To the considerable relief of Pope John Paul and the Curia’s hierarchy, after the Enimont scandal the IOR managed to mostly stay out of the news. Stories about anonymous accounts, political bribes fueled with church funds, money laundering, and the financing of illicit empires like those of Sindona and Calvi seemed matters of the past. When a Sicilian archbishop, for instance, was charged with extorting money from the contractors he chose to renovate a twelfth-century cathedral, it did not tarnish the bank. Although investigators found a million dollars hidden in an IOR account, Vaticanologists considered the archbishop a rogue prelate, not an instance in which Vatican officials were themselves suspected of wrongdoing.1
The reduced amount of bad ink was good news for Caloia, whose five-year term had been renewed in 1995. Cardinal Castillo Lara and De Bonis wanted to replace him with an American, Virgil Dechant, the Supreme Knight of the Knights of Columbus. Dechant was a smart alternative. John Paul liked the garrulous American who had raised a lot of money for Solidarity. But Caloia had the support of all his lay colleagues on the supervisory panel as well as the key endorsement of Secretary of State Sodano.
Caloia began his second term with a list of goals. At every opportunity, he reaffirmed that the IOR’s purpose was to serve the spiritual needs of the church “while excluding speculation and unethical financial transactions.”2 He urged the bank’s employees to “better select their customers” before opening accounts. Even in small ways—such as ending the unwritten rule that barred women from working in managerial positions—he tried modernizing the IOR (one press report said the ban on female executives was “apparently on the unspoken assumption that sooner or later, they would put family first”).3
One challenge that carried over from his first five years was how to stop the abuse of the bank’s accounts. He knew there was no quick fix. Many customers legitimately handled enormous amounts of cash. Charities and ecclesiastical missions relied largely on cash donations and then disbursed it in wire transfers around the globe. Putting too many restrictions on the flow of cash would generate a pushback from genuine account holders. Better monitoring would require the IOR to be fully digital. But many records were still kept by hand.
A couple of months after his reappointment, Caloia got a clear reminder of the hurdles he faced when it came to the bank’s accounts. A former CIA officer living in Italy, Roger D’Onofrio, was charged as a central figure in an international smuggling ring of arms, drugs, and plutonium.4 In a stunning declaration he fingered Barcelona’s cardinal, Ricardo María Carles Gordó, as the intermediary with the gangsters. D’Onofrio claimed the duo had run nearly $100 million through an IOR account.5 The money was traced to D’Onofrio’s Swiss business partner. The Italians wanted to determine why Cardinal Carles Gordó’s name was on the Vatican account and if he knew anything about money laundering.6 Thirty-six indictments had already been issued by the time Italian prosecutors notified Carles Gordó that he was under investigation.7 The archconservative Carles Gordó dismissed the inquiry as politically motivated by leftists. He had “no relations” with the motley crew of ex-spooks, mercenaries, and mobsters. The Spanish government backed the church on the question of sovereignty and blocked Italian investigators from even questioning him.8 (Carles Gordó was never charged with any crime; the following year Pope John Paul promoted him to the Prefecture for Economic Affairs of the Holy See, and he remained as Barcelona’s chief prelate until his 2004 retirement.)9
What most bothered Caloia about the Carlos Gordó episode was that $100 million could pass through the bank without anyone asking questions. Another baffling episode soon followed. Italian police announced they were investigating the cardinal of Naples, Michele Giordano, for extortion and usury and hiding his ill-gotten gains in an IOR account. Police unearthed a trove of incriminating documents when they raided the home of the cardinal’s brother, a captain in the Camorra crime family. That evidence suggested the cardinal had used the IOR for moving mafia money. When detectives raided the cardinal’s office, the Vatican lodged a formal complaint with Italy.10 Ultimately, the Church took the unprecedented step of standing back and allowing prosecutors to bring the seventy-year-old prelate to trial as part of his brother’s loan-sharking ring (a magistrate acquitted him in 2000; in 2002 he was convicted of illegaly converting real estate bequeathed to his diocese, but that conviction was reversed in 2005).11 More important to Caloia than whether the cardinal was guilty, was why no one inside the IOR noticed that his account had quickly gone from a long-standing small balance to millions of dollars. It again heightened Caloia’s fear that what would land him and the IOR back on the front pages was something hidden in an account about which he knew nothing.
