WORLD

Nazis, gold—and justice

Swiss banks confront their past

NOMI MORRIS November 11 1996
WORLD

Nazis, gold—and justice

Swiss banks confront their past

NOMI MORRIS November 11 1996

Nazis, gold—and justice

WORLD

■SWITZERLAND

Swiss banks confront their past

NOMI MORRIS

Before the Nazi Holocaust, Abraham Hammersfeld was a successful Viennese businessman who supplied linens to hotels across Austria. His grandchildren Hans and Renée, who now live in Toronto, remember him as a religious man, attentive and concerned about his family’s future. Hans, Renée’s cousin, was 11 in 1941 when he saw his grandfather for the last time. That was just outside Riga, Latvia, where part of the family fled after they were driven from their homes by anti-Jewish laws. Much later, Abraham’s descendants learned that their grandfather and his wife were among a group of Baltic Jews who were shot in front of a mass grave that they had to dig themselves. Renée, who survived countless horrors, including a year in the Auschwitz death camp, recalls that before the German annexation of Austria in 1938, her worried grandfather took her aside to say he had put some money away in Switzerland.

“I don’t know if it was $5,000 or $50,000,” says Renée, who met and married Royal Canadian Air Force serviceman Charles Appel at the end of the war. “I was busy surviving and wasn’t interested in the details.” Now Appel and her cousin, Hans Hamersfeld (the second m fell out when he immigrated to Canada), are among nearly 1,000 survivors and relatives of Holocaust victims who have submitted claims to Switzerland’s banking ombudsman for assets that the ultra-secret and bureaucratic Swiss banking establishment had steadfastly refused to acknowledge until late 1995. Mounting international pressure— spearheaded by the World Jewish Congress and the U.S. government—has plunged a quiet country of seven million people into a moral accounting of its banking secrecy laws, its wartime record, and the principle of neutrality on which its national identity is based.

The scandal goes beyond the tens of millions—some say billions—of dollars in unclaimed accounts, which according to Swiss law revert to the banks rather than state coffers, as in the United States and Canada. Recently declassified U.S. and British intelligence reports have also revealed that Swiss banks profited from gold that the Nazis looted from Jewish victims and the treasuries of occupied countries. Switzerland has been forced to admit to a secret agreement with Nazi Germany to turn back Jewish refugees at the border, which affected at least 10,000 of the wartime desperate. And last month, the Swiss foreign ministry first denied, then acknowledged, secret Cold War deals with Poland and other East Bloc countries to use money from unclaimed accounts—mostly Jewish—to compensate Swiss nationals who owned property in the east that was nationalized by communist regimes.

“I don’t see why a country like Switzerland should grow rich on the tragedy of the Jewish people,” says Appel, explaining why she and her cousin have each paid a $300 fee and rustled up 60-year-old family letters to support a claim that might in the end prove untraceable and yield nothing. Even with a new spirit of cooperation by Swiss authorities, the obstacles are legion. To escape detection by the Nazis who were seizing Jewish assets across Europe, many Jews opened numbered accounts or asked gentile friends to open accounts on their behalf. Some of those trust account holders may have taken the money for themselves after the war rather than search for the rightful heirs.

Appel and Hamersfeld, who survived the war in a brutal Siberian prison colony, recall that the family inquired through the Swiss consulate in Toronto about their grandfather’s legacy. They were politely rebuffed. It is a story told again and again by survivors around the world who were asked by Swiss bankers to provide account numbers, proof of inheritance or a death certificate— the same stringent rules that are applied to the heirs of any deceased account holder. Says Appel: “I entered Auschwitz with my hair shorn, no clothes, and my hands held high. How could I have such papers?”

