Righting Past Wrongs: Returning Stolen Money from Jews During World War II

February 4, 1997 at 12:00 AM EDT

PAUL SOLMAN: The controversy became news last year after the World Jewish Congress uncovered newly-declassified records at Washington’s National Archives. These documents suggested the Swiss were holding substantial assets of Holocaust survivors. The current claim: $7 billion in assets that rightfully belongs to families of the victims. Swiss banks, however, say the true figure is a fraction of that amount. With the issue heating up, both the House and Senate launched investigations into the Swiss banks.

SEN. ALFONSE D’AMATO, (R) New York: Mr. Chairman, it would appear that during the war Swiss banks and the Swiss government assisted and advanced the plundering of financial assets of Holocaust victims and their survivors by first presenting Switzerland as neutral in the war and a financial safe haven.

PAUL SOLMAN: Swiss banks and the Swiss government have agreed to participate in a joint investigation with the World Jewish Congress. An independent panel, chaired by former Federal Reserve Chairman Paul Volcker, is conducting an independent audit of Swiss accounts. But in recent weeks tensions between Switzerland and Jewish groups have risen, after the Swiss agreed to set up a compensation fund for victims’ families but declined to specify an amount. Then a memo came to light in which Swiss Ambassador to Washington Carlo Jagmetti urged his government to conduct a PR war on the foreign and domestic front. A public outcry led to his resignation a week later.

The latest twist came today. Since World War II, gold bars stored in the U.S. and England have been redistributed to allied nations from which they were looted by the Nazis. But today’s “New York Times” reports that some $68 million worth of gold is still in Britain and New York. The U.S., Britain, and France have agreed to freeze the money for possible compensation to Holocaust survivors contingent on the outcome of the various investigations.

PAUL SOLMAN: Now, more from two key players in this story. Stuart Eizenstat is Undersecretary of Commerce for International Trade. He is overseeing U.S. efforts to track Nazi war assets. Former Federal Reserve Chairman Paul Volcker, as we just saw, is heading an independent committee investigating Swiss bank assets, assets from the war, excuse me. Gentlemen, welcome to you both. Mr. Volcker, how are you conducting your investigation? Who’s behind it, and what have you found thus far?

PAUL VOLCKER, Former Federal Reserve Chairman: (New York) Well, our investigation is–reflects a joint agreement between some of the leading Jewish groups, including the World Jewish Congress, and the Jewish Restitution Organization, and the Association of Swiss Banks, which accounts for virtually all the Swiss banks. They agreed to come together to establish basically a fact-finding commission and subsequently asked me to be the chairman. The commission has three appointees from the Swiss side and three from the Jewish side. And our mandate is to find out the facts as best we can with respect to Jewish deposits of money, of artworks, or gold, whatever, that were placed in Swiss banks for safekeeping by refugees or persecuted persons before or during World War II.

PAUL SOLMAN: And what have you found thus far?

PAUL VOLCKER: We have not yet found anything in terms of a detailed investigation. We are preparing the investigation. We have hired three of the six large accounting firms in the world. We have picked them for their investigatory forensic expertise, in particular. They are planning a very elaborate and detailed auditing effort which will begin shortly.

PAUL SOLMAN: Well, Mr. Eizenstat, what exactly is the U.S. role in all of this, how are you conducting your investigation?

STUART EIZENSTAT, Undersecretary of Commerce: (Washington) Well, first, the Clinton administration in May of ’96, when I was sent to Switzerland, encouraged the creation of what is now the Volcker Commission. And we are very pleased with the progress that the chairman is making. We will have out by the middle of March a complete historical analysis of what the United States Government did to track Nazi assets during the war, what they were being used for in terms of purchasing war material, the neutral countries through which they went, and then after the war the efforts that the United States Government, France, and Great Britain made to recapture those assets and distribute them in two ways, first to the governments from whom those moneys were taken, and second, additional assets, particularly German-held assets, in Switzerland after the war to refugees, in particular, Holocaust survivors and the families of victims.

PAUL SOLMAN: What have you found thus far? I mean, can you be a little more forthcoming, Mr. Volcker, about at least what’s happened thus far in your investigations?

PAUL VOLCKER: Well, at this point what we know is that there is roughly $68 million left in the gold bullion that was taken. Some 330 million metric tons of that gold has already been distributed, and what we’ve done is gotten an agreement with the British and the French not to distribute the additional 6 million tons that was left back for unexpected contingencies and to pay the administrative expenses of the commission that was distributing this and to make a decision as to whether that or any part of that should be used for Holocaust victims. In terms of the report, itself, I think we should wait until March 15th. We’ll have certainly some interesting revelations at that point, but since it’s not complete, it would be premature to go into that. But suffice it to say it will be very detailed, very historic, and I think it will set forth the role of the neutral countries and the United States during and after the war.

PAUL SOLMAN: Can you give us some sense of the flavor of the documents in the National Archives? I’ve been reading some stuff about that, and it’s quite, quite shocking, frankly, even to read the news clips of what–some of the stuff that’s been uncovered.

STUART EIZENSTAT: It is quite dramatic. For example, we now know that there were agreements between the Swiss and Polish governments under which the Swiss were to transfer moneys from some of the accounts that Chairman Volcker is looking at to the government of Poland to help compensate Swiss businesses for their nationalized property during the Communist regime.

