ACCOUNTING FOR GOLD
MAY 7, 1997
Today, the United States released the initial conclusions of a seven-month look at the role Switzerland and other neutral countries had in handling Nazi assets during and after the war. The report also examined the role of the United States and the allies in trying to reclaim those assets after the war.
ELIZABETH FARNSWORTH: First tonight a painful legacy of World War II. Charlayne Hunter-Gault has that story.
CHARLAYNE HUNTER-GAULT: A simmering controversy over assets of Holocaust victims was reignited last year when the World Jewish Congress uncovered newly declassified documents in the National Archives. The documents suggested that Switzerland, which took the official position of neutrality during World War II, was still holding on to financial assets, assets that belong to victims and their families. The president of the World Jewish Congress asked for those assets back at a congressional hearing last December.
EDGAR BRONFMAN, President, World Jewish Congress: (December 11, 1996) Mr. Chairman, to put it concisely, we are seeking moral and material restitution. During the past six months we have been undertaking research in U.S. archives to determine the facts behind what is undoubtedly the greatest robbery in the history of mankind.
CHARLAYNE HUNTER-GAULT: Survivors began demanding their assets back as well.
GIZELLA WASHES, Holocaust Survivor: They can't help me to bring my family back but at least justice, because these people, they worked for their money, and it's their money, so why should the Swiss keep it?
CHARLAYNE HUNTER-GAULT: Under renewed pressure, investigations began on several fronts, including one by the Swiss government. In February, Switzerland pledged to create a special fund for Holocaust victims. It has now reached $185 million. The government has also proposed setting up another larger fund to help survivors and for other humanitarian purposes. It is waiting legislative approval. Meanwhile, another commission, led by former Federal Reserve Board Chairman Paul Volcker, is continuing to investigate dormant accounts that may still be in Swiss banks. And today, the United States released the initial conclusions of a seven-month look at the role Switzerland and other neutral countries had in handling Nazi assets during and after the war. The report also examined the role of the United States and the allies in trying to reclaim those assets after the war.
CHARLAYNE HUNTER-GAULT: Joining us now is the U.S. official responsible for today's report, Stuart Eizenstat. He is Undersecretary of Commerce and International Trade. And here representing the Swiss government is Amb. Thomas Borer, who heads a task force studying his country's wartime role. And, starting with you, Mr. Eizenstat, what was your major finding, in a nutshell?
STUART EIZENSTAT, Undersecretary of Commerce: Our major finding basically was that this was the greatest theft by a government in world history; that the Germans looted from the central banks of the countries they overran some $580 million in gold, which would be worth $5 ½ billion today; that they transferred the large part of that to Switzerland so that they could convert it into Swiss franks to purchase what they needed to sustain their war effort; that the role of the neutral countries and well-established principles of neutrality collided in the case of World War II with morality; and that many of the actions taken were really actions that--by all the neutral countries--this is not just Switzerland, but Sweden, Portugal, Spain--really contributed to prolonging the war effort.
CHARLAYNE HUNTER-GAULT: And was it known at that time that some of that gold actually came from the bodies of victims?
STUART EIZENSTAT: We have no evidence that the Swiss government or any other government willingly and knowingly accepted victims' gold; however, it is absolutely clear from our report that the Swiss National Bank did know that they were accepting looted gold; that is, gold that had been stolen from central banks. And what the Germans did, the Reich Bank combined gold that they stole from the central banks and victims' gold. They re-smelted it. They put disguised markings on it; and then they shipped that largely to Switzerland. Again, there's no evidence the Swiss knew of this, but the Germans certainly did, and they also--we also found that at the end of the war some of that victims' gold, as we call it, down to teeth fillings from concentration camp victims, actually went into a gold pool called the Tripartheid Gold Commission that was supposed to re-distribute to the countries from which it was stolen. That meant, therefore, that some of the victims' gold, which should have been given to survivors, actually went back to the governments thinking that they were getting their own gold back.
CHARLAYNE HUNTER-GAULT: And when you say neutrality collided with morality, what do you mean?