In the case of survivor Marianne Singer—who last saw her father, Fritz Neumann, at the Terezin concentration camp near Prague—the relatives had no account number but they did have a code word of the type used for numbered accounts. “All through my childhood I’d hear frustrated comments about how there was no way to go about looking, since Swiss secrecy laws required the account number, dates and other details,” says Neumann’s grandson, John Singer, who lives in Fort Lauderdale, Fla. and is working on his mother’s claim. Grandfather Neumann owned a cut-crystal factory that exported to 30 countries from Jihlava, the Czech town that was also the home town of renowned

composer Gustav Mahler. Singer suspects his grandfather had substantial holdings, but says justice, not money, is the reason for pursuing the claim. His grandfather perished at Auschwitz and his mother went through five different camps before she was liberated at Bergen-Belsen, weighing 60 lb. “If they paid us 10, 20, or 100 million dollars it wouldn’t begin to redress the pain,” Singer says. “But I feel a moral responsibility to leave no stone unturned. I would be betraying my grandfather’s memory if I didn’t look, even if there is no longer anything there.”

Toronto lawyer Sergio Karas, who represents Singer and the Hammersfeld clan, says his dealings with a Swiss lawyer have convinced him that both families have “credible claims.” Karas has helped 10 clients—including one in Vancouver and one in Montreal—submit their applications. He says the Swiss are considering three logical options to resolve the dormant account dilemma: return money with interest to its rightful owners where bank officials can trace a “match,” provide compensation where they cannot find the money, and provide a lump sum to Jewish organizations or charities for the rest. The real issue, says Karas, is that a cloak of bank secrecy and political neutrality allowed the Swiss to avoid confronting their past for decades.

WORLD_

The Swiss did in 1946 transfer some Nazi gold to the Allies, who sought to use it to help rebuild Europe. The Swiss also paid out an amount worth $77 million today to those persecuted by the Nazis, under a Washington agreement that unfroze Swiss assets in the United States and German assets in Switzerland. Then, in 1962, the Swiss banks were forced by law to compile a list of unclaimed funds of foreigners and war refugees, which amounted to $23 million at today’s value. By 1974, after processing 7,000 claims, most of that money had been paid to heirs and the rest to Jewish and Swiss refugee aid organizations.

Last year’s 50th anniversary of the end of the Second World War was one of several recent events that sparked a renewed interest in Swiss wartime dealings. Officials of the World Jewish Congress began to pore over declassified American and British documents, an effort that led to a $27-billion suit against Swiss banks by Jewish heirs in the United States. The British Foreign Office also launched an investigation, prompted by questions in Parliament. Among the discoveries was that the Swiss had misled Washington about how much Nazi gold they had at the end of the war. Other researchers charged that the Nazis sold leather from Jewish factories to the Swiss shoe concern Bally. And a series of papers pointed to collaboration between Swiss bankers and businessmen and the Nazis to move gold and looted property in and out of Switzerland. Among the plunder was stolen artwork, jewelry, Jewish ritual objects and even gold from the teeth of gassed Jews, which was allegedly sold to the Swiss National Bank.

Veteran Swiss parliamentarian Jean Ziegler, who represents a Geneva riding, says such revelations have become “an earthquake, a deep trauma” in the Swiss national consciousness. Ziegler is among those who believe it is time for Switzerland to revise its benign Sound of Music historical selfimage. “In the past, Switzerland strangled its memory and denied its crimes. Now, with the revelations from abroad, we can no longer deny them,” he says. “We are like a criminal who has been caught.” Ziegler, who earlier this year published a book critical of the Swiss banking industry, calls Swiss neutrality “a lie, plain and simple.” The younger generation, in particular, he says, must come to terms with the role played by their parents and grandparents in the Second World War. “They became accomplices by accepting the gold taken from the dead at Auschwitz. The immense prosperity of the Swiss banks is founded on profits made with the Nazis,” Ziegler says. “Since the Second World War, Swiss neutrality means making the most money possible with everybody.”

Stung by such vociferous attacks, the Swiss Banking Association last year pledged to conduct a new review of dormant Jewish bank accounts, and came up with an estimate of $43 million from 775 accounts in 36 banks. But the group opened itself to criticism by failing to consider non-cash assets — such as jewelry and gold bars— and deposits in insurance firms and trust companies. By last spring, the government had hired a U.S. public relations firm to protect Switzerland’s image, linked to the credibility of its banks, and had authorized the ombudsman to oversee the processing of claims against Switzerland’s 400 banks.

