16

THE DEAL

Edgar Bronfman does not appreciate infidelity. Blessed with a billion-dollar fortune, the stylish heir to the Canadian Seagram distillery empire is accustomed to compliance and obedience from others. But as a businessman Bronfman likes and is accustomed to making deals. Unfortunately for Switzerland, when George Krayer, the chairman of the Swiss Bankers Association, met the president of the World Jewish Congress in September 1995, he misjudged the new crusader. Krayer believed that Bronfman, as a professional dealmaker, would regard his offer to pay a lump sum in final settlement of Jewish grievances as an attractive deal. The banker did not contemplate that a businessman might be troubled by questions of morality.

Ever since his election as president in 1981, Edgar Bronfman, sixty-eight, had gradually jettisoned his playboy lifestyle. Besides managing the world’s biggest liquor manufacturer, he had transformed himself into a notable personality among world Jewry. From his unique office in the Seagram Building in central Manhattan, surrounded by Rodin sculptures, a Miró tapestry, and other masterpieces, he had saved the moribund World Jewish Congress—cofounded in 1936 by Nahum Goldmann to crusade against Nazism—from bankruptcy and in 1991 had tasted the success of his first crusade. With energy, gusto and skill, the three senior executives employed by the World Jewish Congress in New York had captured universal attention by establishing that Kurt Waldheim, the president of Austria and the respected former secretary general of the United Nations, was a liar and had been associated with Nazi war crimes. Singlehandedly, the WJC had destroyed the politician’s reputation and had tarnished Austria forever. Four years later, Bronfman arrived on his private jet in Bern with two members of the Waldheim team to reactivate the cause of the heirless assets and dormant accounts.

Israel Singer, the WJC’s general secretary, an orthodox Jew and graduate of a rabbinical seminary, was an experienced strategist with a good understanding of history and twenty years of experience in negotiating on behalf of the Jews with foreign governments. Renowned for his volatile temperament, Singer was the logistician on whom Bronfman relied. The mouthpiece was Elan Steinberg, the executive director, who shared Singer’s aggressive energy and his courage to shout when others might shy away out of embarrassment; he would prove to be a shrewd propagandist. The level of noise generated by these two men suggested an enormous organization, but in reality the two were the complete executive staff of the World Jewish Congress. That truth was understood by the Swiss bankers.

Bronfman had flown to Bern at the suggestion of Rolf Bloch, the president of the Swiss Federation of Jewish Communities. Over the previous four months, Bloch had noticed a significant change of mood in Switzerland. The collapse of communism and the restitution of confiscated property to Jews in the former East Germany had encouraged Kaspar Villiger, the Swiss president, to choose the fiftieth anniversary of the end of World War II as the occasion for an emotional appeal. A new study of Switzerland’s wartime treatment of the Jews by Jacques Picard, a Swiss historian, based on newly released archives had recently exposed the wartime government’s anti-Semitism as much worse than previously thought. Speaking in parliament, Villiger had told his countrymen that Switzerland must apologize to the Jewish community for its behavior toward the refugees during the war. “We can only bow our heads in silence before those whom we led into suffering and captivity, even death,” he had intoned. “We can only bow our heads before the family members and descendants.”

Bloch reported to Bronfman that the discussions he had started with the Bankers Association in March had progressed substantially. “The bankers are showing a new sensitivity,” said the representative of Switzerland’s small Jewish community. “They are aware of the new attitude in Switzerland. There’s anger that Switzerland deceived foreign governments about its relations with the Nazis and that the Swiss lied about their handling of the property of the Jews.” The Bankers Association had agreed with Bloch that their members should be asked to produce a final account on the heirless assets and unclaimed accounts. After six months of preparatory discussions, Bloch had arranged a meeting with Bronfman that, everyone agreed, would remain strictly private.

George Krayer, the chairman of the Bankers Association, was waiting for the three Americans on September 12 in a private room at La Grande Société, a club near the parliament building. Standing with the chairman were Hans Baer, an affable Jewish banker who had spent his childhood during the war in the United States; and two association officials: Jean-Paul Chapuis, the secretary general, and Heinrich Schneider, his deputy responsible for internal matters. Standing in the background were several lawyers and Hanspeter Häni, recently appointed as the Bankers Association’s ombudsman to help Jews find dormant accounts in Swiss banks. Since Häni was overtly pessimistic about finding “much for the heirs of the Holocaust,” his presence was a warning that the association could not be trusted.

None failed to be impressed as Bronfman, a tall, imposing figure, entered the room. As president of both the WJC and the World Jewish Restitution Organization, Bronfman had received the endorsement of Yitzhak Rabin, the prime minister of Israel, as the representative of world Jewry in Switzerland. On the other hand, the two swarthy men peering through thick glasses who accompanied the tycoon struck the waiting bankers as men who, like their predecessors over the previous fifty years, required reluctant toleration but could eventually be ignored.

After shaking hands, Bronfman rapidly became irritated. They were standing in a small room without tables or chairs, and the mood was frosty, in marked contrast to the warmth they had encountered in meetings earlier that day with the Swiss president and the chairman of the Swiss Bankers Commission. “They are pledged to negotiate in good faith and in secrecy,” Kaspar Villiger had told Bronfman, “until you reach a just solution.” Yet the bankers were exuding unfriendliness. Pompously, Krayer announced to Bronfman that a survey conducted by the Bankers Association had found dormant accounts with a total value of SF38 million ($32 million). Although not all the SF38 million was identified as originally deposited by Jews, the sharp increase from SF9.4 million disclosed after the 1962 law should have alerted the association that suspicions would be aroused. Instead, the Swiss bankers believed the contrary: that the Jews would be satisfied and grateful that more money had been discovered. For Krayer and the Bankers Association, that money was the solution to the historical problem. Bronfman, they judged, would shake on the deal, eat the lunch offered and depart forever.

“Will you take this as a final settlement?” asked Krayer.

Bronfman and Singer were shocked. “I don’t like the ‘take it or leave it’ attitude,” replied Bronfman. “I haven’t come here to discuss money. I’m here to discuss a process.” Krayer retreated. The tension lifted.

As the party sat down for lunch, the Jews’ optimism returned. Two historic obstacles had been removed. Recently, under pressure from Washington, Switzerland’s banking secrecy laws had been weakened to prevent deposits of drug money and, while Krayer had said in the past that he had “no knowledge” of dormant accounts, he was now volunteering to the visitors that “the banks had not behaved well.” Since the survey among the association’s 440 members had revealed the existence of dormant accounts, the banker remedied the introductory insult by promising, “We will certainly return the money, every penny, which belongs to the Jews.”

Bronfman had no reason to disbelieve the banker. “We’re not here to talk about the amounts of money,” repeated Bronfman, “just about the procedure.” Krayer nodded. By the end of the meal, an agreement had been reached. The association would conduct another comprehensive survey among its members for all dormant accounts and—Bronfman emphasized that “this is most important”—there would in the meantime be absolute secrecy. Publicity, it was agreed, would suggest that a final sum had been discovered, and that would provoke controversy and demands for payment. To smooth the presentation, the two sides agreed that their best course was to aim for unanimity before any announcement was made. Until an agreement on the final sum had been reached, they decided, their discussions should remain secret. It’ll be a rare occasion that we stick to a pact of silence, thought Steinberg as they drove to the hotel. Pleased with the meeting, Bronfman and the two executives flew to Belgium to attend another meeting at the European parliament about restitution. The secrets of the Swiss banks, it appeared, would be finally revealed.

