← Back home

54,000 Swiss Accounts Tied to the Nazis’ War Victims

The New York Times
December 7, 1999
By David E. Sanger

WASHINGTON—A three-year audit of Swiss banks found records of 54,000 accounts that were probably linked to victims of Nazi persecution, a draft report released on Monday said. The report described in detail how some of the banks had issued "deliberately misleading statements" for decades to Jews who had come looking for their family's assets.

Only three years ago the Swiss Bankers Association had insisted that there were fewer than 800 such accounts on the books and that they had few assets. While highly critical of the actions of individual banks, the commission, headed by the former Federal Reserve Board chairman Paul Volcker, concluded that there was "no evidence of systematic destruction of records of victim accounts" and no "organized discrimination" against them.

Instead, Volcker's commission concluded that the banks showed "a general lack of diligence—even active resistance—in response to earlier private and official enquiries" into the accounts, according to a draft of its report.

Assessing the true value of the accounts proved virtually impossible; much of the surviving information was fragmentary. Most of the accounts had been closed by unknown parties over the years and drained by banking fees and, in a few cases, by deliberate profit-skimming by the banks themselves.

But Volcker said, to the enormous relief of the embattled Swiss bankers, that he saw no reason to revise the $1.25 billion settlement that Switzerland's two largest banks concluded last year with the surviving Holocaust victims.

The World Jewish Congress, one of the many Jewish groups involved in that settlement, said they agreed with Volcker's assessment that the settlement should stand.

"It is appropriate for the number of living claimants and heirs," said Elan Steinberg, a top official of the World Jewish Congress. "The fact is that the owners of these accounts are mostly dead." "We're only asking the banks for one thing today," Steinberg said. "The words 'We're sorry."'

The banks said they felt vindicated by Volcker's findings. "The dramatic and sweeping accusations leveled against Swiss banks for years have proved to be unfounded," said Georg Krayer, president of the Swiss Bankers Association.

The report ends one of the most contentious issues in modern Swiss history, and a conflict that quickly turned into a major source of tension between the United States, which pressed the inquiry, and Swiss authorities, who felt improperly blamed for activities that took place under the duress of wartime.

Volcker concluded that most major banks in Switzerland cooperated with his team of hundreds of auditors, spending hundreds of millions of dollars to search out long-buried records. But he reported that some banks resisted a "foreign investigation" and he named one, Banque Cantonale de Geneve, that the report said "has not allowed the auditors to carry out any of their mandated functions" and "posed a substantial impediment" to the investigation.

But the most startling elements of Volcker's final report are anecdotes about the lengths a number of banks went to in order to hide those assets for decades after Germany's surrender.

Several banks endorsed procedures to mislead Jews, but not non-Jews, who came in search of old accounts. But apparently concerned about potential liability, the report did not name the banks, a step that appeared far short of the full disclosure that was promised when the audit began.

The report quoted a 1969 internal memorandum from the legal department of one bank that said "in the case of inquiries about Jewish clients whose assets had to be transferred" to Germany in the 1930s, "we have always responded that we could not supply the requested information as we are only obliged to retain ledgers and correspondence for a period of 10 years."

In 1975, the report adds, another internal memorandum "confirms that the unequal treatment of Jewish claimants and their heirs was a direct result of the bank's concern that it may ultimately be held liable."

The report describes another case of an account opened in 1930 by a Russian Jew that was worth over 1 million Swiss francs by 1962. But a memorandum found in the bank's record stated that the bank "could 'cream off' the returns on the investment and recreate the account documentation as if no profits had been earned." Only recently, the report concluded, the bank settled with the account holder's heirs.

While evidence of similar instances was scarce, the report concluded, the attitude of Swiss banks throughout the past few decades has been one of resistance—resistance to both individual and government calls for a full accounting.

"The handling of these funds was too often grossly insensitive to the special conditions of the Holocaust and sometimes misleading in intent and unfair in result," said the final report.

The panel was appointed by both the Swiss banks and international Jewish organizations, and was aided by the passage of a law that lifted some aspects of Swiss bank secrecy to allow auditors to do their work.

Not surprisingly, the panel was divided about how to assess both the number of accounts and their value. Some members of the panel drawn from the Jewish organizations, extrapolating from the data the auditors found, believed the true value of the accounts could range up to $1.9 billion.

But others thought the number was a quarter of that figure, in part because it was impossible to know who had removed cash from the accounts during and after World War II. For the Clinton administration, the publication of the report assists its recent effort to repair the badly strained relations with Switzerland.

"It will take years to straighten out the damage and get some trust back," one senior administration official said. "But the first step was getting the banks to acknowledge how long they had misled so many."