Nazi Gold

by Bower, Tom

  Unexpected support for the new law was offered by a prominent government official. Winding up the Compensation Office’s affairs and transferring the staff to other departments, Walter Stucki wanted to embarrass the man who had savagely curtailed his career thirteen years earlier. On May 22, 1959, eight weeks after Huber’s letter to the minister of justice, Stucki invited himself to the same ministry. Insisting that what followed should be classified “top secret,” the veteran castigated Switzerland’s lawyers for “shamelessly” earning a fortune representing Jewish claimants searching for their money. He then moved on to an unforeseen disclosure. Over past years, he growled, it had always been possible to establish whether Jews were the owners of unclaimed assets. The banks, Stucki had discovered, had entered the detail of their new clients’ religion when the accounts were originally opened. And, most important, officials of the Compensation Office reviewing the records had discovered that in “very many cases” the owners of the unclaimed German assets were labeled as Jews. By itself, that astonishing revelation was most damaging to the banks. Warming to his theme, Stucki continued unburdening himself, recounting his conversations with two bankers based in west Switzerland. Independently, both bankers had admitted to him that “several hundred million Swiss francs” which belonged to French nationals “whose fate is today unknown” was deposited in their banks. Appreciating the effect of his revelation, he said, “This all shines a strange spotlight on the Bankers Association’s insistence that the heirless assets are worth less than one million Swiss francs.”

  Unrecorded in the secret minutes of that meeting was the two men’s common suspicion that most private people, including lawyers and notaries, entrusted with money by foreign Jews would long ago have quietly assigned that fortune to themselves, leaving no trace of their perfidy. Even the banks, paying no interest on diminishing amounts as they regularly deducted costs, could legally begin destroying some records. Under Swiss law, financial institutions were not obliged to maintain the records of dormant accounts beyond ten years after the last “activity,” provided they gave notice of their intention to close the account. To fulfill their legal obligations, banks were required to serve only six months’ notification of their intention by writing to the depositor’s address. Since, to maintain discretion, foreign clients invariably stipulated that their address should be a mailbox within the bank, there was no opportunity for heirs to become aware that the process of legally eradicating any evidence of an account had begun. The alternative illegal scenario considered by Stucki and government lawyers was the traceless transfer by bank employees of dormant accounts into accounts under their own names.

  The unrecorded discussion of that unpalatable probability coincided with a rash of Nazi attacks on Jewish cemeteries across Germany. The international uproar caused by the desecrations impelled Wahlen—skeptical that more than SF1 million would be found—to ask his officials in 1959, “When can a final version of the law be presented?” The banks, it seemed, finally had cause to fear a decree ordering disclosure of the untouched millions. Their counterattack began within days.

  Still convinced that there was no serious foreign interest, the Bankers Association dispatched to Wahlen a list of “reservations” about any draft legislation. Unintentionally, the bankers’ long submission revealed embarrassing somersaults. First, the so-called heirless assets, the minister was told, were not “heirless” but belonged to living persons. Yet the bankers failed to explain why those “non-heirless assets” had not been transferred to the “living persons.” Second, reversing its opposition to the Polish agreement, the Bankers Association justified not releasing the “few” existing heirless assets—at most SF1 million—by explaining that the money did after all belong to the country of the depositor. Third, in an unusual twist of logic, the Bankers Association resisted handing over the heirless assets to a charity because that would violate the “principles of trust” under which they were originally deposited and would be tantamount to confiscation, damaging worldwide confidence in Swiss trustees. To threaten that confidence in Swiss banks, pleaded the Bankers Association, by introducing special legislation for such trivial, inconsequential amounts of money was self-destructive. But the minister seemed disinclined to listen.

