Nazi Gold Page 20
On November 1, 1946, Robert Meyer, a respected lawyer in Zurich, called at the Political Department to propose using the heirless assets, which he estimated were worth between SF40 and SF50 million, to help 5,000 Jewish refugees settle in Switzerland. The respect that Meyer’s plan generated outraged lawyers close to Heinrich Rothmund, the director of the Police Department. They were anxious that all foreign Jews should leave the country. Police representatives rushed to de Rham to denounce Meyer as a mere mouthpiece of the World Jewish Congress. His estimate of heirless assets, they said decisively, was too high. “He wants 5,000 to 6,000 Jews to stay in Switzerland out of political rather than humanitarian motives,” Rothmund’s emissaries told de Rham, adding that there was unhealthy competition among Jewish groups to control the heirless assets. The police offered an alternative proposal. To save public funds, the heirless assets should be used, until their removal from Switzerland, to alleviate the “big problem” of caring for the refugees in the spartan camps. Just as they had been during the war, the Jews should be self-financing. Since “the money belonged to the same type of people who would now benefit,” submitted the police, the financial problem at least would be solved.
Four months had elapsed since the accord was signed and the crusaders in the Treasury and State Departments, under pressure from Jewish groups highlighting Swiss obstruction, urged action. Intelligence reports from Europe revealed that, in contrast to the Jews, the 72,000 Germans resident in Switzerland were enjoying uninterrupted Swiss hospitality. Despite American demands that 24,000 suspected Nazis be expelled, only 3,000 incriminated Germans—all political and intelligence operatives—had been ordered to return to Germany. On Swiss criteria, only those who were undesirable to Switzerland were expelled. The Allies’ interest in the German financiers and industrialists was ignored.
Freed from the Allies’ restrictions, Eduard von Steiger, the minister of justice and the police, had also quietly altered the conditions for Germans’ entry into Switzerland, a particular help for former Nazis forbidden by the Allies to travel. Swiss officials, accepting bribes of SF200,000, provided temporary residence permits and “Ersatz Passes” for former Nazis to move clandestinely through Switzerland and disappear beyond the Allies’ control. Among the most favored routes was the regular KLM flight, booked in Swissair offices, to Argentina and Brazil. “The Swiss government,” noted Tom Caruth, the assistant military attaché in Bern, “made a considerable profit getting rid of [the Germans and ensured] that too many questions were not asked.”
Other privileged Germans, allowed to remain in Switzerland, were enjoying such relaxed conditions that the country was condemned in the House of Commons as a refuge for former Nazis. In Lugano’s luxury hotels and villas, Nazi Germany’s former diplomats, arms dealers and SS officers, pampered by newly recruited staff, paraded in expensive cars. In Davos, the location of the German-owned Catholic sanatoria that in wartime had been centers of German espionage, former Nazis who had crossed the border looking impoverished soon tapped into their protected bank deposits to buy new clothes, eat well and rejoin “the anti-Semitic movement.” In their conversations, none voiced any contrition about the past. Rather, they spoke of vengeance against the Americans for the injustice they had suffered. Among the many sources of suspected income were 15 tons of gold bullion, mostly in coins, missing from a Berlin bunker controlled by von Ribbentrop’s Foreign Ministry and 3 tons that had been smuggled across the border into Switzerland at Lake Constance. None of those Germans was pursued as the Jews had been by von Steiger’s police or was subjected to investigation by Compensation Office officials, who were preventing Jews from gaining access to their funds. The accumulation of those reports even persuaded the British and French governments in September to send protest letters to Bern about the Swiss failure to fulfill their promises. The instinctive reaction in Bern was to ignore any criticism, although German influence was beginning to encroach on Switzerland’s attitude toward the accord.