But what soon put the IOR back on the defensive had nothing to do with the flood of cash that flowed through it. Instead, the Vatican and its bank were about to become the focus of Holocaust survivors’ groups and the World Jewish Congress, which had begun insisting on an accounting from Swiss banks and Allied countries about stolen victims’ assets.
By 1996, the media’s attention and the public’s sympathy had been captured by the children of Holocaust survivors—who had traveled to Switzerland to collect the money left in the bank accounts of their murdered parents—only to be turned away because they could not produce death certificates. “Nazi gold” was coined to describe the wartime loot that disappeared into Swiss banks, never to be seen again (the World Jewish Congress called it “victim’s gold”). Growing pressure had pushed Switzerland to cooperate with a commission headed by Paul Volcker, former chairman of the U.S. Federal Reserve. Volcker planned a series of forensic audits of top Swiss banks to determine how much money might be missing.12 New York Senator Alfonse D’Amato held the first of five hearings before the Senate Banking Committee in which Swiss bankers were grilled about victims’ money.13
The Swiss estimated there was about $40 million in dormant accounts; some Jewish organizations put that amount, with accrued interest, at $7 billion.14 Many Swiss banks privately considered the restitution effort a shakedown.15 They stonewalled. Their intransigence eventually prompted a threat by New York’s comptroller to divest the city’s pension funds of Swiss bank holdings and to prevent them from underwriting future city debt.16
In October 1996 a Holocaust survivor filed a $20 billion class action lawsuit in Brooklyn federal court against one hundred Swiss banks. The suit claimed the banks had “acquired and transferred gold which the Nazis plundered from Jewish victims, including gold removed from victims’ teeth.”17 It opened the litigation floodgates, kicking off class action suits not only against the Swiss, but also banks in Austria, Germany, and France; German companies for having profited from slave labor; and museums that had art stolen by the Nazis.18
The Vatican had initially been left out of the bruising sparring over wartime loot and missing gold. It had not been the subject of any claims for restitution by victims or their families. But its luck ran out in the summer of 1997, when the church and the Vatican Bank’s conduct during World War II came under new scrutiny. The U.S. State Department declassified an October 21, 1946, one-page memo from Treasury agent Emerson Bigelow, in which he wrote about the enormous booty that Croatia’s Ustašan fugitives had stolen during the chaos of the closing days of the war. Bigelow concluded “approximately 200 million Swiss francs was originally held in the Vatican for safe-keeping” (about $225 million in 2014 dollars).19 He said that the Vatican had either sent the loot to Spain and Argentina through its “pipeline” or used that story as a “smokescreen to cover the fact that the treasure remains in its original repository [inside the Vatican].”20,I
The Bigelow memo put a spotlight on the Vatican and the IOR. And that memo was only the first in what the U.S. government estimated were some fifteen million still classified documents relating to the “safekeeping of Nazi-plundered gold.”22
Two days after the Bigelow memo was made public, Rabbi Marvin Heir, the director of the Simon Wiesenthal Center, told reporters that the gold deposited at the IOR was likely used to fund “the Vatican rat line [where] basically many leading Nazi war criminals escaped to South America with Vatican passports.”23
Heir’s charge kicked off a frenzy of reporting about the long-forgotten alliance between the church and the Nazi-puppet government in Croatia.24 Some commentators used it to reevaluate Pope John Paul’s controversial decision the previous year to be the first Pontiff to pray at the tomb of Alojzije Stepinac, Zagreb’s wartime cardinal. Stepinac had led the Croatian church during the war and was later convicted of war crimes.25
The church’s early response to the Bigelow memo was terse. “These reports have no basis in reality,” claimed Joaquín Navarro-Valls, the Vatican’s chief press spokesman. “The information, which is without any documentation, is only based on a reliable source [emphasis added] in Italy which, even if it existed, remains unidentified and of dubious authority.”26
Edgar Bronfman, an heir to the Seagram’s liquor and real estate fortune, was the volunteer head of the World Jewish Congress. He requested a personal meeting with the Pope. “Everybody is going to have to get involved in answering the questions of what happened to the property of the Jews who were killed during the Holocaust,” Bronfman told reporters. “That includes the Vatican.”27 Another press release from Rabbi Heir charged that the Vatican had set up twenty-two committees after the war to help spirit wanted Nazis out of Europe.