STUART EIZENSTAT: There was a well-established tradition. Switzerland has been neutral for hundreds of years, and there was a legitimacy to neutrality. It enabled small countries to stay out of the frequent European wars. But many of the neutral countries in World War II, Charlayne, failed to recognize that Nazi Germany was not just another opponent; that World War II was not just another of a long series of European wars. It was one of the most evil forces in history. It was killing civilians at a record rate. It was threatening western values. Each of the countries--Sweden was supplying critically needed ball bearings--Spain and Portugal and Turkey critically needed items like chrome and cobalt and taxon. The Swiss were serving, in effect, as bankers or facilitators for the looted gold. And so, altogether, this contributed to a war effort. It was, in fact, neutral, but by, in effect, cooperating with such an evil force it did prolong the war.
CHARLAYNE HUNTER-GAULT: Mr. Ambassador, do you accept that indictment of Switzerland's role in the war?
THOMAS BORER, Swiss Task Force on Nazi Victims' Assets: Let me first thank Amb. Eizenstat and his team for this monumental work. The Swiss government made it clear on several occasions that we want to know truth about our history during the Second World War, and I think this report is a very important step to the truth. It's known that after the Swiss government discussed if all the findings of the Eizenstat report are right, we take this and it's up to the historians to judge the role of Switzerland 50 years ago. We today should more keep in mind what Switzerland of today is doing--
CHARLAYNE HUNTER-GAULT: All right. Let's--
THOMAS BORER: --to get to--to get down with its history.
CHARLAYNE HUNTER-GAULT: Excuse me, Mr. Ambassador. I didn't mean to interrupt you. We're going to get to that in a minute, but let me just ask you, just looking back historically, did the Swiss government know what they were doing? I mean, do you at least know that and accept the finding that there was evidence that they knew?
THOMAS BORER: Of course, as Amb. Eizenstat made it clear, neither the Swiss National Bank nor Switzerland as a government knew that the Germans were melting down concentration camp gold and mingling it with other monetary gold and transferring it to Switzerland and other European countries. This was not known to us till this morning when the Eizenstat report was revealed.
CHARLAYNE HUNTER-GAULT: All right. Let's just put a pin in that and go back to Mr. Eizenstat because your report said that there was incontrovertible evidence that the Swiss bankers and the national bank, the private banks--the private Swiss bankers and the National Bank of Switzerland knew.
STUART EIZENSTAT: Now, what they knew, Charlayne, was not that they were getting victim gold, which the Reich Bank cleverly disguised. What they knew was that they were getting looted gold that the Germans had looted from central banks. Now, it's important when we look at this whole issue of neutrality that we look at it in a realistic format. During the early parts of the war Switzerland and the other neutrals were only a panzer division away from being invaded. Switzerland was surrounded on all sides by the axis. During the latter stages of the war, however, when business as usual still was conducted by the neutrals with Germany, that fear had dissipated, and our particular concern, and what is least understandable and least explicable is that the post war conduct of the neutrals, including a Switzerland with the possible exception of Sweden, was such that they dragged out negotiations with the allies; they paid only a fraction of what ought to have been paid; and here the U.S. role comes into account.
CHARLAYNE HUNTER-GAULT: All right. Before we get to that, what about that indictment, Mr. Ambassador, that there as a business as usual attitude and that you were doing business at a time when negotiations were going on--post war--stalling things? You heard the indictment.
THOMAS BORER: If you talk about this part of our history, one has to understand the special situation of Switzerland. As I can show here, Switzerland was surrounded even 1943 by Nazi Germany and the axis powers. And the only way for the Swiss to survive was by dealing with Nazi Germany. And the gold trade was part of this dealing. And as Amb. Eizenstat made clear, this was totally accepted by the allies till about ‘43, ‘44. My government continued at this time after ‘44/'45 this gold trade because it took a very legalistic attitude based on the international law which was enforced at this time. It lacked the moral attitude, as we take it today.
CHARLAYNE HUNTER-GAULT: So you acknowledge that the Swiss failed the moral call?
THOMAS BORER: At this time, yes, because the basic principle of Switzerland's foreign policy at that time was neutrality. And on the basis of the neutrality law, they were at that time--it was lawful to accept gold which was looted from other countries because under International Law of 1907, the occupation power had the right to seize the state-owned gold of an occupied country. This is something which in today's eyes is not anymore reasonable, not moral. But that was the days of this--
CHARLAYNE HUNTER-GAULT: Is that an--
THOMAS BORER: --of this time.
