by Bower, Tom
Under Stucki’s supervision, the Compensation Office had become pitiless in its discrimination against the Jews. Allowing concentration-camp survivors use of their savings deposited in Swiss banks, Max Ott told Nat King’s assistant, “would create insurmountable administrative difficulties” and “a very dangerous precedent.” Poker-faced, Ott added, “We know that all Germans were victims of the Nazis.” Stucki’s officials in the Compensation Office had forgotten the Holocaust. Contrary to the decision on December 17, 1945, there had been practically no exceptions to the freeze, not least because the Compensation Office “did not want to rely on dubious foreign documents.”
Among Ott’s victims was Jorg Heyd, a German-Jewish engineer who had fled to Switzerland in 1933. During an ill-timed visit to France in 1940, Heyd was arrested by the Germans. After miraculously surviving the war, Heyd was consistently denied reentry to Switzerland, and Ott denied him access to the substantial balance in his American Express bank account. Otto Mendelssohn-Bartholdy, the grandson of the German Jewish composer Felix Mendelssohn-Bartholdy, had survived a concentration camp and was also denied access to his savings in Swiss banks, in particular to shares worth SF1 million that had been confiscated by the Germans and deposited with UBS in Basel. The Compensation Office’s justification for denying Mendelssohn-Bartholdy his money was his presence on February 16, 1945, when the freeze started, in a concentration camp in Germany—he was therefore “a German resident in Germany” on that date. With proof of his individual statelessness, Mendelssohn-Bartholdy had sought the help of Hans Frölicher, the official at the DIV appointed to care for Germans’ interests. But in Frölicher’s opinion, Mendelssohn-Bartholdy was a Jew, not a German. Referred by Frölicher to the Compensation Office, Mendelssohn-Bartholdy was told by Ott, unwilling to peek at the number tattooed on his visitor’s arm, “The Swiss government would find it extremely difficult, having been a neutral, to distinguish between persecutees and other residents of Germany.”
In private, Ott admitted that his real motive for discriminating against the Jews was to sabotage the Allies’ freeze on German property. “When the Allies’ influence in Germany diminishes,” he agreed with Homberger, “then Germans will turn up here and accuse us of stealing their property.” Not only Jews but also anti-Nazis would be used as Switzerland’s pawns to help former Nazis. Members of the German resistance who had spied for the Allies against the Reich were, Ott decreed, forbidden to use their wartime payments deposited in Swiss banks by the Allies. “I’m against exceptions,” Ott was told by Armin Daeniker, a Political Department official whose brother, Heinrich Daeniker, was a senior member of the Bankers Association. “It would weaken our position in the accord.” Ernst Speiser, the industrialist, in blunt language, also supported the official: “I strongly warn you against allowing any exceptions. We mustn’t allow that under any circumstances.” Anti-Semitism and pro-Nazism had unashamedly resurfaced in Bern; yet paradoxically their manifestations were controlled by Stucki’s sense of honor.
The creation of Israel in May 1948 (after Britain had ignominiously surrendered its mandate in Palestine and admitted defeat against the Arabs and Zionists) had altered Foreign Office policy toward helping the Jewish refugees. Now united, the Allied diplomats in Bern persuaded Stucki that Switzerland was finally bound to pay an interim SF20 million to the refugees. Stucki’s concession infuriated Heinrich Homberger, who was certain that the creation of a new German state was inevitable. “I think it’s a shame for those good Swiss francs,” he told Stucki. “It’s a loss for Switzerland,” Dunant agreed. Goaded, Stucki lost his temper. The dual character of the official, pure Jekyll and Hyde, was displayed once again before his persistent critics: “It’s about Switzerland’s honor! The payment was agreed on in Washington!” But the moment passed and Stucki relaxed. So much, he conceded, had changed since 1946. Perhaps, he sighed, lamenting Britain’s unreliability, he might remind the British about their confidential requests to withhold the money. “We thought that the British didn’t want the Jews to get the money, but we didn’t know that they would withdraw from Palestine.” Reluctantly, on July 1, 1948, Stucki scribbled a note pledging that Switzerland would finally advance SF20 million “in view of the IRO’s financial difficulties and out of compassion for the Nazis’ victims.” Four weeks later, just as the money was deposited in the International Refugee Organization’s account, an earthquake struck the foundations of the crusade.
