Philip Rubenstein
Switzerland: Handmaiden to Hitler? Part 2: The Reckoning
Philip Rubenstein - Switzerland - Handmaiden to Hitler, Part 2: The Reckoning
- Hello everyone. Good morning, good afternoon, good evening, wherever you are. Welcome back. And before we get going, let me just say it’s an absolute pleasure to wish a huge happy birthday to Barry Rudolph, who I hope is with us today. Barry is a mere 86 today, so still very much in spring chicken territory, so happy birthday from all of us, lockdown and all of us who were watching and listening today, and many more to come, Barry. Okay, so, if you didn’t catch yesterday, it’s available on the website. And if you did catch yesterday, welcome back to part two of our examination of Switzerland’s record during World War II. So what I’d like to do is just begin with a recap of what we did yesterday before we talk about the events after the war. So, let’s just start with this. Okay, so, let’s start with that charge sheet that we looked at yesterday. I mean, we learned, if you recall, that it was the Swiss, not the Germans, who insisted that the passports of German and Austrian Jews should be stamped with the letter J, and how the Swiss were therefore able to identify in 1938, 30,000 Jewish refugees who turn up at the Swiss border, and then they send them all back to what is their certain death. We also considered the true object of Swiss government policy in World War II, which was to protect the nation’s huge wartime profits, which came from activities such as laundering, stolen Nazi gold, handling stolen diamonds from Belgium, allowing hundreds of Swiss companies to be used as fronts for the Nazis. And we discovered that Swiss neutrality, so-called neutrality, was in fact a piece of complete fiction, because Switzerland and Nazi Germany were economically locked into each other. They were codependent.
And with the Nazis’ access to Swiss francs freely provided by the Swiss banks, that almost certainly worked to prolonging the war and prolonging the Shoah. So, I mean, these are all quite damning charges, but if we go back now to 1945, to the war’s end, what we find is that none of this information was in the public domain at the time. Very few people at the time actually were thinking about Switzerland at all, and those who did generally bought the line fed by the Swiss that their plucky little army had deterred the Nazis from invasion all on their own, and, as a consequence, they’d remained honourably neutral throughout the war. But anyone who cared to look a little more carefully may have been surprised to find that unlike most of Europe, which lay in ruins and was bankrupted by war, I mean, financially, most of Europe was financially destitute. Not only were Swiss towns and cities completely unscathed, but financially the country seemed to have done rather well out of the war. In fact, Switzerland emerges from World War II as one of the wealthiest countries in Europe. Now, the image that we see here, this is taken from an official website, and you can see these young men on VE Day who are waving French-American Swiss flags. But what’s interesting is what we don’t see in this photo, because on the day after Germany’s surrender on the 8th of May, 1945, the Swiss government issues an edict that there are to be no celebrations. And actually, on many official buildings, the flag is flown half-mast, so no one’s celebrating in the Swiss government.
One group of people, however, were very interested in Swiss wartime activities, and that was the team behind an extraordinary US-led intelligence operation, which was codenamed Safe Haven. And I mentioned Safe Haven a couple of times yesterday. Safe Haven was the brainchild of this man, Henry Morgenthau, who was the treasury secretary of the US, and its purpose was essentially to track down assets looted by the Nazis. And the idea is that once they had a catalogue of them, they could then be disposed of by the Allies once they’ve taken control over a defeated Germany. The Safe Haven team were interested in the role that neutral countries were playing. And it wasn’t long after they started their work that their focus particularly landed on Switzerland. Now, in parallel with Safe Haven’s work, the US, along with the UK and France, set up an Allied Gold Commission. So, Safe Haven is doing the work, and the Gold Commission is now going to do the negotiating. So this commission gets in touch with the Swiss government in 1945 and says, “Look, all the stolen gold that your banks are sitting on, right, we want it all to be surrendered so that we can return the gold to its rightful owners.” And Swiss officials do what we’ll see they do best. They stonewall, and they’re not particularly cooperative, and they don’t want to meet. So the Allies turn up pressure. Very reluctantly, the Swiss come to the negotiation table.
This is Walter Stucki, and as you can see, he is the senior official who the Swiss put up to lead their team to the Washington talks in 1946. So, the Swiss sit down with the Americans and they say, “Look, we were also victims of the Nazis, and we don’t think there’s a problem here. We don’t think we’ve done anything wrong.” So they’re not particularly cooperative, and they certainly are not going to divulge any details of the Nazi loot that’s stored in the bank’s funds. So the Allies’ negotiating team are not going to have any of this. So, over about six months, there’s a lot of door slamming, a lot of screaming and shouting across the table, a lot of frustration. And the Allies figure, “Look, it’s better we come out of this with something rather than nothing.” So they agree to a deal with Swiss, and this becomes known as you can see here as the Washington Agreement, the Washington Agreement in 1946. Under the terms of the agreement, there’s a kind of a tit for tat. The US agrees it’s going to unfreeze all of those Swiss assets that it’s holding, but don’t provably belong to Nazis or any Nazi collaborators. And in return, the Swiss banks agree that they’re going to hand over $60 million worth of looted gold from the bank’s funds And the Allies, once they get this gold, they can now return this to the various countries of Europe from whom the Nazis had plundered it. By the way, you know, the Swiss always managed to kind of stick a little catch in there. So, they only agree to sign the agreement so long as it’s recognised that they’re doing this freely and voluntarily, and they’ve got no legal obligations to hand over this gold at all, right? I mean, it’s the most unbelievable nerve. Now, the Washington deal was a poor deal. It was a poor deal for the Allies, and the Allies knew this, but they had to push hard to get any kind of deal, and there was only so far they could push the Swiss because, you know, this is one of the complications of relationships, diplomatic and political relationships, after the war with the Cold War and with shifting alliances.
