Presentation Before The Nazi War Criminal Records Interagency Working Group

September 27, 1999

My name is Irwin Nack and I am Investigative Counsel for the New York State Banking Department. Since the Fall of 1996, I have headed the New York State Banking Department’s investigation into the activities of Swiss banks in New York, prior to and during the Second World War. At the outset, I would like to say that it is both an honor and a pleasure to be here today to share my thoughts and views relative to the Nazi War Crimes Disclosure Act.

What I would like to do is very briefly describe for you the work we have been doing, particularly as it relates to our reliance on declassified documents held at the National Archives in College Park, Md. Then I would like to offer some suggestions on how the Interagency Group can better achieve its stated goal of ensuring that all remaining classified U.S. government documents pertaining to Nazi war crimes, war criminals, acts of persecution and looted assets, are declassified.

In addition to our heavy reliance on declassified documents held by the National Archives, our investigation placed a heavy emphasis on locating those relevant documents still existing within the banks’ archives. Our experiences over the past three years would no doubt prove useful to the Interagency Group and thus I would welcome any questions at the end of my remarks.

In the Fall of 1996, at the direction of Governor George Pataki, the Banking Department undertook an investigation into the wartime activities of those Swiss banks which were operating in New York, prior to and during the Second World War. The impetus for this investigation came from the recent declassification of documents in the National Archives which identified several thousand customers of the New York offices of Swiss Bank Corporation and Credit Suisse. Virtually all of these customers were non-US residents and thus the question arose, were there any Holocaust victims among those customers and if so, what happened to their assets.

During the period leading up to the Spring of 1940, Switzerland moved massive amounts of its wealth to New York out of fear of a German invasion. By June of 1941, when Swiss assets in the U.S. were frozen by President Roosevelt’s executive order, their value exceeded $1.5 billion, a sizable amount of which were held by Swiss Bank Corp. and Credit Suisse.

As part of our investigation, we wanted to know the source of those funds as well as the true ownership. This has proven to be somewhat difficult since the bulk of the assets were held in "pooled" and "numbered" accounts and the information regarding the beneficial ownership was usually only known by a few bank officers or only by bank personnel in Switzerland. Nevertheless, intensive searches of the banks’ many archives here in the New York area as well out West have proven fruitful and despite the passage of more than fifty years, sizable amounts of records do still exist.

During the wartime period, the Swiss banks were subjected to extensive scrutiny by a variety of Federal agencies such as the Treasury Department, the Federal Reserve Bank, the Justice Department and the FBI. We have made great use of the documents which have been declassified to date and indeed, some of those documents have been directly and indirectly responsible for the return of assets to Holocaust victims and their families. In reviewing the volumes of documents, however, one agency’s records are noticeably absent -- those of the FBI. I can not stress enough the importance of the various investigatory files of the New York Field Office of the FBI. We know from other agency records and internal bank records that the FBI had extensive investigative operations taking place here in New York which focused on the activities of the Swiss banks. The reason for this was the concern that the neutral Swiss banks might be used as a conduit for funding of espionage activities in the United States. As a result, the FBI devoted extensive resources to monitoring the banking industry in New York. I have seen countless references in the records of the Swiss banks to inquiries and contacts from FBI agents. Moreover, the FBI made use of a network of informants and at least one heavily redacted document released to the Senate Banking Committee strongly suggests that among their informants was a board member of one the Swiss banks.

These investigative files would prove invaluable in aiding our understanding of the business activities of the Swiss banks in New York while shedding light on the true identity of some of their clients. Moreover, it would assist us in understanding the practices which were engaged in by the banks’ branches in Switzerland.