Over the next ten weeks, Israel Singer returned three times to Bern to meet Krayer and discuss progress. As Singer sat in a suite at the Schweizerhof Hotel, his mood varied. The bankers, he said, telephoning Bronfman, were suspiciously slow. In particular, Heinrich Schneider, the Bankers Association’s secretary responsible for interior affairs, was hostile. Parochial and antiforeigner, Schneider was also hampered by his intellect. Like Max Oetterli, his understanding was limited to Swiss politics and prejudices. Singer believed the decision to meet in Bern rather than in the association’s own buildings in Basel reflected a distaste for allowing Jews into the association’s headquarters. Although Singer had become immune to slights, by the time of his return to New York in December he suspected that the Swiss bankers were intent on breaking their undertaking. A threshold had been passed. A telephone call sealed the fate of Krayer’s strategy. Bronfman struck out for an alliance with an unlikely partner—Senator Alfonse D’Amato.

Ever since D’Amato’s election to the Senate in 1980, Bronfman had had no reason to meet “Senator Pothole.” Not only was Bronfman a lifelong contributor to the Democrats, but he had little personal affection for the fifty-nine-year-old Republican, who had recently held hearings in the Senate to embarrass President Clinton over his association with the illegal finances of the Whitewater development in Arkansas. But, to his credit, D’Amato was a self-made, independent man with a feisty record of public campaigning for the underdog. As a street fighter with a rottweiler’s compassion for his target’s sensitivities, he was the ideal politician to challenge the Swiss banks, particularly as he was the chairman of the Senate Banking Committee. Past disagreements were ignored by the two rugged personalities as, over lunch in the Senate dining room on December 7, 1995, Bronfman outlined, with Singer by his side, his unease about the bankers and his grief for the handful of surviving Jewish victims. “We want you to know what’s happening,” said Bronfman. “This is an information trip.” Revenge would be uppermost in his mind if he was betrayed by the same breed who had outwitted the disarmed Sam Klaus and Sy Rubin.

“They’re taking you for a ride,” said D’Amato. Bronfman was still unsure.

D’Amato was not blind to the political advantage of supporting Bronfman, the representative of the largest Jewish population in the world, but he was genuinely outraged by the compounded dishonesty. “We’ll hold hearings,” he told Bronfman, sealing a pact whose consequences George Krayer could never have imagined. As he walked from the dining room, D’Amato said to Gregg Rickman, his diligent thirty-three-year-old legislative director, “This sounds great. Let’s do it.”

Compared with other politicians, the one hundred United States senators enjoy extraordinary power, veneration and resources, and over the years their targets have suffered mixed fortunes depending on their vulnerability. Switzerland’s bankers, D’Amato and Bronfman agreed, were particularly unprotected. Judged against U.S. banks, Switzerland’s financial institutions were puny and their fortunes depended upon their business activities in the United States. Withdrawing their licenses to trade in the United States would destroy their prospects. Beginning the lengthy process to deprive them of those licenses rested with D’Amato’s Banking Committee; and his announcement of “hearings,” a euphemism for a public trial or a kangaroo court, would undoubtedly terrify the Swiss banks. To prepare those hearings, D’Amato needed evidence and witnesses to prove to the public the validity of Bronfman’s complaint. But for the moment he was cautioned to remain silent until Bronfman’s suspicions had been confirmed. On no account, Bronfman repeated, would the WJC break the Bern agreement.

In January 1996, the WJC held its annual conference in Jerusalem. Carefully Bronfman avoided questions about the heirless assets. “We have met the Swiss bankers,” he told inquirers, “but I don’t want to make any further comment.” As he deflected the questions, the Bankers Association, in Basel, was veering toward a different policy. Krayer, with the encouragement of Heinrich Schneider, had become convinced that, to satisfy Swiss opinion and the increasing interest of parliamentarians, it would be politic to announce the results of the association’s 1996 survey at the regular half-yearly press conference to be held on February 7. News of that decision, picked up by local journalists, reached Singer in New York the day before.

Excitedly, Singer telephoned Schneider. “What’s going on?” he yelled. “If you break the agreement to keep the negotiations silent, we’ll confront you. In no uncertain terms.” By nightfall in Europe, no association official had bothered to reassure Singer. The Jews, thought Schneider, were powerless. Their threats were empty. Even if Bronfman was rich, he was no different from thousands of other rich men who regularly passed through Switzerland’s banks. The Jews were as irrelevant as they had been fifty years earlier. The following morning, Krayer formally announced the association’s survey: 775 accounts had been discovered that had been dormant since 1945. Their total value was SF38 million ($32 million), and not all had been deposited by Jews. The impression Krayer left among his audience was precisely that which Bronfman and Singer had feared. Beyond that amount, the association had declared, there was no more money owing to the Jews in the Swiss banks.

Bronfman, Singer and Steinberg were fuming. Fifty years after Klaus and Rubin had complained about Swiss dishonesty, the pattern had not changed. Nor had the association’s self-delusion about the Jews. The following morning, February 8, Singer flew down to Washington to brief Gregg Rickman.

Tucked away in the corner of D’Amato’s suite of Senate offices, surrounded by files, Rickman, a specialist in Middle East and Jewish affairs, was naturally as aware as most Jews about the generalities of the Holocaust, but he knew nothing about Switzerland, Safehaven, and the heirless assets. Since the lunch with Bronfman two months earlier, he had waited for an explanation to a problem that no one else in Washington understood. At the end of Singer’s briefing, the two agreed, “There might be some evidence in the archives.”

Among the advantages of recruiting D’Amato to the cause was the alacrity of government departments’ responses to a senator’s requests. The National Archives, which stored the records of all government departments and agencies, were eager to help the politician, although he was required to supply the researchers. The WJC provided Rickman with Willi Korte and Miriam Kleiman. “It’ll only take a couple of days,” the two researchers were assured.

Eleven government departments and agencies had been involved in the saga since 1944. Not only the Departments of State, Treasury, Justice and Army had touched Switzerland’s activities, but also intelligence agencies and humanitarian groups. Their accumulated records between 1940 and 1962, scattered across the capital, amounted to incalculable millions of sheets of paper. Only a few of the government documents were properly indexed, and although some had been available since 1972 many remained classified. Even twenty well-briefed researchers would need at least one year to compose the history of an issue that was hardly mentioned in textbooks and had been practically forgotten even before the death of most of the participants. Yet, within the first weeks, luck and diligence provided a nugget that confirmed the validity of Bronfman’s complaint.

An intelligence report from Switzerland in July 1945 stated that Jacques Salmanovitz, the owner of the Société Générale de Surveillance, a notary and trust company in Geneva with links to the Balkan countries, possessed a list of 182 Jewish clients who had entrusted SF8.4 million and about $90,000 to the notary pending their arrival from the Balkans. The report added that the Jews had still not claimed their possessions. Rickman and D’Amato were ecstatic. Here was historical proof that unclaimed heirless assets were retained by Swiss financial institutions. Still unaware of the background, complexity and dimension of the question, D’Amato submitted the report for publication in the Congressional Record on March 27. Dramatically, he accused the Bankers Association of a cover-up, and asked it to explain the failure of its recent survey to account for that SF8.4 million worth $20 million in 1996 values. SGS officials denied D’Amato’s charges, contending that the funds were returned to their beneficial owners “as far as [they could] ascertain from the files still available from that time.”

