Nazi Gold

by Bower, Tom

  Ever since D’Amato’s election to the Senate in 1980, Bronfman had had no reason to meet “Senator Pothole.” Not only was Bronfman a lifelong contributor to the Democrats, but he had little personal affection for the fifty-nine-year-old Republican, who had recently held hearings in the Senate to embarrass President Clinton over his association with the illegal finances of the Whitewater development in Arkansas. But, to his credit, D’Amato was a self-made, independent man with a feisty record of public campaigning for the underdog. As a street fighter with a rottweiler’s compassion for his target’s sensitivities, he was the ideal politician to challenge the Swiss banks, particularly as he was the chairman of the Senate Banking Committee. Past disagreements were ignored by the two rugged personalities as, over lunch in the Senate dining room on December 7, 1995, Bronfman outlined, with Singer by his side, his unease about the bankers and his grief for the handful of surviving Jewish victims. “We want you to know what’s happening,” said Bronfman. “This is an information trip.” Revenge would be uppermost in his mind if he was betrayed by the same breed who had outwitted the disarmed Sam Klaus and Sy Rubin.

  “They’re taking you for a ride,” said D’Amato. Bronfman was still unsure.

  D’Amato was not blind to the political advantage of supporting Bronfman, the representative of the largest Jewish population in the world, but he was genuinely outraged by the compounded dishonesty. “We’ll hold hearings,” he told Bronfman, sealing a pact whose consequences George Krayer could never have imagined. As he walked from the dining room, D’Amato said to Gregg Rickman, his diligent thirty-three-year-old legislative director, “This sounds great. Let’s do it.”

  Compared with other politicians, the one hundred United States senators enjoy extraordinary power, veneration and resources, and over the years their targets have suffered mixed fortunes depending on their vulnerability. Switzerland’s bankers, D’Amato and Bronfman agreed, were particularly unprotected. Judged against U.S. banks, Switzerland’s financial institutions were puny and their fortunes depended upon their business activities in the United States. Withdrawing their licenses to trade in the United States would destroy their prospects. Beginning the lengthy process to deprive them of those licenses rested with D’Amato’s Banking Committee; and his announcement of “hearings,” a euphemism for a public trial or a kangaroo court, would undoubtedly terrify the Swiss banks. To prepare those hearings, D’Amato needed evidence and witnesses to prove to the public the validity of Bronfman’s complaint. But for the moment he was cautioned to remain silent until Bronfman’s suspicions had been confirmed. On no account, Bronfman repeated, would the WJC break the Bern agreement.

  In January 1996, the WJC held its annual conference in Jerusalem. Carefully Bronfman avoided questions about the heirless assets. “We have met the Swiss bankers,” he told inquirers, “but I don’t want to make any further comment.” As he deflected the questions, the Bankers Association, in Basel, was veering toward a different policy. Krayer, with the encouragement of Heinrich Schneider, had become convinced that, to satisfy Swiss opinion and the increasing interest of parliamentarians, it would be politic to announce the results of the association’s 1996 survey at the regular half-yearly press conference to be held on February 7. News of that decision, picked up by local journalists, reached Singer in New York the day before.

  Excitedly, Singer telephoned Schneider. “What’s going on?” he yelled. “If you break the agreement to keep the negotiations silent, we’ll confront you. In no uncertain terms.” By nightfall in Europe, no association official had bothered to reassure Singer. The Jews, thought Schneider, were powerless. Their threats were empty. Even if Bronfman was rich, he was no different from thousands of other rich men who regularly passed through Switzerland’s banks. The Jews were as irrelevant as they had been fifty years earlier. The following morning, Krayer formally announced the association’s survey: 775 accounts had been discovered that had been dormant since 1945. Their total value was SF38 million ($32 million), and not all had been deposited by Jews. The impression Krayer left among his audience was precisely that which Bronfman and Singer had feared. Beyond that amount, the association had declared, there was no more money owing to the Jews in the Swiss banks.