The problem is the Allies need the Swiss and the Swiss banks to help them with the reconstruction of Europe, particularly the reconstruction of Germany. What the Allies didn’t know is just how lousy the deal really was, because the true value of the looted gold that the Swiss banks had taken and accepted from the Nazis wasn’t $60 million at all. We now know it was closer to $400 million, but of course, this would only come out many years later. So, by paying off or handing over 60 million, which is a mere 15% of what they should have been doing, this was a massive payday for the Swiss banks, big windfall. But there’s another reason, a more pointed reason why the Washington deal with the Swiss was such a poor deal. And it’s this. The deal said nothing about the millions of dollars in Swiss bank accounts deposited in the 1930s in good faith by the thousands of Jews in Germany, Austria, Central Europe, who trusted that the Swiss would keep their family money safe until after the war was over. This brings us to the vexed issue of the so-called dormant accounts, are those accounts that have been opened by Jews before the war, and that had laid dormant mainly for reasons that the Swiss wouldn’t hand them over to any potential claimant. When the Nazis took power in 1933, many thousands of Jews could see the writing on the wall, and they started to look for a safe place to deposit their life savings. A year later, in 1934, as Nazi laws became increasingly oppressive, in order to help Jews put their assets beyond Hitler’s reach, and I talked about this a little yesterday, Switzerland passed its banking secrecy laws, which assured the anonymity of account holders. Thousands of Jews managed to smuggle funds out of the Reich and into Switzerland. So they crossed the border, often arriving at a bank, you know, just with a bag full of cash, which they just handed over to a teller and then were given serial number, receipt, and other details.
And they had no problem believing that when the war was over, their heirs would be able to retrieve the money. Because Switzerland, remember, as far as they were concerned, Switzerland was was a byword for financial security and propriety. Most of those who handed over their savings died in the flames of the Holocaust. But at least their heirs could claim the funds back, at least the people who’d survived them, the family who’d survived them, would have the chance to rebuild some kind of life with a fund that their parents or grandparents had saved. But of course, it wasn’t to be, because from 1945 onwards, the bankers of Bern, Geneva, and Zurich said, “No, we won’t give you your money because you can’t prove to our satisfaction that it’s yours.” Now, we’re about to watch a short clip of Estelle Sapir who explains what happened when she went to Credit Suisse in 1946 to claim her father’s account. So, just a little bit of background, Estelle Sapir, she’s a Polish survivor of the Shoah. She was in Majdanek, and the last time she spoke to her father Joseph, was through barbed wire at Majdanek, and he tells her that after the war, she must survive. She must tell the world what happened here. And then he gives her account numbers and branch details of his Swiss accounts, which she writes down. So she’s got these details. So, this is what happened when she shows up at the bank in 1946.
In ‘46, I went to Switzerland, to Geneva. I went to Credit Suisse, and I went in, and I said to the lady, I told her the story, and she left. She said, “You wait here and I come back to you.” 10 minutes later, she comes back. She had my paper, what I gave her, she had a whole chart in her hand, And I saw, it said J. Sapir, Joseph Sapir. And I ask her, this is my father’s account? She did not answer me. She said, “You have to wait here.” A man, maybe 10 minutes, came out a man. And he asked me, “Are you the daughter?” I said yes. “Do you have proof?” I said, sure. “You have a death certificate from your father?” I said, “What is a death certificate?” He said, “When somebody dies, you have to have a proof he’s dead.”
So, that’s Estelle Sapir telling us that the bank would only release the funds, would only confirm that there was an account, if in the first instance she can produce a death certificate for a man murdered to a Nazi concentration camp. She goes back to Credit Suisse with lawyers in 1954, and again, they send her packing. And it takes her 53 years from that first visit to Credit Suisse to finally force the bank to release her father’s accounts. So that was in 1998. One year before Estelle Sapir died. Mrs. Sapir’s experience was mirrored by hundreds of other survivors who were denied, obstructed, stonewalled by the banks, and required by the banks to furnish a death certificate. And this was standard practise at almost all the Swiss banks where a Jewish relative would try to access the family’s account. There were no death certificates issued at Majdanek, just as there were no death certificates issued at Auschwitz. But when a Jewish relative protested as much, the bank official would just put up their hands and say, “I’m sorry, those are the rules.” Let’s contrast this with the treatment meted out to the very many Nazi officials who held Swiss bank accounts themselves and who fled Europe after the war for the shores of South America. And you won’t be surprised to learn that it’s a very different picture. The Swiss government had made promises to the Allies that they would freeze Nazi assets.
