ECHOES OF THE HOLOCAUST

By Johanna McGeary

What a thoughtless Swiss diplomat came to call nothing less than a "war" against his country started with little things. A gold ring. A novel. A chair. Before long, a chain reaction of seemingly disconnected events, an assortment of powerful personalities and a series of Swiss blunders culminated in a moral crusade to track down stolen wealth hidden away inside the vaults of Zurich and restore it to the victims of the Holocaust. The proximate cause was money, but the soul-searing intent of the men and women who set the hunt in motion was to peel back the veil time had cast over the evils of Nazism and expose the truth.

For Bert Linder, now 85, it began the day in 1942 when the Nazis took his gold wedding ring. It was such a mean little gesture as they separated him from his loved ones. The Auschwitz ovens later claimed his wife and 10-month-old son and four other family members. Linder was one of only 2,000 to leave that charnel house alive, and so, he says, "my life was meant for something."

The idea to get money back from Switzerland's bankers, who bragged about their neutrality even while taking gold stolen, like Linder's ring, from the Jews, came to the California resident last July as he visited Austria on a lecture tour. In Vienna he read about how much looted Nazi wealth remained in Swiss banks and how others were trying to retrieve funds deposited for safekeeping there.

Linder, now rich enough not to worry, wondered instead about the poorest survivors struggling to get along, the ones without big Swiss bank accounts from the old days. "I thought, Why shouldn't this money be got for all Holocaust victims?" he says, and so he hired a lawyer to investigate, then threatened to sue the banks if they did not create a reparations fund. The banks were "negative, negative, negative."

But Linder is nothing if not tenacious--how else would he have come out of Auschwitz alive--and he made himself the bane of the banks. The Swiss press dubbed him David against Goliath. His lawyer bombarded the banks with letters and warned of lawsuits, but action was held up when one bank after another came forward with a promise to contribute to a fund. "My friends tell me enough is enough. But enough is not enough. The Swiss have the audacity to keep this money that does not belong to them and to make money with it. It should go back to the Jewish people."

For New Yorker Naomi Weisz Nagel, 56, the story began with precious coded letters miraculously smuggled out of Czechoslovakia by her parents in 1943. An aunt who survived the war showed her how the letters contained the numbers of a secret Swiss account disguised as a telephone number. But when she and her aunt tried to retrieve the money from a Basel bank after the war, officials said there were no records of the account. "Despite our specific identification of an account number at a specific bank, despite having hired a Swiss lawyer, the bank refused to return my family's money," says Nagel.

Leslie Gabor's mother trusted a personal code too. She started sending money to Swiss banks from Bercel, Hungary, in 1940, noting the account numbers and bank names on the bottom of a dining-room chest and underneath a kitchen cabinet. Transferring funds three times a year, she had amassed about $100,000 by 1943. In 1944 Gabor's mother, brother and sister were transported to Auschwitz. Gabor and his father escaped, but when they reached the family house, everything was gone. "All the furniture had been removed by the Germans. We no longer had the names and numbers of the Swiss accounts." Now Gabor, 80, who lives in Lawrence, New York, cannot afford the 300 Swiss francs required by Switzerland to process a claim for those who live outside the country.

New York City resident Rudolphine Schlinger says she too has proof her husband William had Swiss bank accounts. The wealthy furrier had made deposits before and during the war from his home in Versoix, Switzerland. But he died in 1985 without having retrieved the funds. Then a December 1996 article in the newspaper Jewish Week listed his account at Swiss Bank Corp. At a hearing last week in New York City attended by a representative from the bank, the 89-year-old widow appealed directly for restitution. "To you, sir, I ask, rather I demand, that you tell me what happened to my husband's money."

Now nearing the end of their lives, in one last attempt to win restitution of what they believe is rightfully theirs, Nagel, Gabor and Schlinger have joined 12,000 Holocaust survivors in a $20 billion class action filed last October against four Swiss banks for the recovery of dormant accounts and looted property. Their suit--and the high-profile crusade by Jewish organizations, American politicians and Swiss activists--has inspired an unprecedented search through the darkest passages of 20th century history.

