Senate Banking, Housing and Urban Affairs Committee

Hearing on the Swiss Banks and the 1946 Washington Accords

Prepared Testimony of Mr. Michael D. Hausfeld, Esq.
Representing the Holocaust Victims

10:00 a.m., Wednesday, July 22, 1998

Mr. Chairman and Members of the Committee:

Swiss banks perversely claim they have no accountability for their critical service as the financial core of Hitler's Germany. They only engaged in "ordinary banking transactions," they assert. And if wrongs were wilfully or inadvertently committed, they too were only "ordinary" and deserving of no international condemnation. After all, they contend, the "ordinary" commandment that "thou shalt not steal" has no universal consequence.(1)

There was nothing "ordinary" about the Holocaust, its purpose, breadth, scope or depravity. A war of unparalleled aggression was waged to eliminate an entire civilian population solely because of who they were. Not only were the victims of persecution to be wiped off the face of the earth, but all tangible evidence of their having been was to be obliterated. Virtually nothing they possessed was to be saved. They would have no need for estates or legacies, for they were to have no future.

At Nuremberg, the civilized world convened a Tribunal to record their revulsion to the most extraordinary of offenses denounced as being against all of humanity. The Tribunal declared that conscious mass extermination was not ordinary murder ­ it was genocide. The systematic confiscation and looting of a people was not ordinary theft ­ it was plunder. And when plunder is part and parcel of genocide, the Tribunal wrote, both the perpetrator of the genocide and the aider and abettor in plunder are guilty of crimes against humanity. In these most extraordinary of circumstances, for these most extraordinary of crimes, the Tribunal held that international fundamental human rights laws proscribed simple rules of unyielding application. "Complicity" in the commission of a crime against humanity is a crime under international law. Without doubt, the Tribunal wrote, all who "participate or play a consenting part of any element of a program of genocide" are themselves guilty of a crime against humanity. There may be different levels of culpability for the same crime - direct perpetrators do not necessarily share the same moral or legal culpability as their aiders and abettors. But distinctions of degree of guilt apply only to the severity of the punishment, not to whether there is guilt at all. German bankers were sentenced to prison for the banking services they rendered in furtherance of genocide. Swiss bankers have never been held accountable for their even greater services to the Third Reich.

For over half a century, Swiss banks have assiduously, deceitfully and arrogantly defied and evaded accountability for their guilt in the inhumanity of the Holocaust, a guilt that arises in two contexts: first, in their collaboration with the perpetrators of war crimes; and second, in their offenses against those who survived the misery of the Holocaust only to be condemned to the misery of being penniless because Swiss banks refused to restitute to them what was rightfully theirs. While displaced persons fell to wandering the world in rags, Swiss banks rose to unprecedented riches on the wealth of their misfortunes.(2)

How extensive was their offense? What did Germany loot and Switzerland launder, transfer or shelter? What was taken and why? While the borders of Switzerland were closed to refugees, gold coins, watches, spectacles, jewelry and teeth freely flowed into the vaults of its banks, public and private. A 1946 Swiss poem scored the beat of this frenzy and lust:

How the bars are stacked up high'
Really pure and heavy gold'
No one asked where from or why,
Even glad for robber's gold. . . .

* * * * *

And the dumbest of them all
Urged "humanitarian places";
Hypocrites throughout the hall
Made some very pious faces.
Did they talk that way before
'Mid the blood and bullets' hiss?
No, they then just prayed for more:
"Give the gold to us, the Swiss!"(3)

The laundering of looted gold was a prime service extended by Swiss banks to its German partners of "paramount importance." Vast amounts of gold looted throughout Europe were collected by the Reichsbank and in the first two years of the war, passed primarily through the Swiss commercial banks and were later switched to the National Bank. Once the war had begun, victim gold became an important source of foreign exchange for the Third Reich.(4)

