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Also by Adam LeBor

Non-Fiction

A Heart Turned East: Among the Muslims of Europe and America

Surviving Hitler: Choices, Corruption and Compromise in the Third Reich

Milosevic: A Biography

“Complicity with Evil”: The United Nations in the Age of Modern Genocide

The Believers: How America Fell for Bernard Madoff’s $65 Billion Investment Scam

Tower of Basel: The Shadowy History of the Secret Bank That Runs the World

City of Oranges: An Intimate History of Arabs & Jews in Jaffa

Fiction

The Budapest Protocol

The Yael Azoulay Trilogy

The Geneva Option

The Washington Stratagem

The Reykjavik Assignment

Danube Blues

District VIII

Kossusth Square

HITLER’S SECRET BANKERS

 

Adam LeBor

 

 

 

Contents

Welcome Page

Dedication

A note from the author on the new edition

Introduction

Chapter 1: A Trust Betrayed

Chapter 2: Looting a Continent

Chapter 3: The Financiers of Genocide

Chapter 4: Kapital über alles: The Bank for International Settlements

Chapter 5: Whose Safehaven?

Chapter 6: The Art of Economic Camouflage

Chapter 7: The Boat is Full

Chapter 8: A Nest of Spies

Chapter 9: Dealing with the Devil

Chapter 10: Back to the Future

Chapter 11: A Final Reckoning

Chapter 12: Recompense, At Last

Chapter 13: Fourth Reich Rising

Chapter 14: The Abandonment of Raoul Wallenberg

Afterword

Acknowledgements

Chapter Notes and Sources

Bibliography

About the Author

An Invitation from the Publisher

In memory of my beloved grandparents:
Ben and Luba LeBor, who left in time

A note from the author on the new edition

The first and second editions of Hitler’s Secret Bankers were published in 1997 and 1999 when the furore over Swiss banks and Nazi gold was at its height. The book was short-listed for the Orwell Prize in Britain, published in the United States and six foreign languages including Japanese and Hebrew. Hitler’s Secret Bankers garnered substantial publicity, especially in the United States. I like to think that my work both increased our knowledge of this period and added to the pressure on Swiss banks and the successors to other Nazi-era financial institutions to admit their role in funding and enabling Nazi genocide - and to eventually make some recompense.

Writing the book demanded a very fast learning curve. Why did Swiss banks and Switzerland so willingly accept looted Nazi gold? How exactly did Swiss bankers deliberately empty the accounts of Holocaust victims, send the funds to Nazi Germany, then block and stonewall survivors and their heirs for decades? To find out I travelled to Switzerland, the United States, London and Israel. I interviewed survivors and relatives of Holocaust victims who had placed their money in Switzerland. I immersed myself in archives, researching the finances of the Third Reich, the mechanics of looting a country’s national gold reserves, the destruction of European Jewry and the fate of its wealth, Switzerland’s wartime record, the concept of neutrality, the role of the Bank for International Settlements in keeping trans-national finance channels open during the war, and more. All of these fascinated me. The second question that lodged in my mind then, and which is still there now, is also a “How?”. How did one of Europe’s most sophisticated and civilised countries descend into a barbarism for which no words can ever really do justice?

Hitler’s Secret Bankers shaped my writing career. I tried to answer that question in my subsequent book. Surviving Hitler: Choice, Corruption and Compromise in the Third Reich, co-written with my friend and colleague Roger Boyes, examined everyday life in the Third Reich. Every dictatorship depends to some extent on the consent and cooperation of those governed. Nazi Germany and its empire was no exception. In Surviving Hitler I did in-depth research into several people about whom I had written in Hitler’s Secret Bankers. Their ambiguous, complex stories had fascinated me. Albert Goering, brother of Hermann, had saved the lives of dozens of Jews and anti-Nazis. When the Gestapo were on his trail, Albert asked his brother to intervene. He did. The brothers were utterly different yet still they kept their bond. Even in war, blood was thicker than politics. In a modest flat in Tel-Aviv I interviewed Hansi Brand, whose husband Joel had been sent by Adolf Eichmann on an abortive mission to negotiate a deal between the Allies and the Nazis. Hansi had worked with Rezso Kasztner, the wartime Hungarian Zionist leader who did strike a successful deal with the Nazis: 1684 Jews were allowed to leave after paying $1000 each. Hansi had sat in on the negotiations with Eichmann. It was hard to imagine this elderly Hungarian Jewish lady dealing with the devil himself. I asked her what Eichmann had been like. “He wasn’t too loud, He said something to me and I said something to him and I received an answer for that. But he was very nervous. His weapon was always there on his desk, and his helmet.”

Hitler’s Secret Bankers also inspired my first novel, The Budapest Protocol, a thriller. The protagonist is a foreign correspondent based in Budapest who discovers that the European Union is a front for a Fourth Reich in which Germany dominates Europe by economic rather than military means. That idea was directly inspired by the Red House Report, a wartime American intelligence document, detailing Nazi plans for a Fourth Reich, which is quoted in Hitler’s Secret Bankers. I moved the Red House hotel to the Astoria in wartime Budapest, which was taken over by the Gestapo during the Nazi occupation. Hitler’s Secret Bankers also taught me that money, looting and profit drives wars as much as ideology. After Surviving Hitler I wrote a biography of Slobodan Milosevic, drawing in part on my experiences as a reporter covering the Yugoslav wars of the 1990s. Behind the nationalist ideologies that were supposedly driving the conflict, plunder was also an engine of war. Criminal gangs fought for control of tobacco and smuggling networks that crossed the front-lines. When towns and villages fell to one side or another, they too were looted.

