Renewed pressure from 1995

The changed setting

Several developments combined to reopen the question in the middle of the 1990s. The end of the Cold War opened archives in Eastern Europe and in the United States and allowed survivors and heirs in the former Soviet bloc to press claims that had been impossible for decades. The fiftieth anniversary of the end of the war in 1995 brought a wave of commemoration and self-examination across Europe. In Switzerland, President Kaspar Villiger apologised on 7 May 1995 for the country’s treatment of Jewish refugees during the war and stated that Switzerland bore a considerable burden of guilt.¹ While journalistic investigations in Switzerland and abroad drew attention to the fate of dormant accounts, the Swiss Bankers Association adopted in 1995 guidelines on the treatment of dormant assets that for the first time set common standards for the industry.²

The association also carried out a survey of its members. In September 1995 it announced that banks had identified 775 deposits opened before 1945 with a total value of CHF 38.7 million.³ Converted into dollars, the figure appeared in American reports as about USD 32 or 34 million. The announcement was intended to show transparency. It had the opposite effect because the figure seemed implausibly low to Jewish organisations, which had heard for years from survivors about accounts that banks had refused to disclose.

The World Jewish Congress

The organisation that turned the question into an international campaign was the World Jewish Congress, led by its president Edgar Bronfman and its secretary-general Israel Singer. On 14 September 1995 Bronfman met representatives of the Swiss Bankers Association in Bern and was told that the dormant accounts amounted to only about USD 32 million.⁴ The World Jewish Congress regarded the offer of a lump sum on that basis as unacceptable and decided to take the question to Washington. Its own account records that Bronfman won over Senator Alfonse D’Amato of New York, the Republican chairman of the Senate Banking Committee, at a meeting on Capitol Hill in December 1995. The account also mentions estimates, circulated by the organisation at the time, that Swiss banks held about USD 7 billion of Jewish assets, a figure that no later investigation confirmed.

On 2 May 1996 the Swiss Bankers Association on one side and the World Jewish Restitution Organization together with the World Jewish Congress on the other signed a memorandum of understanding that created the Independent Committee of Eminent Persons under Paul Volcker.⁵ The memorandum is treated in section VI below. Its conclusion at such an early stage shows that the banks accepted the need for an independent investigation before the political pressure reached its peak. What they did not anticipate was the speed with which the question would escape the bounds of a negotiated audit.

Senator D’Amato and the Senate Banking Committee

Alfonse D’Amato was a skilled political operator who represented a state with a large Jewish community. He announced hearings of the Senate Banking Committee on Swiss bank assets of Nazi victims in February 1996. The first hearing took place on 23 April 1996, followed by further hearings on 16 October 1996 and 15 May 1997.⁶ The World Jewish Congress later described the first as the first congressional hearing in fifty years on the role of the Swiss banks in the war. D’Amato’s staff searched declassified American archives for documents on Swiss wartime conduct and released them in a steady stream, each release producing headlines on both sides of the Atlantic.⁷

The hearings were never intended to be a judicial procedure. Their purpose was to create political pressure and public attention. In that they succeeded. The Swiss banks and the Swiss government, accustomed to dealing with such questions through quiet diplomacy, found themselves confronted with accusations formulated in the language of American politics and broadcast live into Swiss living rooms. The hearing of 15 May 1997 on the report prepared under Under Secretary of Commerce Stuart Eizenstat was broadcast live in Switzerland.⁸ The Eizenstat report, published by the State Department on 7 May 1997, described Switzerland as the banker of Nazi Germany and criticised the Swiss handling of the Washington Agreement. Its tone provoked deep resentment in Switzerland, although much of its substance was later confirmed in more nuanced form by the Bergier Commission.

