Nazi Gold

by Bower, Tom

  Borer meant well, but when he announced on January 8, 1997, that his government hoped that Switzerland’s banks would establish a Holocaust memorial fund financed from the dormant accounts, his statement exploded in his face. “They are trying to buy us with money that is not theirs,” scoffed Avraham Burg. Thrown off balance and groping for another idea, Borer was stunned the following morning to hear the news that a security guard at Union Bank had, during a routine check in the bank’s shredding room, glanced at old ledgers and papers filling three large bins. Leafing through them, the guard saw that the fountain-pen entries referred to property transactions during the Nazi era. Quite clearly, historical material whose destruction was forbidden by Swiss law had been illegally dispatched for destruction. Switzerland’s defenses were crumbling fast. Union Bank’s chairman, Robert Studer, had derided suggestions that there was unclaimed Jewish money in Switzerland’s banks and had dismissed as a “fairytale” the allegation that Switzerland’s banks had earned fortunes from the victims of the Holocaust. His bank’s admission that, after review by a historian, thousands of other documents had been destroyed, although there was no inventory to identify them, was capped by Studer’s dismissal of the guard for revealing the shredding and so breaking the bank’s secrecy rules. All Borer’s efforts were once more nullified as D’Amato and Steinberg offered excruciating soundbites, all faithfully reported to Switzerland.

  Ministers and officials in Bern were once again reeling. Only a Nazi invasion in 1940 could have been more destabilizing. Tormented and searching once again for advice about how to stop the collapse, Delamuraz was prevailed on to apologize again for the “misunderstanding,” and Switzerland’s bankers were beseeched to cease fifty years of obstruction. A deal was vital.

  It fell to Rainer Gut, the chairman of Crédit Suisse and the ambitious elder statesman of Swiss banking, to break the logjam. Only one gesture, he knew, could reduce the tension and save the international reputation of Switzerland’s banks. On January 22, Gut broke ranks with his two major competitors to offer a solution. A “well-endowed” compensation fund, he suggested, should be established to help Holocaust victims and their families. He mentioned no figure but eventually offered SF100 million ($72 million). Even triple that sum was condemned by D’Amato as too little, too late, and the WJC stuck to $250 million. Each day, the expectations of Switzerland’s adversaries grew. One billion dollars was seriously suggested as the minimum price if the campaign was to be stopped. Nothing, it appeared, that Swiss ministers could say would stem the tide. Even the announcement the following day that the Swiss government and all of Switzerland’s leading financial institutions had agreed to cooperate with Gut’s plan was greeted with silence.

  Switzerland, it seemed, had not quite understood. The conflict could be resolved only by a deal. To the Jews, the deal would require Switzerland to acknowledge its wartime conduct. To the Swiss, the deal was to buy off an irritation and get on with business. Switzerland’s agony while it came to terms with its past conduct and world censure was of no concern to the United States. There seemed no alternative other than to wait until the Swiss bowed and offered a humiliating apology and massive compensation. For Switzerland, the cost of its delayed remorse would be truly horrendous.

  FINAL WORDS

  Switzerland’s retreat began in early February, at the famed annual World Economic Forum in Davos. The former Alpine Nazi sanctuary was a fitting location for Switzerland’s rulers to confront the consequences of their nation’s wartime policies. Unlike previous years, the hosts of the world’s leaders were not greeted with unconditional warmth. Instead, the invited politicians, government officials and Jewish leaders, not only from the United States and Israel, cautioned Switzerland’s ministers and bankers that their stubborn resistance was untenable. Over canapés and champagne, and at discreet dinners, the once impervious Swiss were repeatedly stung by criticism and advice from their guests. Muttered hopes by the hosts that the Jews could be bought off or even ignored were firmly scotched by those whom the Swiss regarded as friends. Despite their hurt sensitivities and their resolute conviction that they were the victims of an international plot and even blackmail, Swiss ministers and bankers finally collided with the immovable conscience of their adversaries. The cost of their predecessors’ moral indifference posturing as neutrality bore unpalatable consequences in the new era of global finance. Sanguine and insensitive for so long to events beyond their frontiers, Switzerland’s power brokers were revealed as vulnerable, shamed minnows.