This new edition of Hitler’s Secret Bankers includes an extensive afterword. It examines how the compensation fund of $1.2 billion was eventually distributed, and how even after it was signed, the Swiss banks continued objecting and filibustering over its terms. It also draws on the reports by the Volcker Commission, which investigated the extent of lost and dormant accounts and the record of the Swiss banking industry during the war, and the Independent Commission of Experts, known as the Bergier Commission, which was formed by the Swiss government. This examined the role of Swiss banks and broader historical areas of Swiss policy and relations with Nazi Germany.

One of the most eye-opening discoveries I made while writing the first edition of this book was the central role played by the Bank for International Settlements, the bank for central banks, then and now based in Basel. I became fascinated by the BIS, where Allied and Axis officials worked together, while not far away their compatriots were killing each other. Some years later I went on to write Tower of Basel, the first investigative history of the BIS, which was published in 2013. Even now the world’s most powerful bankers regularly meet in secret at the BIS, to discuss the state of the world’s economy and monetary policy. Much of Tower of Basel deals with the pre-war, wartime and immediate post-war history of the BIS, which is intricately bound up with the Third Reich and its finances. What I learnt confirmed that the title of Chapter Four of Hitler’s Secret Bankers, about the BIS, was absolutely correct: “Kapital Uber Alles”, Capital Over All. I have included extensive new material on the BIS and its role as a secret wartime channel between the Axis and the Allies, which draws on Tower of Basel.

All history is a work in progress. I gladly pay tribute here to my fellow journalists, authors and historians, especially Gerald Aalders, Goran Ahlstrom, Professor Michael Bazyler, Ingrid Carlberg, Benny Carlson, Piet Clement, Eric B. Golson, C.G. McKay, Anna Porter, Christopher Simpson, Cees Wiebes, Ulf Olsson, Joshua Prager, Jay Weixelbaum, and the work of the Volcker and Bergier Commissions. I have drawn on all of their fine work. I hope that this new edition of Hitler’s Secret Bankers adds something to our understanding of the darkest hour in human history and the ongoing nexus between war and plunder, profit and genocide.

Introduction

Travelling in December 1996 on a pristine Swiss train to Bern, site of the Swiss Federal Archives, I met an American expatriate who, fifteen years earlier, had relocated to Zürich. Our conversation soon turned to the question of Holocaust victims’ dormant accounts and the revelations about Swiss-Nazi economic links that had dominated the international headlines from the spring of that year.

Why, I asked, had the Swiss bankers responded in such a clumsy and ham-fisted manner to the revelations that for decades they had sat on money owed to the descendants of Holocaust victims, even demanding that claimants produce death certificates for their parents who had been killed in Auschwitz? ‘The problem with the Swiss bankers, and Holocaust victims’ accounts,’ he said, ‘is that the bankers have a concept deficit about this.’ A concept deficit. It was a telling, two-word summation of a complicated issue. This phrase, suggestive of a moral rather than financial shortfall, I thought, encapsulated a lot more than the bankers’ refusal to hand over monies deposited by Jews who died in the gas chambers or were shot into mass graves by SS Einsatzgruppen troops.

Insulated by decades of political neutrality and historical isolationism, buttressed by the massive amounts of the world’s questionably acquired wealth that still lies in the Swiss banks’ vaults, the bankers didn’t understand why they should have to answer questions from anybody, let alone from claimants without the proper paperwork. Rules were rules, that was how Swiss banks had always operated and that is how they always would, they believed. Swiss banks, and by extension Switzerland itself, was unaccountable. Perhaps the best example of this was the furore that erupted in January 1997 when outgoing Swiss president Jean-Pascal Delamuraz described as ‘extortion and blackmail’ demands by Jewish organisations that the Swiss banks, who made so much money by trading with the Nazis, set up a Holocaust compensation fund. This too was part of the ‘concept deficit’, with Swiss government leaders failing to realise that the world has changed, and no nation, not even a neutral one, is an island. But even Switzerland must adjust to changing realities of global realpolitik, and Delamuraz later apologised for his remarks.

The concept, if you will, of the ‘concept deficit’ aptly sums up all the key strands in the network of connections that bound the wartime Swiss economy into the Nazi war machine, and anointed the ever-discreet financial mandarins of Zürich, Basle and Bern, as Hitler’s Secret Bankers. For the monies deposited in good faith by Holocaust victims and sat on for over fifty years by stonewalling bank clerks are just the opening shot of the case against the Swiss banks. Swiss officials claim that their policies towards the Allied and Axis powers were those of balanced neutrality but the scales were heavily tipped in favour of the Nazis, at least on economic matters.