But in spite of this, Nazi money and Nazi gold from Swiss bank accounts made its way across the Atlantic any which way. By diplomatic pouch, so that’s government officials, by bank transfers, bank officials who are doing it, and sometimes, well, in one case by submarine to Argentina. And this movement of funds has been described as the greatest exodus of capital in history. Throughout the 1940s and the 1950s, Shoah survivors get precisely nowhere with the Swiss banks. And then, in March, 1959, a prominent Swiss lawyer by the name of Dr. Harald Huber, you can see him in the photo here, he writes a letter to the new Minister of Justice in Switzerland, Friedrich Wahlen. And in the letter, he’s recounting a disturbing conversation he’s just had with a banker acquaintance of his, and this is what he writes. “He told me that on the basis of his experience across the industry, he knows there are assets worth hundreds of millions belonging to the missing people lying in the banks.” By missing people, of course, he’s referring to Jews who have been killed in the Shoah. And then Huber goes on to say that his informant told him that funds from many of these accounts have been covertly transferred over to specially created companies, which are being used, and the funds are being used as free injections of capital. So, this is like someone takes your money without your permission, and uses it to fund their activities, pay off their debts, and you don’t even know about it. Huber ends his letter by calling for a new law that would compel the banks to identify dormant accounts belonging to victims of the Shoah. So the Justice Minister Friedrich Wahlen, he gets this letter and he’s quite disturbed by it because Harald Huber is not just a prominent lawyer, but he’s a well-respected member of parliament. He has a reputation for being extremely sober.
And Huber’s telling him two things. First, he’s saying that the sums in these accounts aren’t small, they’re hundreds of millions of francs. And second, he’s saying that the banks appear to be committing deliberate fraud. Unexpected support for this new law comes from none other than the man we met earlier, Walter Stucki, who’d led? that delegation to Washington. He had also spoken to bankers, and he was told that the sums deposited in their banks, again, amounts not to small amounts of money, but to hundreds of millions of Swiss francs. These are the dormant accounts. And he says, quote, “This all shines a strange spotlight on the Swiss bankers. The Swiss Bankers Association’s insistence that the heirless assets are worth less than 1 million Swiss francs.” By the way, this phrase heirless assets is one that was quite common at the time and was used by the Swiss banks. And I’m not going to use it because the whole point is there were heirs to the assets. So, I’ve been using the phrase dormant accounts rather than heirless accounts. Anyway, they mean the same thing. So a new law is proposed, but the Swiss banks lean on the government very heavily, and the government is very susceptible to anything the Swiss banks want. Swiss banks are never going to allow a law, that’s going to force them to do anything that they don’t want to do. So, they massively weaken and dilute the law and they denude it of any effective measures. So in 1962, the Swiss pass a law on dormant accounts that has more holes in it than the piece of cheese that you see before you. The law says the banks should identify dormant accounts belonging to victims, but it’s up to the banks themselves to decide which accounts. There’s to be no independent supervision. The banks aren’t obliged to draw up a list for outside inspection. There were also numerous disqualifications and exceptions, which conveniently rule out huge numbers of Jewish account holders who otherwise would’ve been eligible. Safe deposit boxes are excluded. It doesn’t say why, but it excludes safety deposit boxes.
