The Role of Swiss Financial Institutions in the Plunder of European Jewry
(c) 1996 by Institute of the World Jewish Congress, Jerusalem. All Rights Reserved.
Switzerland's reputation as a neutral safe-haven during World War 11 has been
badly tarnished by recent revelations about its wartime transactions with
Germany. What began as an examination of the dormant bank accounts of
Holocaust victims has gained momentum to include the whole gamut of Swiss
financial dealings with the Nazis. In recent months a vast amount of
incriminating documentation has been unearthed that reveals the sinister side
of Swiss "neutrality".
Switzerland served as a repository for Jewish capital smuggled out of Nazi
Germany and the states threatened by it, and also for vast quantities of gold
and other valuables plundered from Jews and others all over Europe. Right up
until the end of the war, Switzerland laundered hundreds of millions of dollars
in stolen assets, including gold taken from the central banks of
German-occupied Europe. At the war's end Switzerland successfully resisted
Allied calls to restitute these funds, and in the Washington Agreement of 1946
the Allies contented themselves with acceptance of a mere 12% of the stolen
gold. Holocaust survivors and the heirs of those who perished met an
implacable wall of bureaucracy and only a handful managed to reclaim their
assets. As it turns out, some of the dormant accounts were taken by the
Swiss authorities to satisfy claims of Swiss nationals whose property was
seized by Communist regimes in East Central Europe.
Among the most recent revelations is the fact that both the United States and
the United Kingdom still retain looted gold recovered in Germany. Jewish
groups and others have suggested that the gold be transferred for the benefit
of Holocaust survivors.
In the last year international pressure has steadily mounted on the Swiss to
allow for the conduct of a transparent audit and investigation. US Senator
Alfonse D'Amato has spearheaded these efforts to force the Swiss to restitute
property and has called for the Washington Agreement to be re-negotiated. In
May 1996 the Swiss Bankers' Association signed an agreement with the World
Jewish Congress (WJC) and the World Jewish Restitution Organization (WJRO) to
establish the "Independent Committee of Eminent Persons" to carry out a
thorough and transparent audit which will identify and recover dormant
accounts. Switzerland and the United States have also established special
committees to investigate the fate of plundered Jewish and other property which
was secreted in Switzerland.
Swiss banks have long been a favored repository of capital from unstable
countries. Before the Second World War, with the rise of Nazism, many Jews in
Central and East Europe sought to protect a part of their assets by depositing
money in Swiss accounts, and their valuables in Swiss safe deposit boxes. To
encourage such transfers, in 1934 the Swiss even strengthened special banking
secrecy laws which facilitated preservation of the anonymity of depositors.
Most of the Jews who availed themselves of the opportunity to transfer
their assets failed to escape the flames of the Holocaust. While happy to
accept Jewish capital, the Swiss were less happy to accept Jewish refugees
(often their own depositors). It is well known that the Swiss vigorously
blocked the entry of Jews attempting to flee Germany and occupied Europe. In
1938 (at the suggestion of Swiss Chief of Police Heinrich Rothmund) Bern
requested that Berlin mark the passports of Jews with a "J" - so that German
Jews could be instantly distinguished from German gentiles - and be denied
admission to Switzerland. Indeed, the great majority of those denied sanctuary
in Switzerland perished in the German death camps.
In 1995, speaking about Swiss complicity in the Holocaust, Federal President
Kaspar Villiger declared that "we bear a considerable burden of guilt for the
treatment of Jews by our country". This was the first official admission of
any Swiss culpability for the fate of European Jewry. It took the Swiss fifty
years to admit any responsibility for wrongdoing. It took the Swiss fifty-five
years to exonerate (posthumously) Paul Grueninger, the police chief in the St.
Gallen Canton who defied regulations and aided thousands of Austrian Jews in
escaping to Switzerland. As a result of his actions, Grueninger was dismissed
from the police and convicted of fraud.