In a hot congressional committee room on July 31, 1948, Elizabeth Bentley, a well-educated New Englander who was a graduate of Vassar, confessed that while posing as a librarian she had been a full-time courier shuttling between Soviet intelligence officers based in New York and Washington and senior U.S. government officials. Her admission, in the midst of the blockade of Berlin and the mobilization for war, that Americans were traitors destabilized the United States and offered a reprieve to Switzerland’s bankers. In particular, Bentley accused Lauchlin Currie and Harry Dexter White of membership in a communist spy ring, taking orders from Moscow to sabotage the West German economy and using, among other weapons, the Safehaven program. Currency reforms in western zones of Germany and negotiations for a new constitution anticipated the permanent division of Germany by the creation of a West German state in 1949. Although Currie and White strongly denied the accusations and the evidence was questionable, to those American officials long opposed to Safehaven, Bentley’s testimony not only was credible but explained and justified their antagonism. In Switzerland, the resentment against the Washington Accord and the Jews hardened. Currie and the freeze were a communist plot, the Swiss agreed. Overnight, Abba Schwartz, an easygoing AJDC executive, sensed that the Swiss attitude had become intolerable.
In 1945, Schwartz had found two gas cannisters filled with wedding rings and gold teeth near a liberated German concentration camp. With special permission, he had exchanged the gold for cash in Switzerland to help the survivors. Ever since, he had worked ceaselessly to persuade the Swiss to release the heirless assets, but in July 1948 the negotiations for the promised census to identify the heirless assets had first soured and then halted. “The Swiss government,” wrote Jean Brunschvig from Geneva, “is determined not to initiate any legislation with regard to Jewish heirless property before some of the Allied nations have done the same.”
Six months later, stirred by his conscience, Rubin lunched with former colleagues at the State Department. To his “amazement,” he heard that the problems of the German Jews and the heirless assets remained unresolved. “This is a thorough perversion of the terms and the intent of the accord,” he told Schwartz and volunteered to negotiate with the Swiss government on the AJDC’s behalf. Rubin arrived in Bern in April 1949 aware that the Allied and Jewish negotiating position was “hopeless.” Stucki was suffering from “diplomatic illness” and had withdrawn from the endless negotiations about implementing the accord. Both the British and the French delegations had told Nat King that their governments opposed giving any further money to the Jewish refugees and would not press the Swiss to unblock the German Jews’ assets. The Allies’ indifference had encouraged Swiss greed and unscrupulousness: ignoring Jewish claimants’ pleas for their own money, the Swiss government had just released $47 million to Germans.
To secure Switzerland as an ally in the cold war, Washington had agreed to pay $69 million in compensation for the mistaken bombing in 1944 of Schaffhausen, a small town close to the German border. Switzerland had also demanded interest on the compensation. The damaged property, the Swiss argued, had not earned any money since the bombing. That bookkeeper demand had been rejected. France had also been presented by Switzerland with a bill for SF164,950 and 75 centimes for violations of the Swiss frontier and Swiss neutrality when stray machine-gun bullets crossed into Switzerland and French pilots made forced landings at Swiss airports. Switzerland’s additional demand for 5 percent interest was rejected when the Quai d’Orsay handed over SF150,000. “I leave it to your imagination,” the French finance
minister wrote to the defense minister, “under what heading you classify these expenses.”
In his discussions with Max Ott, Rubin heard familiar expressions of bookkeepers’ mentality and irritating sentiments about the Third Reich, added this time to an audacious initiative to penalize the Jews still further. To seize more property owned by German Jews as reparations, Ott proposed to define as “residents of Germany” any Jew who had traveled from a concentration camp through Germany before settling in Displaced Persons camps in other countries. Although that Swiss initiative would be scotched by the Allies, Rubin concluded in a letter to New York on June 6, 1949, that “the negotiations are in a state of advanced collapse.” Looking through the window of his bedroom in the Bellevue Palace Hotel at the Jungfrau towering among the Alpine peaks in the distance and at the River Aare flowing gently below, Rubin was bemused by this idyllic background to such unpleasant events. It was as hard as ever to get a handle on the Swiss.