On September 13, Stucki chaired the first meeting of the Swiss commission to implement the accord. Two antagonists faced him across the conference table. Robert Dunant, representing the Bankers Association, was upset and determined to forestall the transfer of 50 percent of the German property, the loot and the heirless assets to the Allies and Jews. Having warned Petitpierre since March that the Currie agreement was dangerous, Dunant, the son of a prominent Swiss diplomat, had ever since unloaded his fellow members’ complaints onto the minister, attacking the government’s opinion that “the Swiss people would not understand if the German assets were left untouched.” In funereal tones, the bankers’ representative expressed his “exceptional regret,” as a Swiss patriot, that the accord had been signed. “It’s contrary to Switzerland’s constitution,” he insisted, “it will undermine Switzerland’s sovereignty, and, most seriously, it will be exploited by the Allies to allow Switzerland’s competitors to discover our commercial secrets.” Stucki understood that the bankers were declaring war on the accord, expecting Switzerland to renege on the agreement.
The second antagonist facing Stucki was Heinrich Homberger of the industrialists’ Vorort, the representative of Switzerland’s most powerful clan. Homberger’s influence was only too evident: he was provided with an office in the Ministry of Economics to facilitate his access to civil servants and ministers in the shaping of Switzerland’s policies.
Stucki’s opening remarks, which ruffled his adversaries’ feathers, showed that he was not easily manipulated: “There’s resistance to the implementation of the accord. We’re getting reports that some financial groups are causing problems in the freeze on private German assets.” Dunant and Homberger knew that the reality was worse than Stucki and Schwab could imagine. Swiss companies that had agreed to become protectors of German companies at the outbreak of the war were refusing to transfer property back to the Germans—either to protect it from seizure or purely for profit. Other Swiss displayed outright greed. “It’s shameful,” said Max Ott of his countrymen’s avarice, “how many people think that they can just take these German assets.”
Unknown to Homberger and Dunant, Schwab’s suspicions about their activities had prompted the Compensation Office to tap a number of telephones. Schwab’s motives were laudable. He was deluged by rumors and unsubstantiated reports, and his only chance of discovering loot and hidden fortunes held by those known to be working closely with the Germans was by taps. Those suspicions nonetheless reinforced the antagonism in the room, signaling to Stucki, whose approach would increasingly reveal his Jekyll-and-Hyde character, that to avoid isolation and allay the financiers’ fears he should switch direction. So, with a hint of skepticism, he began explaining how the implementation of the accord could be delayed. The principal ruse, he suggested, was to argue with the Allies about the exchange rate for calculating the value of the German assets. “We fought like lions in Washington over the exchange rate,” Stucki told Homberger and Dunant. “The Allies are obviously very interested in selling off the German assets as fast as possible, not least because the first SF50 million is to be used for the Nazis’ victims. But so long as the sale hasn’t started, they can’t have the money. So we’ve got a bargaining counter which we shouldn’t waste.”
Homberger warmed to Stucki’s new defiant tone. In cryptic terms understood by everyone present he declared: “I’m pleased with that report. I’ve always wondered whether the accord could ever be implemented. I’ve always believed that fixing the exchange rate will determine everything.” Left unspoken, however, was his anger with Stucki. Germany’s assets in Switzerland, he believed, should not be shared with the Allies but should be used to pay off Germany’s debts to the Swiss state.
Nine days later, at the second meeting, Homberger raised a new demand. German assets in Switzerland, he told Stucki, should also be used to pay off private debts owed to Swiss nationals. “That’s impossible,” protested Stucki, clearly disliking the industrialist’s motives. “The Allies insist on using the money
for reconstruction and we must hand over some money to the victims of the Nazis. There’ll be a huge argument with the Allies if we do what Herr Homberger wants.” Homberger was unimpressed: “Your arguments are political and everything will change.” Stucki disagreed. “The accord may be crude; but if it looks as if we are breaking the agreement and representing German interests, it would do us no good and we’d be giving the Allies the chance to take everything.” Stucki knew how to interpret Homberger’s silence. Switzerland’s industrialists were untroubled by the Allies’ feelings or threats.
Toward the end of that second meeting, Dunant asked about the fate of the heirless assets. Stucki’s reply was encouraging. Their fate, said the official, would be determined by those sitting around the table. There was no mention of asking Switzerland’s financial community to deliver the results of its investigation initiated by Petitpierre. The subject would not be formally discussed for another two years.