And finally, the banks only have to deal with claims submitted to them. So that eliminates any case where the heir simply has no knowledge of the existence of their relative’s account. Nevertheless, 7,000 claimants come forward in response to a Swiss appeal for the submission of claims. Although, surprise surprise, the vast majority of those claims are rejected. In total, the banks, as a result of this new law, pay out a total of 9 and a half million Swiss frank. So that’s two and a half million dollars. And they’re paid to 900 claimants. In other words, they’re paying a pittance to a small number of people for a law that makes the banks prosecutor, judge, and jury in their own case. And yet it didn’t stop the shameless Swiss banking community maintaining the lie for the next 50 years that the 1962 payout was fair and just, and a full and final settlement of all unclaimed Jewish assets. So now we forward to the mid 1990s, and this is when the facade finally starts to crack. Why the 1990s? Why does this issue of dormant accounts and the role of the Swiss banks during World War II suddenly resurface some 50 years after the war has ended? Well, in this next clip, Stuart Eizenstat, who I’ve mentioned a number of times already in these two talks, he addresses that question, so we’ll hear from him in a moment. So Eizenstat is, he’s a senior official in the Clinton administration, and he’s appointed in the mid 1990s to run a high-level US government investigation into these matters. So, that’s his role here, and he’s definitely one of the good guys. He’s fair-minded, he’s measured, and it just so happens he actually happens to have devoted, since that time, most of his professional life over the last 25 years or so to the issue of Holocaust restitution. So here he is explaining why this matter suddenly comes to a head in the mid 1990s
And yet still, why now? Why 50 years later? Why did justice for survivors suddenly reappear on the world’s agenda in the mid 1990s? There was a unique combination of historical events which came together at precisely the same time, together with a few individuals who took advantage of that confluence of events. One was the implosion of communism. Just as the Cold War aborted any efforts to help refugees after the war, the end of the Cold War permitted those behind the fire, former Iron Curtain, for the first time to be able to travel. It opened up archives, it freed up energies to look at the unexplored and forgotten part of World War II. And at roughly the same time while I was serving in Brussels, there was a proliferation of World War II-related 50th anniversary commemorations. D-Day, the Battle of the Bulge, and the End of the War in Europe, all led journalists and historians to look back at the unexplored past in World War II. One of those journalists was Peter Gumbel, who wrote a front page story in the Wall Street Journal in the summer of 1995, about World War II Swiss bank accounts established by Jews to keep their assets out of Hitler’s clutches, but never returned to their former owners. He gave a human face to that story, Greta Beer, an elegant, articulate, and sympathetic now elderly lady in Boston who had spent literally decades going through Switzerland, trying to locate her father’s bank account only to have one obstacle after another put in her path. I read that story in my office in Brussels, and I called Holbrook up and I said, “I’d like if you could extend my mission from Central Europe property restitution to Swiss bank accounts.”
So here’s Eizenstat saying it was the mid 1990s because it was the end of the Cold War, and our attention started to go elsewhere. And with the coincidence of the 50th anniversary of VE Day, suddenly the media spotlight is on the role of several different European countries during World War II. And that he personally asked for this mission, he was moved to ask for the mission. So, at this point, we should familiarise ourselves with some of the individuals who are going to be key to the rest of this story, and who are going to feature heavily in the turbulent events that unfold from 1995 over the next three years or so. So, let’s take a moment and let’s go through each of these. So starting at the top on the left, we have Stuart Eizenstat, who we just saw, and as I said, he’s about to be appointed by President Clinton to head of US Government Commission to investigate this issue. Next to him, in the middle, you may recognise Edgar Bronfman. Edgar Bronfman was the chairman of the World Jewish Congress at the time, as well as being the chief executive of Seagram’s, the alcoholic drinks company. Now, Americans will be more familiar with the World Jewish Congress. The WJC, as it’s known, is the Jewish organisation that took the lead on this issue. It was founded in the middle of 1930s by Nahum Goldmann, an exceptional Jewish leader. And it’s particularly well known because in 1942, its representative in Geneva, Gerhart Riegner, was the person who first broke the news to the world that the Nazis were engaged in a systematic programme to exterminate the Jews of Europe. Next to him, on the right, so on the right at the top is Al D'Amato, Senator Alfonse D'Amato, and D'Amato was a combative Republican senator for New York.
He was the chairman of the Senate Banking Committee, which was hugely influential, and which gave him, as a result, a high profile platform. Some of you may remember him because he was the guy who spearheaded the Whitewater investigation into the Clintons. But by 1995, Whitewater was really petering out. So, he’s able to devote himself fully to this issue, and he gets very engaged in this issue. And in the middle here, we have two of the thousands of Jewish survivors who for 50 years have been denied access to their parents’ Swiss bank accounts. On the right is Alice Fisher, who we’ll hear from in a few minutes. She’s a formidable woman. And then next to her is Estelle Sapir, who we met earlier. And finally on the bottom, we have our Swiss friends. First of all, on the left we have Thomas Borer, B-O-R-E-R. Thomas Borer, and I guess I can probably best describe him as the acceptable face of Swiss diplomacy at the time. He’s an international lawyer by background, and he becomes a career diplomat. He’s suave, he’s good-looking, he’s affable, he’s highly credible, always sounds very reasonable, very empathetic. He’s the one who’s always saying in public, “We in Switzerland, we’re deeply aware of the pain around this issue and all we want in Switzerland, all we ever wanted was to get at the truth.” So, he’s kind of the intermediary. So, the acceptable face of Swiss diplomacy. And next to him, finally, is Georg Krayer. Georg Krayer is the chairman at the time of the Swiss Bankers Association. And compared to Borer, he’s pretty charmless and his usual posture is defensive and somewhat bureaucratic. He’s kind of the stonewaller-in-chief, if you like.
So, that’s, if you like, our kind of cast of characters. And what’s important to understand is that back in early 1995, when this issue really comes to the fore, it’s purely about the efforts of survivors to recover their money. The role of Switzerland in the war, the complicity of the Swiss in the Nazis’ looting of Europe, the treatment of Jewish refugees, and the infamous J stamp, none of that has come out at the very start of 1995, but two years later, it’s all in the public domain. So, this next clip that we’re about to see, this is the introductory clip from a TV documentary that was shown in the US in 1997. It’s called Blood Money. And we’ll see some of the individuals who we’ve just met, who were shown in this introductory clip. So, here we go.