After the war, when the survivors attempted to reclaim their assets, they were
ensnared in a web of bureaucracy that refused to recognize the fact that death
camp survivors, or the heirs of those who perished, could not possibly furnish
customary documentation such as death certificates. Swiss banks strictly
adhered to the rigid restrictions of Swiss banking law in total disregard of
the special situation which had arisen out of the mass murder of the Jews of
But the Swiss enriched themselves not just from the victims of the Shoah, but
also from the perpetrators. Switzerland was the favorite haven for Nazi bank
accounts and safe deposit boxes, which often contained property plundered from
Jews. Swiss banks did a lucrative business with the German Reichsbank and with
individual Nazi officials. Symbolically, even the royalties from Hitler's
Mein Kampf were deposited in a Swiss bank account.
Toward the end of the war, when other neutral states refused to purchase gold
directly from Germany, Switzerland continued to carry on this highly profitable
trade. That gold generally came from two sources - the gold reserves of the
central banks of the occupied countries and gold taken from individuals -
including gold dental fillings extracted from corpses.
Documents recently uncovered in former East German archives suggest that in
1944, SS Chief and German Interior Minister Heinrich Himmler sent a special
train loaded with hundreds of millions of dollars worth of gold, jewelry and
art objects to Switzerland for deposit in the vaults of Swiss banks.
There is considerable evidence to suggest that these funds were originally
earmarked for laying the foundations of a Fourth Reich. This scenario was
first publicized in a novel by Frederick Forsyth called the Odessa File.
As Forsyth explained, his book was based on several actual events,
including a meeting by German industrialists, representing some of the leading
German concerns, in Strasbourg in November 1944. In recent months the WJC has
uncovered secret documents confirming that the Maison Rouge gathering
actually did take place.
At that meeting, at which SS Obergruppenfuehrer Dr. Scheid presided, the
captains of German industry were told, "From now on German industry must
realize that the war cannot be won and that it must take steps in preparation
for a post-war commercial campaign." These steps included smuggling over $100
million in gold bullion to Switzerland.
Thus, Swiss banks managed to attract and retain the assets that Jews managed to
smuggle out, and much of what they did not. The latter, plundered by the
Germans, was deposited in Switzerland. As it happens, not only Swiss financial
institutions were beneficiaries of Jewish suffering, but Swiss commercial and
industrial firms as well. For example, Bally, the celebrated Swiss shoe
company, appears to have acquired shops in Germany confiscated from Jews.
Diamonds stolen from over 1,000 firms in German-occupied Belgium were sold to
Swiss and Spanish dealers.
Swiss art dealers trafficked in art seized from Jews and others. Britain's
chief investigator of looted art produced damning reports on the activities of
the Swiss dealers. Both American and British authorities pressed for the
prosecution of several of the worst offenders. Nothing, however, seems to have
come of this.
World Jewish Congress efforts to force Switzerland to look into the issue of
the dormant bank accounts of Holocaust victims led to a broader investigation
which revealed the extent of Switzerland's role as a depository of plundered
Jewish and Allied property. Consequently, we can distinguish several types of
assets which wound up in Switzerland and which arc now the focus
of international attention and a number of committees of inquiry:
-Dormant private and corporate bank accounts and safe deposit boxes
-Monetary gold plundered from the central banks of the occupied countries
-Privately owned gold and other precious metals and jewels, including dental
gold, much of which was melted down and intermingled with the monetary gold
-All manner of assets, "legitimate" and plundered, including art work, stashed
in Switzerland by German officials and businessmen
-Stolen assets bought by Swiss individuals and institutions for disposal in
Switzerland or abroad
A 1962 law compelled the banks to make what amounted to a half-hearted attempt
to identify dormant accounts belonging to victims. It was up to Swiss banks
themselves to determine whether or not an account fell into that category.
Moreover, there was no independent supervision. Banks were not obliged to draw
up a list for outside inspection. Money from depositors in East Europe (the
home of the majority of Shoah victims), which had fallen under Communist
control, or in the names of corporate entities (which could not, claimed the
Swiss, be victims of racial persecution) were disqualified. The banks were
only compelled to handle submitted claims - immediately eliminating cases in
which beneficiaries or heirs did not themselves have knowledge of the existence
of accounts, or were so intimidated by the bureaucracy that they never
submitted claims. A total of SF 7.5 million in 961 accounts was turned over to
claimants, and an additional SF 2 million was given to the Swiss Jewish
communities and a Swiss refugee organization. However, only a tiny fraction of
the 7,000 cases received in response to a Swiss appeal for submission of claims
were affected by this action. Safe deposit boxes were not affected by the law,
nor were any of the other assets enumerated above.