Stucki’s resolute indifference was prompted by the sudden turmoil across the border. News reports were describing a major break in relations between the Western Allies and the Soviet Union on the question of Germany’s economic future. For the first time a permanent division of Germany was being discussed. In the developing struggle to establish Europe’s fate, Switzerland was too unimportant to attract much attention from the Allies.
The reply to the Foreign Office’s mild protest in September had been a question from Stucki calculated to deter any further interest. Britain was asked to supply any information about the heirless assets in Switzerland and to explain how the British government intended to discover the heirless assets deposited in Britain. Gerry Villiers was perplexed. There was no mention of any Allied responsibility in the Paris Agreement, and naturally the British government had not contemplated searching the British banks for those assets—nor did it consider such a search possible. In the absence of banking secrecy laws, inquiries by Jewish survivors without any information were routinely circulated among Britain’s banks, and if the names matched, the bank immediately admitted the existence of an account. All that was required was for the claimants to prove their right to the inheritance. The Swiss, it was clear to Villiers, were “just fishing.” The British could not suggest to the Swiss how else to trace the assets. The best solution, Villiers decided, was to “throw the ball back” to the Americans, such passionate supporters of the cause: “I’ll be interested to see what the result will be.” Six months had elapsed since the Swiss had promised to explain their proposals for the heirless assets. Selous, the commercial secretary in Bern, wanted to know whether he should formally inquire about progress. The consensus in London was to ignore the Swiss query and to remain silent.
In Paris, a similar Swiss inquiry received an obfuscatory reply. Since the nonmonetary gold found in Germany, replied the Quai d’Orsay, had been given to the Jews, the French government was not obliged to introduce legislation to discover and hand over to the victims of Nazism any property deposited in France. This evasion concealed France’s refusal, in contrast to the behavior of the British and U.S. armies, to hand over to the Allied depository all the gold and other valuables whose ownership was now unknown but that had been confiscated from the Jews. Among the valuables shipped to Paris, allegedly for the compilation of an inventory, were 2,500 kilos of gold belonging to Hungary, and cases of jewelry and paintings, seized from Jews, discovered in the Austrian Tyrol. Their fate in France remained unknown.
The Swiss letter to the State Department was cunning: “It would be helpful to the Swiss authorities to know the basis for the allegation of the Allied governments that a considerable number of the victims of the Nazi persecution died without heirs and had their estates in Switzerland.” At the end of the short, polite note was a reference to Poland’s claims to the heirless assets of Polish citizens. In their struggle to find an answer to the main question, State Department officials neither pondered the mention of Poland nor contemplated any amendment of the law to discover the heirless assets in U.S. banks. There were no secrecy laws to prevent a bank’s disclosure of a deposit, and if an account was dormant for ten or more years, it was automatically disclosed in public advertisements. To increasingly beleaguered State Department officials, the minutiae of small sums of money and wartime principles were becoming irrelevant compared with the fate of Europe. Paul Culberston, head of the State Department’s Western European division, shared the British lack of interest in Safehaven. Irreconcilable difficulties with the Soviet government relegated the differences with Switzerland to the status of an unwelcome irritation. Western Europe’s survival depended upon a unity of purpose. Chasing Nazi war criminals and Nazi loot was interfering with the bewildering skirmishes being fought over the evolution of a strategy. The crusaders had become an embarrassment. The United States, Culbertson told William Clayton, assistant secretary of state, in October, was viewed by the Swiss as the “big bad wolf,” not least because too many staff members in the State and Treasury Departments considered the Swiss “a bunch of crooks.” Culbertson wanted to remove the “running sore” with the Swiss and withdraw all but one of the Safehaven personnel in Switzerland. The Swiss should be allowed, he concluded, to run Safehaven. Clayton agreed.
