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NEWS ANALYSIS U.S. report shifts spotlight to other wartime ‘neutrals

NEW YORK, June 2 (JTA) — This week”s release of a long-awaited report about the role of six so-called neutral nations in the Nazi war effort means that Switzerland no longer stands alone under the microscope. But have Swiss government and banking officials been let off the hook? Swiss officials had been looking forward to the second installment of a U.S. State Department report, with its examination of the trade in war materiel by Sweden, Portugal, Spain, Turkey and Argentina, as well as by Switzerland — trade that “helped to sustain the Nazi war effort,” according to the report. The first report, issued last year, focused on the amount of looted gold that made its way during World War II from Nazi Germany to the Swiss central bank. That report provided blistering evidence of how Switzerland profited from bankrolling the Nazi war machine. The latest study — also created under the guidance of Stuart Eizenstat, the U.S. undersecretary of state for economic affairs — deals with the extent and importance of the trade that the Nazis engaged in with the six neutral nations. Beyond providing details about these financial dealings, the report extensively addresses what it calls the “complex phenomenon of neutrality.” The Swiss government, the focus of intense international criticism since revelations surfaced two years ago about its financial wartime dealings and its handling of Holocaust-era assets, angrily denied last year”s conclusions. But this week it welcomed the new report “as a further contribution to clarifying events” related to the conduct of neutral nations during the war. The Swiss Federal Council, the country”s Cabinet, also pointed out that the new report “mentions many positive aspects of Switzerland”s conduct” during the war. Critics of Switzerland”s wartime dealings with the Nazis, however, see the report”s implications quite differently. The World Jewish Congress, which has spearheaded international efforts to get the Swiss to confront their wartime past, believes that Switzerland will now face greater pressures to make restitution for its financial dealings with the Nazis. “Moral responsibility is spread to other neutral nations” as a result of the latest report, said Elan Steinberg, the WJC”s executive director. “But financial liability is increased for Switzerland.” Steinberg”s assessment was based on the report”s estimate that $300 million in gold looted by the Nazis was transferred to the five other neutral nations. “Three-quarters of that — or more — went through Switzerland,” Steinberg said. This could increase the liability of the Swiss National Bank because, under agreements reached after the war, the country that first received looted assets — not those to whom the assets were subsequently transferred — is responsible for their return. But Swiss officials disagree with Steinberg”s assessment. The Eizenstat report “contains no new findings,” said Caroline Heimo, spokeswoman for the Swiss Embassy in Washington. Pointing to the Swiss National Bank”s decision to provide about $75 million to a fund for Holocaust victims, she said that her government”s “course is the right one.” The issue of potential liability is significant in light of recent calls by Jewish officials for Switzerland to agree to be part of a global settlement of all Holocaust-era claims stemming from the country”s actions during the war. The WJC, lawyers representing Holocaust victims and Switzerland”s three largest private banks have been holding settlement talks in recent weeks under the aegis of the U.S. State Department. But the Swiss government has so far refused to join the commercial banks in the talks. For his part, Eizenstat said at a briefing Tuesday that the Swiss government and central bank should “take to heart” the report”s findings and called for further diplomatic discussions about restitution. In addition, the House Banking Committee was scheduled to hold another in a series of hearings about Holocaust-era assets. The role of Switzerland is likely to figure prominently in those hearings once again. Although it does not refer to the issue of liability, the latest Eizenstat report upwardly revised the amount of gold that Switzerland purchased from the Reichsbank, Germany”s central bank, during the war. Ironically, the revision was based on the findings of an international panel of historians whose work had been commissioned by the Swiss government. The panel, known as the Bergier Commission, estimated that Switzerland purchased from the Nazis some $440 million in gold — about $4 billion in today”s dollars — of which $316 million had been looted. In its report issued last year, the U.S. State Department had estimated that Switzerland had purchased as much as $414 million in gold from Germany, of which between $185 million to $289 million had been looted. In a briefing Tuesday, Eizenstat cited the Bergier Commission”s estimates, saying that the latest figures “now give us a higher and more definitive range of the total of looted and non-looted gold that flowed through Switzerland.” After the war, Switzerland returned to the Allies, in accordance with a 1946 accord reached in Washington, only $58 million in looted Nazi gold. The latest figures could increase pressures for the postwar accord to be reopened. But the Swiss government firmly refuses to reopen the accord, according to Heimo at the Swiss Embassy in Washington. “It is not at all in anybody”s interest to start reopening international treaties because then you would have to reopen all of them,” she said. Eizenstat appeared to concur. “It”s more important to focus on the current cooperative process and to resolve issues through cooperation and consultation,” he said at the briefing Tuesday. Among the other key findings of the report: * The so-called “Melmer Account” — named for the S.S. officer in charge of the gold that had been stripped from concentration camp victims and resmelted – – was worth more than $40 million in today”s dollars. This was double the amount of earlier estimates. The account, however, was believed to contain only a fraction of the gold taken from victims of the camps. * Two private German banks — Deutsche Bank and Dresdner Bank — sold gold from the Melmer Account to Turkey in order to supply Germany with the hard currency needed to purchase war supplies. This finding could embroil the two banks in the class-action lawsuit being pursued by Holocaust survivors and in calls for compensation to Holocaust victims. * The wartime Nazi puppet state of Croatia, led by what was known as the Ustashe regime, may have looted as much as $80 million in gold from Jewish victims. The report cites documents that Ustashe leaders — accused of torturing and killing an estimated 500,000 Jews, Serbs and Gypsies during the war — used Vatican ties to escape Europe after the war with a possible fortune in plundered gold. While unable to pin down the amount of gold that may have been looted, the report called on the Vatican to open its archives to help provide an “accounting of the gold and valuables” taken from the victims of the Ustashe regime. * Details about the trade in vital war materiel — iron ore, ball bearings, tungsten, timing devices and anti-aircraft guns — supplied to Nazi Germany by Sweden, Spain, Portugal, Argentina, Turkey and Switzerland. These findings, while not breaking any new historical ground, call into question whether the six nations should indeed be regarded as “neutral.” The report goes to great lengths to examine the complex issues of geography, history and political leanings that affected each of the six nations, concluding that neutrality was not a “monolith concept” during the war and that “there was no such thing as a uniform or absolute neutrality” for any wartime nation. While concluding that “each of the wartime neutrals made a substantial contribution to the economic foundations of the Nazi war effort,” the report also cited their contributions to the Allies. In addition, referring to the neutrals” “mixed pattern of actions,” the report mentions how these nations together offered refuge to more than “250,000 Jews fleeing the Holocaust. Eizenstat addressed the issue during his briefing, saying the neutrals” actions were “acceptable by the standards of the time.” But, he added, “as a result of the war itself, the recognition of the dimensions of the Holocaust, the Nuremberg Trials which followed, and the U.N. Declaration of Human Rights, standards of morality have certainly risen.” The report states that its authors “sought neither to defend nor indict any nation today on the basis of its actions half a century ago.” Yet, as a section called “From History to Justice” makes clear, the report expresses the hope that an honest examination of the past will prompt the present generation “to help right the wrongs and to deal with the injustices suffered by the victims of Nazi aggression.””