Some nine years ago, in an effort to assuage critics, Union Bank of Switzerland
donated US $40 million to the International Red Cross (IRC) as token payment to
compensate for unclaimed accounts belonging to victims of the Shoah. It is
difficult to ignore the irony in the fact that the recipient of the Swiss
banks' charity was an organization particularly indifferent to the plight of
European Jewry during the war - as its present President, Cornelio Sommaruga,
admitted publicly. Addressing the WJC- sponsored Israel Council on Foreign
Relations in Jerusalem in June 1995, Sommaruga expressed his "compassion for
the millions of victims of the Shoah... Our failure to speak out at that time
was a moral defeat." WJC Secretary General Israel Singer characterized the
money given to the IRC as "a gift of money from those who did not own it to
those who did not deserve it".
For many years the Swiss banking community had maintained that its 1962/63
payout settled once and for all the question of unclaimed Jewish assets. Last
year, however, that facade began to crack. The international news media,
including leading business publications such as the Wall Street Journal,
Business Week and the Financial Times, devoted considerable
attention to this issue. Two important Swiss banks - the Union Bank of
Switzerland (UBS) and the Societe de Banque Suisse (SBS) - were compelled to
admit that they "probably" still have the accounts of Holocaust victims on
deposit. That Swiss banks used the dormant accounts in order to enrich
themselves is now beyond question. Last year, there was already enough
evidence of this to prompt Swiss MP Otto Piller to investigate the allegations
and to submit the issue to the Swiss Parliament. The Swiss Government issued a
reply which, while not admitting that the banks were engaging in such practice,
did call for the banks to cooperate and facilitate the handling of claims. The
Director of the Federal Banking Commission, Kurt Hauri, declared that "the
money remains the property of the depositors and their legal heirs" and added
that the charges that banks had been appropriating such money "prejudice the
reputation of the Swiss financial establishment".
Last year, in the face of a concerted campaign to induce the Swiss to address
the issue of Holocaust-era assets in Switzerland, SBA President Georg Krayer,
admitted that the banks were holding Jewish assets and announced the discovery
of US $32 million in still dormant accounts. That figure was immediately
called into question and independent researchers believed it to be a gross
However, from the outset the World Jewish Congress made clear that irrespective
of the amount of money that could or would be retrieved, a principle was
involved. Neither Swiss banks nor any others should be allowed to benefit from
the murder of their depositors. This principle was acknowledged by Swiss
President Villiger at a meeting with WJC President Edgar M. Bronfman in
Consequently, the SBA finally agreed to establish a special commission to
investigate this question and appointed an ombudsman to oversee it. A central
office was established to answer inquiries. Of particular importance was the
pledge to create a central research center which would gather the necessary
documentation in order to determine the identity of heirs and accounts and
would look into the applications with a minimum of red tape and bureaucracy.
Georg Krayer claims that "banking secrecy does not obstruct the search for
assets in any way". A separate problem entirely is that of funds entrusted to
law offices which were to act in a fiduciary capacity, and savings that were
placed in insurance policies.
The Swiss historian Jacques Picard attributed the willingness of the Swiss
bankers to deal with this issue to the international expansion of their banks:
"Internationalization means banks have to adopt world standards of business ethics."
The WJC insisted on an independent and transparent audit and the Swiss agreed.
The Swiss bankers apparently thought that they could manipulate events to suit
themselves. In February 1996, in direct contravention of the understanding
with the World Jewish Congress, the SBA announced, unilaterally, that it had
already conducted its own (non-independent) audit and "discovered" a total of
US $32 million in dormant accounts its member institutions, reiterating the
figure it had publicized before concluding an agreement with the WJC. It was
never made clear whether the alleged US $32 million included interest on the
dormant accounts. Conservative
estimates placed the figure at several hundred million dollars. "This amount
defies credibility" stated Mr. Bronfman. "In any case I told them that we
weren't interested in the money but the process. Swiss banks cannot be allowed
to profit from the Holocaust."
