BREAKING THE CODE NOVEMBER 19, 1996 TRANSCRIPT

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U.S. auditors are investigating Swiss banks in an effort to recover funds lost by those who died in the Nazi Holocaust. Switzerland's intensely secret system makes the search formidable.

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A RealAudio version of this NewsHour segment is available. May 24, 1996: Daniel Goldhagen, professor of government at Harvard University, is author of the controversial book, Hitler's Willing Executioners: Ordinary Germans and the Holocaust.

JIM LEHRER: Now the lost funds of those who died in the Holocaust. Today's announcement that three U.S. auditing firms would investigate Swiss banks is the latest turn in a controversy that continues 50 years after the end of World War II. Betty Ann Bowser reports.

ESTELLE SAPIR: This is my place. This is my chateau.

BETTY ANN BOWSER: For the past 25 years, Estelle Sapir has lived in this tiny, one-room apartment in Rockaway, Queens, New York.

ESTELLE SAPIR: This is the stove.

BETTY ANN BOWSER: Things were not always this austere. As a child Sapir, lived in a grand house in Poland as the daughter of a wealthy investment banker.

ESTELLE SAPIR: I just could tell you, I was taken from paradise to hell in one minute.

BETTY ANN BOWSER: That one minute was in August of 1941, when the Nazis came to Sapir's home and took her family away to a concentration camp. And she remembers vividly what her father said to her the last time she saw him 55 years ago...

ESTELLE SAPIR: There is money for everyone, for you in Switzerland. He says, remember what I tell. Remember what I'm telling you. He repeat this many, many times.

BETTY ANN BOWSER: There's money for you in Switzerland?

ESTELLE SAPIR: There's money. Don't worry for money. You have plenty of money in Switzerland.

BETTY ANN BOWSER: But Sapir never recovered that money her father said he stored in Swiss banks. Most of her family, including her father, died in the camps. Sapir herself escaped and became a member of the French Resistance. When the war was over, she went back home and found what she believes are records of her father's deposits. One shows an entry in franks worth then about $19,000. Today that amount could be worth an estimated $350,000. Twice, Sapir went to Switzerland, hoping to take money out of her father's bank accounts.

ESTELLE SAPIR: When I went to the Swiss people, I come in and tell them my father was killed in a concentration camp and I come for his money. And he says you have proof? I says sure I have proof, and this is when they ask me for a death certificate for my father.

BETTY ANN BOWSER: The teenage Sapir had no death certificate. Lewis Salton's father was also murdered by the Nazis, and like Sapir, Salton's father told him he had put thousands of dollars in Swiss bank accounts because Switzerland was a neutral country where the money would be safe. He was the only member of his family to survive the Nazis, so after the war, he tried unsuccessfully to recover his father's money. Unlike Estelle Sapir, Salton is a wealthy businessman who lives comfortably in New York City.

BETTY ANN BOWSER: How important is this issue to you?

LEWIS SALTON: It is as important to me as this picture of my father, as this photo of my father--not the value of the money but the fact that it was his money--I can associate some things, physical thing with my family, who was murdered. I can't explain it any other way.

BETTY ANN BOWSER: There was a good reason people put their money into bank accounts in Switzerland. For more than 300 years, Swiss banks had the highest reputation for reliability and honesty. They also have the most secretive bank system in the world. And in 1934, in order to provide even more protection for the assets of European Jews, they created numbered accounts, in other words, bank accounts that bore no names. The efforts to reclaim the money for Holocaust survivors stalled after the end of the war. Then earlier this year, the World Jewish Congress began to open records at the National Archives in College Park, Maryland.

Researchers like Johnathan Eulakin are looking through documents, some recently declassified, dating back to the 1940's, that will verify the existence of massive Jewish holdings in Swiss banks. So far, they've found bits and pieces of evidence to substantiate that. But what researchers say they're also finding is existence of something more troubling--that the traditionally neutral Swiss government did business with the Nazis on a grand scale.

JOHNATHAN EULAKIN, Researcher: I'm getting a sense from the documents that the effort on the part of the Swiss bankers and the Swiss companies was not passive, but they were actively engaged in trying to expand the level of commerce and relations that they had with the Germans.

NEWSREEL SPOKESMAN: The Reichstag, Frankfurt, Germany, and first films of the U.S. inventory of Nazi war loot. Here gold and silver coins plundered from countries occupied by Hitler's armies--

BETTY ANN BOWSER: It's been known since the end of the war that the Nazis looted the assets of Jews all over Europe, and used those assets to keep Hitler's war machine going. They even made gold bars out of the fillings taken from the teeth of Holocaust victims, and although the Swiss deny it, there are accusations even today that some of those gold bars made their way into Swiss bank accounts. Elan Steinberg is executive director of the World Jewish Congress.

