Stuart E. EizenstatForward; Under Secretary of Commerce for International Trade

2.47 Stuart E Eizenstat, Forward; Under Secretary of Commerce for International Trade, Special Envoy of the Department of State on Property Restitution in Central and Eastern Europe, U.S. and Allied Efforts to Recover and Restore Gold and Other Assets Stolen or Hidden by Germany During World War II, Prepared by William Slany, The Historian, Department of State with the Participation of various Departments and Federal Agencies, May 1997, p. III – XII

a) Background

The process of Americanization of Swiss law and legal culture after World War II was marked by other conflicts, which go way beyond the series of post war conflicts of jurisdictions like the case study of the UBS-case (see texts 2.50 – 2.53)) In the nineties, fifty years after the end of the war, the United States spearheaded a general international analysis of still unsolved issues in connection with the atrocity of the Holocaust. The United States were devising a complex international action plan to attempt to redress those calamities. This brought Switzerland’s behaviour during and after World War II and the behaviour of some enterprises such as banks and insurance companies to the center of world public attention.

The issues confronted Switzerland and Swiss enterprises with the dark sides of their alleged and actual behaviour, beyond issues of strict legality and involvement,  from long before until after World War II. The sudden upsurge of the Holocaust issues in the nineties caught Switzerland and Swiss enterprises off guard and forced them to participate in the international attempt to search for solutions that were politically, legally and morally acceptable to the world community. This issue faced Switzerland with strong convictions ingrained in American law and lawyers in government which at the outset led to a cultural and legal clash and disconnection. Switzerland and Swiss enterprises had difficulties in dealing with the issue, which only partly and certainly not primarily were marked by issues of law. The United States unexpectedly and forcefully used a mix of historic, political, media and legal instruments as instruments of foreign policy. Switzerland and Swiss enterprises at the outset of the conflict were victims of their legalistic posture, and their inabilities to face the thrust of the overriding moral dimensions (See the assessment in retrospect by historian Thomas Maissen 2.49).

The US effort was personalised and spearheaded by Stuart E. Eizenstat, a powerful and experienced representative of the US government. Eizenstat is a lawyer and a member of the Jewish community who is very experienced in global and particularly European matters. During a decade and a half of public service in three US administrations, Ambassador Eizenstat has held a number of key senior positions, including chief White House domestic policy adviser to President Jimmy Carter (1977-1981); U.S. Ambassador to the European Union, Under Secretary of Commerce for International Trade, Under Secretary of State for Economic, Business and Agricultural Affairs, and Deputy Secretary of the Treasury in the Clinton Administration (1993-2001). During the Clinton Administration, he had a prominent role in the development of key international initiatives, including the negotiations of the Transatlantic Agenda with the European Union (establishing what remains of the framework for the US relationship with the EU); the development of the Transatlantic Business Dialogue (TABD) among European and US CEOs; the negotiation of agreements with the European Union regarding the Helms-Burton Act and the Iran-Libya Sanctions Act; the negotiation of the Japan Port Agreement with the Japanese government; and the negotiation of the Kyoto Protocol on global warming, where he led the US delegation.

Much of the interest in providing belated justice for victims of the Holocaust and other victims of Nazi tyranny during World War II was the result of Stuart Eizenstat’s leadership of the Clinton Administration as Special Representative of the President and Secretary of State on Holocaust-Era Issues.  He successfully negotiated major agreements with among others the Swiss, Germans, Austrians and French,  covering restitution of property, payment for slave and forced labourers, recovery of looted art, bank accounts, and payment of insurance policies.

For this anthology dealing with the Americanization of Swiss law and legal culture we consciously chose the text of ambassador Eizenstat’s – revered and feared – personal Foreword to the extensive preliminary studies with the title “U.S. and Allied Efforts to Recover and Restore Gold and Other Assets Stolen or  Hidden by Germany During World War II”, Prepared by William Z. Slany, The Historian State. This effort was coordinated by Stuart E. Eizenstat in his function as special Representative of the President and the Secretary of State. The report henceforward was called Eizenstat I report.