That May, survivors filed a class action suit against seven major European insurers for escheating life insurance policies and failing to pay claims.28 To the few Vatican insiders familiar with the IOR’s profitable and integrated partnership with Italian insurance companies that operated in Nazi-occupied Eastern Europe during World War II, there was temporary relief the church was not named as defendant. But there was no dearth of bad news about the IOR and the war. Reuters obtained newly declassified U.S. intelligence documents from the National Archives that revealed the Vatican Bank had used Swiss middlemen at least three times during World War II either to get money from the Reichsbank or to transfer funds through blacklisted companies.29 And the Holocaust Educational Trust, a British-based charity, issued a twenty-five-page report that cited new state archival documents revealing that while the Allies had returned more than three hundred tons of central bank gold to ten countries plundered by the Nazis, about 5.5 tons from concentration camp victims had never been redistributed to the victims or their families.30 In the wake of that report, the United States and a dozen European countries contributed to a Holocaust compensation fund. The Vatican refused to cooperate.
On September 10, 1997, Shimon Samuels, the European director of the Simon Wiesenthal Center, had an audience with the Pope. Samuels was in Rome to attend an annual conference of the International Council of Christians and Jews. He was aware the Vatican had a long-planned “millennium examination of conscience” scheduled for the following month, and that its focus was the church’s history of injustice against Jews. He thought it an ideal time to ask the Pontiff to open the church’s archives to resolve the charges that the Vatican Bank had collaborated with Croatian fascists and that Nazi gold helped war criminals reach South America. Most Western countries had statutes by which documents in their archives were opened to the public after a set number of years had passed. For the Vatican and the IOR, opening such sensitive files required a sovereign decision by the Pope.
When Samuels made the request, the Pope sat silently, refusing even to answer. When he later put the question to Monsignor Remi Hoeckman, the Secretary of the Vatican’s Commission for Religious Relations with the Jews, Hoeckman was blunt: the church would “not address the issue; it is out of the question.”31
Samuels told reporters about the rebuff. What church leaders failed to realize was that they were in the middle of a public relations battle they could not win. Within a week, an Auschwitz survivor protested at St. Peter’s Square, wearing a striped prisoner’s uniform and carrying a placard that read: “Pius XII and the Vatican are also guilty of the Holocaust.” He collected signatures for a petition demanding an international investigation about the extent to which Pius XII remained silent during the Holocaust, tolerated Nazi atrocities, and ignored actions of pro-Nazi Catholic clergy.32
When a Vatican symposium to address anti-Semitism in Christian society opened that November, the news was dominated not by the Pope’s address to the attendees, but by a public letter addressed to John Paul from the Wiesenthal Center calling again for the opening of the secret archives and the IOR’s wartime ledgers: “In this age of transparency, the Vatican is among the last hold-outs in not sharing its full documentation on the period of the Holocaust, thus hampering its contribution to a universal pedagogy in drawing its lessons from, and even in its practical co-operation in, the search for Nazi criminals.”33
The international pressure built on the city-state. At the end of that month, forty-one countries gathered in London to discuss what to do about the 5.5 tons of concentration camp gold repatriated by the Tripartite Gold Commission, a body set up after the war to settle the issue of stolen assets. The Vatican initially refused to attend. There was no reason to be part of it, said a spokesman, since the church had revealed all there was to tell.34
Few believed that. And under strong behind-the-scenes lobbying from the United States, France, and Germany, the Pope sent two representatives, Giovanni d’Anello, a diplomatic advisor to the Secretariat of State, and a Jesuit priest and history professor, Marcel Chappin.35 Other countries balked, however, when they learned the Pope sent the duo only as silent observers. Under more pressure, the Pontiff upgraded their status to full delegates.
