Albion Monitor /Commentary

Swiss Banks Continue Hiding Nazi Gold

by Lucy Komisar

on this topic
NEW YORK -- The Swiss, it turns out, who long polished their image as upstanding burghers, were bankers and money-launders of the Nazis, confidence men who took depositors' money, hid the records and refused to pay back rightful owners. Incredibly, they are outraged that world opinion considers them unsavory and insists they return the booty, valued by the World Jewish Congress at $3 billion. Equally incredible, the Swiss continue to stonewall justice in the face of demands for restitution by governments, organizations and individuals.

Unfortunately, since there is no international criminal court, the Swiss bankers and their associates cannot be brought to trial for their actions. Since national governments are generally loathe to lean on, much less punish, allies (how else to explain why the United States and other Western nations let the Swiss get away with keeping much of the pilfered gold), citizens and local officials must force some measure of justice.

A letter released last month shows the Swiss knew full well that the Nazis were turning over valuables stolen from concentration camp victims
Acknowledging past U.S. failures to press the Swiss to return stolen funds, Under Secretary of State Stuart E. Eizenstat is brokering discussions between Swiss banks and American lawyers regarding a class action lawsuit filed in New York federal court in 1996. The suit seeks $20 billion in damages from the banks for cheating Holocaust victims and their heirs. There are more than 350,000 Holocaust survivors, 100,000 of them living in the United States.

In December, 200 U.S. state and local public-finance officials agreed to a three- month moratorium on threats to institute sanctions against Swiss banks unless they are more forthcoming. California Treasurer Matt Fong, a leader of this movement and who was the first to call for a boycott, serves on a committee monitoring Swiss actions. This committee met last week to assess progress by the Swiss banks.

Meanwhile, evidence against the Swiss piles up. Again refuting Swiss claims that they didn't know they were receiving tainted assets, a letter from a Swiss army officer, written in February 1945 to a high-level government finance official and released last month, shows the Swiss knew full well that the Nazis were turning over valuables stolen from concentration camp victims.

The grand scheme was simple. The Nazis needed supplies to keep their war effort going. They obtained them from "neutral" countries using gold stolen from occupied countries and handled by Swiss bankers. Altogether, the Swiss received about $440 million, most of the $517 million the Nazis exported in gold, and passed some of it on to Portugal, Spain and Sweden to pay for war supplies. Turkey and Argentina also got gold. Most of it has never been recovered.

Receiving stolen goods is a crime in most people's eyes, but the Swiss apparently have different standards. Compounding their crime, the Swiss, after the war, decided to keep what they knew belonged to others. They negotiated an agreement with the Allies in 1946, but lied about the size of their holdings.

Accordingly, the Swiss returned only $58 million in gold, keeping gold valued by a Swiss historians' commission at $350 million ($3.5 billion at today's prices). Some of this gold came from the teeth, jewelry and gold coins of concentration camp victims and other individuals.

They also kept most of an estimated $250 million to $500 million in liquidated German assets -- even some from German Jews. Half of this was supposed to go to stateless victims, who finally got about $28 million. A lot of the take is believed to be in secret accounts and investments.

The Swiss should consider themselves lucky: In most criminal proceedings, the fruits of ill-gotten gains also are confiscated
The U.S. government was, as it were, an accessory after the fact. When U.S. Rep. Joseph Clark Baldwin declared, in a 1946 cable to President Harry S. Truman, that he was "profoundly disturbed" by the Allied agreement requiring Switzerland to return only $58 million out of $300 million in Nazi gold it held, Acting Secretary of State Dean Acheson lied when he wrote there was "no reasonable evidence" for the higher number. Reichsbank documents then held by the State Department, and now declassified, confirm the $300 million figure. Washington was more intent on fighting communists than helping the countries and lives that Adolf Hitler had plundered.

The Swiss hark back to the 1946 accord when defending their postwar actions. They insist the matter was settled. But an agreement based on fraud ought to be null and void.

The Swiss, moreover, should consider themselves lucky: They are being asked to return only their takings. In most criminal proceedings, the fruits of ill-gotten gains also are confiscated. The Swiss, then, are being asked to make only minimal restitution.

Today's Swiss officials try to deflect any responsibility for what their predecessors did. But they can't have it both ways. If they keep the loot, they are, like any recipient of stolen property, as culpable as the original thieves.

In 1962, Swiss banks began "finding" "lost" bank accounts, finally returning $9.5 million to rightful owners in the early 1970s. Pressed again, they suddenly "found" another $32 million in 1996. Now they have apparently located $46.8 million in 5,600 "dormant" (read: purloined) accounts opened by foreigners before May 1945.

The U.S. should take the lead in demanding an end to bank secrecy in Switzerland
The Swiss banks are asking to be judged as financial, not political institutions. The United States should take them up on it. The banks named in the suit to recover "dormant" accounts are the Credit Suisse Group, Swiss Bank Corp. and Union Bank of Switzerland. Credit Suisse owns First Boston in the United States. Swiss Bank Corp., which owns Warburg Dillon Read Inc. in the United States, recently announced a proposed merger with UBS. U.S. regulators must approve the deal that would create the world's second-biggest bank, in terms of assets, and the world's largest asset manager.

In weighing the merger, U.S. regulators must consider the banks' integrity. Aren't we concerned with where the banks' money comes from? Does Washington really want to approve a merger among banks that refuse to return stolen gold and bank deposits, much of it belonging to Americans? Would Washington approve a Mafia or Cali cartel bank funded by drug dealers? Is Nazi gold purer?

Finally, after restitution (here at issue) and punishment (unfortunately not possible), lawmakers need to review how to make sure such a crime doesn't happen again. In this case, one cure would also be poetically just.

Bank secrecy was conceived by the Swiss in 1931 and implemented in 1934, not to help victims of the Nazis, as they like to pretend, but to attract money. In the bitterest irony, bank secrecy made it easy to loot gold, jewelry and money that Jews had put in Swiss banks. Those pickings taught Swiss bankers a valuable lesson: After serving the Nazis, they used the system to become bankers of choice for the world's dictators, Mafiosi, drug dealers and other crooks.

The U.S. should take the lead in getting the major powers to force an international end to the bank secrecy in Switzerland and elsewhere that continues to swindle the living as it victimized the dead.

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Albion Monitor March 31, 1998 (

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