For Israel Singer it started with a book. In 1994 he chanced to read a Paul Erdman novel, The Swiss Account, that alluded to Allen Dulles' wartime role as America's top spy in neutral Switzerland. The hints of unsavory Swiss behavior enticed the ordained rabbi and former political science professor from New York City into reading a biography of Dulles, which made reference to a U.S. intelligence operation code-named Project Safehaven. Its mission: to track down Nazi gold and loot being smuggled out of the Third Reich.

Papers dealing with the project had begun to be declassified after the requisite 50 years, and Singer was fascinated by the possibility of digging into such secret government files. At least 130 members of his family were killed by the German machine in a single day. "They can't bring those people back," he says, "but they can at least give back to my mother, in her 80s, her wealth, her history and her standing." Singer asked his boss at the World Jewish Congress in New York for permission to begin an investigation of the Swiss accounts and got the go-ahead.

The boss was Edgar Bronfman. Heir to the Seagram spirits business, he had devoted his early years to building the company founded by his father into a multibillion-dollar empire. Only when his ardently Zionist father died in 1971 did Edgar rediscover his faith. For the past 20 years, he has expended much of his formidable energy and much of his time on the activities of the World Jewish Congress. Bronfman first transformed the relatively passive fund-raising charity into a prime mover of Jewish causes. He has personally bankrolled much of the organization's work and used his stature to force recognition of Jewish rights as he sees them. Bronfman championed the campaign to make the former Soviet Union permit Russian Jews to emigrate, and he almost single-handedly ended the career of Kurt Waldheim, once U.N. Secretary-General, then President of Austria, for alleged war crimes. "Part of my life and part of the things that I want out of life," he says, "is to be a Jewish leader."

What turned this courtly, resolute advocate into the point man for reclaiming Jewish assets from Switzerland was a chair--or, more precisely, the lack of a chair. On Sept. 12, 1995, Bronfman went with Singer to a meeting in Bern. They wanted to ask the Swiss Bankers Association to investigate the dormant accounts of Holocaust victims. Without offering their visitors a seat, the bankers began to dictate their terms. They proposed turning over $32 million discovered in 774 Jewish accounts since the war and suggested that that would close the matter for good. "I don't think it occurred to them that there was not a chair," recalls Bronfman. "From my viewpoint, you do not treat people that way."

That incivility, especially from a country he considered honorable and sophisticated, helped spur Bronfman into a relentless campaign. "They had bought off groups before, and this was just a bigger bribe," he says. "I realized what they really wanted us to do was to take the money and run."

Instead Bronfman went to Washington and had lunch with New York Senator Alfonse D'Amato. The Republican from Long Island was down in the polls back home, under fire for his partisan assaults on President Clinton's ethics, desperate for an issue that would refurbish his image. Bronfman brought him a heaven-sent gift certain to appeal to his large bloc of Jewish voters. When Bronfman told him about the Swiss banks' stalling, D'Amato offered public hearings by his Senate banking committee. With the in-your-face D'Amato aboard, the war was about to begin in earnest.

Two weeks ago, the Swiss capitulated. A little. First the major banks announced they would create a $70 million humanitarian fund for the remaining survivors of the Holocaust and families of victims. Then the Swiss government said it would oversee the fund, but would not commit any public money until its investigation, headed by former U.S. Federal Reserve Chairman Paul Volcker, had been completed.

The American-led crusade for financial restitution and a fresh reading of history has by no means reached its end. In April, Under Secretary for International Trade Stuart Eizenstat will unveil a potentially explosive examination of American wartime records, including the controversial U.S. role in tracing Nazi assets.