The initiative passed to Max “Moose” Isenbergh, a thirty-six-year-old lawyer trained at Harvard, Columbia and Yale, who had recently been recruited by the AJC from the Department of Justice as the counsel for European operations. Born in Albany, New York, Isenbergh had spent the previous three years helping German Jews in the United States. His negotiations for the AJC to recover Jewish property in Austria had proved intensely depressing. Fearful of losing votes, Austrian politicians had refused to order loyal Nazis to return Jewish property distributed by the former regime. Only the threat of sanctions by Congress had compelled the Austrian government to offer $17 million compensation. “Peanuts,” cried Isenbergh. He was convinced that the heirless assets in Switzerland were worth between $50 million and $70 million, but he was conscious that Congress was preoccupied with other issues. The crusade now depended entirely on Jewish lobbyists in Europe.
To resolve the Swiss crisis, Isenbergh asked Petitpierre to meet a delegation representing the principal Jewish organizations to discuss the heirless assets. Instead, at the minister’s suggestion, the delegation was directed to Eduard von Steiger, the minister of justice. Isenbergh could not have anticipated the outcome.
12
THE POLISH CONSPIRACY
The patrician Eduard von Steiger, the minister of justice and the police, was an accomplished actor and a cunning survivor. During the war, while masterminding Switzerland’s anti-Jewish policies, he had allowed the spotlight to fall on Heinrich Rothmund, his loyal police chief, and in the aftermath he had evaded blame by sheltering in shadows. After hearing that a delegation of Jews would be visiting his office, he trusted his instincts as an ultraconservative lawyer and asked Emil Alexander, his colorless legal adviser, to act as spokesman. Although he would naturally greet the delegation in his office, von Steiger planned to remain silent, avoiding participation in the pantomime.
Unsuspecting, at 3 P.M. on July 8, 1949, Max Isenbergh, Seymour Rubin and Dr. Bienenfeld, representing the World Jewish Congress, entered von Steiger’s wood-paneled office. They were given coffee. Speaking English in his contrived, fawning manner, von Steiger explained, “The Political Department have asked us to prepare a report on the heirless assets because complex legal questions are involved.” Nodding toward Jakob Burckhardt, the minister explained that Petitpierre’s representative would report their discussions to the Political Department.
“Fine,” replied Isenbergh, settling into a chair. The Swiss, he believed, understood the history of the heirless assets, had calculated the sums involved, and were prepared to transfer the money to the Jews. He still trusted the Swiss despite the secrecy imposed by the bankers.
Since the Bankers Association had given the Political Department its estimate, in late 1947, that its members had traced heirless assets worth SF482,000, lawyers representing the Swiss Federation of Jewish Associations had met Guy de Rham and other minor Political Department officials. Under instructions not to reveal the Bankers Association’s census, de Rham had listened to the Jewish lawyers’ detailed submissions and uttered polite reassurances that the department was struggling with “the difficulties of definitions” and awaiting other contingencies. To de Rham’s relief, the delegation had departed without mishap. After self-congratulations, Walter Hohl, an official in the Ministry of Justice, minuted his colleagues, “The amount of goods which comes under this account appears to be so minimal that no formal census is justified.” Unaware of that decision, Isenbergh now addressed von Steiger with misplaced optimism: “All we ask of you is to comply with your promise made in Washington in 1946.”
Von Steiger remained silent. Government files confirmed that the Allies had been uninterested in the fate of the heirless assets since 1946, and the silence from Washington had encouraged Swiss bankers to dismiss the issue as nonexistent. But von Steiger preferred to allow Alexander to justify the paralysis in uncontroversial, legal terms. “We cannot assume that all dormant accounts are heirless,” Alexander told the delegation, “because there may be heirs who do not know the existence of the assets.” Those who had not communicated since May 5, 1945, said the adviser, needed to register.
“But if they’re all dead,” said Isenbergh, pulling the discussion back from the world of Alice in Wonderland, “they can’t claim.”
“Yes,” agreed Alexander, barely acknowledging the logic. “The Compensation Office will investigate, but under our law we must deal with heirless assets on the basis of the inheritance laws of the deceased’s country of origin.”