PAUL SOLMAN: You mean Swiss businesses that were nationalized by the Polish–

STUART EIZENSTAT: By the Polish during the Communist regime.

PAUL SOLMAN: So then the Swiss took money from Polish accounts?

STUART EIZENSTAT: That is correct. But we’ll have a broad analysis. And, again, the immediate issue now is what to do with the $68 million worth of gold, part of which is in the Federal Reserve Bank of New York, part of which is in the Bank of England. And we’re now working with the French and the British, our partners in the tripartheid commission, to decide whether or not any portion of that should be used to compensate victims who are still alive, or the families of victims, or survivors.

PAUL SOLMAN: Is there real evidence that their Jewish victims didn’t get money or their families didn’t get money or assets that were presumably theirs, I mean, in these documents?

STUART EIZENSTAT: Well, there’s no question but that some of the survivors did not get their dormant bank accounts out. That’s what Chairman Volcker is looking at. There is also a whole class of Holocaust survivors, particularly those in Central and Eastern Europe, who, unlike those who emigrated to the West after the war, have essentially gotten nothing from the German government. So one of the issues which is an issue of conscience and morality is whether any of this gold that’s been held back should go for their benefit. But there are legal constraints because to the extent that it was gold taken from central banks through which the Germans confiscated during the war, there is under the Washington and Paris agreements a legal obligation unless they waive it to give it to those countries. Interestingly, the country with the largest claim on that $68 million in remaining gold is the government of France, and they’re discussing amongst themselves now and with us whether they might waive any portion of their claim to that amount.

PAUL SOLMAN: Mr. Volcker, is it clear that victims have been deprived? I know you don’t want to go into the whole investigation because you haven’t done it yet, but to you is it clear that there–victims have been deprived?

PAUL VOLCKER: Oh, I think there must be victims that were unable to get their money from accounts in Swiss or other banks, for that matter. How many is in dispute, and it’s inherently a difficult problem because many people did not have and cannot, for obvious reasons, give precise identification of the depositor of the money. If the depositor lost his life in a concentration camp, in the midst of the Holocaust, it is obviously more difficult to establish the claim, and someone’s got to try to sort through all that.

PAUL SOLMAN: Could you describe for us, Mr. Volcker, the stash of gold bars at the New York Fed, perhaps just physically describe what that–what people are talking about there?

PAUL VOLCKER: Well, I think Sec. Eizenstat described it. And a lot of this information is coming out. I think we ought to say it’s information that wasn’t unknown before, but it didn’t come out in the same way, in the same atmosphere. And the gold taken by the tripartheid commission at the time was largely but not entirely so-called monetary gold, gold seized from central banks. And a large part of that was restored to the central banks one way or another, or distributed. But there was this residual amount that was left which Secretary Eizenstat has described and the arrangements that will be made with that residual amount of gold.

PAUL SOLMAN: I meant, could you describe physically for people what’s down there in the New York Federal Reserve Bank?

PAUL VOLCKER: Well, what tends to be in the Federal Reserve is gold bars that are oh, somewhat bigger than an ordinary brick. It looks yellowish. It looks like gold, and they tend to be 99.99 percent gold. Now, gold is unidentifiable once it’s been melted, alloyed properly; you can’t tell where that gold came from.

STUART EIZENSTAT: And this was an important point. One of the issues is whether any portion of not only these bars but other bars that were given to the Swiss back in 1946 after the war to the U.S., the U.K., and France, might have consisted at least in part of what would be not taken from the central banks; that is, non-monetary gold.


STUART EIZENSTAT: Jewelry and other effects, possibly from victims, possibly from other individuals.

PAUL SOLMAN: I read gold fillings might be one hypothesis.

STUART EIZENSTAT: Well, we have no evidence at this point that that is the case, but we do have some indications that at least some portion of the gold that was transferred from Switzerland, this 337 metric tons of gold, some portion may well have included a non-monetary gold, although, again, we have no evidence that it was actually from victims. That would set up a different legal situation in terms of whether we’re obligated to give it back to the claimant countries.

PAUL SOLMAN: Now, Mr. Eizenstat, I’ve read that other countries, such as Sweden and Spain, have been implicated in this, is that right?

STUART EIZENSTAT: Well, what’s fascinating is 50 years after the fact, we now have the French setting up their own historical commission to look at their role during the war. We have the Swedes doing the same. Norway, Portugal, and Spain are considering setting up historical commissions. And it’s very important, I think, in the end to my mind even more important perhaps than the money is to get to the actual facts, what did happen during the war, were these countries truly neutral, or were they really facilitating the German war effort? And I think that our report of mid March will shed a tremendous amount of historical light on that, and thereby help those countries come to terms with their own history. Some have convinced themselves, for example, that they were neutral; that they were humanitarian; and this report, I think, will shed light on their own history.

PAUL SOLMAN: Thank you both very much. Appreciate your being here.

PAUL VOLCKER: I should add that the Swiss have set up such a commission.

STUART EIZENSTAT: Absolutely. And we’re very pleased that the Swiss government now, without question, is fully cooperating. They want to get to the bottom of their own history, and they’re prepared to live with the consequences. And I think they deserve a lot of credit for that.

PAUL VOLCKER: They certainly have been cooperating with my commission. I can’t have any complaint on that score, and I think you will see some action. I’m hopeful for some action from Switzerland to establish some kind of a preliminary fund anyway to help take care of this problem.

PAUL SOLMAN: Thank you very much, gentlemen, both.