ELAN STEINBERG, World Jewish Congress: The fact of the matter is that the role of the Swiss government--the Swiss establishment--during the Second World War could hardly be called neutral. They were collaborists with the Nazis at the political, social and economic level. They did not partake in the murders--let's not exaggerate that--but to suggest that without Switzerland the Nazi war machine could function as smoothly and as long as it did is to ignore the realities of history.

BETTY ANN BOWSER: Accusations like this have shaken the Swiss who historically pride themselves on their neutrality. Carlo Jagmetti, Switzerland's ambassador to the United States, held a press briefing to answer the accusations.

CARLO JAGMETTI, Ambassador, Switzerland: The recent spate of alleged revelations about Switzerland's role during and after World War II, its dealings with Nazi Germany and the whereabout of assets left by victims mainly of Jewish origins in its banks and other institutions are serious questions that evoke deep and rightful concern. It was a tough time in Switzerland, and a few things might have gone wrong there too and we'll find out.

And I think even my generation, who was alive then, is very interested. And I think the pressure in the country is enormous, but I don't deny that the pressure from the outside has helped in accelerating this soul searching.

BETTY ANN BOWSER: And Jagmetti said his government will do all it can to locate valid claims to the accounts of Holocaust victims.

CARLO JAGMETTI: I believe it necessary to reiterate the total commitment of the Swiss authorities to establish the truth and nothing but the truth. Insofar as witnesses, records and documents will permit in a historical perspective, there cannot be any statute of limitations. And we owe this truth to the memory of all those who were persecuted and perished during the war. We owe it to the dignity of their heirs and descendants, and we owe it to our own people and the good name of Switzerland.

BETTY ANN BOWSER: Some people aren't willing to wait for the Swiss to make a full accounting.

ED FAGAN, Lawyer: You're looking at a document.

BETTY ANN BOWSER: 1945.

ED FAGAN: The document is dated 1945, but the document was declassified on July 15, 1996.

BETTY ANN BOWSER: Ed Fagan is a New York City attorney who's filed a class action lawsuit against Swiss banks on behalf of Holocaust survivors.

ED FAGAN: The lawsuit seeks three things. One is to--is for an accounting to compel them to disclose all the information about the accounts that were opened from 1933 to 1945. The second count is a count for what's called conversion. They took property, and they've kept it for fifty-one years, and the third count is for unjust enrichment. They became unjustly enriched from the backs and the life blood of these people.

BETTY ANN BOWSER: Since Fagan filed the suit in federal district court, his firm has received hundreds of phone calls and letters from all over the world.

ED FAGAN: "When we were taken away from our house, my father told my mother, brother, and myself that he had written the Swiss bank accounts on a closet wall of the storeroom in our house. When I arrived back home, after the war, the storeroom was removed, the closet was gone."

BETTY ANN BOWSER: Roy Smith, who teaches global banking at New York University, says that kind of anecdotal information won't be enough to prove the existence of bank accounts opened 50 years ago.

PROFESSOR ROY SMITH, New York University: It's very difficult to do that. It's like you went to the railroad station where all of the left luggage boxes had, you know, triple combination locks on there, and that, you know, you had heard from your parents that somewhere in New York City there was money in one of those accounts and that you should try to get it. You would be hard pressed to figure out which of those boxes was yours and then when you got there how to open it.

BETTY ANN BOWSER: New York Senator Alfonse D'Amato's Senate Banking Committee has been holding hearings on the issue, and from what D'Amato has learned so far, he thinks the accounts can be identified.

SEN. ALFONSE D'AMATO, (R) New York: I don't believe it's that difficult. Certainly. if you can identity a number of accounts--if it's ten thousand or fifteen thousand accounts that have had no activity since let's say since 1939--that gives you a pretty good indication they were victims of the Holocaust.

BETTY ANN BOWSER: In December, the Swiss parliament is expected to pass legislation that will make it easier for officials to examine old secret bank records. Ambassador Jagmetti hopes the world will be patient.

CARLO JAGMETTI: The complexity of the task ahead and its pitfalls are all too evident. Accusations should not be made before records have been carefully analyzed. And sinister motives should not be attributed to measures taken out of genuine concern.

BETTY ANN BOWSER: But for 84-year-old Holocaust survivor 84-year-old Lewis Salton time is running out. He fears none of this controversy will be settled in his lifetime.

JIM LEHRER: The investigation by former Federal Reserve Chairman Paul Volcker is not the only one underway. Switzerland's Parliament has said it will soon create a panel of historians and legal experts to look at the matter, and the U.S. government is investigating the U.S. role in the seizure and disposition of any Nazi assets. A public report on that is due early next year.

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