The U.S. State Department has asked California’s treasurer to reverse his state’s sanctions against Swiss banks, claiming that such “punitive measures” undermine the Swiss government’s efforts to carry out its commitments to Holocaust survivors.
California Treasurer Matt Fong announced last week that he had imposed a moratorium on state investments and deposits in three major Swiss banks until speedier progress is made in settling Holocaust-era accounts.
The California moratorium actually went into effect, without public notice, in August.
Since then, California has liquidated $2 billion held in the Swiss banks, and “we now have zero dollars in direct investments” in Switzerland, said Fong’s spokesman, Roger Wildermuth.
Following Fong’s public announcement, U.S. Undersecretary of State Stuart Eizenstat phoned the state treasurer and urged him to lift the moratorium, spelling out his objections in a follow-up letter.
Eizenstat earlier directed an in-depth study by 11 U.S. government agencies on the disposition of Nazi gold during and after World War II.
In his two-page letter to Fong, Eizenstat cited efforts by Swiss banks to identify dormant World War II accounts and in establishing a fund of some $200 million to aid Holocaust survivors, as well as the Swiss president’s pledge to conduct a “merciless search for the truth” about his country’s past.
Eizenstat warned that sanctions, such as those taken by Fong, “have led to a negative reaction in Switzerland, creating the impression among the Swiss population that they are under unfair attack. This impression undermines the Swiss government’s ability to complete those initiatives that are subject to a direct vote of the people in referenda.”
The referenda applies to the public’s need to approve a Swiss government proposal to establish a $4.7 billion “Solidarity Fund,” some of which would be earmarked for Holocaust survivors.
In a carefully non-committal response, Fong spokesman Wildermuth said, “We are reviewing Mr. Eizenstat’s concerns and appreciate having the benefit of his views.”
The State Department earlier criticized as “counterproductive” the action of New York City in not allowing the Union Bank of Switzerland to take part in a billion-dollar bond offering.
New York’s state comptroller has also said it would not give Swiss banks any new business, and Massachusetts has said it would cut its line of credit with Union Bank of Switzerland.
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