Part of this is that there’s a mystery involved. Part of it is that there’s a moral outrage involved in that mystery.
It really shouldn’t come as a great surprise that the Nazis, the greatest mass murderers of history, engaged in the most breathtaking series of robberies in history.
What we had on our body, that’s all what we had left. Everything was gone.
The Germans, what they took from us, they deposited in Swiss banks, were so good that did they take the funds from Jewish teams.
This is definitely the biggest crisis of foreign policy in Switzerland since the second World War.
We are fully aware that nothing less than our reputation as an honourable country and reliable friend is at stake.
What we’re doing now is we’re writing the last chapter of World War II and the Holocaust.
I get absolutely furious when I think that people were making money on what happened at Auschwitz.
That they should be offended, because we are shocked by what we find. That’s absolutely unconscionable.
The irony of it is that Jewish money could have financed their worth.
We’re talking about lots of money, lots of people. And now the question is, well, what happened to these accounts? Where did they go?
They have the money. Nobody, nobody could tell me they don’t have the money.
This is an onion whose layers are to be peeled away.
That last comment was very telling, I thought. And that was, that last comment was from Elan Steinberg of the World Jewish Congress, who featured a little bit earlier in the clip. He was the guy with glasses. And the comment was, “This is an onion whose layers to be peeled away.” And it’s true. I mean, in 1995, it was just the first layer that had been unpeeled. So when this issue is first raised, and there’s a media frenzy, I mean, I remember it very well at the time, the Swiss government is initially bewildered and kind of somewhat shell-shocked because their reputation as a decent country with an honourable record as a neutral nation during the war is now under quite severe threat for the very first time. And within the Swiss government, I mean, we only found this out later, there were very deep divisions as to what to do and how to react. Some in the government were quicker and keener to react than others. And the first reaction, the first positive reaction was in April, 1995, Flavio Cotti, who was then the Swiss foreign minister, he’s the one who first acknowledges that the Swiss record during the war is blemished. And in a speech he says, “We cannot and must not deny that Switzerland was implicated in the unspeakable barbarism at the time.” That is the first time that any member of any Swiss government has ever said anything like that. “We cannot deny that Switzerland was implicated in the unspeakable barbarism of the time.”
And then in May of the same year, May ‘95, around the time of the 50th anniversary of VE Day, the Swiss president who’s pictured here, Kaspar Villiger, he makes an unprecedented apology to the Jewish people on behalf of his country for the 1938 policy of the J stamp, and for turning away 30,000 Jews from Switzerland borders. So for the first time, the Swiss acknowledged this policy, acknowledged it was wrong, and apologised. And he concludes his speech by saying, “We made at the time a bad choice in the name of the national interest taken to its narrowest sense.” Which, in English, means, we were selfish, and we didn’t care about anyone else. The Swiss banks did not follow the precedent set by the Swiss government. And their reaction is a different story altogether. For now, they remain defiant. Initially they refused to meet with any Jewish representative of any Jewish organisation outside Switzerland. But eventually, and reluctantly, they agreed to meet with the World Jewish Congress and other Jewish organisations. And when they meet Georg Krayer, the chairman of the Swiss Bankers Association, puts a deal on the table and he looks Edgar Bronfman of the World Jewish Congress in the eye and says, “We are prepared to offer $32 million and that will be a full and final settlement for all unclaimed Jewish accounts. And that’ll be it.
And we won’t admit any legal responsibility. And then we all agree, we’re just going to draw a line under this issue and we’re all going to go home. Thank you very much.” Now, bear in mind, at the time, no one has got any idea how many of these dormant accounts exist. And that’s because the Swiss banks refuse to say. And by the way, it would’ve been very easy for them to find this information out. You know, all each bank had to do as a bare minimum was go through all their records and work out how many unclaimed accounts have been opened between, say, 1933 and 1939, from Germany, Switzerland, and certain countries in Eastern and Central Europe. And then they’ll have an answer. So, it was not difficult for them to work this out. So, this 30 million offer is on the table, and Edgar Bronfman says, “That’s not what we’ve asked for. We don’t want your payoff to make this all go away. What we’re asking for and what we want is a process. We want a proper accounting of what happened, what you’ve got, and who it belongs to.” So, what does Georg Krayer and the SBA do in February '96? So, that’s a couple of months after that meeting takes place. Krayer decides unilaterally, he’s going to call a press conference, and he announces that the Swiss banks have conducted their own internal audit. So again, let me translate, non-independent. So they’ve done their own audit and they’ve discovered a total of $32 million in dormant accounts in total in their member institutions.