This is not the first time the U.S. has sought to account for all the gold bars the Nazis looted from occupied countries, the Jewish assets seized, the jewelry, gold dental fillings and wedding rings wrenched from concentration-camp victims. As early as 1943, when Washington launched Project Safehaven to locate the Nazi plunder and find out where it was going, the U.S. knew most of it was entering Switzerland. That year, spymaster Dulles warned the Swiss government that much of the 100 tons of gold bullion the Reichsbank was selling for Swiss francs was stolen. Eventually, Safehaven agents concluded that some $6 billion in Nazi assets had been transferred into Switzerland from 1938 to 1945 under cover of bank-secrecy laws.

Now that the paperwork from Project Safehaven has finally been unsealed, memos among the nearly two tons of documents provide damning evidence of how long, how closely and how lucratively Swiss banks collaborated with the Nazis.

--Dec. 10, 1941. The British embassy in Washington warns the U.S. Treasury Department that "every leading member of the governing groups in all the Axis countries have funds in Switzerland. Some have fortunes."

--An undated document identifies an account held for Hitler in Switzerland for royalties from Mein Kampf.

--An undated paper cites the 300,000-franc Swiss account of Hitler's tailor.

--July 10, 1944. President Franklin Roosevelt gets a classified report from William Donovan, chief of the Office of Strategic Services, calling his attention to the personal friendship between senior Swiss and Nazi central-bank officials and a deal they had arranged. Each month, Switzerland promised to purchase 6,000 kg of German gold, which the Reich was using to buy Swiss ball bearings. Roosevelt's reply: "We ought to block the Swiss participation in saving the skins of rich or prominent Germans." But Roosevelt took no action.

--An undated paper records the debriefing of a certain Dr. Landwehr, who had directed the Nazi foreign-exchange department. "Dr. Landwehr estimates that all in all, the sum of German assets which passed into Switzerland amounted to at least 15 billion reichsmarks," said the report. "Landwehr dismissed with an ironic smile the Swiss estimate of 1 billion reichsmarks."

Nevertheless, in 1946, the tripartite gold treaty accepted a total of only $60 million in gold as Switzerland's payment in full of Nazi loot. Britain, France and the U.S. further decided the money would be given back only to German-occupied countries, not to individual claimants.

Israel Singer packed his briefcase with Safehaven documents when he and Bronfman flew to Bern in September 1995. One by one, he laid them on the table before officials of the Swiss Bankers Association, charting a trail of the banks' complicity. Singer and Bronfman insisted the bankers come clean about their role, restoring Jewish funds to Holocaust survivors. But, recalls Singer, "they stonewalled us," offering merely the $32 million found in 774 dormant accounts.

Bronfman told the Swiss he had not come to Bern to talk about money; he had come to talk about process. He wanted to work with the Swiss on a new survey of exactly how many Jewish accounts had existed and how the money left could be returned to rightful owners. Finally the two sides agreed to set up an audit, then discuss a final resolution. In the meantime, the process would be kept quiet.

But on Feb. 7, 1996, the bankers broke the confidentiality agreement and publicized a long, detailed Swiss view of the problem. Immediately afterward, the World Jewish Congress issued a statement debunking the Swiss declaration. "I was furious," says Bronfman. "I had just been talking to 500 Jews in Jerusalem who asked me what was going on. I said I couldn't tell them anything because we had agreed with the Swiss not to have any publicity. Then their statement came out. I think it was written out of anger and bad judgment on their part. I stopped trusting them."

The quiet war gave way to public battles, and Bronfman wasn't finished enlisting political help. On April 8, a day before he was to testify at D'Amato's hearing, Bronfman invited Hillary Rodham Clinton to his New York apartment for a fund-raising lunch. That morning, New York magazine had published a story on the search for Jewish money in Swiss banks. Bronfman ripped the pages out and gave them to Clinton. "Will you please read these?" he said. "You will understand how important it is that I see your husband tomorrow." Clinton scanned the article and asked, "Swiss banks, do you think you can do anything about them?" Bronfman looked her in the eye and replied, "Yes, Mrs. Clinton. With your husband's help, I think we can."

