Swiss lies and Nazi gold



HE GIRL, IN the shoe shop can’t help me, nor can the kindly hotel receptionist who comes out into the street scratching her head in puzzlement.  Somehow, given Switzerland’s obsessive tradition of mercantile discretion, it seems completely appropriate that the that the system to trace money which may belong to Nazi victims should be conducted behind an unobtrusive door in a line of little shops at Number 7 Seestrasse, Zurich.

Hans-Peter Häni (pronounced Hannay) is the Swiss banking ombudsman and his office is on the second floor of an old apartment block, up a stairway that could do with a lick of paint.  He has been a little reluctant to talk to another journalist, so widely has he been misquoted, but receives me graciously and sets me down to read a sheaf of documents.  Only after I have read them shall we talk.

The journey that brought me here began the previous evening in a detached house in Giffnock, a southern suburb of Glasgow and a centre of the city’s Jewish community.   Hannah Greenberg, whose father Avrohom Kestenberg was shot in Buchenwald, is one of more than 700 cases processed so far by Mr Häni and dealt with by the Swiss banks.  Dealt with, and almost invariably rejected.

As he led her from the Warsaw Ghetto in 1943, past the German guard whose affability testified to the size of his bribe, Kestenberg, who had been a wealthy manufacturer of soaps and shampoos, told Hannah that there was a dowry for her in Switzerland.  They said farewell.  The family’s old seamstress was waiting round the corner.  She passed her on to a Polish family, and Hannah spent the rest of the war in a village, saying her Jewish prayers silently and her Catholic prayers out loud.  Her mother had already been taken from the ghetto by the Germans.  She never saw either of her parents again.

Her first foster mother was a dour disciplinarian and they often quarrelled.  After the war and her return to Warsaw, she found anti-Semitism still rampant and she became its unhappy butt at school.  Later she jumped at the chance to go to London and was brought up in Clapton, east London, by Mrs Tilly Barber.  She married and eventually came to Glasgow, where her husband Philip is rabbi of Giffnock synagogue.

The years have brought her an active and fulfilled life; but they have not wiped away the pain of that parting, or the nightmares that dogged her teenage years.  Indeed, she still flinches as she remembers her anxieties and dreams. ‘My new mother loved me out of them,’ she says with a deep-felt gratitude.  Nor has time erased her sense of injustice and her conviction that a substantial sum belonging to her is in Swiss banks.

Her case, and hundreds like it, form one strand in a sinister cord of guilt tightening itself around Switzerland’s self-respect and international reputation.  Another is the parallel affair of the Nazi gold in Swiss vaults, some bought from the Nazi regime in exchange for hard currency, some filched from the national banks of subject nations and transported to Switzerland, some looted and melted down, some even from the fillings in the teeth of Holocaust victims.

Fifty years have passed since Switzerland coughed up to the Allies a small fraction of the gold bought from the Germans – an amount said to be worth less than $60 million or about 10%.  Thirty four years have passed since the Swiss Banks attempted to identify money that might belong to Holocaust victims and paid out 9.5 m Swiss francs (about £5m at current rates).   And now it is only because of pressure from Jewish organisations – which have been given access to classified American documents – and from the US and British governments, that Switzerland, shifting uneasily in the international spotlight, is taking steps to ventilate the past, though at a pace which makes a snail look swift and with a conspicuous unwillingness to cough up hard cash to anyone who cannot prove title to it beyond doubt.

Mr Häni is polite, a little weary and occasionally exasperated by an obtuse question.  He runs the contact office set up last year to handle claims from Mrs Greenberg and people like her as part of his wider duties as banking ombudsman.   His office is financed through a foundation funded by the banks, but he says he is independent of them.

The pay-out of 9.5m Swiss francs in 1962 was the result of a federal decree.  This sum was regarded as woefully inadequate by Jewish groups and last year the banks were tung into a new survey.   This identified 38m Swiss francs (£20) in dormant accounts which were opened in 1945 or before – all accounts and not just those belonging to possible Nazi victims.

Mrs Greenberg’s case was one of more than 2,000 initial inquiries sent to the contact office set up under Mr Häni.  Of these, more than 700 were formalised on questionnaires which he passed to every bank in Switzerland.  The banks tried to match the claims with dormant accounts.   Mrs Greenberg’s case was among those that failed, and she showed me Mr Häni’s regretful note of rejection written in his own hand.   He has received about 600 responses from the banks.  He will publish a summary of the results later in the autumn but holds out little hope that the claims will be successful.  He told the Observer: ‘I think the banks did their job in 1962.  They delivered what could be seen to be from Holocaust victims, and I fear we won’t find much for people who are searching now.’  There are many who share his pessimism, but many who quarrel with his view.  Herbert  Winter is a Jewish lawyer in Zurich who has processed the claims of Mrs Greenberg and about 50 others.  He believes that the banks have told the truth – but only as far as it goes.  He thinks large sums of money may be unaccounted for.  ‘How shall I put it?’ he asks.  ‘Some of it may simply not be disclosable.’



R WINTER RAISES the disturbing possibility that some of the money may have disappeared through malpractice and even fraud in the decades before the authorities tightened regulations. Many accounts may not be classified as dormant –  and would therefore fall outside Mr Häni’s remit – if they have been kept active by a trustee, a proxy, or a person with power of attorney.