  Bronfman, Singer and Steinberg were fuming. Fifty years after Klaus and Rubin had complained about Swiss dishonesty, the pattern had not changed. Nor had the association’s self-delusion about the Jews. The following morning, February 8, Singer flew down to Washington to brief Gregg Rickman.

  Tucked away in the corner of D’Amato’s suite of Senate offices, surrounded by files, Rickman, a specialist in Middle East and Jewish affairs, was naturally as aware as most Jews about the generalities of the Holocaust, but he knew nothing about Switzerland, Safehaven, and the heirless assets. Since the lunch with Bronfman two months earlier, he had waited for an explanation to a problem that no one else in Washington understood. At the end of Singer’s briefing, the two agreed, “There might be some evidence in the archives.”

  Among the advantages of recruiting D’Amato to the cause was the alacrity of government departments’ responses to a senator’s requests. The National Archives, which stored the records of all government departments and agencies, were eager to help the politician, although he was required to supply the researchers. The WJC provided Rickman with Willi Korte and Miriam Kleiman. “It’ll only take a couple of days,” the two researchers were assured.

  Eleven government departments and agencies had been involved in the saga since 1944. Not only the Departments of State, Treasury, Justice and Army had touched Switzerland’s activities, but also intelligence agencies and humanitarian groups. Their accumulated records between 1940 and 1962, scattered across the capital, amounted to incalculable millions of sheets of paper. Only a few of the government documents were properly indexed, and although some had been available since 1972 many remained classified. Even twenty well-briefed researchers would need at least one year to compose the history of an issue that was hardly mentioned in textbooks and had been practically forgotten even before the death of most of the participants. Yet, within the first weeks, luck and diligence provided a nugget that confirmed the validity of Bronfman’s complaint.

  An intelligence report from Switzerland in July 1945 stated that Jacques Salmanovitz, the owner of the Société Générale de Surveillance, a notary and trust company in Geneva with links to the Balkan countries, possessed a list of 182 Jewish clients who had entrusted SF8.4 million and about $90,000 to the notary pending their arrival from the Balkans. The report added that the Jews had still not claimed their possessions. Rickman and D’Amato were ecstatic. Here was historical proof that unclaimed heirless assets were retained by Swiss financial institutions. Still unaware of the background, complexity and dimension of the question, D’Amato submitted the report for publication in the Congressional Record on March 27. Dramatically, he accused the Bankers Association of a cover-up, and asked it to explain the failure of its recent survey to account for that SF8.4 million worth $20 million in 1996 values. SGS officials denied D’Amato’s charges, contending that the funds were returned to their beneficial owners “as far as [they could] ascertain from the files still available from that time.”

  George Krayer was worried. The association was unaware of the Salmanovitz account—because the SGS was not a bank—but the existence of such confidential information in the U.S. archives promised a succession of horribly embarrassing revelations. More sensational reports from New York and Washington about public accusations by D’Amato and Steinberg against the Swiss bankers added to Krayer’s concern; they were followed by notice of the first hearing to be held in the Senate on April 23.

  In organizing the hearing, Rickman had written to Mark Cohen, a lawyer at Wilmer, Cutler, Pickering representing the Bankers Association, asking whether the Swiss bankers would provide a witness. The association’s retention of the firm in 1994 had followed the dismissal of its previous lobbyist, Bob Royer, the casualty of an inte
rnal dispute. That decision, in retrospect, was not astute. While Royer enjoyed especially close relations with D’Amato and his staff, Cohen and his superior Roger Witten were outsiders without any contacts in D’Amato’s office and ignorant of the sentiments and strategy driving the new crusade. Unquestioning, and unversed in the politics and the history, they accepted their client’s professions of innocence and thus misjudged the threat presented by D’Amato. One immediate misguided decision was to allow Hans Baer, the Jewish banker involved in the Bern meeting in 1995, to represent the association at D’Amato’s hearings.

  In preparing for the hearing, D’Amato and Bronfman agreed on one fundamental principle. Since most of the beneficiaries were dead, they were anxious not to appear to be mercenary. Bronfman’s carefully considered public approach would be to insist that his cause was moral, not financial. Taking the same ground, D’Amato spoke about an “accounting.” Elan Steinberg referred to the “last chapter of the Holocaust.” Emotions rose. Overnight, the irrepressible mystery of the swastika, with its drumbeat overtones of brutality, war and genocide, attracted every newspaper to an untold story of hidden fortunes and greedy, criminal bankers. There was even a living victim.