  Encouraged by Edgar Bronfman and Israel Singer, Flavio Cotti, Switzerland’s foreign minister, accepted that his country’s proffered solution to champion delay until all the investigations were completed was self-destructive. The pressure on Switzerland was intense. American politicians, including the governor of New York, spoke eagerly of challenging the licenses of Swiss banks in U.S. courts; and the banks, reporting losses for the first time in recent history, were more dependent than ever on foreign earnings. Testimony of the commitment of the Clinton administration to the campaign was the president’s announcement, having secured the agreement of the British and French governments, to freeze the final distribution of looted gold seized in 1945 worth $68 million until Jewish claims that some ingots were manufactured from Jewish jewelry and dental fillings were properly considered. More embarrassing revelations about Switzerland’s nefarious trade in looted gold with the Reichsbank were promised in an American historian’s report being compiled from classified government documents under the control of Stuart Eizenstat. Gnawing in Switzerland itself was the audit of the banks under Paul Volcker, who predicted that, despite the banks’ protestations of innocence, previously undisclosed accounts would be discovered. Absorbing the cumulative threats posed by the Bronfman-D’Amato campaign, Switzerland’s frustrated politicians accepted an invitation to negotiate peace.

  The first step was the Swiss government’s endorsement of Rainer Gut’s “Humanitarian fund for the victims of the Holocaust.” The second step was Cotti’s agreement to participate in a top-level conference. On February 14, Edgar Bronfman welcomed all of the antagonists to the WJC’s headquarters in New York. Senator D’Amato, Paul Volcker, Stuart Eizenstat and Thomas Borer sat with representatives of Israel to agree to a timetable that satisfied the Jews. Miraculously, the temperature had cooled. The fury generated by D’Amato’s vitriol had evaporated as confrontation gave way to cooperation.

  Contributions from other Swiss organizations had by then increased the potential Holocaust fund to $110 million. The issue was how much the Swiss government would contribute that would be sufficient to meet the WJC’s target of $250 million. Within ninety minutes it was agreed that the Swiss government would be allowed the grace of receiving two reports due in the summer. One report from the Volcker commission and a second from historians investigating the wartime accounts of Switzerland’s National Bank. These reports, it was believed, would help Cotti and his colleagues to overcome their countrypeople’s increasing antagonism. “It was a profound even,” said Eizenstat at the end of the encounter. “Payments probably will be able to begin this summer,” Bronfman said, smiling, giving hope to the Holocaust’s impoverished survivors. But he cautioned that the crusade had not been about money. Echoing the spirit of Sam Klaus, the original crusader fifty-three years earlier, Bronfman sought to disarm the anti-Semites: “The issue is the truth. The issue is morality.”

  But even Bronfman had not anticipated the announcement by President Arnold Koller on March 5 that the government would no longer wait for completion of the reports. Under pressure from the Big Three banks, terrified of unremitting hostility in America, Koller announced a breathtaking solution. By revaluing Switzerland’s gold reserve, a fund worth SF7 billion ($5 billion) would be established to produce annually SF350 million to compensate victims of all human catastrophes including the Holocaust. Admitting that Switzerland’s wartime conduct was tainted by ‘moral lapses’, Koller suggested that the new fund, to be called t
he Swiss Foundation for Solidarity, would be a token of thanks for the country’s escape from suffering during the Second World War. The truth was naturally different. The Swiss government and the financial community hoped to stun their critics into allies. The government’s remaining problems were to secure the support of their skeptical electorate in a referendum and to persuade the plaintiffs in the two class actions in America to drop their damaging claims. Success in neither seemed as certain as the threat of more embarrassing disclosures. Nevertheless, the Swiss had admitted defeat. The crusaders had all but captured the fortress.

  Burning with anger, Sam Klaus and the original crusaders had fought a valiant but eventually losing battle to compel the Allied governments to fulfill their wartime pledges, honor the ultimate sacrifice of millions and exact justice from those who had sought to profit from evil. It was a testament to western civilization that even after the passage of half a century, the inheritors of Klaus’s mantle had marshaled sufficient strength to peacefully persuade the stubborn Swiss of the moral bankruptcy of retaining blood money.