Swiss banks, particularly the Swiss National Bank, accepted gold looted from the national treasuries of Nazi-occupied countries and from dead Jews alike, which they either bought outright or laundered for the Nazis before sending it on to other neutral countries, declassified intelligence reports reveal. Swiss banks supplied the foreign currency that the Third Reich needed to buy vital war materials. Swiss banks were the financial conduit that allowed Nazi economic officials to channel their loot to a safe haven in Switzerland. Swiss banks financed Nazi foreign intelligence operations by providing funds for German front companies in Spain and Portugal. At the Basle-based Bank for International Settlements, Nazi and Allied nationals even worked together all through the war as their compatriots were slaughtering each other on Europe’s battlefields.

There is a powerful argument that, without the considerable efforts of Swiss bankers to help keep the Nazi regime sufficiently funded, the Second World War could have ended several years earlier, especially after the Wehrmacht’s massive defeats at the battles of Stalingrad and Kursk, that were the final spasms of Operation Barbarossa, the invasion of the Soviet Union that cost many millions of Reichsmarks and hundreds of thousands of German lives. Certainly, other neutral countries also traded with and aided the Third Reich. Spain and Portugal supplied tungsten, Turkey chrome, and Sweden steel. But Turkey eventually severed diplomatic relations with the Nazis, and Sweden, together with Denmark, organised a mass rescue of thousands of Danish Jews by boat in the autumn of 1943, hid them, and gave them all sanctuary.

No other neutral country played as crucial a role in keeping the Nazi war machine rolling as Switzerland. Where did the money come from that allowed the Nazis to purchase these essential war materials? Swiss banks – for few in Madrid, Lisbon, Ankara or Stockholm would accept Reichsmarks. True, there were banks in Lisbon and Stockholm too, but the Portuguese escudo and the Swedish krona were not a serious medium of international finance. The Nazis’ trading partners wanted hard currency, Swiss francs, and those they got, supplied by Swiss bankers.

Switzerland’s policy of neutrality, enshrined in international treaties, demanded that it avoid joining either side during the Second World War and pursue policies towards both the Allies and the Axis that were non-discriminatory and impartial. For the Swiss, a people of three major languages and cultures – German, French and Italian – neutrality is more than a way of avoiding neighbouring wars. Neutrality is the glue that helps bind the country together, says Peter Burkhard of the Swiss government task-force, set up in the autumn of 1996 to examine Switzerland’s wartime relationship with Nazi Germany. ‘Neutrality is part of the Swiss identity, it is like a myth. Every country and every people needs a common myth, especially Switzerland where there is no such thing as a Swiss nation in cultural terms. Swiss identity is based on a common history, values and experience, but not a common culture or language. Neutrality is one of the few things we have in common.’

But just how neutral, in these terms of even-handed abstention, was wartime Switzerland? Not very, when it came to frontier controls, for example. After August 1942, Switzerland’s borders were almost hermetically sealed against fleeing Jewish refugees, but Nazi financial officials such as Emil Puhl, Reichsbank vice-president and BIS director, could freely come and go. So could Allied diplomats, but when US Treasury department officials refused to release the Swiss gold held in the United States for fear that the Swiss would make it available to Nazi Germany, the supply of coal to the American embassy was cut off, all through the freezing winter of 1941. Their German counterparts were warm enough, but then it was German coal that helped keep Swiss industry going during the war.

Certainly in active military terms Switzerland was truly neutral – no Swiss units fought with the British army or the Wehrmacht. In passive military terms there is room for debate. Swiss machine-guns were fitted into Luftwaffe airplanes, and Swiss timing devices helped explode Luftwaffe bombs, although the Allies’ armed forces too made use of the latter.

Had the Nazis invaded Switzerland they would have had a tough fight on their hands. For military reasons, certainly, as subduing a nation with a well-armed and trained civilian army that was ready to blow up bridges and mountain passes and battle it out for months would have been a different matter to rolling waves of Panzer tanks into Belgium or Holland. But also for political and cultural reasons. There was little love for the Third Reich among much of the Swiss population, and the policy of economic appeasement of the Third Reich followed by the Swiss Federal Council and many Swiss bankers did not enjoy the overall support of the Swiss general public. Only a tiny minority supported the pro-Nazi extreme right, and much of the Swiss press was fervently anti-Nazi during the war. After the August 1942 law was passed that closed off Switzerland as a haven for Jewish refugees a public outcry erupted, led by the press, church leaders and many individuals.

Switzerland does have several wartime heroes of whom it can be proud, particularly Charles Lutz, wartime diplomat in Budapest, and former police chief Paul Grueninger. The former initiated the policy of placing Budapest Jews under Swiss diplomatic protection as the Holocaust entered its final phase – a policy that was later followed by his Swedish counterpart Raoul Wallenberg, as well as by Spanish diplomats and the International Red Cross. The mutterings in Bern at the Swiss Foreign Ministry about his unconventional work did not prevent Lutz from putting 50,000 Jewish lives under Swiss protection. Six years before Lutz issued his first protection papers, Paul Grueninger saved 3,600 Jews from being returned to Germany by altering their passports during the summer and winter of 1938. His reward was to be fired as chief of police, lose all his pension rights and be denied suitable employment in the private sector. Grueninger died in poverty in 1971 and he was not legally rehabilitated until 1995, after four attempts by his family to restore his good name.