  Greta Beer, an attractive seventy-five-year-old former Romanian who had settled in Queens, New York, to become a tour guide, was introduced to the packed committee room near the Capitol by D’Amato just after 10:05 on April 23. The senator’s opening words were a declaration of war against the Swiss banks. Greta Beer, proclaimed D’Amato, was a casualty of “the systematic victimization of people … started by the oppression of the Nazis” and then by the Swiss banks. The “broken trust” perpetuated by the Swiss banks, he continued, “with the evasions and excuses for over fifty years,” meant that “the Greta Beers have been denied justice.” Emotive references to “deliberate cover-up” and “callousness” established the accusation. Fifty-one years after Sam Klaus had drafted the Safehaven proposal one mile from the Capitol, the trial of Switzerland was under way.

  Greta Beer’s story was heartrending. Shortly before his death in 1940, her father Siegfried Deligdisch, a Romanian textile manufacturer employing over 1,000 people, revealed that there was a Swiss bank account for his wife and two children, but he did not disclose either the identity of the bank or the account number. After surviving the war, Beer emigrated to the United States and, after the enactment of the 1962 law, traveled with her mother to Switzerland to seek information from banks in Bern, Zurich and Lausanne. All denied any knowledge of an account. “My mother did not have an easy life,” said Beer, her voice breaking, “and my own life would have been totally different if we had access to that money. I am bitter about being deprived.” The committee room was silent as the old woman recounted the last words that she, as a young girl had heard from her father: “Don’t worry. You will be provided for. The money is safely deposited in Switzerland.”

  The story was a damning one, and Edgar Bronfman’s testimony, delivered soon after, encapsulated the moral assault: “Our collective mission here is nothing short of bringing about justice. We are here to help write the last chapter of the bitter legacy of the Second World War and the Holocaust.” Condemning Switzerland’s banks for “their repeated failure of integrity,” for earning a “profit from the ashes of man’s greatest inhumanity to man,” and accusing Switzerland of breaching its neutral status during the Nazi era in ways that cost a “staggering [number] of American lives,” Bronfman demanded “a proper accounting.”

  For years, the Swiss had enjoyed a cozy niche in the world’s consciousness as a tiny, decent, wealthy community associated with Toblerone chocolate, Swatch watches, Alpine ski resorts and at worst boredom. Suddenly cast into the spotlight by D’Amato and Bronfman, the Swiss were no longer just a peculiarly charmless people who had produced no artists, no heroes since William Tell and no statesman, but were dishonest Nazi collaborators who had profited from genocide. “We cannot rest,” agreed D’Amato after accepting Bronfman’s praise for holding the hearings, “while unnamed individuals profit from the deaths of the six million.”

  Selecting Hans Baer, a decent, upright man—the chairman of a private bank and a member of the Bankers Association’s executive board—as spokesman had seemed a sensible move. His carefully drafted statement to the committee sounded ingenuous. “The SBA,” he explained, “has been pained by the accusations that have appeared recently in the press that the SBA is not sensitive to the interests of the Holocaust victims.” Old history had recorded that defense but, as Baer knew, history was being rewritten. Anticipating the antagonism, he had arrived with a gesture and a solution. His gesture was an offer to pay for Greta Beer to visit Switzerland to find her missing account. His solution was to establish an independent audit commission with members nominated by the Bankers Association and the WJC who would, under an agreed-on chairman, retain auditors to comb through the banks’ records and find any remaining dormant accounts.

