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The letter said, in part, "by singling out in your remarks the east coast of the United States and New York as the source of the restitution efforts, your perceived intent borders on anti-Semitism…Moreover, many would interpret your remarks of `…in particular from New York,' as an indirect attack on Jews. Others have used those code words before."

Fong, in a statement this week, said, "The statements made by Cotti obviously underestimate the depth of concern over the Swiss banks' actions, both in the United States and abroad.

"The entire world is concerned with the Swiss role in holding Holocaust victims' assets, especially in light of recent allegations about their treatment of Jews during World War II. President Cotti's statements exhibit an unfortunate lack of sensitivity for such a profound matter."

The committee was created in December after a conference of state officials met in New York to discuss the return of assets held in dormant accounts. Fong, who temporarily stopped all California investments with Swiss banks last year because of their role in holding assets, was appointed to the committee along with four other state finance officers.

At the conference, Fong had said he was "generally pleased" with Swiss progress, and he suspended California's moratorium on investment in Swiss banks until March 31 — with the proviso that the moratorium could again be imposed depending on Swiss actions.

"It is disappointing to see their progress toward providing restitution undermined by callous remarks with disturbing overtones," Fong said in this week's statement. "My fellow committee members and I will continue to monitor the banks' progress closely to determine if further action is warranted by California and other states."