Secret Bankers For The Nazis

AS A SMALL CHILD, Elizabeth Trilling-Grotch was smuggled out of the Warsaw Ghetto by her Christian nanny, who hid her in a load of laundry. Her parents perished in World War II, like so many other European Jews, but Trilling-Grotch, who now lives in California, says her mother told the nanny "not to worry, there was money in a Swiss bank account." Her father, Roman, had owned a textile factory, and he saw the war coming in time to get some money out of the country. "He had complete faith in Swiss honesty," his daughter says now. But after the war, her Uncle Max ran into a stone wall when he tried to recover the funds. He did not know the name of the bank or the account number, and the secretive Swiss weren't interested in looking for dead depositors. "They pretty much ignored him," says Trilling-Grotch. "He felt betrayed."

Switzerland is famous for its uncompromising neutrality and the utter discretion of its bankers. But in World War II, "neutrality" was not what the unwary assumed it to be. Virtually defenseless had the Germans chosen to invade, Switzerland paid dearly for its freedom by acting as banker to the Nazi war effort. It was a Faustian bargain that the Swiss themselves have only begun to acknowledge. It now seems clear that the Swiss made a bundle out of the war-far more than other neutral countries like Sweden, Spain and Portugal. Precisely how much the Swiss made, or who among them made it, will probably never be known. But for the first time in five decades, a concerted effort is being made to find out.

At the heart of the campaign is a dispute about the lost assets of Jewish Holocaust victims. Under an agreement signed last month between the World Jewish Congress and the Swiss Bankers Association, the banks have promised to give an independent investigating commission "unfettered access" to their accounts, the first time any outsider has been granted such access. The commission is expected to begin work as early as this week. Stunned by revelations in Swiss newspapers, the country's younger generation, and even some of its bankers, seem eager to learn the truth about a past too little examined.

Strands of that truth can be found in a gigantic trove of Allied documents declassified in recent months, some of which have been obtained by NEWSWEEK. The documents, which include U.S. intelligence reports compiled in the 1940s in an attempt to track German loot, go further than ever in detailing the extent of Swiss involvement with the Nazi regime. The papers also show how the Nazi horror was financed with billions in blood money stolen from its own victims. They weren't only the Jews, but occupied governments and other citizens stripped of gold, jewelry and other property. Many of the documents embarrass Swiss banks that since the war have become world-class institutions renowned for their integrity. One 1944 U.S. intelligence report, for example, accuses Union Bank of Switzerland and Credit Suisse of routinely laundering Nazi money during two months of that year. (Both banks declined to comment on the document. But a Credit Suisse spokesman said that during the war, the bank "had a businesslike relationship with the Germans," operating within the guidelines of the Swiss Bankers Association.) Other banks are cited for falsifying stock certificates so they could fence securities the Germans had looted from France.

The documents were unearthed this spring by the Senate Banking Committee and the WJC as part of a campaign to retrieve victims' lost assets. The papers suggest that, without the Swiss as their middleman and money launderer, the Nazis probably would have been starved for funds by early 1944. "The other neutral nations... refused to accept gold from the Reichsbank, [while] Switzerland carried on gold transactions" until the beginning of 1945, says a U.S. memo describing the postwar testimony of the head of the Nazi regime's foreign-exchange department.

Of course, Swiss neutrality also served the Allies well at times. High-level spies like Allen Dulles made their bases in Switzerland. And in the midst of the Holocaust, when the Swiss government interned Jewish refugees and excluded many others because of their religion, Switzerland was an outpost for international Jewish agencies working in Europe. But the documents suggest that the Swiss were far from evenhanded. A 1945 Treasury memo reports that "during the course of the war the Swiss [bank] secrecy law worked only against the Allies and not against the Axis."

After the war, the secrecy laws continued to work against the survivors of Jewish depositors. No one knows how much money is in those accounts; the WJC admits it's a tiny amount, compared with what the Nazis stole in occupied Europe and funneled to Switzerland for safekeeping. But to the survivors, finding out about Jewish deposits is important. Mordechai Karni was 14 when his father told him, in a cattle car on the way to Auschwitz, that he had a bank account in Switzerland. By the time young Karni was liberated, his entire family was dead, and he had forgotten the name of the bank and the account number. He moved to Israel and eventually became an ambassador. When he visited Switzerland in the 1960s to search for the family fortune, he got nowhere. He says he was told "if you had no number, you had no chance. So I gave up." Now, he says, "if they would just open the books and let us look through the lists, that would help a lot."

"The last chapter of World War II is just starting," says Edgar Bronfman, chairman of the WJC. And now the Swiss are ready to cooperate. "They recognize you can't be a pariah and be effective as an international bank," says Michael Mann, head of the international department of the U.S. Securities and Exchange Commission. Scandals over the hidden assets of dictators like Ferdinand Marcos of the Philippines have embarrassed the Swiss. Since 1989 banking secrecy has been curtailed by reforms that make it illegal for banks to hide laundered money or other proceeds of crime. There probably will never be a full financial accounting of prewar Jewish deposits, many of which were made under the names of Swiss lawyers, accountants or other middlemen. But at least the Swiss have begun a moral accounting, and for many Holocaust survivors, that may be the only comfort still within reach.