The text at hand is an official document by the United States with far reaching effects on the conduct of the handling of the contents of the issue. It has been said that the foreword in part is not in conformity with some parts of the report and selectively singles out Switzerland as the main target and topic to be taken on in redressing the calamities of World War II. It is the opening move in a transatlantic quest of high intensity and high determination with the US government leading the late attempt to solve this unfinished business of World War II.

b) Summary

The foreword is a nine pages personal summary and appreciation of Stuart EIzenstat of the report, specific weight being given to certain findings and to specific political intentions of the US government. For the readers and users attention: The overall report, which has 204 pages, consists of a series of documents, the table of contents of which reads as follows: I. Wartime Efforts To Halt Commerce With Germany and Prevent the Flight Abroad of German Assets, II. The Safehaven Program, III. Potsdam Heads of Government Meeting and the Paris Reparations Conference, IV. The Allied-Swiss Negotiations at Washington, March- May 1946 , V. Five-Power Conference on Reparation for Non-Repatriable Victims of Germany, June 1946 , VI. Implementation of the May 1946 Allied-Swiss Accord , VII. Allied Negotiations With the Other Neutral Countries , VIII. U.S. Army Involvement With the Acquisition, Accountability, and Security of German Monetary Gold and Related Assets Following World War II , IX. Disposal by the United States of Captured Gold Looted by Germany From Individual Victims of Nazi Persecution and From European Central Banks , X. The Tripartite Commission for the Restitution of Monetary Gold , XI. Bank for International Settlements , XII. Disposition of Heirless Assets, 1946- 1963

The Forword of Stuart Eizenstat contains a part Introduction, a part Major Conclusions and Policy Implications and a part Challenges For Action.

For the purpose of this summary of a summary we chose a series of citations showing among others the possible strategy and the tactics of the author – vis a vis – the Swiss government and Swiss enterprises.

“This report addresses a vital but relatively neglected dimension of the history of the Second World War and its aftermath, one that became the focus of intense political, diplomatic and media attention over the last year. It is a study of the past with implications for the future.” …

“It is in the context of this mandate that the report catalogues the role of neutral countries, whose acceptance of the stolen gold in exchange for critically important goods and raw materials helped sustain the Nazi regime and prolong its war effort. This role continued, despite several warnings by the Allies, even long past the time when these countries had any legitimate reason to fear German invasion.” …

“Among the neutral countries, Switzerland receives the most attention in the report. We have no desire to single out a country that is a robust democracy, a generous contributor to humanitarian efforts, and a valued partner of the United States today. But Switzerland figures prominently in any history of the fate of Nazi gold and other assets during and after World War II because the Swiss were the principal bankers and financial brokers for the Nazis, handling vast sums of gold and hard currency.”…

“The picture which emerges from these pages, particularly of the neutral nations, is often harsh and unflattering. Many profited handsomely from their economic cooperation with Nazi Germany, while the Allied nations were sacrificing blood and treasure to fight one of the most powerful forces of evil in the annals of history. At the same time, our team knew that if we were going to shine the bright light of history on other nations, we also had to look carefully at America’s role, and the study does so.” …

“Many of the neutrals had a rational fear that their own independence was only a Panzer division away from extinction. But if self-defense and fear were factors in that rationale for neutrality, so too were profit in all neutral countries and outright Nazi sympathy in some. The neutrals ignored repeated Allied entreaties to end their dealings with Nazi Germany. Whatever their motivation, the fact that they pursued vigorous trade with the Third Reich had the clear effect of supporting and prolonging Nazi Germany’s capacity to wage war.” …

“As late as the end of 1944, Secretary of State Stettinius and his State Department colleagues concluded that, on balance, Switzerland’s neutrality had been more a positive than a negative for the Allies during the War. This relatively benign judgment was not shared by other agencies, from the War Department and Treasury Department to the Office of Strategic Services (OSS) and the Justice Department.” …