The Swiss National Bank was so enmeshed in the network of looting that they themselves looked for ways to disguise the identity of the shipped bars and considered melting them down at their own expense. The National Bank deliberately requested that Germany stamp gold "1939" so that it would appear that the gold was "pre-war" gold from Germany's gold reserves.(5) United States intelligence reports also noted that certain Swiss banks had on hand ingots, which were difficult to dispose of through normal channels, so they were sold to private concerns which either directly or indirectly coined foreign gold moneys, particularly in South America.(6)

With exceptions authorized and approved by the National Bank, and with meticulous attention to technicalities and loopholes(7), the commercial banks of Switzerland maintained a small, continuous, but always highly profitable, trade in gold throughout the war. In fact, by the end of the war, the OSS reported that Swiss commercial banks were so "embarrassed" at having so much stolen gold they were disposing of it in violation of the country's law forbidding the export of gold.(8)

Gold was by no means, however, the only asset disposed of by Germany in or through Swiss banks.


"The Swiss government never . . . introduced restrictions on the commerce of foreign currencies, and the export as well as the import of bills of all national banks of the world . . . were admitted freely by the Swiss authorities. . . The rates on black markets all over the continent were set in Geneva. It is under those favorable circumstances that the Nazis disposed of the currency looted in their conquests."(9)

Securities, Bonds

In the same fashion the Nazis found a ready market for looted securities. The Swiss required that securities be accompanied by a certificate of ownership, but this only applied to non-bearer securities and though it had in some instances restricted negotiability of Axis-held securities it was only slightly prejudicial as they can still be disposed of at a discount through the accepted black market dealers.(10)

Additionally, there were many allegations against the Swiss commercial banks accusing them of falsifying affidavits of ownership of foreign securities in Switzerland.(11) This was compounded by the banks accepting bonds stolen from Jews and others, and offering them for sale to foreign governments. It was reported that the German government had established in Berlin a central office where all bonds stolen from occupied countries ­ particularly from Jews ­ were collected. These bonds were then classified and offered to foreign governments, either directly or through Swiss banks, at very low prices, against Swiss shares or American dollars.(12)

Individual Germans frequently bought Swiss blocked accounts, particularly securities accounts, at reduced prices, making use of stolen assets to finance their purchases.(13)

Aryanization, Business Credits, Cloaking, Transfers

Swiss banks profited handsomely from the Aryanization of Jewish firms. As Germany closed its vise on Europe, confiscated businesses inured to the benefit of Swiss concerns, including Swiss banks.(14)

Collaboration with the Germans was also evident in the extraction of assets from Germany through spurious business credits. Books of German firms were fixed to show loans which on being repaid in Switzerland were then deposited into anonymous accounts.(15)

Switzerland was Germany's "foremost cloak for financial operations" and in many instances made available Portuguese, South American, dollar and other foreign exchange for German use.(16)

Swiss banks also rendered invaluable aid to Germany by maintaining foreign original contacts such a regularly transferring Argentine pesos to Germany via Swiss bank accounts(17) and exchanging Spanish escudos with the Reichsbank.(18)

Extortion and Ransom

Germany utilized "ingenious methods" of using the misery of Jews to yield them needed money.(19) On July 4, 1939, the SS founded the "Reich's Union of Jews in Germany," a cover organization enabling them to collect valuables from Jews and sell them abroad, particularly in Switzerland. Within German doublespeak, Theresienstadt was denominated an old people's home where the residents would sign a contract buying themselves into the home and ensuring a livelihood until the end of their days. In return, they transferred their assets to the Reich Union. For purposes of gradually vacating the territory of the Reich, Jews then pledged to donate at least 25% of their liquidity in order to finance their food and transportation to relocation centers. Donations were made to the Reich Union. The funds of the Reich Union were believed to have been transferred to accounts in the Swiss commercial banks.(20)

As the supply of gold and other assets available in the occupied countries themselves ran out, the Germans maintained a supply of free foreign exchange by the sale of exit permits to persons in the occupied areas. A frequent arrangement was that these persons were permitted to leave the occupied territory on deposits in a German-controlled account in a neutral country. The intermediaries through which these transactions were carried on were Swiss nationals, and some of the depositories for the extorted money were located on Swiss soil.(21)

