by Bower, Tom
Sitting in her home in autumn 1996, the sixty-six-year-old Weisshaus, staring at a photograph of herself as a child with her father, decried the results of three unsuccessful visits to Switzerland to find her father’s bank account: “That made me really mad. They’re just playing for time, waiting for everyone to die. I have to do justice for my parents.”
The publicity given to the two class actions persuaded over 3,000 other potential claimants to contact the east coast lawyers to join the case. “This publicity is really killing us,” groaned a Foreign Ministry spokesman in Bern. “We’re peeling back the layers of the onion,” rejoiced Stuart Eizenstat.
To combat the adverse publicity and correct the mistakes, Carlo Jagmetti, the sixty-four-year-old Swiss ambassador in Washington, was ordered by Bern to host a press conference. A heavy man on the eve of retirement, Jagmetti would clearly have been happier sitting in a mountain café, drinking a glass of cold white wine from the Vaud alongside Lake Geneva—or even lying on a beach in Florida—rather than getting embroiled in unsavory controversy. Prior to his appointment, neither he nor his masters in Bern had anticipated that the son of a long-established Zurich family would ever emerge from the anonymity familiar to the representative of an insignificant country in Washington. Indeed Jagmetti, angry that Clinton had allowed four months to pass before allowing the ambassador to present his credentials, had afterward derided the president to Swiss journalists for “laughing at inappropriate moments” during their interview and had even asked, “Who actually runs the country?” That contempt now gave an extra charge to the anger he shared with most of his generation about the slurs being leveled against noble Switzerland. In consequence, Jagmetti and his staff were floundering as they defended their predecessors only to discover that their loyalty was poorly rewarded by confusion. Accusations by the Jews in New York were denied in Bern only to be reversed and admitted. Assertions by Senator D’Amato were ridiculed and then conceded. Who, wondered Jagmetti, was in charge back home and why did D’Amato refuse his requests to meet? The senator was loathsome, disrespectful and a sensation seeker. The ambassador’s fury, however, after he had received some careful briefing, was repressed when, on October 30, he begrudgingly welcomed fifty journalists and a dozen television cameras in the embassy’s reception hall.
Christoph Bubb, the embassy’s legal counselor, stood aside from the ambassador, not much wiser than he had been two weeks earlier when, at the embassy’s reception, he had scorned the notion that Switzerland’s banks could have retained any Jewish assets and derided Senator D’Amato’s suggestion that Switzerland had made a secret agreement with Poland. But the lawyer was still puzzled. Nothing in his education and training had prepared him for the tumult engulfing his country. Coping with the barrage of assaults was testing his very sanity. The language and the emotion typified war rather than diplomacy—a war for the survival of Switzerland. That concern was shared by Jagmetti. Both men viewed the “war” as a conflict about money, not truth or justice. The Americans, they believed, wanted a deal, but negotiating sums of money with such people was impossible.
The ambassador’s brief was to reassure. Blinking nervously at the unusual crowd inside his sanctuary, he opened with a promise: the full truth would be disclosed “as soon as possible,” and while the historians’ investigation was under way, he urged, even if it lasted five years, “we must avoid the trap of hasty conclusions based on alleged revelations.” Referring to his principal enemy’s accusation that five years “is too long,” he countered that D’Amato’s remarks were “a travesty,” because the historians would produce “early results.” A mention of the senator’s name, a red rag to the ambassador, aroused a further attack against “misrepresentations,” but recalling his instructions from Bern to appear conciliatory he admitted, “Soul-searching is very much going on in Switzerland. There is fundamental discussion. Opinions are polarized.” As the questions became hostile, the ambassador uttered his concession: “Of course the banks made psychological mistakes. From the human point of view some real mistakes have been made.”
