Switzerland Under Siege

No sooner had soothing PR oil been poured on the troubled waters of Swiss-Jewish relations than another, even worse, blunder by the Swiss bankers filled the world's headlines. This was perhaps the finest example yet of the bankers 'concept deficits' about how to deal with the assets of Holocaust survivors that they still hold. In January 1997, an employee at UBS, Switzerland's biggest bank, whose records will be pored over by both the Volcker Commission and the Swiss government's Experts Commission, shredded a pile of unique historical documents. Other saved papers recorded financial deals dating back to 1875, including loan records to Swiss and German firms, and records of properties put under auction in Berlin between 1930 and 1940. Some of those records may have dealt with 'forced auctions' of Jewish property in Nazi Germany, when the Third Reich confiscated Jewish land, businesses and property and put it up for sale.

 

The remainder of the UBS records were saved from destruction by a conscience-stricken security guard, Christoph Meili, who stuffed them down his shirt and smuggled them out of UBS's headquarters on Bahnhofstrasse in Zurich. The humanitarian traditions of Swiss saviours, the wartime diplomat Charles Lutz and the border police commander Paul Grueninger, live on. Meili, who handed the papers over to Jewish groups, was suspended from his job. But he was hailed as a hero by both Swiss Jews and American Jewish leaders, who presented him with a golden menorah (candelabra) and a cheque for SF50,000 to cover his legal fees and living expenses. Meili could technically face prosecution for his actions, as they may break Switzerland's bank secrecy laws. So could UBS, if prosecutors decide that the shredding contravened a Swiss government ban on destroying any relevant documents that could help the search for dormant Jewish accounts. UBS denied that the employee who shredded the documents had any intention of destroying any records that could be used by the Experts Commission and said that no client account records were destroyed. But just how important were the now vanished documents will never be known, as they are gone for ever.

Barely a fortnight had passed since the shredding scandal when Switzerland's battered public image took another pounding. At the end of January 1997, Carlo Jagmetti, Swiss ambassador to the United States, resigned after a Swiss newspaper published his thoughts on the Nazi Gold crisis. These included the observations, detailed in a confidential report sent to Switzerland in December 1996, that Switzerland was fighting a 'war...on two fronts: foreign and domestic'. In most undiplomatic language, Jagmetti also spoke of 'opponents' who 'cannot be trusted'. These were widely believed to be Jewish organisations and senator Alfonse D'Amato. Both welcomed Jagmetti's resignation.

Soon after Jagmetti's resignation, the Swiss bankers finally surrendered to the inevitable. Three leading Swiss banks, Union Bank of Switzerland, Credit Suisse and Swiss Bank Corporation set up a Holocaust Memorial Fund, with an initial contribution of $70 million, to compensate Holocaust victims and their families. The three banks, who paid about one third each, also encouraged other financial institutions to contribute to the fund, and Rainer Gut, head of Credit Suisse, suggested that other commercial banks, the Government and the Swiss National Bank should contribute the same amount. By mid-February 1997 it was still unclear exactly how the fund would be administered and the monies distributed, but the big three banks emphasised that its work would not prejudice or affect any claims from Holocaust survivors, or victims' relatives on monies still sitting in dormant accounts.

This sudden burst of philanthropy aside, the $70 million donation was a small price for Swiss banks to pay to prevent a move that would have cost them hundreds of millions of dollars worth of business. Welcoming the news of the Memorial Fund, the World Jewish Congress announced that plans for a worldwide Jewish boycott of Swiss banks were now cancelled. Once some money had been laid on the negotiating table there was suddenly a new buzz-word in the air: 'co-operation'. Even Senator D'Amato joined in this sudden outburst of mutual understanding, cautioning against 'punitive' steps against the Swiss. The New York state comptroller, Carl McCall, promised to reconsider his decision to bar deposits of state funds in Swiss banks.

History, it seems, can repeat itself, at least where Swiss banks are concerned. At the end of the Second World War Swiss officials had fobbed off the Allies by returning $60 million-worth of German gold from the Swiss National Bank. This time around the big three private banks paid more than the Swiss National Bank, $70 million, but for that they had quietened their former foes at the World Jewish Congress, together with Senator D'Amato and removed the threat of an international boycott. Quite a bargain.

By this time it was hard not to feel a tiny pang of sympathy for Switzerland, battered and reeling under the combined onslaught of the World Jewish Congress and the international media. Like a once mighty boxer who suddenly realises he is punch-drunk, Switzerland is, perhaps most of all, confused what to do next. Two examining commissions have been set up, one in direct cooperation with Jewish groups; the formerly sacrosanct banking secrecy law has been lifted to unveil the truth about the Swiss-Nazi connection; and it seems likely that some kind of compensation fund will be set for aged Holocaust survivors. What more do we have to do? asked the bankers of Bahnhofstrasse and the Federal Councillors in Bern. But the furore refuses to fade. No wonder Hans Baer, of Bank Julius Baer, who has become a de facto spokesman for the Swiss bankers, told the American International Club of Geneva: we still do not have a strategy on how to get out of this impossibly difficult situation.'

Extracted from Hitler's Secret Bankers: How

Switzerland Profited from Nazi Genocide, published by Simon &Schuster, distributed by IBD.