Yet another scheme documented in U.S. government records involved Jews and others in neutral countries receiving authentic notices that their friends and relatives in concentration camps were in great need. Money sent to them in a certain way, it was written, could aid them. Dollars, in the form of blank checks, were the currency of choice. The blank checks were received by the camp and then gathered together and sent to a neutral country, often to Switzerland. The Swiss banks put their stamp as a payee and the checks were then sent to New York, without there being any trace that they were sent to Germany and then duly paid.(22)


There was also an active market in paintings and other works of art, obtained primarily from French galleries and private collections. Reportedly these sales yielded the Germans approximately 10 or more million francs annually and the Swiss themselves benefitted from a nominal customs tariff and a 2 percent import fee.(23)


There was no moral or legal excuse for these services. The claims of the National Bank, for example, that it acted in good faith and that Switzerland's neutrality obliged it to accept the gold offered by Nazi Germany have been found clearly unjustified.(24) Likewise, Swiss neutrality in no way obligated the country to accept any other form of looted asset or fruit of acts of inhumanity. Switzerland's financial aid to Germany, as noted in 1945, was "clearly beyond the obligations under which a neutral must continue trade with a belligerent. . . ." It was dictated and driven "solely by the profit motive of the Swiss banks."(25)

No one, no commission and no historian has begun to tally the myriad of methods employed by the banks to enrich themselves on the lives of the slaughtered. The losses of Holocaust victims were the gains of the Swiss banks. Acts of violence in the Holocaust, one noted commentator noted, had their appeal not merely to the sadist and the criminal, but to the careful and meticulous bankers and keepers of accounts.(26) As Germany consciously, brutally and systematically exterminated the bodies of millions, the Swiss banks knowingly, methodically and eagerly liquidated every other remainder of their existence. The Swiss banks were Germany's "financial facilitator of choice," the willing bankers for Hitler's thugs and thieves.

The Washington Accord was part of a process sought to be imposed by the Allies to hold those who financially aided and abetted these crimes to be held to some form of moral, legal and practical accountability. From a government perspective, it sought to retrieve those assets which were due and owing, government to government. From an individual perspective, it sought to suggest and urge a means of accountability between the offenders and their victims to restore what was wrongfully taken and which arose "out of a violation of every canon of morality and international law."(27) Accounts and holdings, through which stolen assets were received or transferred, were to be identified and returned to their rightful owners.(28) The profits of all forms of crimes against humanity were to be turned over to those who slaved for them.(29) The assets of the ashes of the crematoria were to be made available to assist in the reconstruction and reconstitution of the lives of those few who survived.(30)

The Swiss government and its banks acknowledged as much.

In 1946, Switzerland declared that it fully recognized a "great moral obligation towards the innocent victims of...[Nazi Germany's] war...(31) In 1945, it confirmed to the Allies "its determination" to ensure that its territory would not be used to "conceal stolen property,"(32) or assets which may have been taken "illegally or under duress during the war."(33) The Swiss proclaimed that the victims of such acts may "demand" restitution of their property or assets and that "all facilities will be furnished the . . . owners to claim...the assets found there."(34)

The Swiss government also declared that they would not "in any way protect the assets which belong to German nationals who have committed crimes or who have acted contrary to international law...or the laws of war, during the period of hostilities."(35) All property or assets deposited in Switzerland and "acquired illicitly"(36) by any means, had to be returned to their rightful owners or heirs. The commitment was purportedly unequivocal ­ Switzerland would not allow "itself to be suspected of enriching itself from the property of the victims of those abominable events."(37)

What did the Swiss banks do in the face of this acknowledged moral debt when there was no threat of invasion, no coercion to comply or be conquered and no need to sell their services or soul? They split the bounty of their booty between themselves and the perpetrators and spent the next fifty years submerging what was their shame and moral bankruptcy beneath contorted explanations of "why they were right to do the wrong things they did."(38)

What they publicly proclaimed, they privately renounced. The laudable intent of the restitution process and the Washington Accord were subverted, obstructed and nullified by the intransigence, deceit and greed of the banks. What they had wrongfully profited from they were to never relinquish. The banks literally assured that there would be little to no respite to the deprivations of the Holocaust damned. The survivors were to suffer the dual humiliation of being displaced and destitute.