Without telling Rubin, Culbertson dispatched Benjamin Kittridge, a State Department official, to visit Albert Nussbaumer in Zurich. Kittridge confided to the Swiss banker, Petitpierre’s roving ambassador, that his department was “fed up with postwar animosity” and wanted to reestablish a normal relationship with Switzerland. The problems, admitted Kittridge, were caused by “certain personalities among the American delegation in Bern whom he would investigate.” Nussbaumer immediately advised Petitpierre to respond to the “indisputably” pro-Swiss State Department, “who do not agree with the Treasury.” To the minister it appeared that Safehaven was all but dead, not least because the Treasury representatives in Bern were failing to block the sieve as loot disappeared and German property became harder to expropriate. The quest for the heirless assets was suffering in the retreat.
Placed in the front line of the dragnet for the plunder and the Jewish money, Max Schwab and Max Ott of the Conservation Office were handicapped. Confronted by the overwhelming hostility of the bankers and industrialists, they could no longer rely on the Political Department for support. Despite his honest but confused intentions, Schwab could not untangle the myriad interlocking local relationships between German and Swiss companies, nor could he penetrate through the secrecy laws to discover the heirless assets or the German assets.
Schwab’s failures to seize German property for the Allies were frequently picked up by Allied intelligence officers in Germany intercepting the mail with Switzerland. Letters addressed to Swiss banks, often coded, revealed Germans illegally entering Switzerland to manage their assets, which should have been sold, or using their funds in blocked accounts to offset debts to each other; other intercepts revealed how Germans were transferring their fortunes out of Switzerland by using Chinese or South American businessmen to buy Swiss products with the Germans’ money. Inside Switzerland—unlike the situation during the war—neither MI6 nor two American intelligence officers, Harvey Ginsberg and James Kronthal, had replicated the Allies’ wartime successes by comprehensively penetrating the Swiss banks, the industrialists’ boardrooms, the Compensation Office or Stucki’s office. Inconsequential intelligence reports to London and Washington mentioned an increase in food parcels sent to Germany, the suspicious activities of a Christian relief organization and the continued presence of suspected Germans, but in total it amounted to ignorance. Schwab and his staff, dubbed “uncooperative” by Selous, revealed nothing. Whenever American or British diplomats submitted examples of undisclosed German assets, Schwab merely replied, “We know about that already.”
Schwab was lying, yet out of the Allies’ sight he was fighting with the banks to reveal the truth about the Allies’ reports. In one case, he had inquired about a German account. The bank replied that on February 16, 1945
, the day the freeze was declared, the account did not exist. After persistent questioning, Schwab discovered that just days before February 16, in anticipation of the freeze, the account had been transferred into the name of an Englishwoman living in China and the German had continued drawing on his money by using blank checks signed by the woman. “It is,” admitted Schwab, “a typical case of cloaking.” Although the bank was liable to prosecution and a fine, no action was taken. Even the bank’s refusal to reveal its client’s name remained unpunished. Switzerland’s prosecutors were refusing to administer a law denounced by bankers and their clients as unjust and ridiculous. “We’re not finding much understanding in the courts,” Ott told Stucki. “If the courts refuse to do their job properly,” replied Stucki, “that’s their problem. That must not prevent us from prosecuting.” Ott was not persuaded. His feeling was that “the Germans should be grateful to the Swiss for using the freeze to protect their assets.” Their irreconcilable struggle remained unknown to Allied diplomats in Bern, who witnessed only Stucki’s aggressive defense in the national interest of what he privately condemned.
To denigrate the Allies, Stucki called a press conference in January 1947 to announce that, although the Allies had reported one thousand cases of hidden German assets, only five were unknown to the Swiss government. In Sweden, Rubin had swiftly negotiated an agreement that 74 percent of German assets would be sold and the proceeds handed to the Allies and thence the refugees; by contrast, the Swiss vigorously disputed the value of German assets. Instead of the $1 billion estimated by Allies, the Compensation Office’s valuation was $120 million. Stucki’s department, cajoled by bankers and industrialists, was seeking ruses to avoid implementing the accord and to manifest exemplary fairness toward the Germans as proof of Switzerland’s reliability: “We cannot allow the world to think that the German owners did not get fair compensation.”