So in other words, the same figure that he gave to the World Jewish Congress. And, the SBA also announces that they’re appointing an ombudsman, and it’s the ombudsman’s role to help Jewish applicants. So the idea is that any claimant can contact the ombudsman in the first instance, and he’s going to take it there and negotiate with the banks. Well, a year later, the Swiss banking ombudsman issues his first report, and he announces he’s received, over the year, approximately 2,000 requests from claimants. And he’s delighted to say that he’s located a total from all the accounts, all the claims submitted to the office, wait for it, of $8,800. That’s from 2,000 requests. So in other words, what’s happened here is that the Swiss banks have completely sidelined and ignored their own ombudsman. And the whole ombudsman process is now totally discredited at this point. The high point, the high watermark of this affair, comes in 1996. The D'Amato Committee hearings are in full swing. There’s Al D'Amato holding a press conference with Elan Steinberg. International media scrutiny is even more intense than it was the previous year. The Swiss start to buckle. And they agree, the government agrees to establish two independent inquiries into their country’s past. The first is a committee of Swiss historians to scrutinise Switzerland’s wartime role and the question of looted gold and Nazi plunder. And the second is what became known as the So-called Independent Committee of Eminent Persons, very grand title.
And this was an independent investigation, specifically into the dormant accounts. And it’s led by kind of a big hon show, Paul Volker, who was formally, you’ll know his name, he was formally the chairman of the Fed, the US Federal Reserve. So, you know, a heavy hitter. And at the same time, you’ve got the US government investigation headed by Stuart Eizenstat going on. And there’s also, as well as the Senate hearings, there’s also now hearings in the House, in the House of Representatives. Those were in the days when they had a speaker, by the way. At one point there were actually 11 separate investigations going on into this matter, all at the same time. Meanwhile, two class-action suits have been launched in the US by Shoah survivors and against the Swiss banks, and 16,000 claimants, enjoin themselves to this suit. One thing to appreciate with all this intense scrutiny, emotions are running very high at the time, to the point sometimes of being quite feverish. So, people say stupid things. Thomas Borer, that suave unflappable Swiss diplomat we saw earlier in the clip and on the slide, the one who’s been coordinating the Swiss government response all this time, in a meeting with Paul Volker, he let slip a remark.
And this is what he says, “Rich Jews didn’t die at Auschwitz because they could buy their way out.” He later profusely apologises, okay, but it’s what he said. Switzerland’s ambassador to the US, a gentleman by the name of Carlo Jagmetti, he’s forced to resign after a letter he wrote to his government was leaked. And in the letter he advises his bosses in Bern, quote, “to wage war against Jewish groups.” Wage war, wow. Then in January, 1997, the then Swiss president, who’s pictured here, Jean-Pascal Delamuraz, he says that Jewish calls for restitution amount, quote, “to extortion and blackmail.” And he accuses foreign critics of trying to undermine Switzerland’s role as an international finance centre. He also comes out against establishing any kind of compensation fund for holocaust victims because that, he says, would be considered an admission of guilt. So he’s also forced to apologise. But by now, with the damage to the countries already tattered with reputation, has been done. So the pressure, the intensity is just not letting up. And also, you know, you’ve got teams of researchers who are combing the national archives in Washington because there’s hundreds of declassified intelligence files that they’re able to look through now, and information’s coming out all the time. It’s discovered that in the 1970s, Switzerland did a deal with communist Poland, which involved the Swiss transferring the proceeds of dormant accounts of Polish citizens to Swiss businessmen in order to satisfy their claims for property nationalised by Poland. Okay.
Going to just say that in English, the Swiss emptied the bank accounts of murdered Polish Jews to compensate Swiss citizens who lost money from Poland turning communist. Beggar’s belief. And just when the Swiss were feeling it couldn’t get any worse, it does, because in January, 1997, it emerges that an employee at UBS, which is Switzerland’s largest private bank, this employee has been shredding a pile of old bank documents. And this is discovered by Christoph Meili, who was a security guard at UBS. And he’s one of the good guys. He’s another one of the good guys in this story. And he sees the shredding going on, so he decides he’s going to rescue some of the pages, and he hands them to a local Jewish organisation. And when this incident is made public, what does the bank do? Well, what do you think they do? Of course, they fire Christoph Meili. Let’s watch this clip, which tells the story, and please pay particular attention in the interview to Mr. Smooth, also known as Robert Studer, who’s the UBS boss at the time this whole thing happened.
[Narrator] In Zurich, a security guard at the Union Bank of Switzerland discovered the bank was shredding wartime documents. Of a smaller bank it had absorbed in 1945, the Aktiengesellschaft bank. The guard turned some rescued pages over to a local Jewish organisation calling the incident a regrettable mistake. Bank officials insisted nothing important had been destroyed, but the security guard was fired.
Well, it is a catastrophe. I consider it to be a catastrophe, for most probably very little or nothing. But given the emotions we are all in, this is very damaging to our credibility. There is no question about that. What happened? The destruction of the documents is stupid, despite of the fact that we don’t think it has any relevance. The documents which were destroyed came all from that tiny bank today, which isn’t really a bank anymore.