  Over the previous weeks, Baer and Singer and others had been discreetly “unscrambling the egg and returning the parts into a complete shell.” Reminding the Swiss bankers of the Waldheim precedent, Baer had proposed a six-man international committee of eminent persons—three Jews and three Swiss—to supervise an audit and defuse the crisis. Switzerland’s banks would assure the auditors, agreed Krayer, “unfettered access to all the relevant files in banking institutions regarding dormant accounts and other assets and financial instruments deposited before, during and after the war.” President Kaspar Villiger had agreed to introduce legislation to amend the banking secrecy laws to allow the investigation. The final requirement was an impeccable chairman. The committee, Baer believed, could defuse the tension, but he rightly feared D’Amato’s skepticism about the solution. “I’m suggesting that it is a problem,” the senator told the banker, suspicious of any committee, especially one funded by Swiss bankers. Nevertheless, by the end of the hearing Baer felt relieved. With goodwill, he was convinced, Bronfman’s demand for a full accounting would be satisfied.

  The banker was deluding himself. His appearance, despite his sincerity, had made a poor impression and, before he had even walked outside into the lunchtime sun, Bronfman’s limousine had swept down Pennsylvania Avenue toward the White House. Distrustful of any Swiss banker, Bronfman was seeking allies, and the most important was the president of the United States. The previous day, at a lunch he hosted in New York, Bronfman had persuaded Hillary Rodham Clinton of the importance of the issue. Thanks to her intervention, he was now seated with Clinton for thirty minutes. Bronfman sought endorsement for his campaign against Switzerland and the president’s assurance that Alfonse D’Amato’s involvement would not be an obstacle. “I’ll work with D’Amato,” promised the president and, to prove his commitment, he appointed Stuart Eizenstat, the government’s special envoy for property restitution in Central and Eastern Europe, to conduct an interagency investigation to discover the archival evidence against Switzerland.

  In Bern, Basel and Zurich, politicians and bankers were at once bewildered and indignant as they read the reports from Washington. Switzerland, it seemed, had been targeted at the behest of the Jews. The old conspiracy had been resurrected and was proved by the appointment of Madeleine Kunin, a Jewish Democrat, as the new U.S. ambassador to Switzerland. The country, already mortified by recession and unemployment, was under siege by Americans plotting to undermine Switzerland as a financial center. No doubt that was the ultimate sanction available to D’Amato and Bronfman, and the older Swiss knew there was good reason to fear those two men. There was so much history to expose, and the politician and the tycoon were too independent and too powerful to be bothered with Swiss excuses.

  Speaking to each other regularly, Bronfman’s and D’Amato’s staffs agreed that relentless pressure and a diet of embarrassments would eventually defeat their foe. In D’Amato’s office, Gregg Rickman was urging the two researchers at the National Archives to “find more stuff that we can hit ’em with.” Cleared to rea
d classified material, Rickman disappeared into the sealed rooms, searching in the United States’ “secret” archives for more incriminating material. To his chagrin, nothing remotely similar to the Salmanovitz report emerged. But there was compensation. The researchers were photocopying intelligence, Safehaven, and diplomatic reports about Switzerland—many declassified fifteen years earlier and already read by historians, but all resoundingly accusing Switzerland of perfidy.

  Elan Steinberg was not bothered by this flood of detail. The Washington hearings had stirred journalists’ appetites for information about Switzerland’s crimes. Telephone callers to the WJC demanded more information. Steinberg was happy to oblige. Creating a potent image of an army of researchers in Washington digging up untold secrets of Switzerland’s collaboration with the Third Reich, the executive director invited callers to enter his office and catch a glimpse of documents marked “secret” and reeking of authenticity.

  Patently ignorant about the history but eager to accept that any facts unearthed in the archives were new and true, European newspapers during May and June 1996 published a series of increasingly prominent “bombshells” about Switzerland’s connections to “Odessa documents,” the “secrets of Safehaven,” Adolf Hitler’s “secret Swiss bank account,” and Göring’s looted art, and about Switzerland’s betrayal of the Jews. Terror by embarrassment was Steinberg’s weapon, as he uttered a string of accusations designed to cause discomfort and shock. OSS reports, often based on rumor and uncorroborated sources and disregarded for years by historians as hearsay, suddenly assumed uncritical credibility and widespread publicity. European readers enjoyed Switzerland’s embarrassment, yet frustratingly for the WJC and Rickman, that interest was not mirrored in the United States.