  POSTSCRIPT

  The melancholic appearance in Washington on May 6, 1997, of Christoph Meili, the twenty-eight-year-old Swiss bank security guard who had exposed how the Union Bank was secretly shredding historic documents, cast doubt on the euphoria. After Meili and his family received over one hundred anonymous threats to their lives and safety, Meili had fled Switzerland and, assisted by Edgar Bronfman, was intending to settle permanently in America. Among his tormentors, Robert Studer, the chairman of the Union Bank who earned $5 million annually, had expressed a suspicion that Meili was motivated neither by his Christian sentiments, as he claimed, nor by his emotions after seeing the film Schindler’s List, but by something more sinister. Appearing to suggest that an international Jewish conspiracy against Switzerland might have paid Meili to embarrass the bank, Studer had raised the flag for a counterattack. The banker’s apparent contrition during the preceding months had been replaced by defiance. Banking secrecy, he implied, took precedence over mere parliamentary laws.

  In Washington, summoning a special meeting of the Senate Banking Committee—on the same day that 6,000 cases of archival documents belonging to Swiss banks were mysteriously destroyed in a fire in Pennsylvania—Alfonse D’Amato was challenged to reconsider his position.

  Over the previous weeks, the thirty-nine-year-old Swiss diplomat Thomas Borer had lobbied Edgar Bronfman and Israel Singer, whispering that the fate of their deal was imperiled by the growing antagonism of his countrymen toward American criticism. Silence, Borer urged, was vital for their joint cause. Both executives of the World Jewish Congress, although mindful that their more aggressive supporters were demanding sanctions against Swiss investments in the United States (worth $86 billion), were persuaded by Borer’s entreaties and passed the message on to D’Amato. The politician was amenable to a temporary truce, but Meili’s plight could not be ignored, not least because Borer’s personal promise to D’Amato to protect Meili had proved to be worthless. To D’Amato, the machinations of Swiss politicians were crude. While Borer was eager to publicly praise as heroes those few Swiss who had concealed a handful of Jewish refugees during the was, he had effectively condemned a present-day Swiss who exposed criminal behavior. Moral courage, declared D’Amato, was the popular issue.

  Looking down at Meili in the committee room, D’Amato intoned that the events that led to Meili’s flight from Switzerland were a “disgrace” and a “tragedy;” Meili’s moral courage, summarized D’Amato, had been denigrated by the unhindered persecution of his fellow countrymen. Studer, added the senator, should be “ashamed” because while Meili, “a good and decent man,” had been dismissed as a criminal, the guilty bank historian who had initiated the illegal shredding of the sixty-year-old documents had been retained—uninvestigated, unprosecuted, and shielded by the excuse that his actions were “an unfortunate mistake.” D’Amato raised his eyebrows: “We do hold the Swiss government accountable.… The cause of justice is now being made a victim.” Meili shifted in his chair. He had been cast in Switzerland as a traitor working as an agent for foreign Jews, and his vulnerability was painfully obvious. One of the many written death threats delivered to his house read, “We will finish you off. We are going to wipe out the entire Meili clan.” Unemployed, nearly 4,000 miles from his abandoned home with two young children, he was obviously despondent. When the senator was concluding the hearing, he asked as a gesture toward Meili whether Meili wanted to make any final comment. Abandoning all pride, Meili looked up at D’Amato and, in hesitant English, pleaded despairingly: “Please protect me in the U.S.A. and in Switzerland. I have a woman, two little children, and no future. I must see what goes on in the next days for me. Please protect me. That is all.” The senator, a cigar-chomping, poker playing bachelor accustomed to mouthing an inexhaustible catalogue of profanities in his frequent private outbursts, was dumbfounded by this unexpected raw emotion. The sentimentality of others rarely influenced his behavior. Yet before him sat a loser, a casualty of Swiss prejudice suffering complaints similar to those of Jews sixty years earlier. He resolved to seek redress.