Another agency whose records remain largely classified are those of the OSS station in Bern, Switzerland, headed during the war by Allen Dulles. Bern was (and is) home to the Swiss National Bank as well as the seat of the Swiss government. The OSS was very active throughout Switzerland and it was there that many covert operations, both during and after the war, took place. OSS had informants within the Swiss banks and had specific information about specific bank customers. Additionally, the OSS along with other US government officials had direct contact with many high level Nazis in Switzerland who, by the end of the war had escaped to Switzerland and were attempting to avoid the hangman’s noose by making their own deals with the Western Allies. One such man was SS General Karl Wolf, Heinrich Himmler’s Chief of Staff, who during the war wrote of his joy at the knowledge that "one train goes daily with five thousand passengers of the Chosen People to Treblinka."

Clearly the information contained in these still classified files will prove to be embarrassing to our government. In the name of containing Soviet aggression, many hard-core, high ranking Nazis were welcomed into the camp of the Western Allies. Men like General Adolf Heusinger, who served as Deputy Chief of Operations and Planning for the entire German armed forces. A man so close to Hitler that he was literally standing next to him on July 20, 1944 when the room they were in blew up in what ultimately proved to be a failed assassination attempt. Nevertheless, Heusinger was welcomed by the western allies after the surrender and rose to new heights in the postwar period when, on April 1, 1961, his appointment as Chairman of the Permanent Military Committee of NATO with an office in the Pentagon was announced by none other than President John F. Kennedy.

Embarrassing as they may be, the documents covered by the Nazi War Crimes Disclosure Act will prove extremely valuable in helping us to understand the activities of the Swiss banks and the extent of their collaboration with the Nazis, all of which would aid in the identification of looted property. We should also remember that, if we are going to call upon other nations to open their archives, we cannot then say that such complete transparency is not possible by our own government.

The Nazi War Crimes Disclosure Act seeks to declassify those remaining documents which still remain shielded from the public eye. What about those documents which have already been declassified, but only in redacted form? Several weeks ago I visited the electronic library set up by the Department of Justice on their web site. Among the documents available are those relating to

our government's postwar relationship with the notorious SS officer, Klaus Barbie. In viewing the documents, I was struck by the extent of information which was redacted and which still remains redacted. Some of those documents go back to the 1940s and yet despite their relevance, they still remain partially classified. Similar redacted documents bear notations that confidentiality is necessary for national security. It is my sincere hope that among the recommendations made by the Interagency Working Group will be one which calls for a review of those earlier redactions so that a determination can be made whether such classified status is still warranted (or ever warranted in the first place).

This brings me to some final suggestions regarding the manner by which the remaining records are declassified. The review of the documents in question must be done by individuals who are knowledgeable of the underlying subject matter and are able to appreciate it's importance in its historical context. In some cases, I have seen documents which have been extensively redacted and though other channels have obtained unredacted copies, only to be amazed at the extent of innocuous information which was still deemed classified.

During the course of our searches through the many archives of the Swiss banks here in the US, we interviewed dozens of retired employees who were familiar with the record-keeping practices of the period. This would no doubt prove very useful to the work of the Interagency Working Group, keeping in mind that it is not necessary that the retirees be from the wartime period. We interviewed many former employees who worked at the banks in the 1950s and 1960s, some of whom were quite familiar with the record keeping practices of the 1930s and 1940s. These employees also gave us substantial insight into the location of other records.

Experience has shown that many U.S. government agencies kept their own filing systems. These too must be declassified if any real use is to be made of the records themselves. Efforts must be made to ensure that the use of these important documents is not hindered by the lack of good finding aids. As an example of what the staff at the NARA can do, one need only look at the finding aid prepared by the NARA staff working under Greg Bradsher. That finding aid has save us countless hours of research and enabled us to go directly to specific boxes rather than searching for the proverbial needle in a haystack. The guide is also informative from an historical point of view and should serve as a model for all future declassification programs.

In conclusion, I would only like to add that notwithstanding the fact that fifty years has already passed, time is of the essence. For those of us who are seeking the return of assets looted from Holocaust victims, these documents do not merely represent a treasure trove of hidden history, they represent a road map to restitution. Thus, it is imperative that those records covered by the Nazi War Crimes Disclosure Act be identified and declassified as soon as possible so that they may be put to good use.