A day into the conference Donald Kenrick, the chief of the International Romani Union delegation, charged that gold coins and rings worth nearly $2 million were taken from 28,000 Gypsies killed in the Croatian concentration camp Jasenovac. That money, said Kenrick, was sent to the Vatican at the end of the war and deposited into the IOR.36 Although Kenrick did not provide much evidence for his shocking accusation, it was international front-page news.37
The Vatican representatives said nothing over three days. Privately they informed the other delegates they would not be part of any joint closing statement. They refused also to discuss opening the secret archives to historians or to allow auditors into the IOR.38 At one point they almost stormed out in protest when the Americans broached the idea of expanding every country’s obligation to include hunting for stolen artworks, escheated insurance policies, and seized bank accounts, bonds, and securities.39
The conference finished with a promise by forty-one countries to meet again the following year for a progress report. Only the Vatican and Russia refused to agree to the next meeting or to offer any interim help.40 The Vatican also rebuffed a personal entreaty from Undersecretary of State Stuart Eizenstat to “examine their documents and make them available.”41 The church’s representatives would not even commit to a deadline of December 31, 1999, to which all other countries had agreed, to submit their own historical report on any role it might have had with missing victims’ assets.42
All the Vatican intransigence made the church seem an outlier on what appeared to be a clear-cut moral issue. It promoted banner headlines such as the one in London’s Telegraph: “Vatican Comes Under Heavy Flak. World: ‘Archives Hold Key to Nazi Gold.’ ”43
“Everyone left London just shaking their heads in disbelief,” recalled Elan Steinberg, the World Jewish Congress’s representative. “Two hundred tons of gold from the pro-Nazi Croatian government found its way to the Vatican. Here they were, one of the world’s great moral institutions, and they refused to tell us what their view was, much less to lift a finger to help recover any looted assets. It was terribly disappointing.”44
Five days after stonewalling at the London conference, Vatican spokesman Joaquín Navarro-Valls surprised everyone by claiming that the church had performed an “exhaustive perusal of the pertinent documents and could affirm that there is nothing to add to what has already been published.” Moreover, he declared: “Regarding the gold looted by the Nazis in Croatia, searches done in the Vatican archives confirm the inexistence of documents related to the subject and thus ruling out any kind of supposed transaction attributed to the Holy See. Thus the Holy See can look to the past with serenity.”45 As for the many calls that the Vatican open its archives and those of the IOR, Navarro-Valls was clear it would not happen.46
No one thought it likely that the Vatican had really conducted a thorough archival search. Speed was against the church’s ingrained centuries-old trait of operating at a snail’s pace. The general skepticism about Navarro-Valls’s adamant denial of wrongdoing was reinforced within a week from a new batch of declassified documents. They identified the Vatican as one of four countries that had illegally received and stored gold bars emblazoned with swastikas (those bars usually included gold from the dental fillings of death camp victims).47
By early 1998, however, the British government was optimistic that months of secret talks with church officials had paid off in an agreement by which its investigators could access the Vatican’s archives (although the IOR was still off limits). But even that promise turned out to be empty. In March, the church’s Commission for Religious Relations with the Jews released a document, “We Remember: A Reflection on the Shoah.”48 It was further evidence of how poorly the Vatican understood the sensitivities of the controversy in which it was enmeshed. It said, “During and after the war, Jewish communities and Jewish leaders expressed their thanks for all that had been done for them, including what Pope Pius XII did personally or through his representatives to save hundreds of thousands of Jewish lives. Many Catholic bishops, priests, religious and laity have been honored for this reason by the State of Israel.” Some survivors’ groups were particularly incensed by the defense of Pius.49
A supplementary 180-page U.S. government report issued that spring (June 2, 1998) provided more evidence that neutral countries, including the Vatican, had profited by hiding Nazi gold in their central banks.50 In addressing the church, the report noted that since “the postwar disposal of the wartime Croatian treasury remains obscure. . . . There are questions about aspects of the Vatican’s record during and immediately after the war, to which the answers may only exist in Vatican archives.”51
During a press conference at which the report was released, Stuart Eizenstat urged the church and the IOR to open its archives.52 The Clinton administration gave the Vatican yet another chance that month to contribute to a fund for Holocaust victims, not because it was legally obligated to do so, but as a “moral gesture.”53 That was in keeping with the vague language—“moral involvement”—that had been acceptable to the church when it settled the Ambrosiano case. The Vatican, however, was dismissive. “I don’t have anything to add to what was said in the past,” said Joaquín Navarro-Valls.54 By the end of that month, several dozen nations launched a collaborative initiative to identify the size of missing Nazi gold, ascertain the amount of unpaid life and property insurance claims, as well as catalogue artworks.55
By late August, a consortium of nations released a progress report. Thirty-one countries had declassified documents. New information came from private banks as well as the Allies’ postwar gold commission. There was a joint call for further international cooperation to locate and distribute money to aging Holocaust victims by the end of the century, only eighteen months away. Britain’s Lord James Mackay singled out the Vatican and castigated it for not opening its files or providing any assistance about what its bank did with the loot it received.56 The theme of “Vatican Under Fire over Nazi Gold” dominated the news cycle.57
In August 1998—on the eve of the first class-action trial—the Swiss banks settled all pending litigation for $1.25 billion.58 It was the then largest human rights settlement in history. With the Swiss banks out of the line of media fire, the Vatican moved front and center.