It was not enough. In April, U.S. Senator Alfonse D’Amato opened high-profile Senate committee hearings to find out whether Swiss banks were withholding funds from Holocaust victims. Soon after, the Swiss finally initiated legislation to relax 1934 bank secrecy laws so that an independent panel of three Swiss executives and three representatives of Jewish organizations can probe the vaults. Historians were appointed to study the role of the Swiss banks and the Swiss government in co-operating with Nazi Germany during the war. But the revelations kept coming. In mid-October, D’Amato’s committee broke the news of the secret compensation deal between Switzerland and Poland to use unclaimed funds in settling Swiss claims over nationalized assets. Now the Swiss government has appointed even more historians to probe that and similar deals with Hungary, Romania, Bulgaria and Yugoslavia. And the postcommunist governments of several of those countries have announced their own probes.

In fact, the 1989-1990 fall of Soviet Bloc communism was a major trigger for the current pan-European re-examination of the Holocaust. In the Czech Republic and east-

ern Germany, authorities have received tens of thousands of claims from people whose property was seized either by Nazis or communists, and have settled many. Cities such as Moscow and Berlin have opened previously secret archives, providing new information for historians to sift through. Negotiations are under way for the exchange of valuable art treasures— including rare books and original musical scores—that were spirited from one country to another by conquering or retreating Soviet or German armies. Some of the art was part of state collections—and some was stolen by the Nazis from Jewish victims. That was the case with 8,000 items that went on the auction block in Vienna last week as a gesture of atonement by the Austrian government, which had ignored Jewish claims for decades. The sale raised $19.6 million for the care of Holocaust survivors.

Two other European authorities were grappling with new Holocaust-related scandals last week. In Paris, the city council halted a sale of publicly owned apartments amid allegations that several of them had been seized from French Jews who were deported by the wartime Vichy regime. And Portugal was buffeted by a magazine report claiming that it had received Nazi gold valued today at $1.35 billion, possibly through Swiss middlemen. Portugal evidently tried to use the gold to buy coal from Poland.

In Switzerland itself, banking ombudsman Hanspeter Häni announced he would reveal next week the progress made on Swiss bank account claims. He was responding to a sharp attack by the increasingly impatient World Jewish Congress. “After 2,000 inquiries and 1,000 formal claims, the Swiss ombudsman has returned not a cent,” WJC vice-president Kalman Sultanik said in New York City. ‘This a cruel farce.”

The Swiss, too, are re-examining the behavior of the secretive banking establishment—and their own forebears. Sébastien Guex, a historian at the University of Lausanne, says that contrary to popular belief, the 1934 bank secrecy law was not enacted as a humanitarian way of protecting Jewish assets from Nazi scrutiny. It was, he says, designed to provide a tax haven for the French. The anti-Nazi explanation was devised by spin doctors of the 1960s. Says Guex: “In 1933, after Hitler took power, the attitude of the Swiss authorities was not at all to protect the belongings of the Jews, but to protect Switzerland from the arrival, en masse, of Jewish refugees.” The wartime record is also bearing heavily on the current Swiss debates about entering NATO and the European Union—as well as debates about the country’s role as a site of money laundering for drug barons, terrorists and other criminals. “The Swiss bank debate goes to the issue of Swiss neutrality,” says Toronto lawyer Karas. “It’s a question of whether you really can live as an island within Europe. The Swiss think they live in Disneyland.”

Appel survived Auschwitz. 'How could I have papers ?'

To his client John Singer, who is searching for his grandfather’s legacy, the issue is even simpler. “You can’t put a price on human life,” he says. “But the Swiss should do what’s right with those funds.” Now, with five separate probes under way, it appears the Swiss are finally determined to do that.

JO-ANNE VELIN