The next afternoon, Bronfman met President Clinton in the White House. After the Jewish leader had described the Swiss bank issue, Clinton looked pensive. Then he said, "Edgar, if it is necessary, I will work with Senator D'Amato on legislation on this matter." Moving fast, the President ordered Secretary Eizenstat to investigate the U.S. archives. With the ammunition Singer and D'Amato had dug out of the Safehaven trove, emotional Senate hearings in April and again last October matched testimony from Holocaust survivors with hard evidence of Swiss service to the Reich.

The Swiss banks mounted a weak defense. In May they agreed to set up a commission to examine Jewish accounts, headed by American banker Volcker, then said the investigation would take five years. "Holocaust survivors can't wait five years," snapped D'Amato. By early February, New York lawmakers proposed kicking Swiss banks out of the state if they failed to open their banks to local auditors searching for Jewish accounts. New York's Governor warned that Swiss banks could lose their operating licenses, and the state comptroller halted overnight deposits in Swiss banks. New York's city council threatened to bar official deposits in Swiss banks until Holocaust victims were compensated.

On Feb. 4, the U.S., Britain and France froze the distribution of $68 million in gold bars they still hold from the Nazi hoard. It is the last portion of the spoils retrieved by the Allies after the war and was supposed to be parceled out to the remaining nations that claim it. Bronfman advised Clinton to suspend any action until the three Allies decide whether this gold--symbolically at least--was melted down from private Jewish assets rather than national treasuries and should be given to Holocaust victims.

When the Big Three Swiss banks finally announced the Holocaust Memorial Fund on Feb. 5, reaction in the U.S. was tepid. "It's an important step," said D'Amato, "but nowhere near enough." Singer cautiously praised the decision as "a new sign of entente cordiale," but the World Jewish Congress considers the amount far too low. D'Amato was outraged that the Swiss wanted to manage the assets. "Why do you think the Swiss came forward," he said, "because of the generosity of their heart and spirit, or because they realize there could be damaging consequences if they continue their intransigence?"

The "war" will not end easily. D'Amato, riding a highly popular issue that has helped boost his standing in the polls, is already agitating to reopen the terms of the 1946 tripartite gold treaty, arguing that the Swiss lied about the much vaster sums they actually held. And the U.S. Administration doesn't rule it out.

Nor is D'Amato much moved by critics like Rolf Bloch, the main spokesman for Switzerland's 18,000 Jews. "We are Jews in a Swiss way," says Bloch. "We don't want to blame all the Swiss or put them under assault." A Jewish lawyer in Zurich representing 20 people seeking information on wartime accounts considers D'Amato's and Bronfman's tactics counterproductive. "So aggressive, so hostile," he says. "This banging on the head is wrong, and it has provoked reaction. Now we are seeing signs of anti-Semitism in Switzerland."

Bronfman is not swayed by criticism either. "If we did not put pressure on them, nothing would have happened," he says flatly. "I think about it. But Jews do not make anti-Semitism. Anti-Semites make anti-Semitism. If we are going to give them an excuse to yell at Jews, O.K. But there is a moral issue here," he says with grave passion, "and the issue is truth."

As Switzerland's Bloch reminds, there is "no Ali Baba cave under the Swiss National Bank, filled with gold and jewels." The dormant accounts will probably yield little cash, and how will anyone know how much of the $68 million in Nazi gold the Allies have left was taken from Jews rather than from national treasuries? Whatever money is eventually deemed to belong to the Jews will never be more than a tiny fraction of what was taken so viciously from them. Something akin to the truth may well be all that is left to solace them.

--Reported by Cathy Booth/Palm Springs, William Dowell and Elaine Rivera/New York and Adam Zagorin/Washington

With reporting by CATHY BOOTH/PALM SPRINGS, WILLIAM DOWELL AND ELAINE RIVERA/NEW YORK AND ADAM ZAGORIN/WASHINGTON