“The Swiss very reluctantly worked with us, kicking and screaming all the way to the negotiating table,” said the World Jewish Congress’s Steinberg. “But in comparison, when we later tried to get information from the Vatican, the Swiss were an open door. The Vatican told us to get lost.”59
At the end of September, the World War II–era Tripartite Gold Commission disbanded after more than five decades. Its remaining archives were made public. They revealed that the commission had been unable to account for a stunning 177 tons of gold that went missing from Nazi-occupied territories. And it could not estimate how much privately held gold from victims had been mixed in with bullion it had returned at the end of the war to the central banks of eleven nations. Undersecretary of State Stuart Eizenstat cited that report to implore again the Vatican to open its records.60
Seemingly oblivious to the controversy, the ailing seventy-eight-year-old Pope John Paul visited Croatia again and this time beatified Zagreb’s wartime archbishop, Aloysius Stepinac. The Pope rebuffed last-minute appeals from the Simon Wiesenthal Center to postpone the beatification “until the completion of an exhaustive study of Stepinac’s wartime record based on full access to Vatican archives.”61 Instead, a source identified only as a “Croat inside the Vatican” was quoted in press reports dismissing questions over Stepinac’s wartime role as “old claims that had since been disproved” and that “these untruths continue to be recycled by the media.”62 (That Christmas when Croatian prelates offered two special requiem Masses to honor the Ustaša’s murderous leader, Ante Pavelić, the Pope did not issue any criticism or rebuke.)63
Pressure built on the Vatican that November when Argentina, which had long refused to open its World War II archives, began making them public. It was the final stage of a multiyear review by an international commission of historians.64,II In the United States, work conducted by the Holocaust Assets Presidential Advisory Commission, combined with more aggressive intervention by the Clinton administration over the continuing declassification of American intelligence records, rewrote the history about the extent to which neutral countries had aided the Nazis in the wholesale theft of billions in victims’ assets.66 It was a watershed moment for historians.67
Even the Swiss had gotten into the spirit of transparency over their unsavory past. Switzerland formed an Independent Commission of Experts not only to release their own files, but to shine a light on what other neutral nations like the Vatican did through Switzerland during the war.
In November 1998, Israel published a list of a dozen Holocaust-era archival collections that it charged “have refused or have been uncooperative in sharing information.”68 They included the national archives of the Vatican, France, Russia, and Poland’s State Archives, as well as smaller, more targeted collections such as Britain’s MI5, the British Custodian of Enemy Property, and documents held by Prague’s Jewish Museum.
“We appeal to each institution listed to open their files so that we may learn why civilized society failed in its basic commitment to ensure the safety, lives, liberty and property of our people,” the Israelis appealed.69
The Vatican ignored the request.
In December, forty-four nations gathered as they had promised a year earlier for a four-day conference in Washington, D.C., to “redress unjust confiscation” by the Nazis and “ways to find prewar owners and make restitution, whether or not heirs are found.” The first day marked a breakthrough when Russia announced that it would at long last cooperate with historians and Holocaust organizations in finding looted assets and releasing its files. U.S. Secretary of State Madeleine Albright, who was raised a Catholic but learned only the previous year that her Czech grandparents were Jewish victims of the Nazis, made an emotional appeal to the Vatican representatives. “We cannot restore life nor rewrite history,” she said, her voice at times cracking. “But we can make the ledger slightly less out of balance by devoting our time, energy and resources to the search for answers, the return of property and the payment of just claims.”70 Albright’s plea ended in another dead end. Navarro-Valls reminded reporters that the church had no relevant files about the Holocaust and nothing at all about Croatian gold.71
By now the church had extra motivation to stay mum. The previous month a class action lawsuit filed in San Francisco federal district court named the Vatican Bank and the Franciscan religious order with having enriched themselves from the Ustašan gold.72 That lawsuit was the first to name the IOR. Jonathan Levy, a solo practitioner with a PhD in political science, filed the complaint. It relied on declassified wartime State Department reports that linked the IOR to the disappearance of hundreds of millions of dollars of cash, gold, and silver looted by the Ustašans from Serbian and Jewish victims.
