Some Jewish officials warn Swiss are backtracking on paying Holocaust debts

The spokesman, Hugo Schnittenhelm, said in an interview that the $5 billion Swiss Foundation for Solidarity should be devoted to the victims of future, not past catastrophes.

Other Swiss officials have agreed that Holocaust survivors should seek aid from a separate Holocaust Memorial Fund established in February that is expected to begin making payments this summer.

But the total amount available from the memorial fund is in doubt, as more than one-third of the fund's anticipated value may be subject to a national referendum.

Questions about Switzerland's commitment to recompense Holocaust survivors are arising in the wake of a stinging U.S. government report that detailed and sharply criticized Switzerland's wartime dealings with Nazi Germany, and continuing pressures from Washington to redress that past.

Some observers here feel that Swiss officials were never serious about devoting any of the solidarity foundation's resources to Holocaust survivors.

"The idea of the foundation was a big bluff of the government from the beginning to protect Swiss banks" from U.S. threats earlier this year to impose sanctions on the banks if Switzerland did not provide adequate restitution to Holocaust victims, parliamentarian Jean Ziegler said in an interview Sunday.

Ziegler, a historian at the University of Geneva, said Swiss banks still possess "billions of dollars of Jewish money."

"The Jewish people do not need any presents," Ziegler added. The banks "should just pay this money back."

In March, Swiss President Arnold Koller proposed the creation of the foundation during a speech to Parliament. He said it should be used to help the "victims of poverty and catastrophes," including Holocaust victims.

To create the foundation, the Swiss National Bank would sell off some $5 billion of its gold reserves. Interest and other investment income from the proceeds of that sale would generate some $200 million annually to support humanitarian causes.

The Swiss Parliament is expected to vote next year on Koller's proposal, after which it would be subject to at least one national referendum because it implicates a change in the Swiss Constitution.

Anti-Semitic rhetoric has surfaced in the ongoing public debate over the proposed foundation.

Thomas Lyssy, vice president of the Federation of Jewish Communities in Switzerland, was critical of the Finance Ministry spokesman.

"We will not allow that Holocaust victims should be taken from the list [of the foundation's eligible recipients] only because parts of the establishment are afraid of the anti-Semitic arguments" in the referendum debate, Lyssy said.

In New York, Elan Steinberg, executive director of the World Jewish Congress, which spearheaded international efforts to get the Swiss to confront their wartime past, repeated what he stated when Koller first proposed the foundation.

"We are expecting some 5 to 10 percent of the foundation's moneys to go to Holocaust victims," he said.

If Switzerland lived up to that percentage, it could mean some $10 million to $20 million in annual support for Holocaust survivors and the heirs of victims.

Meanwhile, the exact size of the separate Holocaust Memorial Fund is uncertain.

Created with contributions from Switzerland's largest banks and industrial firms, the fund is valued at about $190 million.

But $71 million of that total, which was promised by the Swiss central bank, must be approved by Parliament, a step expected later this year.

While a majority of parliamentarians is expected to support the move, it could also face a national referendum if 50,000 people sign a petition requesting one.

Christoph Blocher, a right-wing politician, has threatened to force a referendum.

In Washington last week, the Swiss envoy who heads a government task force handling the Nazi gold issue went on the defensive, saying his country is growing weary of appearing as an "international outcast."

Testifying before the U.S. Senate Banking Committee in a hearing broadcast live in Switzerland last week, Thomas Borer seemed well aware of his audience.

Borer's remarks came in the wake of the U.S. government report on Switzerland's dealings with Nazi Germany. The report has been criticized in Switzerland as part of an ongoing campaign to discredit the country as an international banking center.

Borer's tone, which one Jewish observer characterized as not only defensive but "offensive," marked a departure from the conciliatory rhetoric Swiss officials used when the report was released May 7.

Sen. Alfonse D'Amato (R-N.Y.), chair of the Senate Banking Committee, called the hearing to examine the 200-page U.S. report compiled by Undersecretary of Commerce Stuart Eizenstat and State Department historian William Slany.

Borer detailed steps Switzerland has taken to try to resolve the controversy surrounding its financial transactions with Nazi Germany and its handling of Jewish assets.

"The Swiss, old and young alike," Borer said, "are perplexed and wonder why, in spite of these efforts, they continue to be treated as an international outcast.

"It would indeed be tragic for all concerned if the numerous individual and collective initiatives taken nationwide in my country should be discouraged and dampened by this harsh and negative campaign."

Testifying before the committee, Eizenstat said the Swiss have "come a long way." He added, "We would like to see them complete the journey."

Specifically, he called on the Swiss to augment the Holocaust Memorial Fund.

He called on other neutral nations who purchased looted Nazi gold to follow Switzerland's lead and make similar contributions to Holocaust survivors.

D'Amato, for his part, renewed his call to renegotiate the 1946 accord on the return of looted Nazi gold. Under that agreement, Switzerland returned only $58 million out of $400 million in looted gold known to have made its way to Switzerland, according to the Eizenstat report.

That money became part of a larger pool distributed to central banks and governments through the Tripartite Commission for the Restitution of Monetary Gold.

Established in September 1946 by the United States, Britain and France, the commission was charged with distributing so-called monetary gold looted by the Nazis from the central banks of European countries they had overrun.

Rather than renegotiate the accord, Eizenstat said the commission should now make available to Holocaust survivors the last $70 million in gold that has yet to be distributed. That gold is stored in the Bank of England and the Federal Reserve Bank in New York.

D'Amato, meanwhile, suggested freezing Swiss assets in the United States if Switzerland fails to return all looted Nazi gold and provide substantial aid to Holocaust survivors.

Eizenstat rejected such a "drastic measure" as premature.

"Our search for truth now progresses to the more urgent pursuit for justice," he said. "Cooperation, not confrontation, is the best path to achieve results."

Meanwhile, D'Amato continued to press for quick Congressional action to secure permanent resident status for Christoph Meili, the Swiss bank guard who was fired after he turned over to Jewish groups Holocaust-era documents awaiting the shredder.

A Senate Judiciary subcommittee is scheduled to take up a bill allowing Meili and his family, now visiting the United States, to immigrate. World Jewish Congress President Edgar Bronfman has offered Meili a job.

While the legislative road is long, Meili has many supporters in Congress. Meili cannot immigrate under normal procedures because he has no family in the United States, does not practice a specific trade necessary for an employment visa and is not fleeing persecution.