It is true that as well as the many pro-Nazi debts, mainly economic, on the balance-sheet of Swiss wartime history, there are also anti-Nazi credits. Switzerland tolerated Allied espionage operations, such as those run by the Office of Strategic Services, forerunner of the CIA, in Bern. Many Allied intelligence operations that involved tapping telephones, intercepting letters and telegrams were quite illegal, but Swiss authorities generally turned a blind eye towards them, as part of the country’s wartime balancing act. Switzerland allowed Jewish and refugee organisations such as the World Jewish Congress and the US War Refugee Board to freely operate, rescuing and aiding Jewish refugees escaping from the Nazis. Switzerland was the site of clandestine negotiations during 1944 between senior Nazis and Jewish officials that almost certainly slowed down the last stages of the Holocaust. And just as the Third Reich needed Swiss banks to keep the Nazi economy functioning, the Allies needed Switzerland as a place where diplomats could meet, an oasis of peace in the heart of wartime Europe. The Allies too sold gold to Swiss banks, over SF3 billion worth, almost twice as much as the Nazis’ total of SF1.64 billion, although, unlike much of the German gold, that sold by the Allies to the Swiss National Bank was not stolen.

Switzerland was also home to the International Red Cross, which performed valuable humanitarian work throughout the war, though many Jewish organisations are critical of its lack-lustre response to the Holocaust. At the same time, almost a quarter of a million refugees passed through Switzerland during the Second World War, many staying for years, albeit often in camps behind barbed war, guarded by armed police. Jewish refugees too found sanctuary in the land that had once given asylum to Lenin – about 22,000 in number, although as many were turned back into the arms of Nazi or Vichy France officials.

Switzerland was neutral, but it was an ambiguous, expedient kind of neutrality, that like most foreign policies was ultimately based far more on national self-interest than adherence to any abstract, let alone moral, principle. The J-stamp, the mark of shame in Jews’ passports, that the Nazis introduced in 1938 – a full year before the war started – after pressure from Swiss officials wanting to dam the tide of Jewish refugees, is perhaps the best indication of how realpolitik generally won out over the country’s humanitarian tradition.

That triumph of cynicism over the principles of neutrality, or the beginning of the governing Swiss Federal Council’s pro-Nazi bias, depending on your point of view, can be dated back to a speech by Dr Marcel Pilet-Golaz, Swiss Foreign Minister for most of the war. It was he who in large part steered Switzerland towards a policy of accommodation, if not active cooperation with Berlin. Speaking after the Nazi invasion of France in May 1940, Pilet-Golaz addressed the nation on how Switzerland had then to face and adapt to the new political realities of Europe. ‘After that speech Pilet-Golaz was known as the man who would alter Swiss policy along the lines defined by Germany. He wasn’t the only one, but he was the most famous,’ says historian Guido Koller.

Pilet-Golaz gave the green light for the bankers to expand and develop their relationship with Nazi Germany. For the ‘new reality’ in wartime Europe meant that there was lots of money to be made in accepting and laundering Nazi gold. ‘There is a relation between policy in its narrow sense and economic policy. One reinforced the other,’ says Koller. In fact, the Foreign Minister was out of tune with the rest of the population and Pilet-Golaz’s speech was greeted with public protests. But Swiss neutrality was a many-splendoured beast that lurched in several directions, and as the Allies advanced across the former territories of the Third Reich, appeasing the Nazis was suddenly less popular than opposing them. Pilet-Golaz was sacked in 1944, just as the Swiss borders were gradually becoming more porous to Jewish refugees, and just as the Allied armies moved ever-nearer to Berlin.

The Swiss-Nazi economic connection permeated virtually every layer of Swiss society, compromising more than the bankers of Zürich’s Bahnhofstrasse. If any one relationship summarises the web of compromise and concession between Bern and Berlin, it is the murky connection between Colonel Roger Masson, the Swiss chief of military intelligence, and SS General Walter Schellenberg, head of Nazi foreign intelligence. Like other Nazi officials Schellenberg needed Swiss banks as a source of foreign currency, in his case to finance Nazi secret agents abroad. Like the Allies, he also needed Switzerland as a base to spy on Germany’s enemies, as well as on the Swiss themselves. The card he held to play against Masson was the possibility of a Nazi invasion. Together with Swiss army chief General Guisan, Masson met Schellenberg in March 1943, but by then it was apparent that with the Wehrmacht bogged down in the Soviet Union, Germany was completely incapable of opening a fresh offensive against Switzerland. Whether rightly or wrongly, the Nazis believed that the intelligence chief was in their pocket. ‘We have Masson,’ one senior German agent, based in Geneva, is quoted as saying in an American intelligence document.

*

Swiss banks laundering Nazi gold, Swiss banks providing foreign currency to the Nazis, Swiss border guards turning away refugees, Swiss intelligence and military chiefs trading information with their Nazi counterparts… all this happened over fifty years ago. So why has this episode in Switzerland’s wartime history suddenly been kicked into the international media spotlight?