  Cherishing that breakthrough, on November 2, 1959 Rubin flew to Zurich to consult Eberhard Reinhardt, a director of Crédit Suisse who in 1946 had been a member of the Swiss delegation to Washington. Rubin believed that the Bankers Association’s anger, and the Swiss government’s concession, confirmed that there were hidden heirless assets. “The Bankers Association’s protests have an unpleasant look,” he told Reinhardt. Hoping that with “goodwill on all sides” an agreement to release the money could be reached, he urged the banker to accept that “ways can be found to conduct a census which do not infringe Swiss secrecy laws or the rights of depositors.” As usual, the banker nodded politely, agreed that a solution could be found, and bade his visitor a fond farewell with no intention of helping the Jews. Although Rubin did not know it, the Bankers Association’s pressure on Wahlen was proving successful. By early 1960, Huber’s initiative had been stymied.

  In June 1960, the silence from Israel and Poland persuaded Petitpierre that there was after all a lack of foreign concern about the “small amount” involved. Noting the minister’s eagerness to find an excuse so that the issue could slip off the agenda, Bindschedler had advised that “we cannot renege on our decision” to introduce a law. Petitpierre easily ignored this advice. The minister was also undisturbed by a note from the American embassy. Reminding the Swiss government of an assurance in 1952 that it would give “sympathetic consideration” to the use of heirless assets, Petitpierre was asked how he intended to locate and dispose of that money in Switzerland. Petitpierre’s officials assumed that the letter had been prompted by the Jewish lobby, and they were given ammunition by Stucki’s recollection of the 1952 statements. “Besides the fact that no one on either side was really serious about this issue,” explained Stucki in a Jekyll-and-Hyde transformation of his stance, “the Americans said cynically that they had been persuaded by the American Jews to present something. After all this time, we don’t need to do anything any more.” Stucki’s dishonesty—claiming in 1952 that there were no heirless assets when he knew the contrary to be the truth—was ignored. Petitpierre, after all, had committed the same sin. “No exchange of letters took place in 1952,” replied the Political Department curtly and inaccurately to Washington, adding, “Investigations have shown that the sums in question are quite small.” The minister did not care to predict “the result … of the work currently in progress.” Days later, Petitpierre’s mood changed dramatically.

  A visit to the foreign minister by Joseph Linton, the Israeli ambassador, was deliberately timed to coincide with international excitement following the announcement that Israeli intelligence officers had kidnapped Adolf Eichmann from Argentina. As expected, the diplomat could see that Petitpierre was not immune to the worldwide passion and accusations aroused by the capture of the former SS colonel, an architect of the Holocaust. Unaccustomed to criticism in Switzerland, the minister was plainly disquieted by the negative publicity orchestrated by Tel Aviv against his country. Unlike the previous eight visits by Israeli diplomats, Linton’s visit was accompanied with the threat of mighty Israel’s displeasure if the heirless assets were again ignored by tiny Switzerland. Petitpierre’s hauteur gave way.

  “It would be irresponsible to drop the problem now,” Petitpierre announced to parliament in October 1960 as he hastened to introduce the law, first drafted in 1952. “Switzerland is expected to produce a solution.” The mood had changed. Even a single remark to Ludwig von Moos, the new minister of justice, by Anthony Mann, a journalist writing for the Sunday Telegraph of London, made Petitpierre wince. Mann had mentioned that he expected assistance from the Israeli embassy in the writing of an article about heirless assets. “The matter must be ended soon,” von Moos instructed his officials, responding to
Petitpierre’s wish that a draft law be swiftly published.

  The news dismayed Max Oetterli, who was already agitated by the prospect of Petitpierre’s retirement on July 1, 1961, and his replacement by the less sympathetic Friedrich Wahlen. To help the bankers, even on his last day in office, Petitpierre was urging the minister of justice to grant concessions. Since von Moos had edited a Catholic newspaper during the war that published anti-Semitic articles, he was not averse to Petitpierre’s request, nor was he unreceptive to Oetterli’s plain language. “Israeli exaggerations,” the bankers’ representative told von Moos’s officials, had been spread across Europe by the governor of the Bank of Israel, who was personally responsible for “drafting” the Swiss government’s law. Oetterli’s last card, fanning anti-Semitism by conjuring the specter of the manipulation of sovereign, neutral Switzerland by the Jews and Israel, terrified George Brunschvig. Naively confessing his apprehension to von Moos’s officials, Brunschvig reassured the successors of Rothmund’s ministry, “My organization always represents Swiss interests and has kept its distance from both the Israeli embassy and foreign pressure groups.” The officials were delighted to hear Brunschvig’s complaint that Nahum Goldmann, the president of the World Jewish Congress, had “stirred up unpleasantness” after his publicized arrival in Switzerland and his claim to have masterminded the introduction of the new law. And they loved the protest from Jews in the United States, angry that Jews in Israel might receive a major share of the heirless assets when the money should properly be distributed among the refugees in the United States. But that was a pleasant sideshow to the prospect of future difficulties.

