Behind the Headlines: Jewish Officials Press Swiss on Comprehensive Settlement

A decision to postpone American sanctions on Swiss banks has one clear goal.

The delay until March 31 will give Jewish officials a chance to negotiate a final settlement of all Holocaust-era claims against the banks, according to an official involved in the negotiations.

The so-called global settlement could involve a payment of billions of dollars in order to bring closure to the entire range of issues related to Switzerland’s wartime activities, World Jewish Congress President Edgar Bronfman said last week in London during an international conference on Nazi- looted gold.

He added that the Swiss banks owed as much as $2 billion to $3 billion to survivors and their heirs.

WJC Secretary-General Israel Singer, who traveled to Switzerland after the conference, would not discuss the nature of his talks with Swiss officials.

But a source familiar with the situation confirmed that there indeed had been discussions on a final settlement to satisfy the demands of all Jewish claimants, including dormant account holders and, perhaps, those participating in a class-action lawsuit against the Swiss banks.

“Swiss bankers didn’t know what to do” when confronted with a seemingly endless succession of claims, the source said, adding that the banks had initiated feelers in recent months about reaching a comprehensive settlement.

The source added that there was a “50-50 chance whether the settlement would occur by March 31, 1998.”

At a conference Monday in New York, public finance officials from across the United States agreed to wait until that date before imposing further sanctions against Swiss banks for what they view as foot-dragging in paying off Holocaust victims’ claims.

California, Massachusetts and New York are the three states that had already imposed sanctions. But California State Treasurer Matt Fong announced at the conference that he was lifting them.

New York City Comptroller Alan Hevesi, who hosted the conference, spoke against an immediate imposition of sanctions — a stance likewise adopted by U.S. Senate Banking Committee Chairman Alfonse D’Amato (R-N.Y.), who has been one of Switzerland’s harshest critics.

The state and municipal officials gathered at The Plaza Hotel gave their informal approval to a moratorium, but some did so grudgingly.

Burton Netarus, a member of the Chicago City Council, said in an interview that he was “straining at the bit” to act against the Swiss banks.

But he added that he would observe the moratorium before submitting a resolution that Chicago cease depositing any city funds with Swiss banks.

At least one conference attendee said he would not wait until March 31.

Joel Weingarten, a New Jersey Republican assemblyman, said in an interview that he would press ahead with plans to co-sponsor a bill to prohibit the state from investing funds with Swiss financial institutions.

Some of the approximately 50 Holocaust survivors attending the conference were clearly dissatisfied with the moratorium.

Alice Fischer, a survivor of the Bergen-Belsen camp, was outraged that the Swiss had served as the Nazis’ bankers and urged immediate action against them.

Estelle Sapir, who fled a Nazi death camp as a teen-ager, spoke out against the WJC for encouraging the moratorium and charged that the Jewish “organizations are just looking out for themselves.”

Among the conference speakers was Ambassador Thomas Borer, who has served as Switzerland’s leading trouble-shooter on Holocaust issues.

No other country has “taken comparable measures” to examine its history, he said, adding that the threatened sanctions are “unfair and are coming at a time when we are achieving tangible results.”

Noting that “punitive threats have created an anti-American posture in Switzerland,” he also hinted that American sanctions against the Swiss could bring a swift retaliation.

Switzerland ranks among the seven top investors in the United States and more than 500 U.S. companies have a presence in his country, Borer said.

The conference took place on the same day that two of Switzerland’s largest banks, Swiss Bank Corporation and Union Bank of Switzerland, announced their planned merger.

Officials from the two banks pledged at the conference that the merger would not impede efforts to locate dormant accounts or to probe possible questionable bank dealings with the Nazis.

Observers believed that the merger might help the ongoing probes since UBS head Robert Struder was being forced into early retirement as a part of the merger.

Struder has in the past referred to dormant Holocaust-era assets in Swiss banks as “peanuts.”

Paul Volcker, the head of a commission probing dormant accounts in Swiss banks, said the commission would likely start processing payments to holders of dormant accounts soon after it meets next week in Zurich.

The Swiss Bankers Association announced just prior to the conference that it made some payments on dormant account claims, but the amounts and recipients were not disclosed.

Michael Bradfield, an official with the Volcker Commission, told reporters Monday that those payments were not made under the commission’s oversight.

He criticized those early payments, saying it was “not consistent with our understanding of the claims settlement” process.

Borer defended the move, saying that only disputed claims would be submitted to the Volcker Commission.