The answer would have to be that the two governments were burying some sort of hatchet, ending some sort of quarrel, that at least one of the two did not wish to identify. The Swiss government had every reason to identify the quarrel, and to make as clear as possible that, the price having been paid, the country could now expect to be left alone. On January 22 the Swiss Federal Council had issued a unilateral declaration that “[t]his settlement provides closure of all the financial claims raised against Switzerland.” The Clinton administration, by making friendly noises void of specific references, could claim that its future intentions toward Switzerland were entirely friendly and that its hands were clean of anything that might or might not have happened in the past.
So, what the Clinton administration did to Switzerland amounted to extending abroad the American interest-group process, by which government officials purchase the support of some citizens by renting to them the power to impose costs on others. In the sixteenth chapter of The Prince, Niccolò Machiavelli warned rulers against this mode of governance because, he wrote, the beneficiaries would never be satisfied, and attempts to satisfy them would make opponents out of people who would not otherwise be such. The only exception to this rule, wrote Machiavelli, occurs when a government can pay off its domestic supporters with the assets of foreigners. So it might seem that when the Clinton administration filled the coffers of a valued party contributor with money taken from foreign companies, it followed Machiavelli’s unexceptionable advice. But Machiavelli understood what the Clinton administration did not take into account, that when any government raids foreign citizens’ or countries’ assets it pays a price in international relations.
Reality: International Implications
The Clinton administration’s extortion of Switzerland alienated public opinion in a historically pro-American country. Because Switzerland is a small country, some might think that the world’s only superpower can afford to exchange foreigners’ ill will for the satisfaction of a domestic constituency. This is not so. The United States as a whole received no benefits from the anti-Swiss campaign, yet it incurred costs.
Swiss public opinion had no reason to blame world Jewry, much less Swiss Jews, for the anti-Swiss campaign. Yet as the campaign gathered momentum and leaders of the Swiss Jewish community were not quite quick enough to disassociate themselves from it, Swiss Jews found that too many of their fellow citizens lumped them in with the “extortionists and blackmailers” of their country. This is what Swiss President Jean Pascal Delamuraz did in his 1996 departure speech. By June of 1997, when Christoph Blocher, leader of the rightist Swiss People’s Party, set about mobilizing public opinion against the United States and the WJC, he was careful to absolve Swiss Jews and Jews in general from any blame for what was being done to the country. Blocher blamed “the Americans” and the Swiss political Establishment. Nevertheless, since nothing could erase the fact that the country felt itself unjustly maligned in the name and for the monetary benefit of “the Jews,” Swiss Jews were left holding the proverbial bag.
Blocher intended to damage relations with the United States, and found it easy to do so. In 1992 he had led a popular movement that overturned the entire political establishment’s decision to join the European Free Trade Area, a way station into the European Union. By August 1997, just five months after he had kicked off the campaign for a referendum to annul any Swiss government decision to establish a fund to pay off the WJC, observers concluded that he had won over public opinion. 19 And indeed the government was so sure it would lose the inevitable referendum that it dropped the plan. Anti-Americanism became a staple of political discourse, and books with titles such as Switzerland’s Humiliation and Switzerland Faced by the American Empire enjoyed wide readership.20
The arguments that resonated with Swiss public opinion amounted to an indictment of the United States and of any Swiss who would take another’s money to appease foreigners. How would the American people react, asked Blocher, if any European country attempted to extract money from the United States to pay alleged victims of America’s war in Vietnam? How dare the Swiss government negotiate with the WJC, whose only qualification was its success in besmirching the honor of the country? How dare Americans impugn Switzerland’s abstention from World War II when America itself abstained until attacked? Switzerland, too, would have fought if attacked. How dare Americans blame Switzerland for failing to take more Jewish refugees when Switzerland took more than America? And how could America accuse Switzerland of having relied on “legalisms” to survive World War II? On what else is a small country supposed to rely? Was America able to protect Switzerland? Could it ensure Switzerland’s safety in the future? If not, what practical, moral, or intellectual basis was there for its demands? And how dare America take sides with Swiss individuals of the radical left against their fellow citizens? If the Swiss Establishment wanted to pay off the Americans, let them do it with their own money, not with that of innocent Swiss citizens. Blocher’s equation of America with stupid malevolence became the common currency of Swiss discourse.