George Krayer was worried. The association was unaware of the Salmanovitz account—because the SGS was not a bank—but the existence of such confidential information in the U.S. archives promised a succession of horribly embarrassing revelations. More sensational reports from New York and Washington about public accusations by D’Amato and Steinberg against the Swiss bankers added to Krayer’s concern; they were followed by notice of the first hearing to be held in the Senate on April 23.

In organizing the hearing, Rickman had written to Mark Cohen, a lawyer at Wilmer, Cutler, Pickering representing the Bankers Association, asking whether the Swiss bankers would provide a witness. The association’s retention of the firm in 1994 had followed the dismissal of its previous lobbyist, Bob Royer, the casualty of an internal dispute. That decision, in retrospect, was not astute. While Royer enjoyed especially close relations with D’Amato and his staff, Cohen and his superior Roger Witten were outsiders without any contacts in D’Amato’s office and ignorant of the sentiments and strategy driving the new crusade. Unquestioning, and unversed in the politics and the history, they accepted their client’s professions of innocence and thus misjudged the threat presented by D’Amato. One immediate misguided decision was to allow Hans Baer, the Jewish banker involved in the Bern meeting in 1995, to represent the association at D’Amato’s hearings.

In preparing for the hearing, D’Amato and Bronfman agreed on one fundamental principle. Since most of the beneficiaries were dead, they were anxious not to appear to be mercenary. Bronfman’s carefully considered public approach would be to insist that his cause was moral, not financial. Taking the same ground, D’Amato spoke about an “accounting.” Elan Steinberg referred to the “last chapter of the Holocaust.” Emotions rose. Overnight, the irrepressible mystery of the swastika, with its drumbeat overtones of brutality, war and genocide, attracted every newspaper to an untold story of hidden fortunes and greedy, criminal bankers. There was even a living victim.

Greta Beer, an attractive seventy-five-year-old former Romanian who had settled in Queens, New York, to become a tour guide, was introduced to the packed committee room near the Capitol by D’Amato just after 10:05 on April 23. The senator’s opening words were a declaration of war against the Swiss banks. Greta Beer, proclaimed D’Amato, was a casualty of “the systematic victimization of people … started by the oppression of the Nazis” and then by the Swiss banks. The “broken trust” perpetuated by the Swiss banks, he continued, “with the evasions and excuses for over fifty years,” meant that “the Greta Beers have been denied justice.” Emotive references to “deliberate cover-up” and “callousness” established the accusation. Fifty-one years after Sam Klaus had drafted the Safehaven proposal one mile from the Capitol, the trial of Switzerland was under way.

Greta Beer’s story was heartrending. Shortly before his death in 1940, her father Siegfried Deligdisch, a Romanian textile manufacturer employing over 1,000 people, revealed that there was a Swiss bank account for his wife and two children, but he did not disclose either the identity of the bank or the account number. After surviving the war, Beer emigrated to the United States and, after the enactment of the 1962 law, traveled with her mother to Switzerland to seek information from banks in Bern, Zurich and Lausanne. All denied any knowledge of an account. “My mother did not have an easy life,” said Beer, her voice breaking, “and my own life would have been totally different if we had access to that money. I am bitter about being deprived.” The committee room was silent as the old woman recounted the last words that she, as a young girl had heard from her father: “Don’t worry. You will be provided for. The money is safely deposited in Switzerland.”

The story was a damning one, and Edgar Bronfman’s testimony, delivered soon after, encapsulated the moral assault: “Our collective mission here is nothing short of bringing about justice. We are here to help write the last chapter of the bitter legacy of the Second World War and the Holocaust.” Condemning Switzerland’s banks for “their repeated failure of integrity,” for earning a “profit from the ashes of man’s greatest inhumanity to man,” and accusing Switzerland of breaching its neutral status during the Nazi era in ways that cost a “staggering [number] of American lives,” Bronfman demanded “a proper accounting.”

For years, the Swiss had enjoyed a cozy niche in the world’s consciousness as a tiny, decent, wealthy community associated with Toblerone chocolate, Swatch watches, Alpine ski resorts and at worst boredom. Suddenly cast into the spotlight by D’Amato and Bronfman, the Swiss were no longer just a peculiarly charmless people who had produced no artists, no heroes since William Tell and no statesman, but were dishonest Nazi collaborators who had profited from genocide. “We cannot rest,” agreed D’Amato after accepting Bronfman’s praise for holding the hearings, “while unnamed individuals profit from the deaths of the six million.”

Selecting Hans Baer, a decent, upright man—the chairman of a private bank and a member of the Bankers Association’s executive board—as spokesman had seemed a sensible move. His carefully drafted statement to the committee sounded ingenuous. “The SBA,” he explained, “has been pained by the accusations that have appeared recently in the press that the SBA is not sensitive to the interests of the Holocaust victims.” Old history had recorded that defense but, as Baer knew, history was being rewritten. Anticipating the antagonism, he had arrived with a gesture and a solution. His gesture was an offer to pay for Greta Beer to visit Switzerland to find her missing account. His solution was to establish an independent audit commission with members nominated by the Bankers Association and the WJC who would, under an agreed-on chairman, retain auditors to comb through the banks’ records and find any remaining dormant accounts.

Over the previous weeks, Baer and Singer and others had been discreetly “unscrambling the egg and returning the parts into a complete shell.” Reminding the Swiss bankers of the Waldheim precedent, Baer had proposed a six-man international committee of eminent persons—three Jews and three Swiss—to supervise an audit and defuse the crisis. Switzerland’s banks would assure the auditors, agreed Krayer, “unfettered access to all the relevant files in banking institutions regarding dormant accounts and other assets and financial instruments deposited before, during and after the war.” President Kaspar Villiger had agreed to introduce legislation to amend the banking secrecy laws to allow the investigation. The final requirement was an impeccable chairman. The committee, Baer believed, could defuse the tension, but he rightly feared D’Amato’s skepticism about the solution. “I’m suggesting that it is a problem,” the senator told the banker, suspicious of any committee, especially one funded by Swiss bankers. Nevertheless, by the end of the hearing Baer felt relieved. With goodwill, he was convinced, Bronfman’s demand for a full accounting would be satisfied.

The banker was deluding himself. His appearance, despite his sincerity, had made a poor impression and, before he had even walked outside into the lunchtime sun, Bronfman’s limousine had swept down Pennsylvania Avenue toward the White House. Distrustful of any Swiss banker, Bronfman was seeking allies, and the most important was the president of the United States. The previous day, at a lunch he hosted in New York, Bronfman had persuaded Hillary Rodham Clinton of the importance of the issue. Thanks to her intervention, he was now seated with Clinton for thirty minutes. Bronfman sought endorsement for his campaign against Switzerland and the president’s assurance that Alfonse D’Amato’s involvement would not be an obstacle. “I’ll work with D’Amato,” promised the president and, to prove his commitment, he appointed Stuart Eizenstat, the government’s special envoy for property restitution in Central and Eastern Europe, to conduct an interagency investigation to discover the archival evidence against Switzerland.

In Bern, Basel and Zurich, politicians and bankers were at once bewildered and indignant as they read the reports from Washington. Switzerland, it seemed, had been targeted at the behest of the Jews. The old conspiracy had been resurrected and was proved by the appointment of Madeleine Kunin, a Jewish Democrat, as the new U.S. ambassador to Switzerland. The country, already mortified by recession and unemployment, was under siege by Americans plotting to undermine Switzerland as a financial center. No doubt that was the ultimate sanction available to D’Amato and Bronfman, and the older Swiss knew there was good reason to fear those two men. There was so much history to expose, and the politician and the tycoon were too independent and too powerful to be bothered with Swiss excuses.

