Report Assails Swiss, U.S. Neutral Nation Profited By Dealing With Nazis, While U.S. Failed To Force Swiss To Come Clean

Switzerland used its neutral status to profit abundantly from business deals with Nazi Germany, according to a scathing federal report released Wednesday that faults the United States for not forcing the Swiss to come clean during and after World War II.

The study also concludes that the Swiss unwittingly trafficked in gold bars struck from melted-down valuables of Jewish war victims - from whom the report says the Nazis stole “everything … down to the gold fillings in their teeth.”

“The Swiss were the principal bankers and financial brokers for the Nazis, handling vast sums of gold and hard currency. … Neutrality collided with morality; too often being neutral provided a pretext for avoiding moral considerations,” said the introduction to the 256-page report, written by Commerce Undersecretary Stuart Eizenstat, who headed a seven-month, 11-agency effort.

Aside from the massive gold sales, the report lists a wide range of Swiss-Nazi commercial relations, some established in the early 1930s, that created the basis for a long and profitable economic entanglement between Switzerland and Germany:

Switzerland’s industries engaged in weapons production for the Axis,

Swiss banks helped Nazis spirit war booty, such as gold and foreign exchange, into Axis-sympathetic areas of Latin America, notably Argentina,

Swiss convoys carried goods and raw materials from Spain across France to Germany,

Switzerland also allowed an unprecedented use of its railways to link Germany and Italy for the transport of coal and other goods.

“Nobody was neutral,” sighed Rositta Kenigsberg, a North Miami Beach, Fla., resident and member of the U.S. Holocaust Memorial Council, whose father survived internment in Auschwitz and 10 other Nazi concentration camps.

“If you have a country that became a banker for the looted assets, how was that neutral?”

The report, added Elan Steinberg, executive director of the World Jewish Congress, “validates the appeals, the claims, the testimonies of Holocaust survivors over 50 years. It doesn’t generalize. It doesn’t stereotype. But it challenges us to confront history in a dispassionate manner.”

Steinberg saw the report as a victory for the World Jewish Congress: Industrialist Edgar Bronfman, who is the WJC president, has struggled for months to pressure Swiss banks into making public their records.

President Clinton assigned Eizenstat, a popular administration troubleshooter, to lead the study after Bronfman accused Swiss banks of withholding the contents of secret bank accounts from the heirs of Jews exterminated in Nazi concentration camps.

Eizenstat conceded in a briefing that the report shed no light on the question of Holocaust victims’ Swiss accounts. A commission headed by former Federal Reserve Chairman Paul Volcker is investigating that aspect of the Swiss banking system, he said.

But, he added:

“Of all the neutral nations, (Switzerland) had the deepest and most crucial economic relationship with Nazi Germany, involving banking, trade, industrial production, and the use of their railways.

“Without question, Switzerland and other neutral nations benefited from their trade and financial dealings with the Germans, and helped prolong the war effort.”

Yet Eizenstat said the study uncovered no proof that the Swiss knew they were trafficking in “victim gold.”

Still, he recommended that the last remnants of the gold - bars valued at $70 million - be transformed into a fund to compensate Holocaust survivors. The bars are a combination of gold the Nazis stole from central banks in the nations they conquered and gold stolen from Nazi victims.

They are in the custody of the Federal Reserve Bank in New York and the Bank of England while the U.S.-British-French Tripartite Commission decides on its disposition.

Eizenstat said the fund should primarily go to the 50,000 Holocaust survivors who spent the Cold War behind the Iron Curtain. Unlike survivors who made it to the West, they never received reparations from Germany that began in the 1960s.

About half live in Hungary, he said.

France, Italy, the Netherlands and Austria presently have claims pending for 90 percent of the remaining gold bars. Eizenstat said they should voluntarily offer to give them up.

“If a significant portion of this amount could be given to Holocaust survivors, it would help them live out their declining years in dignity,” he said.

The Tripartite Commission was created in 1946, and in the 50 years since the war it has distributed most of the recovered Nazi war booty - 329 metric tons - to the banks of central Europe.

Today those tons would be valued at $4 billion, Eizenstat said.

In Washington, a Swiss representative said he was distressed to hear that the gold bars included victims’ melted down treasures.

“If this is really true, it is grave news of the most shocking nature,” said Thomas Borer, the head of the Swiss government’s task force on addressing the Swiss role during and after the war. “The degree of cynicism and cold-bloodedness it would take for the Nazi brutes to re-melt their victims gold and resell it as regular central bank gold is almost beyond the power of comprehension.”

Graphic: The Nazis and looted gold