There may also be outstanding savings books, whose funds in the old days could be payable to the bearer.  Even in cases where there is proof that an account existed, says Dr Winter, banks have failed to find any funds. ‘I have a colleague who produced a bank statement.  They said, “Sorry.  We haven’t got anything.”  In another case they confirmed the existence of a numbered account.   But they said it had been “settled” in 1960.  But my client said there was no one in 1960 who could have closed the account.’  He believes the money may have disappeared ‘in 1950, or whatever, rightfully or wrongfully, leaving no trace’.

Dr Winter hopes that if few claims can be validated by the banks then the 38m francs will be distributed to a good cause – and not necessarily a Jewish one. ‘How about the new Palestine state?’ he asks.  He reciprocates the seasonal greetings I have brought from Mrs Greenberg’s Glasgow lawyer, Leslie Wolfson, but adds that she and the others should regard their claims like a National Lottery ticket.

The question of the Raubgold (stolen gold) has more ‘flesh on the bone’, as the local idiom puts it, than the issue of local accounts.  After decades of sustaining the myth of a heroic neutrality, the Swiss are at last confronting the fact not just that their bankers dealt with Germans, not just that they bought their looted gold, but that they lied when they said they knew not whence it came.

The story of the Nazi gold is now well documented, at least that gold which flowed through national accounts.   What happened to private gold will probably never be known.  Monetary gold as the official reserves are called, was filched by the Nazis and used to pay for their war machine.  It came from countries such as the Netherlands, Belgium, Luxembourg, Poland, Czechoslovakia, Yugoslavia and Albania.  For this gold Switzerland was the clearing house.

The story of the Belgian reserves is particularly strange.  They had been removed to France before hostilities began and the French moved them to Dakar in French West Africa.   After an extraordinary journey by train, riverboat, camel, truck and aircraft, they finally reached the vaults of the Reichsbank in Berlin in 1942 where they were melted down.  The ingots, with fresh numbers, were shipped to Switzerland.

As the war wore on, the Swiss ignored several requests from the Allies that they should stop dealing in German gold.  As the war ended the Swiss changed their tune and engaged in talks with the Allies.  Under the agreement on the liquidation of German property in Switzerland, signed in Washington on 25 May 1946, the three Allies – the US, Britain and France – accepted the Swiss offer of 250m Swiss francs, payable in gold, a sum then worth about $58 million, much less than the $200m estimated by the Americans as the total amount of gold from Germany held in Swiss vaults;  the Allies’ final demand had been for $130 million.

One sentence in the document issued last week by the Foreign Office has caused considerable controversy in Switzerland.  It concerns Alfred Hirs, a director of the Swiss National Band and a technical expert on the  Swiss team of negotiators in Washington.  The British document said that the Allies had, despite the US estimate, no clear idea of the value of the German gold in Switzerland.  It added:  ‘M Hirs let slip during a meeting of the gold committee a figure of $500m.’

This is a curiously loose phrase to find in an official Foreign Office document.   Experts believe it may also be wrong.  Linus von Castelmur, now a Swiss diplomat whose book.  Swiss-Allied  Financial Relations, published in 1992 is one of the standard works on the Washington negotiations is among those who believe this account to be mistaken.

His and other accounts say that Hirs, needled by the Allied team, lost his nerve and expostulated: Wollt ihr meine Bank ruinieren , indem ihr diese 500 millionen Goldfranken beansprucht? (‘Are you trying to ruin my bank by claiming these 500 million gold francs’)  The Foreign Office may have misquoted him but Hirs was no hero.  In fact he appears to have been anti-Semitic and close to the German monetary authorities.


n investigation by the Zurich news magazine Facts showed that he had a long-standing relationship with Emil Puhl, vice-president of the Reichsbank.  He said Puhl had given him a guarantee that German gold came from pre-war balances.  Puhl was a gentleman who could be trusted, a banker among bankers.  ‘Puhl,’ said Hirs, ‘was never considered to be a thief or even a Nazi in the usual sense’

Hirs’s denial that he knew the provenance of the Belgian gold fell apart in a most embarrassing way.  A US senator produced four letters from Puhl.  In one of them, he said Hirs had know the source of the Belgian gold.  Puhl walso made this disclosure during interrogation.  The Foreign Office document said the Swiss ultimately conceded that they had bought $88m of gold traceable originally to Belgium and about $415m in total of German gold in the 1939-45 period, but they did not concede this was the amount they should restore to the Allies.

The evidence of Hirs’s anti-Semitism emerges from a message he sent his boss in Berne after the first day of negotiations in Washington.  It said that his counterparts were ‘three Jews and an Englishman, then an Austrian Jew from the Treasury and a refined jurist from the State Department’.

Switzerland is moving slowly to render a proper account of its conduct.  Its response takes the form of a committee and a commission.  The committee, consisting of bankers and Jewish representatives, is chaired by Paul Volcker, former chairman of the US Federal Reserve.  It will audit the banks’ efforts to validate missing accounts.

The commission will be of eminent historians, Swiss and foreigners.  They will examine the evidence and produce a definitive report on the whole question of Swiss profits from the Nazi past.

Mr Volcker was in Zurich last week.  He met the National Bank, and its board promised that it would make its archives fully available to the historians.  But the historical commission must first emerge from Switzerland’s tortuous legislative process.  It may have to be endorsed by a referendum.  And its report could take from three to five years to complete.  The Finance Ministry last week made a move to cut its budget.  It seems fitting.  Whoever saw a Swiss Banker in a hurry?

Observer 15 1996