“Switzerland’s “business as usual” attitude persisted in the post-war negotiations, and it is this period which is most inexplicable. The Swiss team were obdurate negotiators, using legalistic positions to defend their every interest, regardless of the moral issues also at stake. Initially, for instance, they opposed returning any Nazi gold to those from whom it was stolen, and they denied having received any looted gold. The Swiss contended they had purchased it in good faith, that it was part of war booty obtained in accordance with international legal principles by the Third Reich during its victorious campaigns, and that there was no international legal principle which would entitle the Allies to recover and redistribute Nazi assets. Finally, after long, contentious and difficult bargaining, agreement was reached in the form of the 1946 Allied-Swiss Washington Accord.” …

“But the other part of the Accord, the liquidation of hundreds of millions of dollars in German assets, was neither promptly nor ever fully implemented. The Swiss raised one objection after another, arguing over exchange rates, insisting that German debt settlements be included, and demanding that the U.S. unblock assets from German companies seized during the War but which the Bern government claimed were actually Swiss-owned.” …

“Over a six-year period, before the final 1952 settlement, the Swiss government had made only a token 20 million Swiss franc advance ($4.7 million then or $31 million today) for resettlement of stateless victims. Finally, in 1952, after a lengthy and frustrating effort, Switzerland and the Allies agreed to a total payment of only $28 millionOver a six-year period, before the final 1952 settlement, the Swiss government had made only a token 20 million Swiss franc advance ($4.7 million then or $31 million today) for resettlement of stateless victims. Finally, in 1952, after a lengthy and frusttes of around $250 million. …

“It was not until 1962 that Switzerland began to comply with its 1946 side letter agreement to the Washington Accord “to look sympathetically” at using heirless assets for the benefit of Holocaust survivors. After long denying the possession of any heirless assets, some Swiss banks then found over $2 million in bank accounts, most of which was not transferred to Jewish and other relief organizations until the 1970s. In a renewed effort in 1996, they indicated they had located around $32 million in dormant accounts in various banks. Over the years, the inflexibility of the Swiss Bankers’ Association and other Swiss banks made it extremely difficult for surviving family members of Nazi victims to successfully file claims to secure bank records and other assets. This overall pattern of apparent Swiss bankers’ indifference to the needs of the victims of the Holocaust and their heirs persisted until the current international pressures came to bear and, for instance, the appointment of an Ombudsman in 1996.” …

“Fifth, the report also deals with the hotly debated issue of whether some victim gold was sent to Switzerland and other neutral countries, and whether it was also included in the TGC Gold Pool. This was the Pool into which looted central bank gold was placed for redistribution by the TGC to the governments from which it was stolen during the War. This study concludes that both occurred. The Reichsbank or its agents smelted gold taken from concentration camp internees, persecutees and other civilians, and turned it into ingots. There is clear evidence that these ingots were incorporated into Germany’s official gold reserves, along with the gold confiscated from central banks of the countries the Third Reich occupied. Although there is no evidence that Switzerland or other neutral countries knowingly accepted victim gold, the study provides clear evidenceccepted victim gold, the study provides clear evidencepersecutees and other civilians, and turned it into ingots.

And finally on a positive note:
“Among the neutral countries, Switzerland has taken the lead. It has established two separate commissions. Among the neutral countries, Switzerland has taken the lead. It has established two separate commissions establishing an endowment to generate income for survivors and for other humanitarian causes. Private groups, including churches and high school students, have collected over 500,000 Swiss francs (about $350,000) for Holocaust survivors. The United States welcomes and applauds these significant gestures.”

This Forword was considered by some as a wakeup call and by others as a battle cry facing Switzerland and Swiss enterprises with an unexpected and forceful mix of historic, political media and legal instruments of foreign policy deployed by the United States.
This led to a bitter confrontation of Switzerland with American law and legal culture.

c) Text

You can find a scan (PDF) of the original text here:
A_2.47_EIZENSTAT_US and Allied Efforts

 

© Prof. Jens Drolshammer, office@drolshammer.com,  www.drolshammer.net

Comments (0)