Several factors combined to expose the story of Swiss economic collaboration with the Third Reich: the fiftieth anniversary of the Allied victory in Europe, the end of the Cold War, America’s freedom of information policy, and the marriage of political and electoral convenience between the World Jewish Congress in New York and Senator Alfonse D’Amato.

The V-E Day anniversary celebrations triggered a bout of national soul-searching in Switzerland’s neighbours France and Germany about their wartime history, and particularly, the fate of their Jewish community. Even neutral, isolationist Switzerland was not immune to these currents and in May 1995 then Swiss President Kaspar Villiger apologised for the introduction of the J-stamp and Switzerland’s wartime record of turning away tens of thousands of Jewish refugees. At the same time, the end of the Cold War meant that the borders of Eastern Europe were once again open, in fact had been for several years. Jewish Holocaust survivors and Jewish organisations were negotiating with the new democracies in power in Poland, Hungary, Slovakia and the Czech Republic for the return of their property. From Eastern Europe it was but a short hop to Switzerland, where for decades stories had been circulating about Swiss banks still sitting on Holocaust victims’ money, but refusing to return it to account holders’ surviving descendants.

But where to get adequate information about the notoriously secretive Swiss bankers? The answer was in the US National Archives, where the comprehensive records of Operation Safehaven (the US State and Treasury Departments’ operation that monitored the flow of looted Nazi assets into Switzerland) were both extant and readily available under the US Freedom of Information Act. As the WJC (the New York based World Jewish Congress) researchers burrowed through the archives, they discovered more than information about dormant accounts; they uncovered the whole international web of Swiss-Nazi economic connections. Where once a few Swiss bankers stood in the dock, charged with holding onto dead Jews’ money, suddenly a whole nation was on trial, charged with systematic economic collaboration with the Third Reich.

Ever alert to a hot topic, Senator Alfonse D’Amato, powerful chairman of the Senate Banking Committee, jumped on the bandwagon and began holding hearings, at which tearful Holocaust survivors would testify how stone-faced Swiss bankers had refused to return their families’ monies. All that was enough to trigger a feeding frenzy by the world’s media, who knew the ingredients of a fabulous story – Jews and Nazis, unyielding bankers, smug Swiss functionaries, looted gold – when they saw them. The trickle of documents turned into a torrent and so the pressure built, in Bern, Washington DC and London.

Finally, by the autumn of 1996, the dam of Swiss obduracy, both government and financial, broke. The WJC and the Swiss bankers set up a joint commission to examine the question of dormant accounts, while the Swiss government set up a commission of experts, with a mandate to report back in five years on its investigation into the whole Swiss-Nazi economic relationship.

Slowly, gradually, Switzerland’s ‘concept deficit’ about these dark chapters in its history is being reduced, in part by the Swiss themselves. This book, written during 1996 and early 1997, as the story broke about Swiss-Nazi economic collaboration, is part of that process. For many Swiss too, are slowly admitting that they were, indeed, Hitler’s Secret Bankers.

A SHORT NOTE ON METHODOLOGY

Hitler’s Secret Bankers is based on extensive research using several types of sources. These include declassified intelligence documents, wartime and post-war diplomatic correspondence, contemporary interviews with Holocaust survivors, previously published works of history, and discussions with historians and other analysts. This book also draws on the mountain of newspaper and magazine reports that were published last year about Switzerland’s wartime record of economic collaboration with the Third Reich.

Many of the intelligence documents upon which I have heavily drawn have only just been made available to the public and are still being examined by historians. They may not all be 100 per cent accurate, distorted, like every account, by misinterpretation, inaccuracies, the writer’s prejudices, and the simple need of a spy to justify his existence to his bosses by sending regular reports. Some of the wilder ‘revelations’, supposedly detailing the movements of millions of dollars belonging to Nazi leaders by Swiss diplomatic pouches to South America, for example, I have not used in this book. That said, none of these caveats detracts from the documents’ relevance or use as a primary historical source, but merely should colour our perceptions of the information contained within them.

Just as effective, thorough, journalism should be, this book is a first, rough draft of history. Its contents are wide open to debate, argument, even contradiction. Whatever the reader’s opinion of the conclusions drawn here, and the analyses made, they are, at least, a starting point. Neither they, nor indeed this book, contain the whole truth, as indeed no one work can ever contain the whole historical truth.

But this book is certainly a part of the truth about Switzerland’s economic collaboration with the Nazis, and is a base on which others may build. William Shirer, in the introduction to his seminal work The Rise and Fall of the Third Reich, says it best: ‘My interpretations, I have no doubt, will be disputed by many. That is inevitable, since no man’s opinions are infallible. Those that I have ventured here in order to add clarity and depth to this narrative are merely the best I could come by from the evidence and from what knowledge and experience I have gained.’

‘For six days a week Switzerland works for Nazi Germany, while on the seventh it prays for an Allied victory.’

Wartime saying

Chapter One

A Trust Betrayed

Money is the god of Swiss bankers.

Katalin Csillag, Hungarian Auschwitz survivor, seeking restitution for her family wealth, deposited in a Swiss bank.

If this happened we are certainly very sorry, but we are not able to verify this after 50 years.

