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  Nazi Gold

  The Full Story of the Fifty-Year Swiss-Nazi Conspiracy to Steal Billions from Europe’s Jews and Holocaust Survivors

  Tom Bower

  To Veronica

  CONTENTS

  Preface

  List of Abbreviations

  1 Confrontation and Tears

  2 The Seeds of Crime

  3 The Crusade

  4 Looted Gold

  5 “An Impenetrable Racket”

  6 Cracks

  7 The Nazis’ Friends

  8 The Pawns

  9 Washington Showdown

  10 The Hidden Millions

  11 Perfidious Swiss

  12 The Polish Conspiracy

  13 New Hope

  14 Keepers of the Flame

  15 Complicating the Riddle

  16 The Deal

  Final Words

  Postscript

  Sources

  Bibliography

  Index

  Acknowledgments

  About the Author

  PREFACE

  The contrast is stark and pertinent. The date was November 1940. Thousands of young Allied soldiers and airmen had just been buried in German-occupied France; Britain’s cities were burning, thanks to the Luftwaffe’s blitz; and sailors of the Royal Navy were drowning in freezing water as casualties of the Battle of the Atlantic. From occupied Europe and Germany, correspondents employed by the New York Times, still unencumbered eyewitnesses, dispatched reports about oppression, arrests, executions and tyranny, characterized as “Our Darkest Hour.”

  In that same month, two hundred of Switzerland’s financial and political leaders—the pillars of that nation—petitioned their government to show greater sympathy toward the Nazis. The plutocrats were pushing at an open door. While Europe shuddered before the apocalypse, Switzerland was aligning itself with evil.

  Both in the midst of the war and in the aftermath, as the horrors were gradually revealed, the Swiss never questioned the morality of that choice. Their justification was their country’s isolation and traditional neutrality.

  Switzerland’s ethics did not go unnoticed or uncriticized in London, Washington, D.C., or Paris, but compared with the other revelations after the Nazis’ defeat, this small country’s misconduct was relegated as of minor importance.

  Yet in 1997, fifty-five years after a group of Nazis finalized their plan at Wannsee, in a pleasant lakeside villa outside Berlin, to destroy the entire Jewish nation, Switzerland has finally been brought before the bar of history and asked to account for its Faustian pact. Switzerland is asked not only to explain its conduct toward the Jews and its relationship with those who plotted their destruction, but to justify something far worse.

  Why, it is asked, did a group of self-professedly respectable Swiss citizens willfully profit from the crime that threatened the foundations of western civilization?

  Crime often produces a windfall for the perpetrators, but greed, intrigue, and deception have not until now been associated with the affluent, faceless men who own and manage Switzerland’s discreet financial institutions. “Switzerland,” wrote F. Scott Fitzgerald, “is a country where very few things begin, but many things end.” The hopes of many refugees ended in Switzerland, and they were murdered soon afterward. But their money remained secure, too secure, in Switzerland’s banks.

  The fate of those Jews—some perhaps featuring as the naked innocents in the smudged photographs and jerky newsreels filmed by their enthusiatic murderers—has been chronicled as a result of an astonishing legacy. Carefully, even lovingly, the Nazis recorded the minute details of their crimes in correspondence, memoranda, and the minutes of their conferences. The surviving archives indisputably proved individuals’ guilt.

  Similarly, the Swiss collaborators and profiteers also recorded their thoughts and decisions on paper. Although the most pertinent of those files still remain hidden from public inspection in the banks—and might well be shredded—sufficient government records had been innocently deposited in Bern’s national archives to substantiate a compelling case against previous generations.

  Until recently, the incidents and conversations described in this book would have been dismissed as irrelevant or inconceivable. In my book The Paperclip Conspiracy, published in 1987, one chapter was devoted to Switzerland’s conduct during and after World War II. However, compared with the revelation that the Allies had protected and employed incriminated German scientists, Switzerland’s protection of the Nazis’ loot and their expropriation of Jewish deposits aroused no interest. One decade later, it is Switzerland’s misfortune that its image as a land of awesome Alpine scenery, clockwork efficiency, and immaculate cleanliness is tarnished by those same sordid but irrefutable revelations.

  As the story unfolds, it becomes painfully clear that facts about Switzerland ten years ago were only hints of a far graver iniquity than could be imagined. After studying archives in Paris, London, New York, Washington and especially Bern and speaking with those who shaped events after 1945, I found a new truth gradually emerging. This is not just a story about a handful of pitiless bankers hoarding the wealth of a ravaged continent while spurning the pleas of defenseless survivors of the Holocaust; it is a sensational accusation that a country whose citizens, over the past half century, boasted to their neighbors about their enviable wealth, was quite knowingly profiting from blood money.