Speaking to each other regularly, Bronfman’s and D’Amato’s staffs agreed that relentless pressure and a diet of embarrassments would eventually defeat their foe. In D’Amato’s office, Gregg Rickman was urging the two researchers at the National Archives to “find more stuff that we can hit ’em with.” Cleared to read classified material, Rickman disappeared into the sealed rooms, searching in the United States’ “secret” archives for more incriminating material. To his chagrin, nothing remotely similar to the Salmanovitz report emerged. But there was compensation. The researchers were photocopying intelligence, Safehaven, and diplomatic reports about Switzerland—many declassified fifteen years earlier and already read by historians, but all resoundingly accusing Switzerland of perfidy.

Elan Steinberg was not bothered by this flood of detail. The Washington hearings had stirred journalists’ appetites for information about Switzerland’s crimes. Telephone callers to the WJC demanded more information. Steinberg was happy to oblige. Creating a potent image of an army of researchers in Washington digging up untold secrets of Switzerland’s collaboration with the Third Reich, the executive director invited callers to enter his office and catch a glimpse of documents marked “secret” and reeking of authenticity.

Patently ignorant about the history but eager to accept that any facts unearthed in the archives were new and true, European newspapers during May and June 1996 published a series of increasingly prominent “bombshells” about Switzerland’s connections to “Odessa documents,” the “secrets of Safehaven,” Adolf Hitler’s “secret Swiss bank account,” and Göring’s looted art, and about Switzerland’s betrayal of the Jews. Terror by embarrassment was Steinberg’s weapon, as he uttered a string of accusations designed to cause discomfort and shock. OSS reports, often based on rumor and uncorroborated sources and disregarded for years by historians as hearsay, suddenly assumed uncritical credibility and widespread publicity. European readers enjoyed Switzerland’s embarrassment, yet frustratingly for the WJC and Rickman, that interest was not mirrored in the United States.

The WJC needed an emotive issue to link the Holocaust and Switzerland. Documents arriving from Washington mentioned the looted gold and the Washington Accord, about which Singer and Steinberg had known nothing. But they did know that, among the catalog of horrors, few images were more searing than the methodical extraction in the extermination camps of gold dental fillings from the mouths of Jewish corpses dragged from the gas chambers. Bags of gold fillings, it had been established at the Nuremberg trials, had been delivered by the SS to the Reichsbank in Berlin. Under Emil Puhl’s supervision, the fillings had been smelted and had reappeared as anonymous gold ingots. There was every reason to believe that those ingots, and others manufactured from wedding rings wrenched from the fingers of corpses, had been delivered to the National Bank in Bern.

Neither Steinberg nor Singer understood the complexities of the negotiations in 1946 in Washington, but both grasped the American negotiators’ complaint about British betrayal. Since the Europeans were showing more interest in the story than U.S. newspapers, they judged that the waves caused by accusations leveled in London might rebound across the Atlantic.

The maneuver was delegated to Greville Janner, a vice president of the WJC and, most important, a Labor member of parliament with a guaranteed platform for winning international publicity. At the end of a dedicated political career, Janner was credited, as a moderate spokesman for Jewish causes, for his active sponsorship of the bitterly contested War Crimes Act, which had finally, in 1991, allowed the prosecution of alleged Nazi war criminals living in Britain. Janner’s lack of knowledge about the Washington Accord did not hinder his widely published and broadcast allegations in July 1996.

Janner claimed that government documents, recently declassified in Washington, proved that a secret deal had been hatched in 1946 between the Allies and Switzerland allowing the Swiss to return only a fraction of the looted gold. In particular, Janner accused the British government and MI6, the foreign intelligence service, of conspiring to deprive the survivors of uncalculated millions of pounds owed from the gold stolen from victims of the Holocaust.

Malcolm Rifkind, the British Foreign Secretary, who was Jewish, was understandably baffled and turned to his officials for advice. The politician was let down by the low caliber of those employed by the British government. Instead of looking in the government’s own volumes of published agreements or referring to published textbooks, Rifkind rapidly uttered a public denial that the government possessed any information whatsoever—an odd statement, considering that the text of the Washington Accord had been published as a government document in 1946. “We have not heard of the allegations that British intelligence knew of the documents concerning holdings by Swiss banks of seized funds,” he said. “None of the intelligence agencies is aware of having such information.” Rifkind’s promise to launch a serious investigation gave unconditional credibility to Janner’s allegations. The hare, to the glee of the World Jewish Congress, was running.

Thanks to researchers in Washington, Janner was provided with another tasty accusation. A 1945 report from Lisbon suggested that the painting Salome by Titian, stolen from a Jew, had been smuggled into Britain and deposited in the vault of the National Westminster Bank. In broadcasts across Britain and other countries, the Labor politician demanded an immediate search and the painting’s surrender. Overnight, the World Jewish Congress was rewarded with massive publicity. Headlines reporting that Switzerland faced a “£15 billion Nazi art scandal” and sensational accounts of German deposits of looted Jewish property in Switzerland worth between $22.3 billion and $106.4 billion filled London’s most respected newspapers. Janner spoke eloquently of Switzerland as an “Aladdin’s cave of art stolen by the Nazis” and encouraged reports about Switzerland’s criminal pact with Hitler. Steinberg was thrilled; the dam was weakening. One more push and the American media might embrace the campaign. No one imagined that a sloppy Foreign Office historian would provide the “eye-catching figure” to rouse Newsweek and Time and rattle the Swiss.

After proper reflection, Foreign Office officials had realized that Janner’s allegations about secrecy were incorrect. Ninety-one government files, all declassified more than twenty years earlier and available to the public in the British archives, told the true story. With unusual speed, the Foreign Office, anxious to create an image of openness, intended to publish a report absolving the British of any role in the nonexistent conspiracy. After rapid research in the archives, the Foreign Office’s historian, absorbing the current hostility toward Switzerland, sought to explain and justify the Allies’ frustrations in 1946. Fortunately for the new crusaders in the United States, the historian misunderstood the Washington discussions about gold, particularly Alfred Hirs’s quip that the Allies would ruin his bank if they demanded SF500 million.

Entitled “Nazi Gold: Information from the British Archives” the twenty-three-page report, published on September 10 and praised by The Times as “a crisp and well-compiled historical survey,” was an innocuous publication with one “bombshell.” After correctly stating that the Allies “had no clear idea” of the exact amount of looted gold “held in Swiss banks,” the historian stated that the Americans estimated the amount to be $200 million. He then added, “M. Hirs let slip during a meeting of the gold committee the figure of $500 million.” In simple terms, dollars had erroneously replaced Swiss francs, quadrupling Hirs’s alleged estimate of the looted gold. In fact, even perfunctory reading of the American transcript showed that Hirs had denied that any looted gold was stored in the Bern bank. He was referring only to the enormousness of the Allies’ demand.

Understandably, the media relied on the Foreign Office’s own calculations. If $500 million of Nazi gold was stored in Switzerland in 1946 and only $58 million had been repaid under the Washington Accord, then, it was reasoned, Switzerland had profited by $450 million. With inflation, the horde was worth $4 billion and, according to the Financial Times, “could still be in the Swiss banks.” After the story had crossed the Atlantic, the front page of the Washington Post reported that Switzerland “still holds 90%” of the gold—worth “$6 billion”—“right down to the gold fillings of Holocaust victims that were melted down into bullion.” The British government, claimed the Post, “has accused the Swiss of refusing to relinquish a cache of billions of dollars of looted gold.” With a twist, the British and Americans were also guilty. Five tons of “Nazi gold” were still stored in the vaults of the Bank of England and two tons in the U.S. Federal Reserve, possibly also manufactured from dental fillings.

