Why Swiss Banks Paid

Sixty million Swiss francs ($40 million): This is the sum that Swiss banks say they will pay out to the victims of Nazism and their descendants. The Swiss Bank Association considers that this sum will be sufficient to restore international confidence in its banks. This trust has been shaken over the past year after the details of the collaboration of several of these banks with German Nazis as well as their attempts to hide the accounts of the victims of fascist terror were revealed. For half a century, this money has been working for the bankers of the association. The publication this Wednesday of the list of Swiss bank accounts that have been dormant since World War II was intended to put an end to this enterprise.


The worried Swiss bankers and politicians pulled their forces together, since not only was trust in their financial institutions put in question but the prestige and image of the country.


At a conference earlier this year in Geneva, Rabbi Marvin Hier, founder of the Simon Wiesenthal Center in Los Angeles and activist in the World Jewish Congress, revealed a previously secret report prepared long ago by the American intelligence service that showed Switzerland was not as neutral during the '30s and '40s as its international status required. It turned out the Swiss helped the Nazis hide gold that they had stolen from Jews in their banks and directly traded with the axis powers in Berlin, Rome and Tokyo, providing Japan, in particular, with military materials and technology.


This was the basis on which the World Jewish Congress defined certain political and commercial circles in Switzerland of the time as "accomplices to the criminal activities of fascists" and "voluntary or involuntary participants in the Holocaust." Thus, despite the publication of the names of holders of dormant accounts, the class-action suit by a Jewish group seeking billions of dollars for restitution of mislaid and stolen Holocaust-era assets is still scheduled for the end of the month, despite the Swiss government's motion to dismiss it.


According to one of the most authoritative committees, under the leadership of U.S. legal expert Michael Hausfeld, 85 percent of the $12 billion that was stolen from Jews in Europe at the beginning of World War II went through Swiss banks. Moreover, there are fully identifiable accounts that were opened by Jews from Germany, Poland and Hungary, who later disappeared in the concentration camps and gas ovens of the Holocaust. A large part of the stolen gold, hard currency and precious stones landed in a special fund of the Nazi leadership and was put into foreign bank accounts.


During the Geneva conference, Hier presented Germany and other European countries, as well as Latin American ones, with a list of people in Hitler's circle who were given the right to hold bank accounts abroad and requested permission to trace them. In all, there were 334 names listed, including the heads of concentration camps, their wives and agents of Berlin in other countries who were uncovered. The worth of these assets is estimated to be some $30 billion.


The Swiss bankers and politicians did not avoid collaborating with the international commissions and confirmed the existence of the dormant accounts. An important step on their part was the partial revision of the law on bank secrecy and the limits on access of international commissions to archives showing bank activity between 1933 and 1945. During the past few months, however, the bankers were only able to come up with only 60 million Swiss francs.


The indignation at such a small sum quickly turned into a political problem. U.S. Senator Alfonse D'Amato accused Swiss bankers of trying to hide a large part of the assets of the victims of the Holocaust and misusing the notorious bank secrecy privileges. D'Amato's committee and the World Jewish Congress also published documents that showed Swiss involvement in a scandalous deal that allegedly was made between the bank association with the Polish communist leadership in 1949. According to the documents, Bern worked out an agreement with Warsaw by which the accounts of Polish victims of the Holocaust would be used to "compensate" for the losses to Swiss citizens from the nationalization of their property in Poland in the first post-war years.


The pressure of American financial and political circles increased day by day. The Swiss side finally conceded to allow an independent commission to investigate the dormant accounts in Swiss banks, under the leadership of Paul Volcker, former chairman of the U.S. Federal Reserve. In February, three large Swiss banks tried to "get rid of the problem" by proposing their own humanitarian fund for victims of the Holocaust. The fund was approved by the Bank Commission and bankers put $90 million into it.


The work of the Volcker commission with the Swiss side appears to have given mixed results. The list of dormant accounts that was made public in major newspapers around the world and over the Internet provided nearly 2,000 names. But many of them, which possibly include high-ranking Nazi officials, raise serious questions about whether the list indeed points to the assets of Holocaust victims. Swiss bankers, however, continue to assert that the traces of money and valuables of the victims of Nazism in their possession amount to only 60 million Swiss francs. With the publication of the list, they stated their intention to begin paying this sum to those who can present convincing evidence of their right of inheritance.





Alexander Shumilin is a Cairo-based correspondent for Novoye Vremya. He contributed this comment to The Moscow Times.