  Friedrich Wahlen, Switzerland’s president that year, was treated to an exhibition of anti-Semitism when a large delegation of bankers arrived in Bern in September 1961. “We are against giving the money to Jewish groups and especially Israel,” Albert Matter, a director of the Basler Kantonalbank, warned the politician. “That would be against the intentions and traditions of the banks.” If the heirless assets were to be distributed, the banker suggested, the ideal charity was the Winkelried-Stiftung, which cared for the distressed families of Swiss soldiers. The prospective newspaper headline “Holocaust Victims Fund Swiss Soldiers” might well have tickled Wahlen’s earthy humor, but his reply was restrained: “The Jewish groups will criticize us. You cannot deny that those groups have legitimate interests?” Oetterli naturally disagreed. Anger blinded him to the implications of his new demand. If the government insisted that the banks pay out the heirless assets, said the Bankers Association secretary, then ministers should promise an indemnity in case a claimant should later appear. Wahlen smiled. If the amount of heirless assets was as small as the banks claimed, the risk was surely irrelevant.

  The inevitability of the law was shaking out the truth. “Just on the basis of all the claims which have arrived in my office,” Dr. Lothar Dessauer, the Swiss lawyer specializing in claims by Jews, told the Ministry of Justice, “many hundreds of millions [of francs] are at stake.” A similarly pertinent complaint from Rolf Frei—a lawyer and director of a major trust corporation (Treuhand AG)—pointed at the bankers’ dishonesty. “From my own experience,” he wrote, “in many actual cases the banks have sold the assets.” The claimants were simply denied their money.

  Anticipating an investigation, the insurance companies admitted for the first time that their members had obeyed the Nazi “special law,” paying out money to the Nazi government under policies subscribed by Jews. Even surviving Jews, admitted the insurance association, had been deprived of their money. But there was no prospect of an apology or of compensation.

  Yet a milestone had been passed. Abandoning sixteen years of claims that the amounts were trivial, the government was finally prepared to acknowledge that the outstanding heirless assets “may still represent a substantial sum”; that, since not all banks were members of the association, there were certainly more unclaimed deposits in numbered and pseudonym accounts and in safe-deposit boxes; and that undoubtedly some money had been stolen. However, in the months before von Moos rose in the parliament on May 4, 1962, to introduce the draft law, Oetterli and the insurance companies had persuaded him to insert loopholes into the law to neutralize its effect.

  “To speak of reparations is a diversion,” the minister of justice told parliament, specifically denying that the country owed a moral obligation to the Jews. “Switzerland has a duty of reparations neither toward the victims of Nazism nor toward Israel. That must be absolutely clear.” To acquit himself of any accusation that he was a puppet of the Jews, Harald Huber agreed with the minister: “Switzerland really does not have to apologize for anything, and we don’t owe any country anything.” Having cleansed his reputation, he added, “Critics have rightly said that the law does not go far enough. This is the most minimal measure possible.” No one disagreed. The flaw was glaring and deliberate.

  Under the proposed law, the banks’ obligations to maintain secrecy were removed in relation to heirless assets. Banks, insurance companies and lawyers were ordered to compile an inventory of any unclaimed money, valuables and jewelery: “All property in Switzerland whose last owners were foreign nationals or stateless persons, in respect of whom no reliable information has been available since May 9, 1945, and of whom it is known or believed that they were the victims of racial, religious or political persecution, must be registered within six months of the law’s coming into force.” The maximum penalty for failure to register or for giving false information was SF10,000 or imprisonment.