The interpretation was neat and sensational—but it was totally untrue. Nevertheless, the World Jewish Congress had finally succeeded in winning attention from the mass media. “This is the greatest robbery in the history of mankind,” said Steinberg, as Rifkind acknowledged the possibility that the gold in the British vaults should, as Janner demanded, be redistributed to families of Holocaust victims.

Switzerland’s reputation was plummeting. Unaccustomed to making fast decisions, Flavio Cotti, the foreign minister, admitted that the issue was causing “serious harm to Switzerland’s image,” and even conceded that the accord could be renegotiated if “new facts arise.” Struggling to limit the damage, he told a crowded press conference on September 16, 1996, “Switzerland never intended taking gold from the Nazis and keeping it for itself.” Switzerland’s total earnings from the gold trade, the National Bank announced, was a mere SF20 million. The only event that day that stilled the rising furor was the Swiss parliament’s debate about amending the banking secrecy laws.

George Krayer and the other members of the Bankers Association were appalled. Rather than controlling events, the government was reeling. “This matter,” the association wrote to the government, “should not be constantly thrown into the political arena on the basis of tragic cases, suppositions and documents which in some cases are highly suspect.” The bankers asked for “more time to clarify what actually needs to be investigated.” One statistic was tormenting the association. While its survey published in February 1996 had reported that SF38 million ($32 million) had been found in the dormant accounts, not all belonging to Holocaust victims, Steinberg was reported to be telling journalists that the Swiss were concealing between $7 billion and $20 billion of property belonging to the Jews. Misreading the situation, Robert Studer, the chairman of the Union Bank, caustically dismissed those claims. “The amounts we’re really talking about are peanuts,” he scoffed tactlessly, walking straight into D’Amato’s trap.

“Switzerland is blatantly profiting from the Holocaust,” D’Amato offered as a succinct soundbite. “How can one have confidence in the Swiss authorities when they have only taken action under pressure from public opinion?” Tirelessly driving his staff to hunt for new angles to cultivate the right publicity, he relished the fight against an unequal opponent whose spokesman could only bleat that the senator was exploiting Switzerland’s discomfort to win votes. American-style democracy was alien to the Swiss, and the experience was becoming more unpleasant. By early October, Gregg Rickman had found six new victims and a new grievance to spur on the senator’s campaign.

Slipping into the crowded conference room in the New York federal court building on October 16 for the second round of hearings, D’Amato was beaming. Six witnesses, all victims of the Holocaust and Swiss banks, were waiting to tell the world of the misery and humiliation they had suffered. D’Amato was also carrying, tucked inside his folder, the sheet of paper prepared by Rickman as the surprise revelation.

The senator’s introductory remarks set the agenda: “We’re very concerned that Swiss citizens and corporations blatantly benefited from the Holocaust while the interests of the survivors were totally ignored.… We want to know where all the hundreds of millions of dollars of assets that the Nazis deposited in Swiss banks went.… It’s time for justice. Time to get the truth.” In the background, Roger Witten and Mark Cohen, the Bankers Association lobbyists, squirmed. The Swiss journalists scribbled furiously, accurately guessing their readers’ reaction. The witnesses nodded. The senator was speaking their thoughts.

In broken English, her voice choking, Estelle Sapir, a small, withered survivor, was the first victim to speak. Describing her quest to find her father’s account, she told D’Amato that the employees of the Swiss banks had been “rude and arrogant.” “Yes,” nodded the senator, “If you look at the age of those who are being further victimized, it seems to me that they [the Swiss banks] would like to stall this until there is no memory left of the survivors.” Pausing for the cameras, he added, “Switzerland is playing the old game of delay.”

D’Amato now moved to the revelation, which required careful explanation: Switzerland had signed secret agreements with Poland and Hungary to make use of the heirless assets. “Imagine that,” said the Brooklyn-accented senator, “Polish Jews had their assets taken over and paid over to the Swiss. Just unconscionable … These assets were looted from victims of the Holocaust.” By the end of the ninety-minute hearing, the senator had secured a satisfactory slice of TV air-time and column inches. “A fraud was committed on those people,” he told the journalists gathered around, “and it continues today.” In the midst of the journalists’ scrimmage, the politician repeated his single-line message. In Bern, it was 7 P.M.—too late to find Flavio Cotti and ask for his reply.

The following day, the Swiss foreign minister was visibly angry. D’Amato’s allegation about the agreement with Poland, he told inquirers, was “totally without foundation.” Sure of his facts, D’Amato dispatched a letter to Bern. “The Swiss government,” he wrote, “was actually part of the conspiracy with the communist government of Poland. This dishonesty and deception by any government would be offensive against the background of one of the saddest chapters in human history. It is especially disturbing given Switzerland’s reputation for neutrality and compassion.” Once again Cotti rebutted the claim as “totally without foundation.” In parliament, the minister fumed, “What has been said about Switzerland, especially in the foreign media … has been shattering, on the very edge of intolerable.” Accusations of Swiss profiteering, he nevertheless conceded, “have gravely undermined our self-esteem and our sense of our own moral value.”

Hours later, helped by Peter Hug, a Swiss historian, Cotti’s officials were led to the evidence of the secret Polish pact stored neatly on the open shelves of the Swiss national archives. “Jewish money,” the Foreign Ministry spokesman sheepishly admitted, “was used to compensate Swiss citizens.” Besieged in Washington, a Swiss embassy spokesman snapped that the spokesman in Bern “was misquoted.” Events, revelations and admissions were multiplying too fast for officials accustomed to a sedate pace. One telephone call to Bern clarified the contradictions. Switzerland, it was admitted at the embassy in Washington, “bought the goodwill of the Polish regime” but “the agreement was not carried out.” Facing both ways, the Swiss now sought to explain the deal in a different manner. Switzerland’s citizens had been compensated not by the Swiss government but by the Polish government. In Bern, the government announced the creation of a task force led by Peter Hug to investigate Switzerland’s agreements with Eastern Europe. Switzerland’s establishment was reeling.

By the end of October 1996, five different investigations were either proposed or under way to dissect Switzerland’s past. Besides Hug’s, there was a proposed historians’ commission to examine Switzerland’s entire archives concerning the Nazi and post-Nazi era. That was expected to report in five years.

The third probe was being conducted by Hanspeter Häni, the Bankers Association’s ombudsman. Häni had received claims, as Weber had in 1963, accompanied by a fee of SF100 ($80), which were passed to banks for reply. After eight months he revealed that, despite 2,229 inquiries and 1,055 investigations, not a single dormant account had been reported. But, faced with intensifying pressure, he suddenly announced the discovery of eleven accounts worth SF1.6 million. However, only five were linked to Nazi victims, and their total deposits amounted to SF11,000 ($8,750). “A cruel farce perpetuated on Holocaust survivors by the Swiss banking industry,” scoffed the World Jewish Congress. “He’s Swiss,” carped D’Amato. “How do you expect that he’s independent?” The fees Häni had received from Jewish claimants exceeded the few dollars his inquiries had discovered.