While no cynical journalist was won over by the ambassador, he had succeeded at the last moment in presenting a human face. But his instinctive feelings could not be contained forever. The rotund Jagmetti—caught up, he believed, in a war to defend his country—committed his own “psychological mistake.” Talking about Greta Beer, who had been flown to Switzerland by Hans Baer, the banker, to find her missing account, the ambassador said, “They found her account but discovered that her uncles had taken everything from the account in the past. So this was a very tricky case. Had she the money, she would have gotten it right away.” But his statement was inaccurate. Hans Baer had found the records of an account belonging to Greta Beer’s uncle, which was empty, but he had not found a trace of the account opened by Beer’s father. Jagmetti’s mistake revealed his prejudice: One Jew had stolen from another Jew. The Jews cannot be trusted.
In Bern, Thomas Borer, firmly in the seat as the task-force commander, considered the ambassador’s “mistake” trivial and was scornful of the resulting uproar contrived by the senator and the World Jewish Congress. In a meeting with Paul Volcker (still battling to establish his own investigation), Borer had shown his own prejudices. To explain his conviction that few Jewish dormant accounts would be found in Swiss banks, Borer had declared, “Rich Jews didn’t go to Auschwitz. They cleverly bought their way out.” Volcker had suppressed his surprise. No wonder he was having difficulty getting the Jews and the Swiss committee to agree the terms to launch the investigation.
Prejudice, anger and suspicion were pulling the antagonists further apart. Intentionally, D’Amato and the WJC executives were feeding more inflammatory documents to journalists to annoy the enemy. In early December, an official of the Simon Wiesenthal Organization in Buenos Aires obtained the wartime records of gold transfers from Bern. Over one billion dollars of Nazi loot, suggested Elan Steinberg, had flowed to Argentina. Rickman in Washington released recently discovered State Department records reporting that Goebbels and Göring had dispatched diplomatic pouches filled with loot to Switzerland for shipment to Argentina, while another intelligence report indicted Swiss officials for helping wanted Nazis to escape through Switzerland to South America. At the center of the web was Switzerland, protecting the Nazis and harming the Jews.
Thomas Borer could not ignore the latest headlines. Nor was he inclined to disregard the evidence. Unlike Jagmetti, he was not instinctively antagonistic toward Americans, nor did he underestimate the combined influence of a senator, a lobbyists’ group and sympathetic media. While disparaging the continuous drip from the archives—“Publishing single documents out of context and without regard to the historical realities constitutes sensationalism,” he complained—he understood the need for dialogue, even if D’Amato was reluctant to offer mutual respect. Rather than reject outright the evidence from Argentina—he played down Jagmetti’s abrupt dismissal as “pure hearsay”—he tried sweet reason: “It cannot be excluded that at some time a diplomatic pouch was misused.” After successive meetings with the Swiss ambassadors to Israel, the United States and most European countries, and with Switzerland’s top bankers, he proposed a new strategy to persuade the world that the Swiss had not stolen any money.
The place to launch the charm offensive, Borer calculated, was at the new hearings on Switzerland and the Jewish assets scheduled by James Leach, the chairman of the House of Representatives Banking Committee, to start in Washington on December 11. Borer intended to testify and to use his visit to meet the major antagonists.
The official’s flight to Washington was not as pleasant as he might have hoped. Shortly before departing, he had received the rushed historians’ 145-page report, exclusively about Switzerland’s secret agreements with Poland and Hungary, that had been prompted by Senator D’Amato’s accusations. Irritatingly, they had concluded that “a number of serious legal and administrative irregularities had been committed by banks and
senior Swiss government officials and politicians.” That report, he decided, would not be released as promised during his Washington visit. It required amendment, certainly delay, and he would ensure that its publication would be overshadowed by another event.