In late April 1996, New York Senator Alfonse D'Amato chaired a hearing on the
Swiss banks issue before the US Senate Committee on Banking, Housing and Urban
Affairs. Meantime, President Bill Clinton expressed his support for WJC
efforts in a personal letter to Mr. Bronfman. In fact, the US Government has
been particularly supportive of efforts to force the Swiss to conduct a
thorough, transparent investigation. Its special envoy for restitution
matters, Undersecretary of Commerce Stuart Eizenstat, was charged with
representing the United States.
Under increasing pressure and eager to avert a public relations disaster (there
was even talk of a boycott of Swiss financial institutions along the lines of
that used against companies which did business with South Africa in the days of
apartheid was contemplated), the Swiss capitulated.
On 2 May 1996, Swiss banking officials signed an agreement with the World
Jewish Congress and the World Jewish Restitution Organization to investigate
deposits of Holocaust victims. The agreement provided for the creation a
six-member commission, an "Independent Committee of Eminent Persons", to carry
out a thorough audit which will identify and recover dormant accounts. This
new body is composed of three Jewish representatives and three representatives
of the Swiss banking establishment. The Jewish side is represented by
President of the Latin American Jewish Congress Ruben Beraja, Chairman of the
Jewish Agency Avraham Burg, and WJC Treasurer Ronald Lauder. The Swiss
appointees are Professors Alain Hirsch, Klaus Jacobi and Curt Gasteyger. The
Committee is chaired by former US Federal Reserve
chairman, Paul Volcker. The alternates for the Jewish side are
Zvi Barak of the Jewish Agency and WJC Secretary General Israel Singer. The
Swiss alternates are Hans Baer and Dr. Pieder Mengiardi. The work of the
Volcker Committee is to be completed
The WJC investigation into Swiss banking transaction led to the discovery of
incriminating evidence of Switzerland's blatant collaboration with Nazi
Germany. WJC researchers in the US National Archives found declassified
documents on an American intelligence project called "Operation Safe Haven".
The aim of this operation was to recover assets seized by Germany and sent to
Switzerland and other neutral states.
As already noted, throughout the war, but particularly toward the end, when it
became clear to German leaders that the Reich would be overrun, vast amounts of
plundered property were spirited to Switzerland. Even before the end of the
war, in April 1945, the US Legation in Bern advised Washington that "the Swiss
agreed with the Germans to accept 3,000 kilos (6,600 lbs.) of gold for use
against 'diplomatic' services". There are, in fact, varying estimates of the
value of these assets. However, one document suggests that the Germans
succeeded in seizing US $587 million in gold, of which US $402 million was
"shipped to or through Switzerland" truly a money-laundering operation
unprecedented in scope and magnitude.
After the war, when US intelligence debriefed the director of the foreign
exchange department of the German Economics Ministry, it became clear that
whereas all the neutral countries, out of consideration for their stance as
neutrals, had refused to accept gold directly from the Reichsbank, Switzerland
carried on gold transactions with Berlin until the beginning of 1945.
With the cessation of hostilities in Europe, the United States and other Allied
powers attempted to secure the return of this property. However, the Swiss
were less than eager to surrender their new-found economic windfall.
Eventually, after several years of stonewalling by Bern, the Allies agreed to
accept a paltry $60 million or about 12% of the value of the gold sent to
Switzerland. This arrangement was formalized in the Washington Agreement of
1946. That 12% was transferred to the Allied Tripartite Gold Commission which
was established to return monetary gold to the central banks from whom it had
been plundered, and later divided among ten Allied claimants. Thus the lion's
share of the booty enriched the coffers of Swiss financial institutions. In
effect Switzerland was handsomely rewarded for its cozy relations with Nazi
Germany. Researchers believe that much of the looted gold that found its way
to Switzerland was sold to third parties, notably Portugal.