  LIST OF ABBREVIATIONS

  AJC

  American Jewish Committee

  AJDC

  American Joint Distribution Committee

  CIA

  Central Intelligence Agency

  DIV

  Deutsche Interresenvertretung (German Interests Section), Swiss Political Department

  DM

  Deutschmark

  FBI

  Federal Bureau of Investigation

  FEA

  Foreign Economic Administration, U.S. Treasury

  FF

  French franc

  FFC

  Foreign Funds Control, U.S. Treasury

  HMG

  Her Majesty’s Government

  IARA

  Inter-Allied Reparations Agency

  IRO

  International Refugee Organization

  MI6

  British Secret Intelligence Service

  OSS

  Office of Strategic Services (U.S.)

  POW

  Prisoner of war

  RM

  Reichsmark

  SBA

  Swiss Banking Association

  SBC

  Swiss Bank Corporation

  SD

  Sicherheitsdienst (SS Security Police, Nazi Germany)

  SF

  Swiss franc

  SIG

  Swiss Federation of Jewish Communities

  SS

  Schutzstaffel (elite stormtroopers, Nazi Germany)

  UBS

  Union Bank of Switzerland

  WJC

  World Jewish Congress

  1

  CONFRONTATION AND TEARS

  BERN–NOVEMBER 17, 1952

  Hatred shone in their faces. Distrust echoed in their voices. The chill inside the conference room struck deeper than the winter air in the ancient square outside.

  Tragedy had compelled the nine men to sit around the long wooden table, but their common sentiment was anger. None had suffered, but all were suspicious. Humanity was confronting greed and, after seven years of strife, the innocent had finally won one victory: the agreement to gather on the afternoon of Nove
mber 17, 1952, in the parliament building.

  All nine men were Swiss, but the majority regarded two of their number as foreigners, not properly acceptable as ancient Helvetii. These two were both Jews, representatives of an intimidated minority who could not boast of courage or prowess. The majority were lawyers and bankers, protectors of their nation’s wealth, proudly successful in excluding their country from the moral conflicts that for centuries had plagued their neighbors. At the head of the table sat Markus Feldmann, the new minister of justice and the police, renowned as an ambitious workaholic but carelessly short-sighted about the conflict he was seeking to broker.

  “We’re here,” announced Feldmann, “to discuss the fate of money deposited by foreigners in Switzerland who were killed because of Nazi violence and wartime events.” The sanitization of the vocabulary used to refer to the Holocaust had been perfected in Switzerland ever since Adolf Hitler became chancellor in neighboring Germany. For the twelve years of the Third Reich, none of the non-Jews in that room had protested about the criminality occurring beyond their frontiers and, in the aftermath, none been troubled to consider the truth. Comfortable survival and self-enrichment remained their entrenched gospel, and any challenge to that credo prompted instant suppression. Such a challenge had now arisen. “Parliament has decided,” continued Feldman, “that we need a decree or regulations to deal with the money in question.”

  The “money in question” was the unaccounted-for millions of Swiss francs—some insiders would eventually confess to “hundreds of millions”—which had been deposited in the Swiss safe haven by Europe’s Jews as much as thirty years earlier. Those Jews had been murdered, their records had disappeared and their secrets were known only to their trustees, represented by the Swiss around Feldmann’s conference table—secrets that they were unwilling to divulge.

  Naturally, the minister looked to Emil Alexander, the reticent but experienced director of the ministry’s Justice Division, to provide an unobjectionable summary of the reasons for their meeting: “At first, when the question of the so-called heirless assets became a reality,” began Alexander, “we tried to deal with it practically. People applied at banks claiming that their missing relations had left behind a fortune deposited in a Swiss bank, and the Bankers Association made inquiries among its members.” To Alexander’s right sat Max Oetterli, the Swiss Bankers Association’s pugnacious forty-six-year-old secretary. Oetterli had fought hard to prevent this meeting and had no intention of leaving without expressing his hostility. “The results,” summarized Alexander, referring to Oetterli’s work, “were usually very thin, which is not very surprising, because the people who came to the banks based their applications on a hunch.” Oetterli agreed with that and with what followed.

  “Those inquiring at the banks,” continued Alexander, “were usually unable to prove that the person was dead or even missing. A further complication is that making inquiries in some countries, especially Eastern Europe, is dangerous. Another great difficulty is that some deposits were registered under false names which the inheritors don’t know. And some people did not deposit their money in banks but entrusted it to private people like lawyers, notaries and business associates. Those identities are of course unknown to the people hunting for their inheritance. Finally, after all this time, there is a chance that money could be lost because of the statute of limitations.”

  Around the table, even men who were foes agreed with the lawyer’s summary. Alexander had arrived at the purpose of their meeting. Protests during recent months had persuaded the government to consider a law compelling Switzerland’s banks, insurance companies and others to declare any assets in their custody owned by murdered Jews. “The banks,” confirmed Alexander, “insist that they do not want to enrich themselves with this money; that they would not apply any time limit to reclaiming the deposits and that we can discuss later what to do with any unclaimed money.” Oetterli again nodded, but his face hardened as Feldmann signaled to George Brunschvig, the president of the Swiss Federation of Jewish Communities (SIG). Brunschvig’s lobbying for a new law had incensed the bankers.