With that irritation removed, the ambitious official stepped off the aircraft eager to build bridges at a succession of meetings. The most important was lunch with Edgar Bronfman in the Seagram building. To everyone’s satisfaction, their encounter would pass off, in Steinberg’s opinion, as “friendly, constructive and encouraging.” D’Amato would also amiably describe his meeting with Borer as “okay.” There was a suggestion from the WJC that Switzerland should establish a goodwill fund. “We need an interim fund to compensate the survivors,” said Bronfman. “So far the pace has been slower than a snail. Not one franc has passed hands.” Although no amount was mentioned, Borer was understanding. “The crisis may have passed,” said Steinberg as Borer flew south to appear at 9.40 A.M. in the Rayburn House building.
Entering the fevered atmosphere of the committee rooms of the United States Congress is for any non-American a daunting experience. Within those undistinguished rooms, politicians like Joseph McCarthy have destroyed the reputations of hundreds of ordinary Americans, and other politicians have terminated the ambitions of presidents. For Borer and his entourage, the stakes were just as high. Since the hearings in April 1996, Switzerland’s reputation had been shredded. Every attempt to rebut or minimize the damage had been at best futile, at worst counterproductive. Borer hoped that his activities would pacify and reassure. But the opening comments of the politicians on the raised dais were not encouraging.
“To those people who find these hearings annoying and unpleasant,” admonished Representative Barney Frank of Massachusetts, “there is an easy way to make them go away: Do the right thing.” For the Swiss officials to hear American politicians speak with passion about the “greatest moral blot on mankind’s record” was disconcerting, but the warning by Representative Spencer Bachus of Alabama was succinct: “The credibility, the veracity, the very integrity of the entire Swiss banking industry [are] at stake in this matter; and the burden of proof lies entirely with the Swiss banking industry.” The gap between the banks’ estimate of dormant accounts at $32 million and the claims of the survivors that the figure was “as much as $20 billion,” warned Bachus, was “too large a gap for honest error.”
Borer—nicknamed “Schwarzenegger” by journalists—flinched as Representative Paul Kanjorski from Pennsylvania, the next speaker, issued a blunt message: “No one can ever be allowed to profit from blood money—not now, not fifty years ago, not fifteen years from now. Never again.”
In Borer’s opinion, Kanjorski was vicious. Not only did the representative heap praise on D’Amato’s grasp of the issues and his unremitting criticism of Switzerland, but he speculated about the use of “sanctions.” The other representatives seemed to approve, and likewise to applaud D’Amato. But as Borer settled down to give his testimony, the first Swiss official ever to appear before Congress, D’Amato left the room. The senator failed to hear Borer’s opening remarks: “Our government and parliament have repeatedly stressed that only the truth and nothing but the truth would satisfy their pursuit of justice.” D’Amato also missed Borer’s assertion that “Switzerland is deeply aware of the pain, mistrust and confusion that surround this issue.… We are not afraid of the truth.”
Eyewash is familiar to American politicians, and the remark by Bronfman, sitting near Borer, about Switzerland’s “stonewalling” caused the scales to fall from the Swiss official’s eyes. All his assurances of progress and good faith aroused skepticism rather than sympathy. “We will be back here in a couple of months,” warned Frank, “with another hearing. No doubt.”
“We view this as a moral imperative,” said Borer later. “No penny should stay in Switzerland.”
Twenty-four hours later, the afterglow of Borer’s appearance had vanished. Most people had been impressed by his statement that before arriving at the hearing he had visited the Holocaust Museum, “to reflect in the surroundings of such an important memorial about whether Switzerland and I am doing enough.” The reality was somewhat different. Reports from the museum’s staff indicated that Borer had arrived with a television crew. After being filmed entering the building, he departed scarcely fifteen minutes later, leaving the impression that his visit had, some felt, been a photo opportunity. So Borer’s fence-mending had been counterproductive. D’Amato and Bronfman sensed no advantage in restraining their campaigns. Behind the bombast, however, attempts were under way to negotiate a settlement among lawyers to avoid the trial of the class action. The possibility of a deal—in Borer’s opinion the real reason for the campaign—depended on the sum of money and the accompanying statement that would explain the payment. Progress on both, however, was proving impossible—not least because of dissension in Switzerland.