Spokeswoman for Crédit Suisse, responding to accusations that the bank had demanded that relatives of Holocaust victims must produce death certificates before providing access to their accounts.

Even in the midst of the Second World War, Zoltan Csillag’s letters to his young wife Katalin found their way home to her from the carnage of the eastern front. Csillag, then serving as a doctor with the Hungarian army, wrote frequently to Katalin, who he believed was relatively safe from the fighting, back at home in the small town of Tapolca, in western Hungary – until the summer of 1944, when the letters were returned unopened and stamped ‘sent to an unknown place’. But the place where his wife had been sent was not unknown: it was called Auschwitz.

The couple had married in 1942, with a traditional Jewish wedding. It was a happy affair, attended by many relatives, to mark the union for life between the wealthy young woman, whose father Adolf ran the Lessner wine company, based in Vienna, which had been founded in 1703, and the successful young doctor, who, although Jewish, had been drafted to serve in the Hungarian army in its futile campaign against the Soviets. Even now the Csillags have copies of centuries-old bills of sale, of the wine the Lessners sold to the Austro-Hungarian nobility.

With homes in Vienna and Tapolca, the Lessners were part of Hungary’s burgeoning Jewish middle class, who were the country’s economic mainstay. Like many Jews across Eastern Europe, they banked the family’s wealth in Switzerland. Katalin knew that her dowry, deposited in a Swiss bank by her father, was unreachable, at least while the war continued. But, like thousands of other Holocaust survivors, she had faith in the probity and rectitude of the bankers who had turned Switzerland into a byword for financial security; she believed that, when the war was over, she would get her money.

Centuries of persecution and pogroms, in countries such as Poland and Russia, and institutionalised anti-Semitism in Hungary, had already persuaded Eastern Europe’s Jews that their assets were far safer deposited in Switzerland, out of reach of the regions’ unstable regimes which might, at any moment, appropriate them. And who knew when they might have to suddenly flee, with no time to deal with banking bureaucracy. Now Switzerland appeared to be an island of sanctuary in a continent at war. Its borders were far out of reach, and in any case all but closed to Jewish refugees. But if physical sanctuary was impossible for them, the Swiss would at least provide financial security for their assets, they believed, as they frantically transferred cash to banks in Zürich, Bern and Geneva as the rule of the Swastika advanced across the continent.

The Jews were wrong, and, over fifty years later, those events are returning to haunt both Eastern Europe’s Holocaust survivors and the bankers who have guarded their family assets – guarded them so zealously, in fact, that for decades they have refused to hand them back, obstructing and stonewalling, all the while profiting from a free injection of capital into their banks, capital deposited in good faith by Jews who feared they might perish but who hoped that their relatives, at least, might survive and inherit their wealth. The secrecy laws which were introduced in 1934 – in part to protect Jews depositing money in Swiss banks – have, in a macabre twist, been turned against account-holders’ surviving relatives to prevent the return of Holocaust victims’ assets. There were no death certificates issued at Auschwitz, but, in the most heartless twist yet of the Swiss bankers’ bureaucratic mentality, their clerks even demanded written proof of death from the relatives of Holocaust victims who tried to reclaim their fathers’ and grandfathers’ wealth.

But money was the least of Katalin Csillag’s concerns that summer morning in 1944, when the Germans came for her and her parents. Together with the rest of her family she was herded into a train and transported to Auschwitz. Tapolca came under Zone Five of the annihilation plan, which covered western Hungary. The Holocaust came late to Hungary, which had joined the war in the spring of 1941; its ruler, Admiral Miklós Horthy, believed that, by aligning itself with the Nazis, Hungary could recover its ancient lands of southern Slovakia and Transylvania, ceded to Romania in 1920. Horthy was a classic aristocratic anti-Semite, who sent fawning letters to Hitler thanking him for his birthday present of a yacht – although he would later balk at the wholesale extermination of his country’s Jews. In fact, until the German invasion of March 1944, Hungary offered relatively safe haven for its Jews. True, stringent anti-Jewish laws had been passed in 1938, tightening up earlier legislation that limited Jewish entry into various professions and universities, but, unlike in Poland or Russia, Hungarian Jews were not slaughtered en masse until after the Germans invaded in 1944. Hungary even gave sanctuary to a few thousand Polish and Slovak Jews as they fled the Nazis.

About 50,000 Hungarian Jewish men had been deported in forced-labour battalions during the war years, mainly to Transylvania in Romania and to the front in the Ukraine. About 5,000 returned. But in towns like Tapolca, and the capital Budapest, Jewish communal life continued. Then, in 1944, as Admiral Horthy dithered between surrendering to the Allies and remaining in the Axis, the Germans invaded while the Admiral was out of the country, and the Hungarian Holocaust soon began in earnest, under the supervision of Adolf Eichmann, who installed himself at the Hotel Majestic in Budapest’s Schwab Hill. The plans for the deportation of the Jews in Zone Five were finalised at a conference in late June 1944, at Siofok, a resort town at Lake Balaton. This was a Magyar mini-Wannsee, a Hungarian version of the meeting of the Nazi leadership on a lake outside Berlin where the plans for the Final Solution were completed on 20 January 1942.