Just months after the signing of the Washington Accord, US Treasury Representative James Mann questioned Swiss government's motivations:

[T]he Swiss have furnished the Legation with an interim report on the progress being made under the blocking and census decrees which is a joke (and which to me clearly proves, if any proof is needed, that the Swiss have no intention of really doing anything in connection with the discovery and immobilization of German assets except to stall as long as they possibly can.)(39)

In a letter from the head of the US Legation in Bern to US Treasury Secretary, Harrison relays his anger at increased "Swiss dilatory tactics," stating that "there is some reason for doubting whether they are making sincere efforts to locate and immobilize assets in their country." He expressed "doubts concerning the good faith of [Swiss] officials" and cited the Puhl/Funk correspondence and Puhl's boast that most of the economic controls against the Germans "have been successfully removed," including the unblocking of the Reichsbank account.(40)

The restoration of private looted property fared no better. In 1945, the U.S. reported that:

The Swiss indicated that they propose to leave that matter entirely to a case-by-case juridical determination and Swiss stolen property legal procedure is singularly inappropriate. This, in effect, means that the Swiss have taken no measures whatsoever to fulfill the pledge given by them on March 8 [the Washington Accord] to enact such legislation as necessary to assure the return of this property to the legitimate owners.(41)

Although the Swiss Government confirmed it would sympathetically(42) examine placing heirless assets at the disposal of the Allied Governments, the officers of the American Legation were of the opinion that this expression was of limited intent.(43)

In a communique dated July 20, 1948, U.S. representatives relayed "the unhappy relation which presently exists with respect to questions of the Swiss-Allied Accord. . . ." The communique notes that:

It is open to serious question whether the Accord has not in fact already been nullified through non-performance. In any case, re-negotiation seems to be indicated in view of the failure until now to arrive at agreement as to the significance or operation of the Accord.(44)

Previously undisclosed documents answer why the Accord, in both intent and spirit, was undermined by the banks. A US wartime report noted that "The economy of Switzerland itself was so entwined with that of Germany that the bankers and industrialists did not wish to have revealed the extent of their collaboration.(45)

Safehaven officials commented that:

In allowing men like Sulzer and their bankers the cloak of diplomatic immunity, the Swiss government has, probably unwittingly, enabled German leaders like Goering, Goebbels, and von Ribbentrop to spirit huge funds abroad. For centuries, Swiss banks have been confidants of men who want to keep their financial transactions secret. A banker is forbidden by the Swiss constitution from disclosing his clients' maneuvers. He would rather go to jail than do so.

The Swiss Banking Association is therefore doubly anxious to induce the United States to refrain from insisting on postwar disclosure of the names of its depositors [sic] here. Besides being forced to confess their relations with war criminals, they will have lost the advantage of secrecy which has enabled them to vie in world influence with the greatest banks.(46)

U.S. Safehaven officials suspected that Swiss Bank secrecy ­ and repeated refusals by Swiss banks in New York to reveal the identity of their account owners ­ was being used by the Swiss banks as a tool to cloak their complicity with the Third Reich:

Three members of the Swiss delegation of the International Business Conference, held at Rye, NY, in November 1944, made several attempts to induce the US Treasury Department to rescind its ruling that the true ownership of all funds deposited by Swiss banks in this country be revealed within one year after hostilities cease in Europe. The Swiss banking system in which numbers designate accounts instead of names, makes it enormously difficult to trace secret or hidden funds.