  Two weeks later, and unusual meeting of the Senate Subcommittee on Immigration was summoned in a nearby committee room. D’Amato and Meili sat together to initiate special legislation to grant Meili permanent residence, with the right to work, in the United States. On the grounds of Meili’s “great service to the Jewish people, to this country, and to the civilized world,” the subcommittee’s chairman agreed to sponsor the legislation through Congress, for “a brave man.”

  Meili’s plight was viewed with some disdain in Switzerland. Few doubted Studer’s insistence that the destroyed records were irrelevant to the Holocaust, and everyone understood that in Switzerland the desires of the banks prevailed. “A grotesque impression,” commented Flavio Cotti, the foreign minister, criticizing the “disturbing” treatment accorded to Meili in America. The minister’s warning was particularly clear to others, especially retired bank officials who might have privately considered helping Paul Volcker or any other investigator. The lesson was also clear to Thomas Borer. Pressured by the financial institutions and other groups, Borer began masterminding the transformation of his exercise in “damage limitation” into a challenge to other countries’ behavior during and after the war. Switzerland, it was gradually emerging, was not alone—among Europe’s neutral or combatant nations—in profiting from the war and the Holocaust. Survivors or their heirs whose complaints had for so long been ignored had suddenly discovered an interested audience. Included as the targets of the new allegations were governments and corporations in Italy, France, Britain, the United States, Germany, and all the neutrals, and there were complaints against the former Communist regimes in Eastern Europe and Russia.

  In Italy, the Assicurazioni Generali, a leading Italian insurance company based in Trieste, was accused of failing to honor the thousands of life policies sold before the war to East European Jews. After the war, when the heirs of those murdered claimed payment, they were rebuffed in a fashion similar to that used by the Swiss banks. Assicurazioni also demanded death certificates for the Polish Jews gassed in Auschwitz or denied liability on the grounds that its assets were guaranteed by investments in Western Europe and the United States. Like the Swiss, Assicurazioni appeared to have sought profits by exploiting the misery and vulnerability of the Holocaust’s victims.

  In France, inquiries by journalists revealed that national politicians and past governments had long profited from the Holocaust. Huge and invaluable art collections owned by Jews and confiscated by the Nazis had not been returned by the French government to their owners, to heirs, or to Jewish survivors after 1945 but had been either dispersed to museums or quietly held in inaccessible storage areas. Similarly, hundreds of apartments in Paris and elsewhere whose Jewish owners had been murdered in Auschwitz had been retained by the French government and assigned at peppercorn rents to favored politicians, civi
l servants, and their families. Investigation of past inquiries showed that government officials had been deliberately reluctant to provide information to Jewish survivors.

  In Germany, researchers in local and American archives had discovered that the Allianz insurance company had, during the Nazi era, insured the buildings and contents of concentration camps, including Auschwitz. The camps were regularly visited by insurance officials and were regarded as a good risk. “Thanks to constant military supervision,” wrote one insurance official after visiting Auschwitz, “impeccable order and cleanliness prevails.” After the war, Allianz, like all other German insurance companies, profited from retaining the money owed on policies unclaimed by the heirs of murdered Jews. Other German researchers revealed that Daimler and Volkswagen had used slave labor but refused to pay compensation to survivors; and Degussa, one of Germany’s oldest and biggest smelters of precious metals, had after 1940 sought and obtained gold and other valuables—including dental fillings extracted by the SS from dead Jews—for smelting.

  Reports of investigations in the neutral countries and in South America confirmed that their profits from the war had been considerably greater than previously estimated. There was also a spreading recognition of the “double victims” in Eastern Europe, where all Jewish property, especially communally owned property, had been “twice stolen,” first by the Nazis and then by the Communists. Newly released Russian archives disclosed that in 1945, specialist squads of Soviet intelligence officers had seized and transported vast quantities of Nazi loot to warehouses in Russia. The loot had remained in Russia ever since, although the sporadic appearance around the globe of valuable paintings and other objets d’art originally stolen by the Nazis suggested that a surreptitious trade in Jewish property had been under way since their original theft. All those revelations encouraged Thomas Borer to alter his tone from contrition to defiance.