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The World Jewish Congress lawsuit against Swiss banks was launched in 1995 to retrieve deposits made into Swiss banks by victims of
Nazi Nazism ( ; german: Nazismus), the common name in English for National Socialism (german: Nationalsozialismus, ), is the far-right totalitarian political ideology and practices associated with Adolf Hitler and the Nazi Party (NSDAP) in ...
persecution during and prior to World War II. Initiated as WJC negotiations with both the
Government of Switzerland The Federal Council (german: Bundesrat; french: Conseil fédéral; it, Consiglio federale; rm, Cussegl federal) is the executive body of the federal government of the Swiss Confederation and serves as the collective head of state and governme ...
and its banks over burdensome proof-of-ownership requirements for accounts, strong support from
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...
politicians and leaked documents from a bank guard pressured a settlement in 1998 in a U.S. court for multiple classes of people affected by government and banking practices. As of 2015, US$1.28 billion has been disbursed for 457,100 claimants.


Negotiations

Starting in 1995, the
World Jewish Congress The World Jewish Congress (WJC) was founded in Geneva, Switzerland in August 1936 as an international federation of Jewish communities and organizations. According to its mission statement, the World Jewish Congress' main purpose is to act as ...
(WJC) began negotiations on behalf of various Jewish organizations with Swiss banks and the Swiss government over dormant Jewish World War II bank accounts. Led by Edgar Bronfman, the heir to the
Seagram's The Seagram Company Ltd. (which traded as Seagram's) was a Canadian multinational conglomerate formerly headquartered in Montreal, Quebec. Originally a distiller of Canadian whisky based in Waterloo, Ontario, it was once (in the 1990s) the lar ...
fortune, the WJC entered a class-action in
Brooklyn, New York City Brooklyn () is a Boroughs of New York City, borough of New York City, coextensive with Kings County, in the U.S. state of New York (state), New York. Kings County is the most populous Administrative divisions of New York (state)#County, county i ...
combining several established suits in
New York New York most commonly refers to: * New York City, the most populous city in the United States, located in the state of New York * New York (state), a state in the northeastern United States New York may also refer to: Film and television * '' ...
,
California California is a state in the Western United States, located along the Pacific Coast. With nearly 39.2million residents across a total area of approximately , it is the most populous U.S. state and the 3rd largest by area. It is also the m ...
, and the
District of Columbia ) , image_skyline = , image_caption = Clockwise from top left: the Washington Monument and Lincoln Memorial on the National Mall, United States Capitol, Logan Circle (Washington, D.C.), Logan Circle, Jefferson Memoria ...
. The original suits arose from grievances of
Holocaust The Holocaust, also known as the Shoah, was the genocide of European Jews during World War II. Between 1941 and 1945, Nazi Germany and its collaborators systematically murdered some six million Jews across German-occupied Europe; ...
survivors and their heirs against Swiss banks. They alleged improper difficulties in accessing these accounts because of requirements such as death certificates (typically non-existent for Holocaust victims), along with deliberate efforts on the part of some Swiss banks to retain the balances indefinitely. The causes for claims eventually expanded to include the value of art works purported to have been stolen, damages to persons denied admission to Switzerland on the strength of refugee applications, and the value or cost of labor performed by persons being maintained at Swiss government expense in displaced-person camps during the Holocaust, along with interest on such claims from the time of loss. Plaintiffs included all Holocaust victims, not just Jews.