While the Swiss Federal Council was propitiating the United States and feigning remorse for any sins that its fathers might have committed, Swiss public opinion was turning against both the Establishment and America.21 Indeed, blaming the Swiss Establishment for failing to stand up to foreigners who were humiliating the country became the opposition’s rallying cry. As in World War II, the government parties’ understandable attempt to appease the dominant power of the day resulted in a political windfall for their opponents. In the October 1999 general election, Blocher’s Swiss People’s Party made the biggest gains in the history of modern Swiss politics, winning forty-four seats and becoming the country’s second largest party—and perhaps its most influential. While one may debate whether this was good or bad for Switzerland, there is no doubt that for American diplomacy it was a self-inflicted wound. Nor would this be the last such wound.
No sooner was the ink dry on the Swiss settlement than the very same lawyers and organizations, backed by the very same Clinton administration, moved against Germany. It was déjà vu all over again. On September 11, 1998, attorney Melvyn I. Weiss filed a suit against the German steelmaker Krupp. This piggy-backed other suits filed in Judge Korman’s Brooklyn courthouse (where else but Brooklyn?) against Krupp, the Ford Motor Company’s branch in Germany, as well as Deutsche Bank and German companies such as Volkswagen. The charge was that they had profited from slave labor, partly Jewish, during World War II. The New York Times, which had supported the anti-Swiss campaign, expressed worry that “efforts to right clear moral wrongs can be seized upon by people with less than noble motives.”22 The Times might have noticed this earlier. Indeed, it might have noticed that this race for a “fast buck” abroad through political influence was part and parcel of what American politics had become at home.
These suits were open to the same criticism as the anti-Swiss campaign: How can one impute profit, much less guilt, to persons who were not even born at the time the damages were done? Could anyone argue with a straight face that the prosperity of German companies in the year 2000 was due in any way to the companies’ balance sheets at the end of World War II? In fact, the war’s balance sheet for the German economy was total disaster. Or could one argue that any given loan by a German bank was dictated by independent judgment rather than by a Führerbefehl, Hitler’s capricious command? It was also quite impossible to put objective value on the labor and misery inflicted on individual slave laborers during the war. The Reich enslaved perhaps 1.5 million people, of whom fewer than a quarter million remained alive in the late 1990s. Who was to distinguish rightful claimants from fraudulent ones? It was certain only that the discretionary power that would come from managing any settlement of these suits and keeping what was not distributed stood to enrich mightily the organizations and lawyers involved, and would in part find its way back into the support mechanism of the Democratic Party.
Moreover, the Third Reich had
not been alone in imposing slave labor. The Soviet Union enslaved perhaps a million Germans and almost as many Poles after the war. Why were these American class action lawyers not suing Russia? Simply because Russia had neither the money nor the disposition to be blackmailed. None of this was lost on the Germans or other Europeans.