CHARLAYNE HUNTER-GAULT: Sorry.
THOMAS BORER: I don't want to say this is an excuse. I just want to explain why the Swiss government at this time took this gold, and it never took the gold just for free.
CHARLAYNE HUNTER-GAULT: Right.
THOMAS BORER: It took the gold as a payment for other goods and--
CHARLAYNE HUNTER-GAULT: And survival.
THOMAS BORER: --survival.
CHARLAYNE HUNTER-GAULT: Is that acceptable, Mr. Eizenstat?
STUART EIZENSTAT: Well, that's what we mean by neutrality colliding with morality. It obviously was understandable, perhaps, during the early parts of the war when the German war machine was at its apex, but by late 1943, with the invasion of Italy, then D-Day in June of 1944, the Soviet advances from the East, the threat of invasion really dissipated, and most particularly, most particularly, Charlayne, it's what happened after the war when there obviously was no threat of invasion, and here the Swiss and the allies agreed on a very minimal settlement in 1946, and yet, even with that minimal settlement, it took six more years for Switzerland to pay the amounts they should have. Portugal took until 1960. The Turks agreed to pay a little over a billion dollars. They never paid any. So--
CHARLAYNE HUNTER-GAULT: So it wasn't just Switzerland?
STUART EIZENSTAT: It was not Switzerland. All the neutral countries and what also is, I think, most disturbing is of the token payment that Switzerland ultimately made in 1952, a much smaller amount than they had agreed to in 1946, that effectively was paid for by Germany, the reason being that they held onto the German assets in Switzerland for these six years between the 1946 accord and their payment in 1952. Why? Because they wanted that as leverage, as did the other neutrals for the wartime debts that Germany owed to the neutrals for shipments of arms and other things. And then once they got the payment from Germany they turned right around and paid this minimal amount to the allies. So, effectively, the Germans paid all the neutrals' amounts to the allies.
CHARLAYNE HUNTER-GAULT: Ambassador, a brief response to that.
THOMAS BORER: I don't want to dispute the historical facts, but this--all this has done in negotiations between Switzerland on one side and the other is on the other side, and Switzerland at that time was not in a very strong position. The allies were in a much stronger position. They just won the war.
CHARLAYNE HUNTER-GAULT: Excuse me. Why didn't the allies press harder, including the U.S.?
STUART EIZENSTAT: We were very honest and candid. We knew that if we were to shine the spotlight of history on other countries we had to look at our own role. The U.S. Government and the allies accepted these agreements, these minimal amounts. Why? The reason is quite clear. The policy of the United States and of the allied powers changed dramatically after the war. The Soviet threat, the need to create NATO, the need to rebuild post war Europe, the need to incorporate Switzerland, and the other allied countries into the western body of countries, given the Soviet threat, all superseded the desire to press the allies--for the allies to press the neutrals to give them what should have been done. Also, it was quite clear, Charlayne, that the allies knew that in the end the Germans were going to be paying part of what the neutrals needed to pay, and we didn't want to burden a post-war Germany with any more burdens than we had to.
CHARLAYNE HUNTER-GAULT: I know you both want to talk about what happens next. Let me start with you, Ambassador. What do you see happening next?
THOMAS BORER: Switzerland has taken unprecedented steps over the last months. We have established a historical commission within independent historians, also Americans. We have established a special fund for needy Holocaust victims. You mentioned it was--for the time being we have 100 million U.S. dollars in this fund. We want to do justice. We want to get down to the truth, and we have taken the lead in dealing with our history.
STUART EIZENSTAT: We applaud those steps, and we think the following should be done. Each of the neutral countries should do as they've now begun to do to create historical commissions and come to terms with their own past, as Switzerland is trying to do. Second, we need to declassify all the documents in the gold pool so we know where it came from. Third, we should have an international conference where we share all this information, and last, there's still $70 million in gold left in this gold pool not yet distributed. We believe that a substantial portion of that should go to the Holocaust victims and other victims of Nazi atrocities and not to the central banks and governments who have already gotten their lion's share of this gold pool.
THOMAS BORER: Let me just make--just let mention that--
CHARLAYNE HUNTER-GAULT: Gentlemen, sorry, we have to go now. Thank you very much. We have to end it.