The fourth proposed investigation to audit Switzerland’s banks, under Paul Volcker, the former chairman of the U.S. Federal Reserve, as yet showed no sign of life. Although the terms of the proposed Swiss legislation to compel banks to disclose their secrets had been broadened to include the “fate of assets which reached Switzerland as a result of National Socialist rule,” the representatives of the banks and the Jews had still not agreed on their terms of inquiry. The banks had so astutely prevented a proper investigation in 1962 that every precaution to avoid an exhaustive investigation thirty-five years later required attention. “I’d be disappointed if we don’t narrow the difference,” said Volcker, resisting attacks by D’Amato—who was questioning Volcker’s independence because his committee’s expenses were paid by the Swiss banks.

The fifth investigation was under the command of Thomas Borer, an ambitious, self-confident thirty-nine-year-old international lawyer, a former counselor for legal affairs in Washington, who ranked number four in the Swiss Foreign Ministry. Borer’s task force was to supervise the country’s investigation of the fate of the “assets of the Nazis’ victims.” As a Swiss traditionalist, Borer had adopted an unexceptional attitude. D’Amato, Borer said, was “unfairly rushing to judgment” against Switzerland.

To irritate the Swiss even more, D’Amato offered more venom. The Swiss, he told reporters, “are trapped in the facts of their predecessors’ actions and defend themselves with new denials, half-truths and distortions. They continue to compound the horrible things they did years ago by accusing others of misstatements.” To overcome the delays, he suggested that the government also establish a “truth commission” similar to South Africa’s. For the racially aware Swiss, it was the ultimate insult. “Comparing Switzerland to South Africa is absurd,” said the fair-haired Borer. “His charges that we want to delay the investigations,” expostulated Cotti, “or that we are not credible because we are Swiss, are insulting and utterly unacceptable.”

Pleas of innocence encouraged a switch to a more sophisticated attack. In New York and Washington, enterprising lawyers organized two class actions against the Union Bank of Switzerland, Crédit Suisse and the Swiss Bank Corporation, claiming damages of over $20 billion. Class actions—unknown in Europe—are used in the United States as battering rams against giant corporations to win vast damages for large groups of individuals. The claims alleged that the banks had refused to return money deposited by Jews and that a colossal amount of wealth stolen by Nazis from Jews, deposited in Swiss banks, should be transferred to the survivors. The quality of proof provided in the two claims was decidedly unimpressive, but the nuisance value was enormous. If the judge allowed one composite case to be heard, the three banks would be immersed in a lengthy saga to defend their wartime relationship with the Nazis. To terrorize the banks further, the Washington case, organized by Martin Mendelsohn of the Simon Wiesenthal Centre, had retained Michael Hausfeld. As proof of his status as the United States’ leading advocate in class actions, Hausfeld had just won a $178 million settlement from Texaco in a race discrimination case. The Swiss Bankers Association finally understood the gravity of the threat. To reinforce the propaganda value, one of the law firms produced another victim to demonstrate Swiss dishonesty.

Speaking at her home in Brooklyn with a strong Central European accent, Gizella Weisshaus, a Hasidic Jew, described her fate in the summer of 1944 when, aged fourteen, she was arrested with her parents and six younger brothers and sisters in Sighet, Romania. While the family was forced to remain in the house, her father was held at the rail station awaiting the journey to Auschwitz. By paying his guard a hefty bribe, her father had been allowed to return home and bid farewell to his family. In the midst of a hurried and strained conversation, Gizella Weisshaus’s father whispered that some money was hidden in the house and that there was more deposited in a Swiss bank. The father returned to the station and was never seen again. Shortly afterward, the whole family was shipped to Auschwitz. At the railhead inside the camp, an SS officer, jerking his thumb, ordered Gizella Weisshaus’s mother and the six younger children to go in one direction, while, ignoring the mother’s screams for her child, Gizella was ordered to join another group. No one realized that it was a decision of life and death; while Weisshaus would survive, her mother and her six siblings would be gassed within hours. More than fifty of her relatives would be murdered by the end of the war. Having survived, Weisshaus had returned to her home to discover, as her father had disclosed, $1,500 in dollar bills and some gold hidden in the roof. Shortly afterward, she married and emigrated to the United States.

Sitting in her home in autumn 1996, the sixty-six-year-old Weisshaus, staring at a photograph of herself as a child with her father, decried the results of three unsuccessful visits to Switzerland to find her father’s bank account: “That made me really mad. They’re just playing for time, waiting for everyone to die. I have to do justice for my parents.”

The publicity given to the two class actions persuaded over 3,000 other potential claimants to contact the east coast lawyers to join the case. “This publicity is really killing us,” groaned a Foreign Ministry spokesman in Bern. “We’re peeling back the layers of the onion,” rejoiced Stuart Eizenstat.

To combat the adverse publicity and correct the mistakes, Carlo Jagmetti, the sixty-four-year-old Swiss ambassador in Washington, was ordered by Bern to host a press conference. A heavy man on the eve of retirement, Jagmetti would clearly have been happier sitting in a mountain café, drinking a glass of cold white wine from the Vaud alongside Lake Geneva—or even lying on a beach in Florida—rather than getting embroiled in unsavory controversy. Prior to his appointment, neither he nor his masters in Bern had anticipated that the son of a long-established Zurich family would ever emerge from the anonymity familiar to the representative of an insignificant country in Washington. Indeed Jagmetti, angry that Clinton had allowed four months to pass before allowing the ambassador to present his credentials, had afterward derided the president to Swiss journalists for “laughing at inappropriate moments” during their interview and had even asked, “Who actually runs the country?” That contempt now gave an extra charge to the anger he shared with most of his generation about the slurs being leveled against noble Switzerland. In consequence, Jagmetti and his staff were floundering as they defended their predecessors only to discover that their loyalty was poorly rewarded by confusion. Accusations by the Jews in New York were denied in Bern only to be reversed and admitted. Assertions by Senator D’Amato were ridiculed and then conceded. Who, wondered Jagmetti, was in charge back home and why did D’Amato refuse his requests to meet? The senator was loathsome, disrespectful and a sensation seeker. The ambassador’s fury, however, after he had received some careful briefing, was repressed when, on October 30, he begrudgingly welcomed fifty journalists and a dozen television cameras in the embassy’s reception hall.

Christoph Bubb, the embassy’s legal counselor, stood aside from the ambassador, not much wiser than he had been two weeks earlier when, at the embassy’s reception, he had scorned the notion that Switzerland’s banks could have retained any Jewish assets and derided Senator D’Amato’s suggestion that Switzerland had made a secret agreement with Poland. But the lawyer was still puzzled. Nothing in his education and training had prepared him for the tumult engulfing his country. Coping with the barrage of assaults was testing his very sanity. The language and the emotion typified war rather than diplomacy—a war for the survival of Switzerland. That concern was shared by Jagmetti. Both men viewed the “war” as a conflict about money, not truth or justice. The Americans, they believed, wanted a deal, but negotiating sums of money with such people was impossible.

The ambassador’s brief was to reassure. Blinking nervously at the unusual crowd inside his sanctuary, he opened with a promise: the full truth would be disclosed “as soon as possible,” and while the historians’ investigation was under way, he urged, even if it lasted five years, “we must avoid the trap of hasty conclusions based on alleged revelations.” Referring to his principal enemy’s accusation that five years “is too long,” he countered that D’Amato’s remarks were “a travesty,” because the historians would produce “early results.” A mention of the senator’s name, a red rag to the ambassador, aroused a further attack against “misrepresentations,” but recalling his instructions from Bern to appear conciliatory he admitted, “Soul-searching is very much going on in Switzerland. There is fundamental discussion. Opinions are polarized.” As the questions became hostile, the ambassador uttered his concession: “Of course the banks made psychological mistakes. From the human point of view some real mistakes have been made.”