The mechanism for forcing the Germans to pay was identical to the one used against Switzerland. Once again, the Clinton administration backed the campaign through Stuart Eizenstat as well as in a meeting between President Clinton and German Chancellor Gerhard Schroeder. But, once again, the real hammer was provided by the fact that Deutsche Bank was in the process of acquiring Bankers’ Trust Company in New York and needed a license from New York City Comptroller Alan Hevesi. Even after the German government agreed in principle to a multibillion-dollar settlement with the WJC, Hevesi said he would wait until the agreement was consummated before issuing the license: “The good news is that there is the beginning of an agreement to set up a process to come to a global settlement of all the remaining issues between Holocaust survivors and heirs and German institutions. In the meantime, I continue to believe that federal and state officials should take no action on the proposed merger between Deutsche Bank and Bankers’ Trust until these issues are fully resolved.”23
The deal was struck on December 17, 1999; the German government and German industry would pay $5.1 billion to “American class action lawyers and Jewish groups” in exchange for a total release from future suits.24 Although in contrast with Switzerland there was no ambiguity about Germany’s role in World War II, the softer terms of this agreement reflected the fact that Germany was more powerful vis-à-vis the United States than was Switzerland. The sum, $5.1 billion, was less to Germany than $1.5 billion had been to Switzerland. And instead of being satisfied with an anodyne statement, the Germans demanded from the Clinton administration an official executive agreement by which the U.S. government promised to oppose any suit against Germany or German companies concerning World War II in any U.S. court. As of this writing the German government was continuing to refuse payment because the Clinton administration’s proposed language for the executive order did not fully preclude further suits. Many German companies believed that the Clinton administration would be unwilling or unable to preclude such suits. By June 2000 German companies had contributed only a small percentage of their share of the fund. Also, the Germans retained the right to direct the disbursement of some of the fund. Finally, the Germans were strong enough to make public that they resented the ransom they had been forced to pay: “Ten billion marks is the final amount” that Germany will ever pay with regard to World War II, said Germany’s chief negotiator, former economics minister Otto Lambsdorf.
On December 17, 1999, another group of plaintiffs’ lawyers filed a nearly identical suit in Judge Korman’s Brooklyn courthouse against every major bank in France, alleging that the banks had “fail[ed] to account to survivors and the families of victims for assets that were seized, blocked, or frozen and breached their contractual and fiduciary duties by failing to take reasonable steps to locate the rightful owners of these assets or their families.” And in April 2000 yet another group of American lawyers filed an $18 billion suit against the Austrian government and Austrian companies for having profited from wartime slave labor. But by that time the Clinton administration had apparently decided that enough was enough and did not put the same amount of quasi-official muscle behind it.
Still, America suffered. The French did not need much prompting to try to diminish American influence wherever it could be found, and the Austrians had already made their rightmost party the country’s ruling party.
Ultimately, in supporting the WJC’s campaign to collect money from European government and businesses in the name of Holocaust victims, President Clinton helped yield billions of francs and marks to constituents of and contributors to his own party. But the campaign yielded only negative returns for the United States as a whole. It escaped no European that the U.S. government was acting as collector for a private group. Europeans understand, better than do most Americans, the extortion of the weak by the strong and the use of foreign policy to line the pockets of domestic constituents, but they resented such things from an America that touted its morality. The anti-Swiss campaign helped convert the vast majority of Swiss and a growing number of Germans and other Europeans to the French view that America had become unbearably imperious and needed to be cut down to size. The rest of Europe asked itself when American interest groups backed by the U.S. government might come calling on them. This embittered the usual disputes over trade and foreign policy. The result was rancor mixed with disrespect.
In sum, whatever may be said of the Clinton administration’s interest in supporting its constituents’ claims based on the Holocaust, there is no doubt that this support abused the U.S. legal system and was a foreign policy fiasco. Worse, it taught those Americans who followed it uncritically some unrealistic notions about international affairs.
CHAPTER 6
Lessons
“Speak softly and carry a big stick.”
—Theodore Roosevelt
THE U.S. GOVERNMENT’S USE OF POWER vis-à-vis Switzerland in the 1990s betrays a misconception of the role of power in international affairs; it also shows a kind of corruption of the U.S. body politic. Let us sum up the lessons of the Swiss experience in World War II and in the 1990s, first with regard to Switzerland and then to U.S. foreign policy.
Military Power is Paramount
The Swiss case recalls the timeless truth that all international requests and demands, demurrers and denials are valid only to the extent they are backed by the capacity and willingness to fight, regardless of the prospects for victory. While technical military factors such as numbers, quality of equipment, and appropriate strategy are important, the nation’s bloody-minded willingness to kill and be killed is the most fundamental of factors. During World War II the several factions in Switzerland’s armed forces disagreed bitterly on much. But all agreed that the sine qua non of their country’s capacity to bargain with Nazi Germany was their willingness to wage a war that Switzerland was sure to lose. This tipped the fine balance of power and interest and made possible independence.