  “Experience shows,” began Brunschvig, bruised by his past encounters with Oetterli, “that those bankers involved seldom give satisfactory information. The only guaranteed way of discovering these deposits, we believe, is by introducing a new law.” Brunschvig glanced for support at his colleague Paul Guggenheim, a respected professor and lawyer.

  “We’ve really got two problems,” said Guggenheim. “First, how to find the heirless assets; and then to decide who will receive the money.” Glancing at Oetterli, the professor continued, “I don’t like the bankers’ proposals because they don’t guarantee that all the financial institutions will be honest. That’s why a law is vital.” The Jewish lawyer, outraged by the perfidies practiced by Oetterli and his ilk since 1945, dropped any pretense of courtesy. “I’m not very impressed by the bankers’ plea that a law would damage their absolute requirement of secrecy. On the contrary, it seems to me that they are more damaged if they keep on with their denials of having any money.” At the last moment, Guggenheim tempered his bluntness with an olive branch: “With goodwill, we can surely find a solution to this problem.”

  Goodwill was far from Oetterli’s thoughts as Alfred Wegelin, the managing director of the Schweizer Volksbank, launched the counterattack: “We strongly disagree about this problem. We’re wide apart.” Sympathy and understanding about recent history were not emotions extended to the two Jews. “We bankers want to find a solution to the deposits of those who are dead. That’s why we support the efforts to help the inheritors. But they must abide by the law. Today a deposit could be described as an heirless asset and sometime in the future the owner will turn up—especially if they live in Eastern Europe.” For the banker, the only solution was to do nothing: “The money is very safe in the banks. It’s always available for the inheritors.”

  Albert Matter, the director of the Basler Kantonalbank, sitting beside Wegelin, would over the next years prove to be as insensitive as Oetterli, yet on this occasion he began with an apparent reassurance. “Banks certainly do not want to enrich themselves with the so-called heirless assets. There’s no danger that claimants will lose their money because they don’t appear for a long time. We’re always ready to help people who come to us looking for money, so long as it’s within a certain framework.” Sneers came as easily to Matter as palliatives: “But don’t forget. It’s not only people who have deposited money with us who have disappeared. People who owe us money have also gone.” Matter’s bank had evidently endured some uncomfortable moments. “We’ve had to put that fact down to experience,” he concluded. Some in Europe had experienced the Holocaust while Matter and his colleagues had experienced bad loans. Some Jews, Matter’s colleagues griped, had even allowed themselves to be murdered in order to escape repayment of their loans.

  The gulf appeared unbridgeable. For the minister, directing a small army of secret-police officers spying on their fellow countrymen, the thought of prying into banking secrets was nearly intolerable. In the tradition of Swiss ministers, Feldmann’s role was not to govern but to serve the different interests of the community. Switzerland’s bankers, he accepted, did not require the government’s protection, only the assurance of noninterference. Together, the bankers were stronger than the state, and they applied pressure when their interests required it. “Clearly,” said the minister passively, “the Jewish group want a law and the bankers don’t. The representative of the Bankers Association should tell us how he imagines future cooperation.”

  Oetterli took the stage, narrowing his eyes and hunching his shoulders. His mood was far from benign. “All our experience convinces us that the problem is vastly exaggerated.” He emphasized each word, at once aggressive and derisive. “Many claimants seem to have convinced themselves that—because a missing relation once passed through Switzerland—he must have deposited a fortune here.” Mocking the Jews came naturally to Oetterli, espec
ially in the battle to protect his members. “The proposed law will be a serious breach of banking secrecy and will damage Swiss banking. If there are any heirless assets, the safest place for them is in the bank. Their future, if they are really shown to be heirless, can be discussed later.” Oetterli had often mentioned talking about the heirless assets “in twenty or thirty years’ time,” ignoring the urgent needs of the survivors.

  “Have all your inquiries worked smoothly up to now?” asked Feldmann.

  “Our members have tirelessly sought to help inquirers,” replied Oetterli. “We do everything we can. Unfortunately, the documents provided are often inadequate.”

  The implication that Oetterli and his members were assisting claimants infuriated Guggenheim. Inquiries to the Bankers Association about accounts—which were considered only if accompanied by a hefty fee—had aroused what the headquarters in Basel had called “a number of legal and practical problems.” To Guggenheim, they were “the completely impossible requirements” of proving the death of a depositor, the proof of heirship and the precise identification of the bank account.

  “Proof of death in a gas chamber is extremely difficult,” Guggenheim had long complained. “All we know is that the deceased was last seen entering a concentration camp and is not known to have ever emerged.” Moreover, the requirement that the accounts be identified was impossible. The Jews had chosen to deposit their money in Switzerland because it guaranteed anonymity. They were not always likely to reveal their ruse to their families.

  “The Bankers Association isn’t proposing anything new,” snapped Guggenheim. “We’re not going to get any further because hardly any of the banks are prepared to give information voluntarily.” But Oetterli was manifestly unimpressed. Charge and countercharge had become routine, even though the representatives of the Jews were mild men who feared exciting enmity. Oetterli was beyond persuasion, but Feldmann’s sympathy was vital, and Guggenheim addressed his comments to the politician.