According to sources having connections in Geneva and Buenos Aires, the reason for Swiss bankers' anxiety to evade disclosure of their clients' names is the fact that Swiss banks have for several years been aiding in the transfer of immense fortunes of Nazi leaders and their European collaborators to the United States, Spain, Argentina, and Brazil.(47)

The Washington Accord and the larger process of which it was a part sought to impose a sense of justice by holding the financial aiders and abettors of crimes against humanity to some level of accountability to the victims of mankind's greatest atrocity. It failed to do so, as has every other moral and legal effort to date. Through obstinance and chicanery the banks believed that if they delayed long enough, their guilt "would disappear like drops of water over time."(48) Justice, however, has neither evaporated nor been forgotten. The banks now publicly cry they are ready for justice. But not in a court of law, nor before an open Senate tribunal, and not if they have to disclose that which would reveal what they knew and what they did. They prefer a form of hypocritical justice, one which they dispense at their discretion, while they conceal the truths buried by them in the recesses of what is known as Swiss bank secrecy.

Individual fundamental human rights, once recognized, are immutable. These transcend violation by any government, any person, or any institution. They cannot be traded for private or political expedience, nor subjugated to bilateral relations. International law and morality command that thou shalt not steal in pursuit of genocide. All who perpetrate, or aid in that offense against humanity, are accountable. For the dignity of those who survived, for the honor and memory of those who did not, we respectfully implore this Committee to take the steps necessary to restore those rights to the position of supremacy they must occupy in the nature of any civilized society.(49)

U.S. law permits foreign individuals to become citizens of this country, but for obvious reasons does not afford war criminals those same rights. Corporate institutions involved in crimes against humanity certainly should have no greater rights.

The Committee should convene hearings to ascertain the war record of the Swiss banks. If it is established that these institutions committed offenses proscribed by international law, they should not be permitted to do business in this country until and unless they have been held fully accountable. It is time for this esteemed body to insist that the Swiss government and the Swiss banks finally follow through on both the legal and moral commitments that they made in 1945 to this government, to the world, and most especially to those individuals, both living and dead, who otherwise would not have the power to compel the restitution of their property.


1. Memorandum of Law in Support of Defendants' Motion to Dismiss the International Law Claims in Friedman and World Council for Failure to State a Claim, 5/15/97.

2. This was further compounded by the failure of the banks, after the Holocaust, to return to survivors or their heirs, the "considerable" assets deposited by victims of the Holocaust in their trust for safekeeping.

3. "Political Poem on the Washington Accord," from Vorwaerts, attachment No. 2 to dispatch No. 14103, 7/24/46, from the US Legation in Bern, RG 59, Box 4212. SB 07060.

4. Independent Commission of Experts Switzerland - Second World War, "Switzerland and Gold Transactions in the Second World War, Interim Report, 5/25/98, at p.188 [hereinafter "Bergier Report").

5. Letter from Emerson Bigelow to Harold Glasser, Asst. Director of Monetary Research, US Treasury, 6/21/46, RG 226, Box 26.

6. Id.

7. Bergier Interim Report, section 2.4 - "What the SNB knew and its justifications," pp. 115-130, p. 189.

8. "Transfers of Gold to Switzerland," OSS report RB-20443, 9/20/44, from the National Archives.

9. "Switzerland and the Axis," from Tomlinson to Delman, 2/1/43, from the Treasury Department Division of Monetary Research, at p. 6.

10. "Switzerland and the Axis," from Tomlinson to Delman, 2/1/43, from the Treasury Department Division of Monetary Research, at p. 6.

11. "False valorization of bearer shares with no certificate of origin," War Department Strategic Services Unit memo, 5/17/46, attached to State Department secret memo No. 3528, RG 84, Box 52 (SB 09725).

12. War Department Military Intelligence records, A/N/A Lisbon, Serial P.L. 17-42, 1/30/42.

13. "Switzerland and the Axis," from Tomlinson to Delman, 2/1/43, from the Treasury Department Division of Monetary Research.

14. "Summary: Swiss Bank Corp., Basle, Switzerland," from the records of the Office of Foreign Funds Control, 1945, at p. 1.