Of late there have been calls, by Senator D'Amato and others, for the Allies to
re-negotiate the Washington Agreement which was signed in part because the
Swiss had withheld information on the true magnitude of their transactions with
Questions remain concerning the ultimate disposition of gold sequestered by
Germany's foreign minister, Joachim von Ribbentrop, who smuggled 15 tons of
gold out of Berlin before the city's fall to the Red Army. Recently
declassified documents suggest that 6.5 tons of that gold was surrendered to US
forces and some 2 tons wound up in the hands of the British army in the
German province of Schleswig-Holstein. The balance was smuggled out to
various neutral countries including Sweden, Portugal, Spain, Turkey and
Switzerland. A part of these assets, including some which fell into the hands
of Allied forces, has disappeared - at least for the time being - without a
trace. SS Chief Heinrich Himmler also succeeded in smuggling plundered
property to Switzerland and the whereabouts of this trove have never been
Some of the loot never made it to Switzerland. In the Merkers salt mine in
Germany example, Allied troops discovered a cache of valuables, including bags
of gold and silver coins, huge quantities of candlesticks, kiddush cups,
dental fillings, jewelry, opera glasses and in other items. In a memorandum
General Dwight D. Eisenhower noted that "the hoard may constitute items of
evidence... for the prosecution of war criminals." What is known for certain is
that only a fraction of these assets were placed at the disposal of
organizations working for rehabilitation of the survivors themselves. The
great majority wound up in the hands of the Tripartite Gold Commission. As Mr.
Bronfman noted: "Everyone was blithe about Jewish property. It wasn't just the
Swiss. That was the attitude of everyone - the Americans, the English, the
French. It was as if they were saying 'The Jews are dead, so to hell with
'em.' They really weren't very concerned that lots of people were
making profits from the assets of dead people."
Under these circumstances US Undersecretary of Commerce Eizenstat called on the
United States to examine its own records to see exactly what was done
with the US $60 million which the US Government received from Switzerland and
why the Allies were not more forceful in their negotiations with the Swiss.
Speaking in Jerusalem in August 1996, he explained: "We know that in 1946 the
Swiss Government turned a significant amount of funds over to the US
Government, possibly looted money. We believe that the amount was distributed.
Some was kept in the US Treasury, some was distributed to the Allied powers.
What we do know is that none of that money went into the hands of those from
whom it was looted. Just as Switzerland may have to undergo some painful
examination about its role, so too will the US Government."
Since that time it has been revealed that some of the gold turned over to the
US, two tons in fact, has been sitting deep within the bowels of the US Federal
Reserve Bank in New York City for close to fifty years. Describing the latest
findings Mr. Eizenstat wrote: "We are peeling back the layers of an onion."
Questions have been raised in Britain, which was also a party to the
negotiations with the Swiss and which received a lump-sum payment. The British
Government initially denied any knowledge of the matter. However, pressed by
MP Greville Janner, who revealed the existence of declassified secret documents
on the transactions, the government opened an investigation.
The findings of that inquiry highlighted Bern's refusal to return more than
what the Times of London called "a fraction of the huge sum of
booty hidden in Swiss vaults". The government report confirmed that Germany
looted more than $550 million in gold (now worth more than $6 billion) and
dispatched most of it to Switzerland - and that only a small portion was ever
returned to Allied governments. Apparently some of it (three tons) still sits
in the vaults of the Bank of England. The Times described the Foreign
Office report as "a fascinating account of greed, deception and double dealing.
It does not admit to any British conspiracy to hide ill-gotten ingots in the
Bank of England. But it does point to an almost unconscionable delay in
overcoming the legal and bureaucratic obstacles that stood between the Nazis'
victims, or their heirs and representatives, and the money plundered from them
to fund Hitler's war machine." Together with the gold in the US Federal Reserve
in New York, some $65 million has yet to be distributed to those from whom it
was looted, or at least their heirs.
The Bank for International Settlement (BIS) has also not emerged from this
affair unscathed. Historians have revealed that the BIS was an important cog
in the Reichsbank's money-laundering operations. The BIS bought gold from the
Swiss fully cognizant of the fact that it had had been looted by the Germans
and sold to the Swiss. Moreover, the BIS had acted to facilitate Reichsbank
gold transactions with third countries, directly aiding the German war
There seems to be almost no end to the damning revelations of
Switzerland's wartime and immediate post-war financial activity - and the
extent to which the Swiss are willing to try to cover their tracks. For
example, attention has been focused on the fact that after the war Switzerland
concluded bilateral agreements with the Communist regimes in Poland and several
other countries in East Europe. Under the terms of these arrangements
Switzerland transferred the proceeds of dormant bank accounts of Polish
citizens to Swiss businessmen in order to satisfy their claims for property
nationalized in Poland. This handy deal considerably simplified the clearance
of Swiss claims to Swiss-owned property seized by the Communists. Although
this agreement was not covert, and was debated in the Swiss Parliament, until
recently the Swiss Foreign Ministry vigorously denied the existence of any such
accords. That denial rang hollow, however, when detailed documentation
revealing the matter was published in the Swiss and foreign media.