While no cynical journalist was won over by the ambassador, he had succeeded at the last moment in presenting a human face. But his instinctive feelings could not be contained forever. The rotund Jagmetti—caught up, he believed, in a war to defend his country—committed his own “psychological mistake.” Talking about Greta Beer, who had been flown to Switzerland by Hans Baer, the banker, to find her missing account, the ambassador said, “They found her account but discovered that her uncles had taken everything from the account in the past. So this was a very tricky case. Had she the money, she would have gotten it right away.” But his statement was inaccurate. Hans Baer had found the records of an account belonging to Greta Beer’s uncle, which was empty, but he had not found a trace of the account opened by Beer’s father. Jagmetti’s mistake revealed his prejudice: One Jew had stolen from another Jew. The Jews cannot be trusted.

In Bern, Thomas Borer, firmly in the seat as the task-force commander, considered the ambassador’s “mistake” trivial and was scornful of the resulting uproar contrived by the senator and the World Jewish Congress. In a meeting with Paul Volcker (still battling to establish his own investigation), Borer had shown his own prejudices. To explain his conviction that few Jewish dormant accounts would be found in Swiss banks, Borer had declared, “Rich Jews didn’t go to Auschwitz. They cleverly bought their way out.” Volcker had suppressed his surprise. No wonder he was having difficulty getting the Jews and the Swiss committee to agree the terms to launch the investigation.

Prejudice, anger and suspicion were pulling the antagonists further apart. Intentionally, D’Amato and the WJC executives were feeding more inflammatory documents to journalists to annoy the enemy. In early December, an official of the Simon Wiesenthal Organization in Buenos Aires obtained the wartime records of gold transfers from Bern. Over one billion dollars of Nazi loot, suggested Elan Steinberg, had flowed to Argentina. Rickman in Washington released recently discovered State Department records reporting that Goebbels and Göring had dispatched diplomatic pouches filled with loot to Switzerland for shipment to Argentina, while another intelligence report indicted Swiss officials for helping wanted Nazis to escape through Switzerland to South America. At the center of the web was Switzerland, protecting the Nazis and harming the Jews.

Thomas Borer could not ignore the latest headlines. Nor was he inclined to disregard the evidence. Unlike Jagmetti, he was not instinctively antagonistic toward Americans, nor did he underestimate the combined influence of a senator, a lobbyists’ group and sympathetic media. While disparaging the continuous drip from the archives—“Publishing single documents out of context and without regard to the historical realities constitutes sensationalism,” he complained—he understood the need for dialogue, even if D’Amato was reluctant to offer mutual respect. Rather than reject outright the evidence from Argentina—he played down Jagmetti’s abrupt dismissal as “pure hearsay”—he tried sweet reason: “It cannot be excluded that at some time a diplomatic pouch was misused.” After successive meetings with the Swiss ambassadors to Israel, the United States and most European countries, and with Switzerland’s top bankers, he proposed a new strategy to persuade the world that the Swiss had not stolen any money.

The place to launch the charm offensive, Borer calculated, was at the new hearings on Switzerland and the Jewish assets scheduled by James Leach, the chairman of the House of Representatives Banking Committee, to start in Washington on December 11. Borer intended to testify and to use his visit to meet the major antagonists.

The official’s flight to Washington was not as pleasant as he might have hoped. Shortly before departing, he had received the rushed historians’ 145-page report, exclusively about Switzerland’s secret agreements with Poland and Hungary, that had been prompted by Senator D’Amato’s accusations. Irritatingly, they had concluded that “a number of serious legal and administrative irregularities had been committed by banks and senior Swiss government officials and politicians.” That report, he decided, would not be released as promised during his Washington visit. It required amendment, certainly delay, and he would ensure that its publication would be overshadowed by another event.

With that irritation removed, the ambitious official stepped off the aircraft eager to build bridges at a succession of meetings. The most important was lunch with Edgar Bronfman in the Seagram building. To everyone’s satisfaction, their encounter would pass off, in Steinberg’s opinion, as “friendly, constructive and encouraging.” D’Amato would also amiably describe his meeting with Borer as “okay.” There was a suggestion from the WJC that Switzerland should establish a goodwill fund. “We need an interim fund to compensate the survivors,” said Bronfman. “So far the pace has been slower than a snail. Not one franc has passed hands.” Although no amount was mentioned, Borer was understanding. “The crisis may have passed,” said Steinberg as Borer flew south to appear at 9.40 A.M. in the Rayburn House building.

Entering the fevered atmosphere of the committee rooms of the United States Congress is for any non-American a daunting experience. Within those undistinguished rooms, politicians like Joseph McCarthy have destroyed the reputations of hundreds of ordinary Americans, and other politicians have terminated the ambitions of presidents. For Borer and his entourage, the stakes were just as high. Since the hearings in April 1996, Switzerland’s reputation had been shredded. Every attempt to rebut or minimize the damage had been at best futile, at worst counterproductive. Borer hoped that his activities would pacify and reassure. But the opening comments of the politicians on the raised dais were not encouraging.

“To those people who find these hearings annoying and unpleasant,” admonished Representative Barney Frank of Massachusetts, “there is an easy way to make them go away: Do the right thing.” For the Swiss officials to hear American politicians speak with passion about the “greatest moral blot on mankind’s record” was disconcerting, but the warning by Representative Spencer Bachus of Alabama was succinct: “The credibility, the veracity, the very integrity of the entire Swiss banking industry [are] at stake in this matter; and the burden of proof lies entirely with the Swiss banking industry.” The gap between the banks’ estimate of dormant accounts at $32 million and the claims of the survivors that the figure was “as much as $20 billion,” warned Bachus, was “too large a gap for honest error.”

Borer—nicknamed “Schwarzenegger” by journalists—flinched as Representative Paul Kanjorski from Pennsylvania, the next speaker, issued a blunt message: “No one can ever be allowed to profit from blood money—not now, not fifty years ago, not fifteen years from now. Never again.”

In Borer’s opinion, Kanjorski was vicious. Not only did the representative heap praise on D’Amato’s grasp of the issues and his unremitting criticism of Switzerland, but he speculated about the use of “sanctions.” The other representatives seemed to approve, and likewise to applaud D’Amato. But as Borer settled down to give his testimony, the first Swiss official ever to appear before Congress, D’Amato left the room. The senator failed to hear Borer’s opening remarks: “Our government and parliament have repeatedly stressed that only the truth and nothing but the truth would satisfy their pursuit of justice.” D’Amato also missed Borer’s assertion that “Switzerland is deeply aware of the pain, mistrust and confusion that surround this issue.… We are not afraid of the truth.”

Eyewash is familiar to American politicians, and the remark by Bronfman, sitting near Borer, about Switzerland’s “stonewalling” caused the scales to fall from the Swiss official’s eyes. All his assurances of progress and good faith aroused skepticism rather than sympathy. “We will be back here in a couple of months,” warned Frank, “with another hearing. No doubt.”

“We view this as a moral imperative,” said Borer later. “No penny should stay in Switzerland.”