“We strongly oppose that,” countered Bienenfeld. The thought of transferring the savings of German Jews back to Germany was truly appalling. “The Jews brought their property to Switzerland because they did not want it to fall into the hands of their own governments. Switzerland encouraged the view that it would defend that intention.”
“We will consider that,” Alexander agreed, “but everything must be settled by the laws passed by our parliament.”
Disquieted by this reliance upon legalities, Bienenfeld switched to morality: “Those governments often persecuted the very people whose murder made the assets heirless. They have no moral claim over the deceased’s property.” As Rubin and Isenbergh nodded in agreement, Bienenfeld resorted to an absurdity in the hope of winning support: “If any nation could claim the property, it is Switzerland, and clearly Switzerland does not want to enrich itself unjustly by taking ownership of this property.” Thinking that the murmurs of his audience showed how persuasive he was being, Bienenfeld outlined the legal options Switzerland could adopt to overcome the unprecedented situation.
When Bienenfeld’s monologue ended, Rubin added, “You could use the 1945 decrees ordering the banks to break their secrecy laws to disclose German and Japanese assets to discover the heirless assets.”
“No,” replied von Steiger firmly, in his only intervention. “Those decrees were revoked by parliament in December 1945.”
“But the precedent has been established,” said Rubin. “You could pass new legislation.” Other European countries—Greece, Italy and Holland—had introduced such laws, he pointed out, not mentioning his disappointment that Britain and France had refused discreet requests by the State Department to do the same. On one issue the two sides agreed. To find the heirless assets, Switzerland’s bank secrecy laws would need to be amended. The meeting had ended. Everyone agreed that the discussion would continue in the near future.
Outside, in the cobbled street surrounded by Bern’s sunlit stone buildings, the delegation commented on the friendly atmosphere. The report to Abba Schwartz would mention how the Swiss were “seriously trying to find a legal basis to dispose of the assets” but would want to avoid breaking international laws and annoying certain countries. Rubin voiced the only serious note of caution. Switzerland, he warned, would continue to stall until other countries adopted similar laws. Looking up at the snowcapped Alps, he again cursed the incongruity of conducting business as sordid as this amid such beautiful scenery.
Two hours later Max Isenbergh arrived in Zurich. Wal
king near the leafy Bahnhofstrasse in the city center, he met by chance Adolf Jann, the heavy UBS banker renowned for his booming voice. Over the past months, Isenbergh, an avuncular hedonist, had developed friendly relations with the former secretary of the Bankers Association. Enjoying the last rays of the summer sunshine, Isenbergh recounted his meeting in Bern that afternoon. Pensive and obviously troubled, Jann stood momentarily silent. “You won’t get your money,” he breathed in an unusually low tone. Puzzled, Isenbergh waited for an explanation. “You won’t get your money,” repeated Jann, wondering whether to say more.
Jann’s unsolicited revelation was not motivated by generosity or sympathy toward the innocent and murdered Jews who had trusted Swiss banks. The unusual indiscretion reflected Jann’s fury, common to all Swiss bankers who were privy to Petitpierre’s latest machination. Inexcusably, two weeks earlier, the Swiss government had interfered in the banks’ affairs. Exposure of the state secret, he hoped, would embarrass the minister and safeguard the inalienable rights of banking secrecy. After glancing at Isenbergh, the banker continued. As a member of the Bankers Association’s Polish Committee, explained Jann, he had been told of a trade agreement between Switzerland and Poland. “Within that agreement”—the banker was speaking slowly—“is a secret clause transferring the heirless assets of Polish Jews to the Polish government.”
Isenbergh stood, frozen. “Did von Steiger and the other officials whom I just met in Bern know about that?” he asked.
“I am late,” replied the banker. “Aufwiedersehen, Herr Isenbergh.”
Isenbergh’s news devastated Rubin. “This is a serious blow to our efforts,” he reported to New York. “Either von Steiger was a knave or uninformed.” Their trust had been abused and their naïveté exposed. Burdened by the secret, the small group despaired about what to do. Publicity, they feared, might so antagonize the Swiss that everything would be lost.