'Gold Rush' on Swiss Banks: Story of Nazi Loot Unfolds

Switzerland needs a symposium of star sleuths - Miss Marple, Sherlock Holmes, and perhaps Jessica Fletcher - to find out whether the tons of stolen gold Nazis stashed here during World War II still remain.

No, this sinister story doesn't stem from mystery novels. In fact, some say it may be one of the darkest chapters in Swiss history.

The government has called for a commission to examine both the fate of Swiss bank accounts of Jews who perished in the Holocaust and stolen gold Nazi Germany likely deposited here.

As Switzerland plunges into this murky past, people here are having a mild identity crisis. The notion that Switzerland escaped World War II because of a strict no-compromise policy has flowered for decades. But darker explanations - such as a tacit trade-off of banking services for peace - appear possible.

"For years people thought we were neutral, heroic, and not to blame," says Enrico Payro of the Geneva bank Pictet & Cie. "Obviously Switzerland did bad things, in not helping the refugees, negotiating with the Germans. There's no denying that. We gave a finger not to have a hand cut off."

Others here say the coming investigation may help restore confidence in Swiss banks. Known for their confidentiality, they have been faulted for resisting scrutiny.

"This is a story touching the reputation of the whole financial sector," says Matthieu Bauer, of the Geneva-based Group of Private Bankers. "Perhaps the private banks are less touched than the larger banks, but the whole industry is concerned now because it's a question of image."

Some of the biggest questions regard gold stolen by Germany from the Netherlands, Italy, Hungary, and Belgium and transferred here during the war. Britain recently charged that Swiss banks still hold about $550 million worth of this gold; now valued at nearly $4.6 billion. Some private bankers here say $2 billion of this money could be held in offshore accounts and other investments.

Neutral during the war, Switzerland traded with the Allied and Axis powers. What's unclear is whether the Swiss National Bank and the Bank for International Settlements, owned by the world's leading central banks, knowingly accepted more than $1 billion in stolen gold during the war from Germany's Reichsbank, says Andre Hubschmidt, head of the Swiss Bankers Association.

"We don't know whether the gold ingots bearing the Reichsbank stamp were to cover Nazi Germany's commercial debts, or treasure to be hidden until the war's end," Mr. Hubschmidt says.

But a former Swiss National Bank employee says the national bank knew in 1943, or even earlier, that they were handling stolen gold. Robert Vogler, who now works at the Union Bank of Switzerland in Zurich, wrote a 1985 report on the matter but said the bank censored the work.

One source close to the issue says talk of a cover-up condemns the commission before it begins.

THE probe will also cover charges, raised in the last year by US Sen. Alfonse D'Amato (R) of New York and British Foreign Minister Malcolm Rifkind, that Switzerland didn't return all the money held during the war that belonged to Jews who died in the Holocaust. In the 1946 Washington Accords, the Swiss paid the Allies $1.5 billion, in 1996 value. In 1962, they paid another $9.5 million to war victims. And earlier this year, after international pressure prompted an internal investigation, the banks discovered another $37 million from accounts dormant since the end of the war. Some say this isn't enough.

Most likely, the investigation won't change today's bank secrecy laws here. "Bank secrecy is already being submitted to a stricter process," says a banker at the private bank Darier Hentsch & Cie in Geneva. "Now there is an obligation to check the economic beneficiary of offshore accounts, ... and if you have doubts about them or the funds, refuse them."

Ironically, the legendary Swiss numbered bank accounts (names known only to top bank officials) were established in 1934 partly to protect Jews and others from Nazi persecution. But in recent years, the government has clamped down on bank secrecy to curb illegal activities. Neighboring Liechtenstein remains one of the last places one can open a truly anonymous account.

This week, Senator D'Amato demanded the 1946 Washington Accords be renegotiated. Swiss Foreign Minister Flavio Cotti opposed his demand and said the commission must be given a chance to carry out its three- to five-year investigation.

"The new commission will deal with all possible assets that reach back to the phenomenon of the Nazi rule," says foreign ministry spokesman Jean-Phillipe Tessiers. "It will devote all its strength to finding out what happened. Only then can Switzerland move on."

Yet some experts close to the story say the commission faces a mission impossible.

"Fifty years have passed and some documents don't exist anymore," says historian and commission member Curt Gasteyger of Geneva's Institute for Strategic Studies. "Even if we clear up a portion of it, dark spots will always remain. So I'm skeptical about it's definitive outcome."