Twenty-four hours later, the afterglow of Borer’s appearance had vanished. Most people had been impressed by his statement that before arriving at the hearing he had visited the Holocaust Museum, “to reflect in the surroundings of such an important memorial about whether Switzerland and I am doing enough.” The reality was somewhat different. Reports from the museum’s staff indicated that Borer had arrived with a television crew. After being filmed entering the building, he departed scarcely fifteen minutes later, leaving the impression that his visit had, some felt, been a photo opportunity. So Borer’s fence-mending had been counterproductive. D’Amato and Bronfman sensed no advantage in restraining their campaigns. Behind the bombast, however, attempts were under way to negotiate a settlement among lawyers to avoid the trial of the class action. The possibility of a deal—in Borer’s opinion the real reason for the campaign—depended on the sum of money and the accompanying statement that would explain the payment. Progress on both, however, was proving impossible—not least because of dissension in Switzerland.

Although he was too professional to confess as much, Borer’s negotiations with politicians, Jewish organizations and lawyers masterminding the class actions had been hampered by divisions and weaknesses among the seven ministers in the Federal Council and by the persistent hostility from the banks.

Consistent with its traditions, the Bankers Association had urged the government not to offer any concessions to the Jews. Agreeing to the Volcker investigation was one concession too many, and attempts were being made to nibble at the terms of reference. Like his forerunners in the service of the Swiss government, going back as far as 1946, Borer was too weak to challenge the association, especially now that the politicians were stumbling. Instinctively protective of their country and artless about the campaign in the United States, the seven ministers were incapable of agreeing on a policy and issuing a directive to solve the crisis. United in their conviction that Switzerland was the victim of a conspiracy, they stubbornly retreated from a position that might enable them to understand the crisis. Their attitude was well expressed by Jean-Pascal Delamuraz, the economics minister—Villiger’s successor as president.

To Delamuraz, the crisis since February had been not about truth or justice but about money. Switzerland was, he believed, under pressure from the Jews to make a deal. Like Jagmetti and so many others of his party and generation, Delamuraz believed that everyone could be bought and that money would solve all problems. The president, however, was more than suspicious about the gap between the $32 million offered by the Bankers Association and the $7 billion mentioned by the World Jewish Congress. Never doubting that his opinions would be interpreted as honest and reasonable, the wine-loving head of state summarized the government’s attitude toward the controversy in an interview granted to his local newspaper on the eve of his retirement from the rotating presidency. Influenced by a dispatch from Carlo Jagmetti (the unauthorized release of which in January 1997 would cause Jagmetti’s resignation) advising that Switzerland should “wage war” against groups in America who “cannot be trusted,” Delamuraz was angry. The reported demand by the Jews that the Swiss should establish a $250 million compensation fund, he declared, was “nothing less than extortion and blackmail.” The “deal” offered by the Jews was also blackmail and was consistent with the United States’ campaign to undermine Switzerland’s role as a world financial center. The furor that greeted the president’s remarks in the United States encouraged his six ministerial colleagues to endorse that opinion. Delamuraz’s disparagement of the Jews was unexceptional and was not even noticed by his colleagues. His protests voiced the thoughts of many. The government, said Arnold Koller, the new president, was not planning to apologize for Delamuraz’s comments. Letters to Swiss newspapers praised the former president for articulating the majority’s outrage about having “suffered in silence.” Grievances against the Jews were openly expressed on the streets. Supported by the majority of his countrymen, Delamuraz would later utter a perfunctory apology to appease the U.S. government, but did not retract his opinion.

In early January 1997, Borer’s education about the threat to Switzerland was nearing completion. In retaliation for Delamuraz’s comments, Avraham Burg, who was the chairman of the Jewish Agency for Israel and a member of the Volcker commission, had threatened a worldwide boycott of Swiss banks and the withdrawal of funds. The Swiss president, Burg accused, was involved in “a conspiracy to destroy negotiations between us in order for the Swiss to avoid taking responsibility for their actions … during the war.” There was talk in New York and two other states of starting proceedings to divest Swiss banks of their licenses to trade. Telephoning around New York and Washington, Borer sought advice on how to defuse the new crisis. Time, he was told, was running out. Waiting five years for a historians’ commission to report and more than one year for Volcker’s committee to complete its work was playing into the hands of D’Amato and Bronfman. The only solution, he was reminded, was a big compensation fund. Rushing to confer with the Swiss ministers, Borer was met with icy stares. The politicians were unprepared to offer money, which would be interpreted as an admission of guilt, especially before the investigations were completed. The sentiments uttered in New York and Washington had merely reinforced Swiss stubbornness. On the same day as Delamuraz said that he had no need to offer a full apology about his remarks because he had been “misunderstood,” Borer was authorized to offer a limited deal.

Borer meant well, but when he announced on January 8, 1997, that his government hoped that Switzerland’s banks would establish a Holocaust memorial fund financed from the dormant accounts, his statement exploded in his face. “They are trying to buy us with money that is not theirs,” scoffed Avraham Burg. Thrown off balance and groping for another idea, Borer was stunned the following morning to hear the news that a security guard at Union Bank had, during a routine check in the bank’s shredding room, glanced at old ledgers and papers filling three large bins. Leafing through them, the guard saw that the fountain-pen entries referred to property transactions during the Nazi era. Quite clearly, historical material whose destruction was forbidden by Swiss law had been illegally dispatched for destruction. Switzerland’s defenses were crumbling fast. Union Bank’s chairman, Robert Studer, had derided suggestions that there was unclaimed Jewish money in Switzerland’s banks and had dismissed as a “fairytale” the allegation that Switzerland’s banks had earned fortunes from the victims of the Holocaust. His bank’s admission that, after review by a historian, thousands of other documents had been destroyed, although there was no inventory to identify them, was capped by Studer’s dismissal of the guard for revealing the shredding and so breaking the bank’s secrecy rules. All Borer’s efforts were once more nullified as D’Amato and Steinberg offered excruciating soundbites, all faithfully reported to Switzerland.

Ministers and officials in Bern were once again reeling. Only a Nazi invasion in 1940 could have been more destabilizing. Tormented and searching once again for advice about how to stop the collapse, Delamuraz was prevailed on to apologize again for the “misunderstanding,” and Switzerland’s bankers were beseeched to cease fifty years of obstruction. A deal was vital.

It fell to Rainer Gut, the chairman of Crédit Suisse and the ambitious elder statesman of Swiss banking, to break the logjam. Only one gesture, he knew, could reduce the tension and save the international reputation of Switzerland’s banks. On January 22, Gut broke ranks with his two major competitors to offer a solution. A “well-endowed” compensation fund, he suggested, should be established to help Holocaust victims and their families. He mentioned no figure but eventually offered SF100 million ($72 million). Even triple that sum was condemned by D’Amato as too little, too late, and the WJC stuck to $250 million. Each day, the expectations of Switzerland’s adversaries grew. One billion dollars was seriously suggested as the minimum price if the campaign was to be stopped. Nothing, it appeared, that Swiss ministers could say would stem the tide. Even the announcement the following day that the Swiss government and all of Switzerland’s leading financial institutions had agreed to cooperate with Gut’s plan was greeted with silence.

Switzerland, it seemed, had not quite understood. The conflict could be resolved only by a deal. To the Jews, the deal would require Switzerland to acknowledge its wartime conduct. To the Swiss, the deal was to buy off an irritation and get on with business. Switzerland’s agony while it came to terms with its past conduct and world censure was of no concern to the United States. There seemed no alternative other than to wait until the Swiss bowed and offered a humiliating apology and massive compensation. For Switzerland, the cost of its delayed remorse would be truly horrendous.