Switzerland’s General Henri Guisan spent more time and energy on building his army’s and civil society’s will to sacrifice than on any other task. His orders to the army were variations on one theme: fighting to the death. His constant message to the civilian population was that the Swiss would fight for the country’s honor and independence regardless of cost. He stressed that point to counter the altogether understandable sentiment in public opinion that standing up to Germany was futile. Building this foundation of military power is not necessarily the job of a military man. In Britain, Churchill did it. Guisan did it in his country because no one else was trying to do it. Creating or preserving an army’s willingness to kill and be killed is the most important—and the most difficult—of military tasks. Without this willingness even the best military preparations, never mind mere military potential, are useless. Without this, the foreign policy even of large countries becomes a bluff begging to be called. Americans should have learned this lesson in Vietnam. This lesson is especially relevant at a time when many Americans who should know better tout the notion that modern technology has done away with the need for physical courage in the armed forces.
The greatest threat to a nation’s military power comes from the tendency of domestic groups to identify their interest with the success of foreign powers. This leads citizens to feel greater affection for foreign causes and less enthusiasm for risking their lives for their own country. General George Washington was able to shape the whole of early America’s foreign policy to smother the habit, typical of small countries, to place their hopes and fears abroad. Creating such a “national outlook” was the most militarily significant of his achievements. Keep in mind that foreign policy breeds domestic factionalism in powerful countries as well.
Machiavelli reminds us that arguments about Pisa helped tear apart Renaissance Florence. Americans must not forget that the most dangerous aspect of the Cold War was that Americans’ sympathy and antipathy for Communism heightened existing domestic divisions. General Guisan was not able to affect his country’s foreign policy directly, but by stressing the unconditional necessity to fight for independence he succeeded substantially in creating a political atmosphere in which factionalism was hard to sustain.
This atmosphere proved to be the most effective weapon against the most dangerous kind of subversion—not the sort performed by petty agents of foreign powers, but rather the accommodationist feelings of insufficiently ardent, excessively prudent elites. Creating such an atmosphere is certainly more of a political task than a military one. And yet every military leader, as a duty to those he must order into harm’s way, must somehow make sure that if there is no Churchill around, there will at least be a Guisan or a de Gaulle if not a Washington.
The indispensable element for a call to bloody duty is calling the enemy—in this case Nazi Germany—by its right name. During the battle of France there could be no dispute about who the enemy was, and thus little quarrel about the troops’ duty. But between the summer of 1940 and the winter of 1943 Germany forbade Switzerland from saying out loud that the Reich was its enemy. So subversion spread beyond the “usual suspects” and became internal political decay.
The Vietnam War should have taught Americans the connection between a government’s failure to identify the enemy and the enemy’s capacity to broaden its appeal far beyond the “usual suspects.” Presidents Kennedy and Johnson did not point to the governments of North Vietnam and the Soviet Union as evil enemies for fear of alienating the left wing of their own party. The results were predictable: The nonprofessional elements of the armed forces became less willing to expose themselves to danger. Drug use and insubordination in the services became widespread, and almost impossible to punish severely. It became illegitimate for any American to stigmatize as traitors those who were literally giving aid and comfort to the enemy that was killing fellow citizens. Most important, since the U.S. government did not forcefully counter the Soviet Union’s and its allies’ indictment of America and its cause in Vietnam, some mainstream Americans came to tolerate the proposition that American anti-Communists posed the greatest danger to world peace.1 In sum, a substantial number of Americans sought their country’s defeat by turning it around from within—the literal meaning of subversion. This was easier to do because the U.S. government did not publicly identify the enemy and acknowledge that America was indeed at war.
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