Contrary to Studer’s disregard for the so-called tiny bank, UBS doubled in size at the time of the merger and safe-haven records show that the Aktiengesellschaft bank was one of the top 10 in Switzerland to take in German investment during the war.
So, you know, I mean, I’ve watched that clip about five times, and it’s still going to dumbfound me. I mean, these guys just can’t help themselves. Studer is saying, “Yeah, it was a disaster, but it was a PR disaster, you know? And funny enough, it shouldn’t have been a PR disaster because these documents didn’t mean anything. And it was a tiny bank, so who cares? In fact,” you know, what does he say? “It isn’t really a bank anymore.” Oh, so he’s disappeared, the problem. And it just is extraordinary. Even when they’re caught red-handed, their default position is just denial. And, you know, he’s just doing it again. So, of course this totally explodes in his face. And that’s it really, you know, I mean, the Swiss government and the Swiss bankers finally surrender to the inevitable. And within a matter of months, the Swiss government announces it’s setting up a major compensation fund. And the Swiss banks announced that they’re now going to settle the class-action brought by survivors for $1.25 billion. Now, I’m not very good at arithmetic, but one thing I do know is that $1.25 billion is a lot more than the $32 million that Georg Krayer had been offering a year earlier. The Volker Committee, that Committee of Eminent Persons, which Paul Volker shared, they reported shortly afterwards, and they said that they could verify a total of 18,000 dormant Jewish Swiss bank accounts, which had been opened by Jews before the war. Now, that word verified is important because they also say that it seems that a vast amount of records had been completely destroyed by the banks. So, no one was ever really going to know what the true total ever was. Meanwhile, Stuart Eizenstat concludes his report on behalf of the US government. And here’s a clip from the press conference when his report is published.
Switzerland and other neutral nations benefited from their trade and financial dealings with the Germans, and helped prolong the war effort. Swiss actions after the war are the least understandable. After the war, despite appeals from allied negotiators to consider the moral imperative, the Swiss demonstrated and obdurate reluctance to cooperate with allied efforts to retrieve and redistribute looted gold. Despite repeated Swiss protestations after the war that they had never received any looted Nazi gold, this report is incontrovertible. The Swiss National Bank and Swiss bankers knew as the war progressed that the rife bank’s own coffers had been depleted and that the Swiss were handling vast sums of looted gold.
So, I’d love to be able to finish this talk by saying that with those settlements, that was the end of the matter. But it wasn’t, because in 2004, so that’s a full seven years after the Swiss banks announced their settlement, the judge who’s in charge of the process to manage the claims, that’s an American judge by the name of Korman, Judge Korman, he publishes a 25-page report, which was a page-by-page blistering criticism of the behaviour of the Swiss banks over the settlement process. And what he says, page after page, the banks have been deliberately spinning things, deliberately putting up new obstacles, and deliberately demanding lots of new, unnecessary paperwork from claimants. So, here they are in 2004, and it’s almost 60 years now after the end of the Shoah, and the end of World War II. And it’s the same pattern of behaviour from the banks, the same old tricks, and survivors being put through yet more hoops just to have returned to them what’s rightfully always been theirs. Let’s end on a more positive note by reminding ourselves that there are still some truly good people out there in the world. People like Dr. Harald Huber, who was responsible for at least trying to get a decent law on the books in 1962. People like Christoph Meili, the security guard at UBS, who, who knew his right from his wrong.
And Paul Gruninger, who we talked about yesterday, Paul Gruninger, who was the quiet hero, the police captain who was so outraged by his country’s inhumane decision to turn back Jews at the Swiss border, that he broke the law as a policeman and he forged documents to help 3,600 Jews cross the border and escape the Nazis. And when he was caught, the Swiss authorities fire him, they remove his pension rights, they prosecute him, they convict him, and they fine him. And ostracised, and forgotten, and without rehabilitation by the Swiss authorities, Paul Gruninger died in 1972. And it took until 1995, over 20 years after his death, and only then because of all the pressure around, before the Swiss government finally annulled Gruninger’s conviction. So, here you see a street named in his honour in Rishon LeZion in Israel. In 1954, in a rare newspaper interview, 'cause most people didn’t want to talk to him, Paul Gruninger was asked why he did what he did. And this is what he said, “How could I seriously consider bureaucratic schemes and calculations? It was basically a question of saving human lives threatened with death.” Thank you. Okay, so that concludes part two of these two lectures. So, let’s have a look now, and we’ll stop sharing and we’ll see what all the comments and questions are.
Q&A and Comments:
Okay. Shelly Shapiro. Hello, Shelly, hello again Shelly.
Q: Why no Swiss celebrations after World War II? Why was the flag flown at half-mast?