15. Id.

16. "Types of Financial Operations in Switzerland which benefit the enemy," from Gilbert to Delman, 11/19/43, from the archives of the Office of Foreign Funds Control.

17. "Summary: Swiss Bank Corp., Basle, Switzerland," from the records of the Office of Foreign Funds Control, 1945, at p. 1.

18. Bergier Report at 168.

19. "Financing of measures for the solution of the Jewish problem," 12/24/42, cited in "They paid for their own extermination," Cash, 6/5/98.

20. Id.

21. "Switzerland and the Axis," from Tomlinson to Delman, 2/1/43, from the Treasury Department Division of Monetary Research.

22. Memo sent to Sam Klaus, 12/21/42, relaying report from 12/8/42, from the records of the Assistant Secretary of Treasury re: Monetary and International Affairs; Intra-Treasury Memoranda of Harry Dexter White, 1934-1945, SB#22607, 22608.

23. "Switzerland and the Axis," from Tomlinson to Delman, 2/1/43, from the Treasury Department Division of Monetary Research, at p. 6.

24. US Treasury Department Office of Foreign Funds Control briefing book compiled by Orvis Schmidt, "Some Current Problems and Data on United States-Swiss Wartime Financial Relations", 1/29/45, the Bergier reports.

25. "The War Trade of Germany and the Neutrals," Foreign Economic Administration document, 6/28/44; "List of Wholly German-Owned Swiss Firms" (Safehaven Report No. 471, 2/5/47).

26. Seymore J. Rubin and Abba P. Schwartz, "Refugees and Reparations," at 1, from Law and Contemporary Problems, Duke University School of Law, Summer 1951.

27. "Letter to Neutral Powers re: Heirless Assets," at 2, 7/20/49. Enclosure no. 1 to Report no. 351 from the US Embassy in Bern. SB#21430-21433.

28. Seymore J. Rubin and Abba P. Schwartz, "Refugees and Reparations," at 1, from Law and Contemporary Problems, Duke University School of Law, Summer 1951.

29. Id.

30. Id.

31. These included all three types of assets ­ looted, cloaked and deposited. See letter from Ambassador Stuart E. Eizenstat to Hon. Alfonse M. D'Amato, 7/31/96: "The issue of Holocaust era assets in Switzerland has several facts: (1) dormant bank accounts; (2) possible dormant accounts in non-banking institutions; and (3) possible 'looted' accounts (those containing assets taken from rightful owners during the Holocaust) in all institutions."

32. Secret Memorandum at 4, 3/2/46, from 1946 Briefing Book.

33. "Restitution of Looted Property in Switzerland," from the 1946 Briefing Book.

34. Id.

35. Id.

36. Gold Conference Committee Memorandum at 3, 3/26/46, from the 1946 Briefing Book.

37. Id.

38. Jeff Jacoby, "What the Swiss owe to humanity," Boston Globe, 7/16/98.

39. Letter to Harry White, Assistant Secretary of the Treasury Department from James Mann, Treasury Representative, 10/10/45.

40. Id.

41. Letter from Hapke to Sy (probably State Department Division of Economic Security Control Chief Seymore Rubin), 10/23/45.

42. Memorandum on "Heirless property in Switzerland belonging to Nazi persecutees" at 1, 8/8/49. From the State Department records of the US Embassy in Bern, Confidential Files, SB#21423-21426.

43. Id.

44. US State Department Aide-Memoire, 7/20/46, RG 59, Box 4247, SB 08742.

45. Letter from US Legation in Bern head Leland Harrison to the US Treasury, 10/23/45.

46. Safehaven records, "Nazi and Fascist Capital in Latin America," 5/23/45, from H.J. Cummings to Lt. Karasik, at 17-18.

47. Safehaven records, "Nazi and Fascist Capital in Latin America," 5/23/45, from H.J. Cummings to Lt. Karasik, at 16.

48. Bergier Report, at p. 85.

49. In Filartiga v. Pena-Irala, 630 F.2d 876 (1980):

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