Although he was too professional to confess as much, Borer’s negotiations with politicians, Jewish organizations and lawyers masterminding the class actions had been hampered by divisions and weaknesses among the seven ministers in the Federal Council and by the persistent hostility from the banks.
Consistent with its traditions, the Bankers Association had urged the government not to offer any concessions to the Jews. Agreeing to the Volcker investigation was one concession too many, and attempts were being made to nibble at the terms of reference. Like his forerunners in the service of the Swiss government, going back as far as 1946, Borer was too weak to challenge the association, especially now that the politicians were stumbling. Instinctively protective of their country and artless about the campaign in the United States, the seven ministers were incapable of agreeing on a policy and issuing a directive to solve the crisis. United in their conviction that Switzerland was the victim of a conspiracy, they stubbornly retreated from a position that might enable them to understand the crisis. Their attitude was well expressed by Jean-Pascal Delamuraz, the economics minister—Villiger’s successor as president.
To Delamuraz, the crisis since February had been not about truth or justice but about money. Switzerland was, he believed, under pressure from the Jews to make a deal. Like Jagmetti and so many others of his party and generation, Delamuraz believed that everyone could be bought and that money would solve all problems. The president, however, was more than suspicious about the gap between the $32 million offered by the Bankers Association and the $7 billion mentioned by the World Jewish Congress. Never doubting that his opinions would be interpreted as honest and reasonable, the wine-loving head of state summarized the government’s attitude toward the controversy in an interview granted to his local newspaper on the eve of his retirement from the rotating presidency. Influenced by a dispatch from Carlo Jagmetti (the unauthorized release of which in January 1997 would cause Jagmetti’s resignation) advising that Switzerland should “wage war” against groups in America who “cannot be trusted,” Delamuraz was angry. The reported demand by the Jews that the Swiss should establish a $250 million compensation fund, he declared, was “nothing less than extortion and blackmail.” The “deal” offered by the Jews was also blackmail and was consistent with the United States’ campaign to undermine Switzerland’s role as a world financial center. The furor that greeted the president’s remarks in the United States encouraged his six ministerial colleagues to endorse that opinion. Delamuraz’s disparagement of the Jews was unexceptional and was not even noticed by his colleagues. His protests voiced the thoughts of many. The government, said Arnold Koller, the new president, was not planning to apologize for Delamuraz’s comments. Letters to Swiss newspapers praised the former president for articulating the majority’s outrage about having “suffered in silence.” Grievances against the Jews were openly expressed on the streets. Supported by the majority of his countrymen, Delamuraz would later utter a perfunctory apology to appease the U.S. government, but did not retract his opinion.
In early January
1997, Borer’s education about the threat to Switzerland was nearing completion. In retaliation for Delamuraz’s comments, Avraham Burg, who was the chairman of the Jewish Agency for Israel and a member of the Volcker commission, had threatened a worldwide boycott of Swiss banks and the withdrawal of funds. The Swiss president, Burg accused, was involved in “a conspiracy to destroy negotiations between us in order for the Swiss to avoid taking responsibility for their actions … during the war.” There was talk in New York and two other states of starting proceedings to divest Swiss banks of their licenses to trade. Telephoning around New York and Washington, Borer sought advice on how to defuse the new crisis. Time, he was told, was running out. Waiting five years for a historians’ commission to report and more than one year for Volcker’s committee to complete its work was playing into the hands of D’Amato and Bronfman. The only solution, he was reminded, was a big compensation fund. Rushing to confer with the Swiss ministers, Borer was met with icy stares. The politicians were unprepared to offer money, which would be interpreted as an admission of guilt, especially before the investigations were completed. The sentiments uttered in New York and Washington had merely reinforced Swiss stubbornness. On the same day as Delamuraz said that he had no need to offer a full apology about his remarks because he had been “misunderstood,” Borer was authorized to offer a limited deal.