A: Well, I mean, as far as the government was concerned, I mean, you know, it was a very muted affair. The Swiss started behaving much better towards the Allies from about 1944 onwards. And they actually started to let a lot more Jews over the border. So, the Swiss borders became a lot more porous from about 1944 onwards. But that was only because they could see the way the war was going and that they would have to deal with the Allies afterwards. But, you know, they profited greatly , and they’d had a good war.
Q: Michael Ostfield says, “Several years ago, I read somewhere that the Swiss allowed their rail lines to be used by the Germans. There was also an allegation that trains carrying Jews to the death camps were allowed to use the Swiss rail lines. The story arose from the allegation that the Swiss Jewish community were given short notice to bring food to one of these trains to feed the people on board. Is there any truth to these allegations?”
A: There may well be, Michael. I haven’t come across them, but that may well be the case. And if anyone else has gotten information on that, then please do let us know.
Q: Has anything been done to chastise Switzerland for their behaviour in World War II? I majored in history in one of the best US universities. Your lecture is the first I’ve heard about how Switzerland behaved.
A: Well, you know, it’s a good question. If you were around in '95, I mean, you would’ve seen that the Swiss had nowhere to go with any of this. I mean, it was newspapers, TV programmes, and it was all over the press. But we forget, don’t we? And memories are short. And one of the reasons I was very keen to do these two lectures is because I think that most of us aren’t aware still of Switzerland’s role, and one of the reasons for lockdown university and one of the reasons for many of our lectures is the preservation of memory.
So, Arlene, thank you. Thank you for that question.
Q: Yona says, “You asserted that Europe accepts Switzerland was financially destitute. Companies that sold war material must have been immensely wealthy. Where did their money go? How much, if any, did those barons return to the German economy after the war?”
A: Well, that’s a great and a huge question. Yes, the national treasurers were destitute, but many companies, particularly German companies, did extremely well. And we all know many household names today, German, Austrian companies in particular, profited hugely, particularly from the use of slave labour and the treatment of slave labourers after the war was little short of disgraceful in terms of the admissions that the German companies made of using them and of any recompense that they were ever offered.
Q: Sam Copperwitz, “Is there any information now about what happened to life insurance policies purchased by Polish Jews from Swiss companies? My grandfather bought them for all members of his family, and then all claims were denied due to lack of documentation.”
A: Well, Sam, I didn’t mention life insurance policies and of course there would’ve been hugely valuable, and you’re absolutely right. And again, this was another act of disgrace by the Swiss insurance companies. And it’s a whole other lecture. But yes, the Swiss life insurance industry did not cover itself in glory on that occasion either.
Q: Louise Sweet, “Would a relative of a non-Jewish victim of a Nazi concentration camp be able to obtain his assets post-war from a Swiss bank? Would a Jewish survivor of the Nazi camps be permitted to obtain his assets?”
A: Well, the answer was that if you were a Jewish survivor, you could, but they put you through every single hoop imaginable in terms of all of the information and the identification that you needed. But it was mainly the heirs who was claiming. Could a non-Jewish victim obtain assets? Well, perhaps they could. But, I mean, the point I would make again is that former Nazis who, after the war, claimed their own funds from their own Swiss bank accounts, including the Nazi, had no problem whatsoever in getting their money out. There is not one case of any Nazi who ever complained of any bureaucracy from a Swiss bank official.
Betty Lowenstein writes, “Our dear friend, an international lawyer from Melbourne, now sadly gone, was hired by a family who knew that their parents had died in the Holocaust. They knew that their parents or grandparents had given their savings to one of the Swiss banks. They of course could not produce the death certificates and did not have the documentation or the numbers or the proof. He took on the case, and the powers that be finally allowed him after years of stonewalling, to investigate, they put him in a room, brought in boxes and boxes with documents from floor to ceiling. It was like looking for a needle in the haystack. By sheer persistence, determination, perhaps stubbornness, he found that needle in the haystack, and in the end he managed to retrieve over a billion dollars for various heirs.” Wow. I mean, well, you know, all I can say is , and, I mean, this sounds like quite a special guy who did that.
So, let’s just have just a couple more questions, 'cause I see that time is running away with this.
Q: “I’ve heard that the Red Cross helped the Nazis to transfer their assets to South America. Any thoughts?”
A: The role of the Red Cross in Switzerland was deeply compromised. There are books that have been written about that and there’s certainly some evidence that Nazis effectively tried, the Nazis tried to effectively take over the managing committee of the Red Cross, or at the very least, influence it.
Q: And finally, from Gerry Rosenberg, “Which is the best book to read about what Switzerland did during World War II.”
A: I mean, the book I found most useful was Adam LeBor’s book, which was “Hitler’s Secret Bankers”. I mean, and it’s been updated since he wrote it in 1997. There was an update from a couple of years ago, but there may well be other things out there. So, it’s just worth doing research.
Okay, so, thank you all very much. Thank you for those of you who are still here, I hope that these two lectures have been useful and informative and enlightening, and I look forward to the next time. All right, good evening. Bye.