germans, to keep herself alive? Switzerland has remained a democratic state, standing for freedom in self-defense among her mountains, and in thought she has been, in spite of race, largely on our side."

Gold and other assets often take circuitous and even devious routes during international conflicts. WWII was no exception. As The Economist noted (August 2, '97), Britain's wartime government simply confiscated the bank deposits from those countries occupied by Germany in WWII, while Canada's Portugal may have helped the Nazis launder gold from occupied countries, and Sweden was, next to Switzerland, the most popular designation for "flight capital" during WWII. David Sanger, reporting in the New York Times on recently-released Federal Reserve records, noted that seven years after WWII, the U.S. melted down gold plates, buttons, ornaments and coins obtained from victims of WWII and then shipped the resulting 40 bars of gold to European banks.

Perhaps the best defense of the embattled Swiss was Hans Schaffner's column in the April 6 New York Times. Schaffner, a Swiss ex-president, who headed the Swiss office of War Economy from 1939 to 1946, noted that "all the relevant details regarding Swiss handling of funds during and after WWII "have been available since 1946." Schaffner points out that the U.S., not Switzerland, was the preferred destination for monies leaving Europe, and that even the Swiss "kept the bulk of their gold in Fort Knox." He notes that in 1946, "Switzerland with the Allies signed the 'Washington Agreement,' which settled WWII claims of European banks. The U.S. released six billion francs of frozen Swiss assets as well as gold payments owed the Swiss National Bank. Schaffner concludes, "A generation that knows nothing about WWII is being misled about my country...it is time for falsehood and half truths to stop."

In 1946, the Commission in Washington established by the U.S., France and Britain held over 337 metric tons of gold seized from European central banks by Germany. Over the next 10 years the Commission returned about 328 tons to these countries. Of the nine countries still having claims, several recently offered monies due them to "Holocaust-related projects."

The New York Times of January 1, 1998, noted the efforts of Swiss Jewish banker, Hans J. Baer, in "putting a human face on Swiss banking." Baer reported that on May 25, 1948, Switzerland had agreed to repay $58 million stolen by Germany and deposited in Swiss banks, and to try and locate assets of Jews killed in the war. Baer said that the "crux of the dispute was verification," adding that before WWII banks rarely required identification of account openers and "not until 1960 did [his own bank] require the prospective depositor present a passport." In addition, there was a 10-year statue of limitation in Switzerland for all bank accounts which showed neither deposits nor withdrawals, after which time the banks could legally destroy the account records.

On May 7th, a report by David Kay Johnson in the New York Times International stated, "The major parties in the dispute over insurance claims by Holocaust survivors and their heirs," had agreed to create an international tribunal to resolve claims. New York lawyer Edward D. Fagan, who had filed class-action suits against European insurers, joined the process. On June 19th, Switzerland's three largest commercial banks offered $600 million to settle claims of Holocaust victims, whereupon attorney Fagan retorted, "My 31,000 clients will not stand for this." New York City Comptroller Alan Hevesi and top officials across the U.S. are presently meeting in New York with Swiss bankers and their U.S. subsidiaries. New York State and City threaten sanctions against recalcitrant Swiss banks by September 1st, while Undersecretary of State, Stuart Eizenstat said monies pledged to Holocaust survivors at a State Department conference in Washington by the U.S., Britain, France, Argentina, Brazil and Sweden, had totaled $2.6 million by June 30th.

Two politicians wooing the Jewish vote in upcoming campaigns have seized the "Swiss Fund" dispute for political gain. Senator Alfonse d'Amato (R-NY) now demands the 1946 Washington Accord be "re-examined," while California's treasurer, Matt Fong, who faces off with Barbara Boxer in a Senate race, threatens a state boycott of Swiss banks. New York's Governor Pataki on July 8th signed a bill to punish European insurance companies who drag their feet on so-called "Holocaust claims."

Meanwhile, our U.S. State Department says Matt Fong is off base. The Swiss say sanctions violate World Trade Organization rules and threaten action in the WTO, while USA-Engage, a trade coalition comprised of 600 major corporations, says both New York and California boycotts are "unconstitutional." (Chronicle, July 16). The scent of gold does strange things to the human animal.

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