Like the Wannsee conference, the Siofok meeting was a pleasant affair for those attending as they wined and dined, enjoying the view of Lake Balaton as it glittered in the summer sun. Guests included local police and administrative officials, all ready and enthusiastic to send their fellow Hungarian citizens to their deaths. Laszlo Endre, a key figure in the destruction of Hungarian Jewry, was holidaying there at the time, together with his fiancée, Countess Katalin. Endre, a fervent anti-Semite and Secretary of State in the Horthy regime, became close friends with Adolf Eichmann and surely broke his holiday for a few hours to check on the plans for the Hungarian Holocaust. Eichmann was so impressed with Endre’s anti-Semitism that he once claimed that ‘Endre wanted to eat the Jews with paprika’. Endre’s reward, like Eichmann’s, was the noose: he was hanged in March 1946 as a war criminal.

The deportations were well organised, both by the Hungarians at the departure points and by the SS at the reception area in Auschwitz. At the height of the mass killings, the camp, the largest extermination centre in Nazi-occupied Europe, was receiving between 12,000 and 14,000 people a day. Randolph Braham, in The Politics of Genocide: The Holocaust in Hungary, describes Auschwitz in the summer of 1944 thus as its workers prepared for the final stage of the Holocaust, the eradication of Hungarian Jewry:

The extermination machinery, which had lagged for months, was put into peak condition to assure smooth, effective continuous operation. The crematoria were renovated, the furnaces relined, the chimneys strengthened with iron bands, and large pits were dug in the immediate vicinity of the crematoria. A new railway line was laid between Auschwitz and Birkenau and the debarkation point was advanced to within 200 yards of the crematoria. The strength of the two Jewish special Kommandos was increased from 224 to 860 and the Canada Kommando which was in charge of sorting the loot was increased to about 2,000.

Loot was always a primary concern for the Nazis. Teeth with gold fillings were pulled from the dead, and piled up before the gold was extracted. Rings, jewellery, spectacle frames, it was all melted down eventually, before being moulded into gold bars, the most gruesome dividend of the Holocaust Bonanza. As for the Allies, they well knew what was happening at Auschwitz, but refused to precision-bomb either the railway lines or the gas chambers, claiming such a raid would divert vital war resources from other war operations. There were plenty of partisan groups operating in the areas traversed by the trains of death as well, but there was not a single attempt to blow up the railway lines.

A letter from the Chief Secretary’s office of the government of Palestine, dated 12 July 1944 and stamped ‘Secret’, to David Ben-Gurion, first Prime Minister of Israel, then working at the Jewish Agency in Jerusalem, shows the full extent of the Allies’ knowledge of the Nazi extermination as it entered its final stage:

Received fresh reports from Hungary stating that nearly one half total of 800,000 Jews in Hungary have already been deported at a rate of between 10,000 to 12,000 per diem. Most of these transports are sent to death camp of Birkenau near Osweicim [Auschwitz] in Upper Silesia, where in the course of the last year over 1,500,000 Jews from all over Europe have been killed and have detailed reports about numbers and methods employed… These facts which are confirmed by various letters and reports from reliable sources should be given widest publicity and present Hungarian government should again be warned that they will be held responsible because they are aiding Germans with their own police to arrest and deport and thus murder Jews.

Together with her parents and brother, Katalin Csillag spent several days packed into a freight train on the journey to Auschwitz. There were usually between seventy and ninety people jammed into each car, as well as two buckets. One was filled with water, the other was empty but was soon filled with excrement. The windows and doors were locked.

These unbearable conditions were all part of the master race’s master plan. Many died on the way, particularly old people and infants, while those who survived were so desperate for water and air on their arrival at Auschwitz that they barely had the will to live, let alone resist being pushed down that 200-yard stretch from the train to the gas chambers. Auschwitz was operating at full capacity that summer, as one eye-witness describes:

Even the primitive gas chambers which had been used before the crematoria were constructed had to be brought back into commission. Enormous heaps of corpses were cremated in recently prepared pits. The entire area was wreathed in smoke which at times completely blotted out the sun. A revolting stench of burning human bones and flesh pervaded the camp. Night and day, without a break, the murdering continued – in several shifts.

Ever ingenious, ever concerned with that favourite German trait – efficiency – the SS officers even worked out how to maximise the burning of the corpses in the crematoria pits. Trenches were dug around the piles of bodies, a primitive irrigation system along which ran not water but human fat, which, released from the burning bodies, was then returned onto them, so they would burn ever faster. Somewhere in the mass graves of Auschwitz lie the remains of Katalin Csillag’s parents, together with those of about 400,000 Hungarian Jews killed there in the summer of 1944.

Katalin Csillag is now 75, and lives with her husband Zoltan, 82, in a spacious flat in Budapest, under the historic castle where Admiral Horthy lived. The Csillags are elderly now, but they are still a bright and sprightly couple, ever ready with a supply of coffee for visitors. Mrs Csillag, though, is bitter about the failure of the Swiss bankers to try to help her regain her family’s assets.

