Banks' Nazi connections exposed

By Rob Gowland, The Guardian (Socialist Party of Australia), 19 June 1996

Fifty years ago, on February 25, 1946, Russell Nixon, Director of the Division of Investigation of Cartels and External Assets in the US Military Government in Germany, testified before the Kilgore Committee of the US Congress that the United States and Britain were preventing the Soviet Union from participating in the search for Nazi assets in neutral countries.

Soviet participation, declared Nixon, would lay bare the Fascist or reactionary regimes in countries such as Spain, Portugal, Switzerland, Sweden and Argentina and would reveal all the elements of collaboration of certain interests in the Allied countries with those regimes.

Half a century later, a small fragment of the involvement of Switzerland and Sweden with both the financing of the Nazi regime and the protection of their assets was suddenly exposed to public gaze just last month with the release in the USA of thousands of documents from a wartime US intelligence operation code-named Safehaven.

Greatly expanded immediately the War ended, Operation Safehaven's aim was to uncover how the Nazis used neutral countries, including Switzerland and Sweden, as a conduit for capital flow and as a way to hide their assets.

Not only were Safehaven's discoveries not shared with the Soviet Union, they were kept secret from US legislators and the US people, locked away as restricted material in the US National Archives.

Operation Safehaven only came to light late last year when the World Jewish Congress started combing the US National Archives for evidence that Swiss banks had assets of Jewish victims of the Nazis in their vaults which they were refusing to disclose.

The files of Operation Safehaven reveal that Britain and the USA were much better informed about Nazi financial dealings through neutral countries than they have previously acknowledged.

In 1944, for example, with the Hitler regime doomed, US intelligence intercepts indicated that two major Swiss banks, Credit Suisse and Union Bank, were making Swiss francs available to the Germans.

One document released from the Safehaven files shows that Swiss banks aided the German Reichbank to dispose of $600 million worth of gold looted by the Nazis from countries they had invaded. The gold was invested in other countries or private Swiss banks.

Even the Swiss-based International Red Cross, according to a 1945 document, assisted the Nazis by using its privileged status to smuggle Nazi assets and looted valuables across Europe in diplomatic pouches.

Many Jewish companies seized by the Nazis were conveniently taken over by Swiss companies rather than German ones. Switzerland's Bally shoe company, owned by Oerlikon-Buehrle, was singled out in the US documents for its involvement in this practice. So was its parent, Oerlikon-Buehrle, which assisted German armaments production and technical research.

Millions of square feet of stolen leather also found its way to Bally.

Questioned by reporters about the Operation Safehaven revelations, a Bally spokesman said the company was checking its records to see if it was true!

Neutral Sweden, on the other hand, made little attempt to hide its pro-fascist position during the War. The strong and profitable connections of Swedish business circles with the Nazis were well known to the Allies who were no doubt persuaded against taking punitive action by those same certain interests that Russell Nixon referred to.

Among the Swedish companies that grew rich by aiding the Nazis was the Enskilda bank, owned by the Wallenberg family. The Safehaven documents reveal that the US government had been tracking the pro-Nazi activities of the Wallenberg brothers, Marcus and Jacob, for some time.

In February of 1945, the Secretary of the US Treasury, Henry Morgenthau Jr, wrote to Secretary of State Edward Stettinius outlining the Wallenbergs' activities.

These included making substantial loans to German industry during the War without collateral and making covert investments for German capitalists in US industries. The Enskilda bank, Morgenthau reported, was repeatedly connected with large black market operations.

Morgenthau identifies Jacob Wallenberg as strongly pro-German and rebutts the view, probably fostered by Wallenberg interests themselves, that Marcus was pro-Allied.

Helping to finance Hitler's war, the Wallenbergs seem to have been playing both ends against the middle, with considerable success. The family remains prominent in Swedish business circles to this day.

Playing both ends against the middle seems to have been a Wallenberg speciality. While his family's bank was funding Hitler and helping to hide Nazi investments, Marcus and Jacob's nephew Raoul Wallenberg, a Swedish diplomat in Budapest, was saving an estimated 20,000 Jews from deportation by providing them with special Swedish passports.

When the Red Army liberated Budapest in January 1945, Wallenberg was arrested as an American spy and vanished. The charge has always been pooh-poohed by Western commentators who preferred to see it as evidence of Soviet anti-Jewish sentiment.

However, earlier this month <MI>US News & World Report<D> reported that a review of recently declassified documents (quite separate from Operation Safehaven) showed that Wallenberg in fact spied for the OSS, predecessor of the CIA.

Curiously, this confirmation of the Soviet charge received remarkably little publicity.

One of the most tantalizing of the Safehaven documents is a 1944 account of a secret meeting in the French city of Strasbourg, at which Nazi leaders told top German industrialists that the war was lost and called on them to finance an underground network aimed at eventually restoring fascism to power in Germany.

It is not known to what extent these plans were ever carried out or what influence they had on the development of the post-war reactionary Adenhauer regime in West Germany.

What is known is that US Senator Harley M Kilgore, of the Kilgore Committee, repeatedly warned during 1945 and '46 that the German cartel apparatus, instead of being destroyed as required under the Quebec, Yalta and Potsdam agreements, was being deliberately built up.

However, in spite of the dedicated efforts of democratically-minded people like Senator Kilgore and Russell Nixon, the connections between US, British and French capitalists and their German, Swedish, Swiss and other supposedly neutral counterparts would ensure that the search for Nazi assets and Nazi business interests would in the long term be largely unproductive.