The threat of sanctions by states and cities

The most effective lever turned out to be the purchasing power of American public authorities. State and municipal treasurers and comptrollers managed large pension funds and short-term investments and bought banking services on a considerable scale. Although they had no power to impose sanctions in the sense of federal foreign policy, they could decide with whom they did business. The New York City Comptroller Alan Hevesi became the central figure in this strategy. In October 1997 he excluded the Union Bank of Switzerland from a New York City bond syndicate, while the California State Treasurer Matt Fong halted investments in the Swiss big banks in 1998.⁹ A committee of state and local finance officers coordinated the measures and gave the campaign a national structure.

On 2 July 1998 New York State Comptroller H. Carl McCall and Alan Hevesi announced a schedule of phased sanctions against the Union Bank of Switzerland, Credit Suisse and the Swiss Bank Corporation. From 1 September 1998, short-term investments with the banks would be barred, the banks would be excluded from selling New York state and city debt and letters of credit would no longer be obtained from them. Further restrictions were to follow on 15 November 1998. From 1 January 1999 the ban was to extend to all Swiss companies if the claims remained unsettled.¹⁰ At that moment, the report noted, the plaintiffs were asking for USD 1.5 billion while the banks had offered USD 600 million. For banks whose American business had become strategically essential, the threat of exclusion from the public finance market of the largest American city and state was serious. It was also contagious because other states were considering similar measures.

Notes

1. Congressional Research Service, The Holocaust – Recovery of Assets from World War II: A Chronology (May 1995 to Present), RL30262, https://www.everycrsreport.com/reports/RL30262.html. ↩
2. Swiss Bankers Association, “Dormant assets”, https://www.swissbanking.ch/en/financial-centre/information-for-clients/dormant-assets, which states that guidelines on the treatment of dormant assets have existed in Switzerland since 1995. ↩
3. “Die Schweiz und die nationalsozialistische Hinterlassenschaft” (as above), which records: “gemeldet wurden 775 Einlagen im Gesamtwert von 38,7 Mio. Franken”. ↩
4. World Jewish Congress, “In Search of Justice: The World Jewish Congress and the Swiss Banks”, 85th anniversary feature, https://www.worldjewishcongress.org/en/85th-anniversary/in-search-of-justice-the-world-jewish-congress-and-the-swiss-banks. The feature presents Israel Singer as the organisation’s key strategist and negotiator. ↩
5. Independent Committee of Eminent Persons (ICEP), Report on Dormant Accounts of Victims of Nazi Persecution in Swiss Banks, December 1999, para. 3, https://www.crt-ii.org/ICEP/ICEP_Report_english.pdf. ↩
6. “Die Schweiz und die nationalsozialistische Hinterlassenschaft” (as above), which lists the hearings of 23 April and 16 October 1996 and 15 May 1997. ↩
7. Wikipedia, “World Jewish Congress lawsuit against Swiss banks”, https://en.wikipedia.org/wiki/World_Jewish_Congress_lawsuit_against_Swiss_banks, used here for orientation on the use of declassified documents in the hearings. ↩
8. Congressional Research Service, RL30262 (as above), entries for 7 and 15 May 1997. ↩
9. Parliamentary Services, “Die Schweiz und der Zweite Weltkrieg – Chronologie”, https://www.parlament.ch/centers/documents/de/ch-wk2-chronologie-d.pdf, entries of 10 October 1997 (Hevesi excludes UBS from a municipal bond syndicate) and 14 October 1997 (California has suspended state business with Swiss banks since the summer). Wikipedia, “World Jewish Congress lawsuit against Swiss banks”, https://en.wikipedia.org/wiki/World_Jewish_Congress_lawsuit_against_Swiss_banks, on Fong, who “in 1998 stopped all investments and deposits from California’s state fund in the U.S. subsidiaries of Credit Suisse, Swiss Bank Corporation, and the Union Bank of Switzerland”. ↩
10. UPI, “NY announces Swiss bank sanctions”, 2 July 1998, https://www.upi.com/Archives/1998/07/02/NY-announces-Swiss-bank-sanctions/7342899352000/. McCall is quoted: “This is about justice too long delayed. The average age of Holocaust survivors is 81.” ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.