Hearings

The WJC was able to marshal the unprecedented support of U.S. government officials including senator
Alfonse D'Amato Alfonse Marcello D'Amato (born August 1, 1937) is an American politician born in Brooklyn, Kings County, New York. He served as United States Senator for New York between 1981 and 1999. He subsequently founded a lobbying firm, Park Strategies. ...
R-NY, who held hearings of the Senate Banking Committee in which he claimed to possess "recently declassified documents that shed new light" on the Swiss role in the war. He also claimed that "hundreds of millions of dollars" of war-era Jewish assets remained in Swiss banks. At the behest of President
Bill Clinton William Jefferson Clinton (né Blythe III; born August 19, 1946) is an American politician who served as the 42nd president of the United States from 1993 to 2001. He previously served as governor of Arkansas from 1979 to 1981 and again ...
, Undersecretary of Commerce Stuart Eizenstat testified at these hearings and commissioned a report which accused
Switzerland ). Swiss law does not designate a ''capital'' as such, but the federal parliament and government are installed in Bern, while other federal institutions, such as the federal courts, are in other cities (Bellinzona, Lausanne, Luzern, Neuchâtel ...
of being "Nazi Germany's banker." The report relied exclusively on U.S. government archives. It contained no new historical information on Nazi victims' deposits into Swiss banks, and criticized the decisions of U.S. officials who negotiated settlements with Switzerland after the war as being too lenient.
Christoph Meili Michel Christopher "Christoph" Meili (born 21 April 1968) is a Swiss-American whistleblower and former security professional. In 1997, Meili illegally disclosed to third parties that Swiss bank Union Bank of Switzerland (UBS) was destroying docum ...
, a Swiss bank guard, also testified at the hearings, claiming to have witnessed illegal shredding of wartime records at Union Bank of Switzerland ( SBG/UBS) in January 1997. He removed wartime records of transactions with German companies and gave them to the Swiss-
Israel Israel (; he, יִשְׂרָאֵל, ; ar, إِسْرَائِيل, ), officially the State of Israel ( he, מְדִינַת יִשְׂרָאֵל, label=none, translit=Medīnat Yīsrāʾēl; ), is a country in Western Asia. It is situated ...
i Cultural Association. A warrant was issued for his arrest for violation of banking secrecy laws, and he fled to the U.S..
UBS UBS Group AG is a multinational investment bank and financial services company founded and based in Switzerland. Co-headquartered in the cities of Zürich and Basel, it maintains a presence in all major financial centres as the largest Swi ...
claimed the records were not relevant to dormant Jewish assets.


US–Swiss tension

The hearings led to international friction between the US and Switzerland, with boycotts of Swiss companies and products threatened in several US states. In Switzerland, the most controversial contention of the Eizenstat report was that Switzerland assisted the
Nazis Nazism ( ; german: Nazismus), the common name in English for National Socialism (german: Nationalsozialismus, ), is the far-right totalitarian political ideology and practices associated with Adolf Hitler and the Nazi Party (NSDAP) in N ...
beyond what was necessary for a
neutral country A neutral country is a state that is neutral towards belligerents in a specific war or holds itself as permanently neutral in all future conflicts (including avoiding entering into military alliances such as NATO, CSTO or the SCO). As a type ...
, and prolonged the war. Swiss public opinion was overwhelmingly against any settlement. The banks' position was that the settlement demands were grossly out of proportion to the value of unclaimed assets, and the Swiss government's position was that negotiations relating to laundering of assets looted by the Nazis were settled during previous agreements with the Allied governments and could not be reopened, because no new historical information had come to light. Audits of dormant accounts ordered by the Swiss government in 1962 and 1995 showed a total of $32 million (1995 dollars) in unclaimed war-era accounts. In 1997, the banks published a list of dormant accounts in newspapers abroad. Among the names, then American ambassador, Zurich-born
Madeleine Kunin Madeleine Kunin (née May; born September 28, 1933) is a Swiss-born American diplomat, author and politician. She served as the 77th governor of Vermont from 1985 until 1991, as a member of the Democratic Party. She also served as United Sta ...
, found Renee May, her mother, who died in 1970. The WJC rejected initial offers from the banks and demanded payment of $1.8 billion to settle the lawsuit. During the negotiations, the Swiss banks agreed to pay for another audit—headed by ex Federal Reserve chairman Paul Volcker—of wartime accounts. This audit committee consisted of three representatives from the banks, and three representatives from the Jewish groups. NY City Comptroller
Alan G. Hevesi Alan G. Hevesi (born January 31, 1940) is a former American politician and convicted felon who served as a New York State Assemblyman from 1971 to 1993, as New York City Comptroller from 1994 to 2001, and as New York State Comptroller from 2003 ...
played a crucial role in the negotiations, convening a meeting in December 1997 with Swiss bank executives and Democratic Party state treasurers to discuss sanctions such as divesting state funds from Swiss banks and withholding licenses.Codevilla, Angelo M. (2000) ''Between the Alps and a Hard Place''. New York: Regnery Publishing. p.186 Hevesi also withheld an operating license for the merger of
Union Bank of Switzerland Union Bank of Switzerland (UBS) was a Swiss investment bank and financial services company located in Switzerland. The bank, which at the time was the second largest bank in Switzerland, merged with Swiss Bank Corporation in 1998, to become ...
with Swiss Bank Corporation, who together made $4 billion in profits per year in
New York City New York, often called New York City or NYC, is the List of United States cities by population, most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the L ...
. Author
Angelo Codevilla Angelo Maria Codevilla (May 25, 1943 – September 20, 2021) was an Italian-American professor of international relations at what is now the Pardee School of Global Studies at Boston University. He served as a U.S. Navy officer, a foreign servi ...
argues that this was essentially blackmail of the banks by state banking officials, with backing of the US administration, to force a settlement between the banks and the WJC. Negotiations involving the banks, the WJC, and Undersecretary Eizenstat ultimately resulted in a settlement of $1.25 billion in August 1998. The Swiss government refused to take part in the settlement, and started a CHF 300 million Special Fund for Holocaust Victims with the
Swiss National Bank The Swiss National Bank (SNB; german: Schweizerische Nationalbank; french: Banque nationale suisse; it, Banca nazionale svizzera; rm, Banca naziunala svizra) is the central bank of Switzerland, responsible for the nation's monetary policy an ...
. It also commissioned an independent panel of international scholars known as the Bergier Commission to study the relationship between Switzerland and the Nazi regime.