‘I have no papers about the money in the banks, because everything was destroyed in 1944. My parents were taken to Auschwitz and never came back; I was the only one to return. I don’t like to talk about Auschwitz, because then I won’t sleep for a month,’ she says, drawing on a cigarette as she speaks. ‘I knew for some time that there was a tradition that the women in our family would get a dowry paid into Swiss banks. My father had five sisters, and each one had a hundred thousand Swiss francs paid into a Swiss bank account. I also had some money. This was our family story, that my father talked about.

‘I should have got the money in 1942, but you know how the world was then and it would have been very dangerous to try and travel to Switzerland. We were a wealthy family, but most of it has gone, apart from a few paintings and some furniture. I haven’t had any correspondence with the banks until now, because we didn’t have any papers and so we couldn’t do anything and there is a law that we cannot have money in a foreign bank account.’

The Austrians, at least, have returned some of the family assets. In 1986 Zoltan Csillag recognised a magnificent wooden chest, used for storing silver cutlery, in a list of looted goods published in Austrian newspapers. It had belonged to his family and was stolen by the Nazis from their home in Kapuvar. The Csillag family monogram still sits on its lid, and amazingly, over forty years after it was stolen, the family silver still remained inside.

It took six years to prove his ownership, but eventually the Austrian authorities returned it to its rightful heir. Zoltan Csillag smiles when I ask him how it felt when the box finally came home, but cannot really talk about it as, over fifty years after the Holocaust, the emotions still surge deep within him.

‘Don’t ask me how I feel. I can’t really tell you about it. If I was a poet I could talk to you about it, but I’m not.’

Swiss officials, though, have been less cooperative. In the summer of 1996 the Csillags wrote to the Ombudsman appointed by the Swiss Bankers’ Association (SBA), asking for assistance in locating the family account, of which, admittedly, they have few details. The Ombudsman’s response was standard: pay SF100 and we might help you.

‘I got a long form back and I have to pay a hundred Swiss francs, with the possibility of paying more,’ says Katalin Csillag. ‘I am outraged at this. This is a lot of money for us. We are pensioners. How can we pay it? Secondly, and perhaps this is the more important thing, the Swiss banks have a lot of money. They are making money from it and now they want more. This all happened a long time ago and they could have done something after the war. Money is the god of Swiss bankers.’

Across the Danube from the Csillags’ flat, along whose banks Hungarian Nazi Arrow Cross troops lined up Jews before shooting them into the river, lies Wesselenyi Street, in downtown Pest. The Blue Danube ran red with blood that winter of 1944 and Wesselenyi Street is still a haunted place, a road that was once a main artery in Budapest’s wartime Jewish ghetto, where history has laid its bloodied hand too heavily. The ghetto gate stood at the bottom, smashed aside by the troops of the Soviet Red Army as they fought their way through the wrecked city in January 1945, awed and horrified at the sight of the half-starved Jews who crawled out of the cellars to meet them. Dazed and terrified, the Jews had sheltered from the bombardment in the Great Synagogue, its adjoining graveyard even now crowded with rows of headstones dating from 1944, when the Hungarian Nazi Arrow Cross rampaged there, shooting and killing on sight.

*

But for many children of Holocaust survivors, the defeat of the Third Reich marked the beginning of their battle to regain their families’ wealth. Dr Gyorgy Haraszti has his office at number 44 Wesselenyi Street, where he is Principal of the American Endowment School for Jewish pupils. A scion of Hungary’s now more or less vanished Jewish nobility, who lived in Hungary, banked in Switzerland, and were at home everywhere from Budapest to Berlin, Dr Haraszti lost 160 relatives in the Holocaust. The Harasztis owned a large swathe of land, including forests and orchards, in Szabolc-Szatmar county, in the east of the country, an area once home to a thriving Jewish population, but their land was taken from them under Communism, for which he recently received two million forints in compensation (£7,000), a substantial sum in a country where many earn less than 40,000 forints a month.

Dr Haraszti’s grandfather, like most Hungarian Holocaust victims, was killed in Auschwitz some time in 1944. Before he died, says Dr Haraszti, he sent three million pengos ($600,000) to Switzerland.

‘We were a well-to-do family. We had ten thousand acres taken away under the Communists, of forests, orchards. My grandfather told my father that he had deposited this money in Switzerland, in case something happened to him. I don’t know how or where they sent it, and that is the problem, the heart of the matter.’

But, if Dr Haraszti doesn’t know where the money was deposited, he can prove it existed.

‘I have documents about the Hungarian properties that were taken by the Nazis and by the Communists. I can prove that my family was wealthy enough to be able to deposit three million pengos. Until the German occupation in March 1944 Hungarian Jews had the opportunity to send money to Switzerland – Hungarian Jews had contacts there. The Joint [a Jewish welfare organisation] had a delegation in Switzerland. My parents and grandparents went there on holiday every year. I can show you postcards from Switzerland at the turn of the century.’

By the summer of 1944 Europe was in chaos, especially Hungary. The deportation of the countryside Jews, from towns such as Tapolca, was under way. The Allies were advancing from the west, the Soviets from the east. Travel, communication, everything was virtually impossible. These were days of endless terror for Budapest’s Jews: random round-ups, sweeps and deportations. There was no guarantee that if a Jew left home to buy a loaf of bread in the morning he would ever come home again, let alone possess the means to travel from the eastern border to the capital.