  Ostensibly, the legal obligation was watertight but, succumbing to the demands of the banks and insurance companies, the government had weakened the law. The banks and insurance companies were given discretion to decide whether a client was “known” or “could be assumed” to have been murdered. To avoid the obligation to surrender any money, bankers needed only to say to themselves, “The client may be alive, perhaps in a communist country.” To block that obvious loophole, the government was urged to adopt a presumption of death if nothing had been heard from a client since May 8, 1945. Oetterli had successfully resisted that provision.

  One hundred and sixty-six members of both houses of parliament voted on December 20, 1962, in favor of the law. None voted against it. Declaring their opposition, the critics understood, was unnecessary. Huber’s belief that the new law would “achieve as complete a settlement as possible of the assets in question in Switzerland” depended on the attitude of Hans Weber, the official at the Ministry of Justice appointed to administer the inquiries under the new law. The law’s opponents confidently relied on Weber’s loyalty.

  15

  COMPLICATING THE RIDDLE

  Hans Weber, a sullen bureaucrat in the Ministry of Justice, readily agreed to perform his functions in an appropriate manner. As the director of the Office for the Property of Missing Foreigners, Weber was to assist Jews searching for their inheritance; and, under the new law, he and his staff of twelve enjoyed considerable powers to demand information from the financial community, to open bank vaults and safe-deposit boxes, and to order the transfer of any money and valuables.

  Help to the Jews, Weber knew, could be offered in two guises. During the eighteen years since the war, the bankers, insurance companies and lawyers had enjoyed ample opportunity to squirrel the heirless assets and other unclaimed deposits into a maze of untraceable accounts. Either he could energetically search for dormant accounts by harassing the banks for information, or he could interpret the law restrictively and rely on the banks’ own initiative whether to declare the existence of a dormant account. To the satisfaction of the Bankers Association, Weber chose to be unhelpful. As he explained to colleagues, under the new law he was not “explicitly charged to search for the rightful owners of assets.” Within weeks, his prejudices were reinforced.

  Dispatches from the Swiss consulates in Tel Aviv and New York described thousands of Jews besieging their buildings, demanding application forms. Newspaper reports around the wo
rld publicizing the new law had encouraged Jews to rush to register claims for their lost inheritance. Hans Gasser, the normally sober consul in New York, reported in May that “tens of thousands” of Jews were contacting his office. Weber was horrified. His initial hopes that few would be troubled to apply were dashed. Panicky Jews evoked nightmarish images, but he was convinced that they were unaware of the rigid criteria under the law, which restricted his duty to find any money. After consulting his superiors, Weber decided that his strategy would be to interpret in the narrowest way the restrictions on the numbers who could apply.

  Hans Gasser’s report in May 1963 from New York had included a request for application forms. Weber procrastinated until March 1964. Then, carefully sealing the envelope, he dispatched just ten forms to New York—by sea mail. To complicate matters further, each application form was printed in German, French and Italian, but not English. Inside the package, now moving at a snail’s pace across the Atlantic, was a note from Weber, urging his colleagues in New York, “Do not waste the forms.” Impatient Jews had by then invented an alternative. A brisk trade, nurtured by rogue lawyers, was offering claimants improvised forms at $2 each, and the lawyers’ services as intermediaries with Weber’s office. But the resulting confusion and acrimony did not disturb Weber.

  The ten application forms arrived in New York in April 1964. Appalled, Gasser dispatched a telegram asking for another 1,000 forms and stipulating: “Send by airmail.” Unwilling to succumb to the pressure, Weber dispatched 200 forms with the message that they should be issued only “with restraint” to people who could first prove the strength of their claim. The explanation of that policy was minuted by Emmanuel Diez, a lawyer in the Political Department supervising Weber. The diplomats in the United States, commented Diez, were starting from “false premises. We don’t really want any registration process for those entitled. The opposite problem is much simpler.” Facing complainants who could not submit an application at all was easier than laboriously examining each claim.