“I had submitted hundreds of Freedom of Information requests to every government and military department I could think of,” Levy said.73 He was initially uncertain whether he could even serve the Vatican Bank. He mailed a copy of the complaint to Angelo Caloia. “It was a Hail Mary of sorts,” Levy confided. “After a couple of weeks he [Caloia] wrote back telling us to cancel our lawsuit, and in the margin of the complaint he had written notes about what he claimed we supposedly had wrong. So we argued to the court that his marked-up version constituted the proof of service. The judge agreed.”74
Some of the early Freedom of Information documents prompted Levy to amend his complaint to include Swiss banks as defendants. Levy’s expanded lawsuit charged that the IOR, together with a Chicago-based Croatian Franciscan group (Croatian Franciscan Custody of the Holy Family), had knowingly sent Nazi gold and cash through Swiss banks to Ustašan war criminals in Argentina.75 A 1948 U.S. Army Intelligence report confirmed that 2,400 kilos of Ustašan gold were covertly transferred from the Vatican Bank to one of the church’s secret Swiss bank accounts. The CIA tracked 5 million Swiss francs from Switzerland to Argentina in 1952. That likely included, contended Levy, the Vatican’s Ustašan gold. That blood money ended up with war criminal Ante Pavelić in Buenos Aires.
In December 1999, the German government and private industry reached a $5 billion deal with the plaintiffs over slave labor claims. It eclipsed as the largest human rights legal settlement the $1.25 billion settlement of the previous year by Swiss Banks.76 A highly critical final report from the Volcker Committee and the Independent Commission of Experts prompted the Swiss to take additional measures to compensate victims.77 The London Conference on Nazi Gold raised $61 million in contributions. Former Secretary of State Lawrence Eagleburger led the International Commission on Holocaust-Era Insurance Claims (ICHEIC). It had made substantive progress on relaxing the standards of proof required for claims filed by victims’ families.78
The Vatican was the only nation that still refused to do anything. Church officials had even less incentive to cooperate since the IOR had been named as the chief defendant in a class action. Caloia steered clear of expressing any opinion about whether the IOR should examine its old records and ledgers. It was history in which he had played no role, and although he was generally sympathetic to the request for open archives, he could not afford to waste any political capital in fighting for it.
The church did not even budge when newly declassified American documents revealed that priests at the Portuguese Shrine of Our Lady of Fatima, where hundreds of thousands of the Catholic faithful make an annual pilgrimage, had hidden 110 pounds of Nazi gold. Each bar had been stamped with a swastika and the words Preußen Staatsmünze—Berlin—1942 (the Prussian State Mint in Berlin). They were smelted from gold stolen from Dutch Jews (the 2014 equivalent of $2.8 million).79 The Fatima clerics had stored their Nazi gold in safe deposit boxes at a local bank. The church’s initial response to the news was silence. A Portuguese bishop, Januário Torgal Ferreira, tried to shift the blame when he told local reporters that while the Fatima gold “had a savage past” it was “money [that] is the true devil.”80 The Vatican, on background only, assured reporters that whatever happened with the Nazi gold at Fatima, none of the swastika-emblazoned bars had found their way to the IOR. The Fatima bishops tried quelling the story by announcing they had sold all their Third Reich bullion a decade earlier to pay for an expansion of the shrine’s sanctuary. There were no records since the bank was out of business. In response to an outcry from Holocaust survivors and the World Jewish Congress, the bishop of Leiria promised to donate some unspecified amount of money to “social causes in order to purify the memory of those Nazi ingots.” (The author has not been able to confirm what, if any, contribution the local church made.)