The question of heirless accounts is particularly troubling. Some Jews
managed to secure their capital in Swiss banks, but they and their entire
families were wiped out. Under those circumstances many accounts have never
been claimed. Here a precedent has already been established. In the case of
property in Central and East Europe, the State of Israel and the Jewish people
have come forward as the legitimate beneficiaries of those who perished leaving
In 1992, following the precedent set by the Conference on Jewish Material
Claims Against Germany, leading Jewish organizations, including the WJC, B'nai
B'rith, the Joint Distribution Committee, the Jewish Agency, and survivors'
groups created the World Jewish Restitution Organization (WJRO). The
organization's activities are focused on the coordination of claims for the
return of communal property and in the transfer of heirless holdings to the
Jewish People. WJC President and WJRO Chairman Edgar M. Bronfman and then
Israeli Minister of Finance Avraham Shohat signed a memorandum in November 1992
in which the State of Israel's special interest in the restitution of Jewish
property was established. The memorandum recognized that "the State considers
itself to be the natural and principal heir to Jewish public property and where
there is no other heir to Jewish private property, together with the local
Jewish communities and the Jewish People".
In recent months, Switzerland has come under heavy international attack for its
behavior both during the war and after. The Times of London called
Switzerland "the largest beneficiary of German gold efforts" and called its
refusal to hand over that money "outrageous". Switzerland, it claimed, had
repeatedly displayed a "tidy habit of hiding away past embarrassments" and its
present behavior was "immoral, selfish and unworthy of a democracy".
As a 1946 US government memorandum addressing the subject of "Allied Policies
for Negotiations of Looted Gold Question" noted: "Allied negotiators should
make it clear to the Swiss officials that the fact that specific looted gold is
no longer in Swiss possession does not operate to defeat the Allied claim or
hinder or impede the handing over of an equivalent amount of gold." This
principle should certainly be applied today, especially now when some in
Switzerland claim that the gold in question has already been passed on to other
countries, "fenced" as it were, and therefore Switzerland is no longer obliged
to pay any compensation.
Clearly, in the wake of these findings, Switzerland's neutrality in World War
11 must be closely examined. Given Switzerland's recent record there can be no
let-up of international pressure on the Swiss to resolve the issue of Holocaust
victims' accounts and the return of property plundered by the Germans. The
number of Holocaust survivors is dwindling fast. Speedy action has to be taken
in order for them to enjoy some of the benefits that may accrue from the
restitution. There can be no rest until justice is done - even if its fruits
are, alas, primarily posthumous ones.
The case of Switzerland highlights the fact that it is not just countries once
shrouded by the Iron Curtain that have benefited from plundered Jewish assets.
Indeed, in recent months considerable evidence has emerged to indicate that
property stolen from Jews in Norway, the Netherlands, France, Austria and
elsewhere was not always
restituted. Countries which served as repositories for
plundered property must be pressed to open their archives for investigation.
Just as other nations in Europe have been forced to confront the seamy side of
their history, so too must the Swiss, no matter how embarrassing or costly.
Some in Switzerland have recognized this and said as much. Swiss MP Verena
Grendelmeier has spearheaded domestic efforts to open a serious investigation.
Lili Nabholz, president of the lower house's Legal Affairs Commission, told her
colleagues in parliament: "What we are doing we are doing late, but it is never
too late." Another MP, Paul Rechtsteiner, said that an investigation offered "a
unique chance for Switzerland to draw up a picture of itself that is close to
reality" adding that the current image was based on "self-deception and
Fifty years have elapsed since the catastrophe that claimed the lives of two
thirds of the Jews of Europe, a third of world Jewry. In the face of
increasing evidence of the widespread Swiss collaboration, through omission and
commission, justice dictates that at least the assets of the victims be
restored to their heirs - and where there are none, to Israel and the Jewish
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