Volcker and Bergier commissions

The Volcker commission audit cost CHF 300 million and gave its final report in December 1999. It determined that the 1999 book value of all dormant accounts possibly belonging to victims of Nazi persecution that were unclaimed, closed by the Nazis, or closed by unknown persons was CHF 95 million. Of this total, CHF 24 million were "probably" related to victims of Nazi persecution.
Report on Dormant Accounts of Victims of Nazi Persecution in Swiss Banks
' Annex 4; and Part I paragraph 41
In addition the commission found "no proof of systematic destruction of records of victim accounts, organized discrimination against the accounts of victims of Nazi persecution, or concerted efforts to divert the funds of victims of Nazi persecution to improper purposes." It also "confirmed evidence of questionable and deceitful actions by some individual banks in the handling of accounts of victims". The Volcker commission recommended that for settlement purposes, the book values should be modified back to 1945 values (by adding back fees paid and subtracting interest) and then be multiplied by 10 to reflect average long-term investment rates in Switzerland. Under these rules, a total of $379.4 million was awarded to account holders or their heirs. In cases where the claimant could be verified but the size of the account could not, a $125,000 award was given. The commission recommended that the remaining balance of the settlement should be given to other victims of Nazi persecution. The Bergier Commission reached similar conclusions about the banks' conduct in its final report, The Bergier Commission Final Report
page 442; and page 518
and found that trade with Nazi Germany did not significantly prolong
World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the World War II by country, vast majority of the world's countries—including all of the great power ...
.


Settlement

On November 22, 2000, Judge Edward R. Korman announced a settlement of this case with his approval of a plan featuring the payment of $1.25 billion into funds controlled by the Israeli Banking Trust. Judah Gribetz was appointed Special Master to administer the plan, which is sometimes called the Gribetz Plan after its chief author. As of December 31, 2015, US$1.28 billion has been disbursed for 457,100 claimants.


See also

* Alperin v. Vatican Bank * Bank secrecy *
Banking in Switzerland Banking in Switzerland dates to the early eighteenth century through Switzerland's merchant trade and has, over the centuries, grown into a complex, regulated, and international industry. Banking is seen as emblematic of Switzerland, along with ...
* Gold laundering *
List of banks in Switzerland Systemically Important Banks Globally Systemically Important Banks *UBS Group AG *Credit Suisse Group AG Domestically Systemically Important Banks * Zurich Cantonal Bank * Banque cantonale vaudoise * Raiffeisen * PostFinance Top-tier Swiss bank ...
**
Swiss National Bank The Swiss National Bank (SNB; german: Schweizerische Nationalbank; french: Banque nationale suisse; it, Banca nazionale svizzera; rm, Banca naziunala svizra) is the central bank of Switzerland, responsible for the nation's monetary policy an ...
(Switzerland's central bank) **
UBS AG UBS Group AG is a multinational investment bank and financial services company founded and based in Switzerland. Co-headquartered in the cities of Zürich and Basel, it maintains a presence in all major financial centres as the largest Swis ...
(Switzerland's largest bank) ** Credit Suisse (Switzerland's second largest bank) * List of class action lawsuits * Nazi gold * Numbered bank account *
Private bank Private banks are banks owned by either the individual or a general Partner (business rank), partner(s) with limited partner(s). Private banks are not incorporation (business), incorporated. In any such case, creditors can look to both the "enti ...
*
Switzerland during the World Wars During World War I and World War II, Switzerland maintained armed neutrality, and was not invaded by its neighbors, in part because of its topography, much of which is mountainous. Germany was a threat and Switzerland built a powerful defense. I ...


References

{{World Jewish Congress Holocaust charities and reparations Banking in Switzerland Law of Switzerland Jewish Swiss history Class action lawsuits Switzerland in World War II