Ultimately, all the Vatican gave to survivors and Jewish groups was John Paul’s personal statement of regret over the church’s long role in fostering anti-Semitism. In March 2000, at Yad Vashem, Israel’s Holocaust Memorial, the Pope said: “As bishop of Rome and successor of the Apostle Peter, I assure the Jewish people that the Catholic Church, motivated by the Gospel law of truth and love, and by no political considerations, is deeply saddened by the hatred, acts of persecution and displays of anti-Semitism directed against the Jews by Christians at any time and in any place.”81
“What it was not was an apology,” Elan Steinberg, who had spearheaded much of the restitution campaign for the World Jewish Congress, told the author. “He was very careful not to say he was sorry for anything the church had done or failed to do when it came to the deaths of millions of Jews and other innocent victims during World War II.”82
Despite more diplomatic pressure, the Pope left Israel without even so much as a promise to consider opening Vatican archives (in 2003 it released documents about its assistance to prisoners of war, and in 2005 some files about Pius XII’s time as a Nuncio to Berlin).83 Measured by the notable progress of other nations both in assisting historians as well as helping victims and their families, the Pope’s remarks rang hollow. By the time of John Paul’s statement, the large class actions had been settled against the Swiss banks and German companies. French banks had reached a settlement in their litigation at the beginning of that year, as had Austria’s banks and private companies.84 The two major remaining lawsuits were Levy’s class action against the Vatican Bank and another filed against Italian and German insurers. When Germany soon signed a broad agreement to address outstanding restitution complaints, German insurance firms were removed from that lawsuit.III
In November 2000, the IOR’s American attorneys asked a federal court to dismiss Levy’s lawsuit for lack of jurisdiction. “Plaintiffs lack standing to bring a general challenge to the wartime political decisions of a foreign sovereign,” the church’s lawyers argued in their forty-one-page motion.86
“It was clear to us,” recalls Levy, “that the Vatican did not want to have to go through any discovery. The idea of discovery really scared them. They would not even entertain having a U.S. government representative act as an intermediary to determine whether or not we could reach a settlement.”87
In the interim, Levy had launched an effort to get more evidence about the IOR and its role with looted assets by filing lawsuits against a dozen U.S. government agencies, including the CIA. He hoped to force the release of documents that the agencies had either withheld or heavily redacted in answering his earlier Freedom of Information requests. And over the Vatican’s objections, Levy convinced the District Court to permit some preliminary discovery to assist in determining the question of whether the court had proper jurisdiction.
The court would not rule on the question of whether the Vatican Bank was immune from the claims of victims for another decade.
I. The Bigelow memo was released on the heels of the 212-page Eizenstat Report, named after Stuart Eizenstat, the Assistant Secretary of State whom President Bill Clinton had chosen to coordinate a review of still-classified wartime files in the archives of eleven government agencies, including the CIA, NSA, Defense, State, and Treasury. That report was a bombshell. It blasted Switzerland for its wartime business with the Nazis and laid bare the extent to which that neutral nation had profited. It concluded that the Nazis stole about $580 million in gold alone ($7.6 billion in 2014 dollars) and sent about half to Switzerland. Beyond the gold, the Eizenstat Report estimated that the Swiss hid an equivalent amount in non-gold-looted assets.21
II. This author played an indirect role in the opening of Argentina’s Nazi files. In a New York Times op-ed, “The Bormann File,” on November 13, 1991—timed to coincide with a visit by Argentine President Carlos Menem to President George H. W. Bush—I wrote about my failed efforts over seven years to get Argentina to release a file about Hitler’s secretary Martin Bormann. I had seen that folder when I was in the secret archives of the Federal Police in 1984 while researching a biography of Auschwitz’s Dr. Josef Mengele. At the time, the Argentines denied my request to examine the file. In The New York Times, I called on Argentina to “release the Bormann papers. There should be no safe haven for the files of mass murderers.” Argentine officials initially denied having any such documentation but after several years of stonewalling, they admitted its existence. It took until 1997 for Argentina to establish the Commission for the Clarification of Nazi Activities.65
III. Austrian and Swiss insurers also got their lawsuits dismissed or settled. Only Italy’s Generali—which had contributed $100 million to the International Commission for Holocaust-Era Insurance Claims—litigated for nearly another decade. Generali ultimately settled by paying another $35 million to the victims, bringing its total payment for 5,500 claims to $135 million. “They got off lightly,” Elan Steinberg told the author. “They made billions and they paid back pennies on the dollar sixty years after the war. For those insurance companies, crime did pay.”85