BERN, Switzerland -- Early last month, a senior Swiss diplomat sent a confidential cable addressed to only his closest aides. Instead, it was circulated to the country's top politicians and set alarm bells ringing.
According to people who have seen it, the cable led the politicians to believe that American Jewish groups were threatening to orchestrate an array of sanctions if Switzerland did not issue a "declaration of intent" to set up a $250 million fund to compensate the families of Holocaust victims and survivors.
Jewish groups, the Swiss politicians concluded from the cable, were poised to organize a boycott of Swiss banks, set up picket lines outside Swiss institutions in the United States, arrange unflattering press coverage and file class-action suits if Switzerland did not capitulate by February. It said the Swiss could respond in two ways: be conciliatory or put up hard-nosed resistance.
The Jewish groups named in the cable adamantly deny making any such threats and say that the proposal for a fund of several hundred million dollars came from the Swiss. But the cable was quickly seized upon by many Swiss politicians and officials, who saw it as evidence of a vast anti-Swiss conspiracy involving Jewish groups, public manipulation and U.S. financial institutions that stood to benefit.
The president of Switzerland, who received the cable, gave an interview just a few weeks after it arrived in which he accused Jewish groups of engaging in blackmail.
Last week, after taking a beating in world public opinion for months, the Swiss government agreed in principle to establish the fund.
But the repercussions from this dispute will not be easily erased. This country, which is only now coming to grips with its World War II history, has seen a surge of anti-Semitic sentiment in recent weeks that one Jewish leader characterized as an "avalanche."
At the center of the dispute between it and the Jewish groups are accusations about this country's conduct during World War II. There have been charges that Switzerland effectively acted as Hitler's banker, laundering gold looted from countries conquered the Nazis. Questions have been raised about money deposited by Jews later killed in the Holocaust, with suggestions from critics that Swiss banks pocketed these accounts after the war.
Finally, there have been documented reports by historians that the Swiss police turned back up to 30,000 Jewish refugees at the country's border, leaving them to face the threat of deportation to the death camps.
A luncheon in New York
The confrontation between the Jewish groups and Switzerland has been building for years. But it turned significantly more rancorous after a luncheon meeting last month in the private dining room of Edgar Bronfman on the fifth floor of the Seagram Building at 375 Park Ave. in Manhattan.
The main participants -- Bronfman, president of the World Jewish Congress as well as of Seagram; Israel Singer, the organization's secretary-general; and Thomas Borer, Switzerland's point man in the conflict with American Jews -- agreed to keep details of the conversation secret.
After the meeting Dec. 9, Borer cabled to Bern a three-page report. In it, the Swiss diplomat gave a clear impression that the luncheon had become an arena for threats from the World Jewish Congress. The report said that if Switzerland made a "declaration of intent" to create a fund, American Jewish groups would turn down the heat.
Elan Steinberg, a spokesman for the World Jewish Congress in New York, said in a telephone interview that the accusations of threats were untrue. Indeed, he said, the proposal for a specific figure for a Holocaust fund -- put by other American Jewish officials at between $230 million and $300 million -- had come from the Swiss themselves.
Moreover, he said, in the view of Bronfman and Singer, the meeting ended as it began, on a friendly note. Even Borer's cable characterized the beginning of the encounter as amicable. But that is not how it played in Switzerland.
Swiss officials circulated Borer's report -- and further diplomatic assessments drawing similar conclusions -- among the seven members of Switzerland's Cabinet. Initially, government ministers kept their knowledge of the document a secret.
Late last month, though, Jean-Pascal Delamuraz, the outgoing president, gave what is usually a routine end-of-term interview by officials as they hand over Switzerland's rotating presidency to their successors. The text of his remarks was vetted in advance by his press spokesman, officials said. When the French-language Tribune de Geneve newspaper published the interview Dec. 31, a storm erupted.
Accusing the World Jewish Congress of "extortion and blackmail" -- words not used in Borer's report -- Delamuraz cited the report as evidence of "a formidable political will to destabilize and compromise Switzerland" and a desire in Washington and London to "demolish the Swiss financial center."
He warned, moreover, that his compatriots might display "negative reactions, anti-Semitic reactions." Referring to the onslaught of criticism, he said that "sometimes, listening to some people, I wonder whether or not Auschwitz is in Switzerland." And he went on to say that a Holocaust fund would only make it more difficult to resolve the crisis.
His remarks caused an outcry among American Jewish leaders, who began to talk openly of a boycott of Swiss banks.
Delamuraz's misjudgment of the likely reaction, according to officials and commentators in Switzerland, was partly a reflection of a deep sentiment among some Swiss that they have been treated unjustly throughout the crisis. According to Swiss Jewish leaders, the remarks also provided political cover for Swiss anti-Semites to bombard newspapers and Jewish organizations with hostile mail.
"I used to get three or four letters -- anonymous letters -- a week from anti-Semites," said Sigi Feigel, a lawyer in Zurich who is honorary president of Zurich's Jewish community. "In the last two weeks, I had 350 letters. About 200 of them were supportive, but 50 of them gave the sender's name and address along with remarks about 'typical Jews, greedy Jews.' "
Newspapers also received what Jurg Schoch, a journalist at Tages Anzeiger, a Zurich daily, called "ugly letters that revived all the old stereotypes."
Indeed, said Martin Rosenfeld, a lawyer in Bern who is secretary-general of the organization representing Switzerland's 18,000 Jews, "We knew there was latent anti-Semitism in Switzerland, but in the last few years we felt accepted and understood as a minority." Since the remarks by Delamuraz, however, "a new avalanche is falling on us," he said.
The furor that followed the remarks seems now to have been part of the catalyst that persuaded Swiss leaders to make a critical policy shift and acknowledge that a bold move was needed to defuse the crisis.
Swiss diplomats, led by the country's consul general in New York, opened secret negotiations with Singer, the World Jewish Congress secretary-general, to agree on the text of both an apology by Delamuraz and a response to it by the World Jewish Congress.
The apology -- effectively blaming Borer's report for providing "imprecise" information -- was published Jan. 14 and within hours, as previously agreed, Bronfman responded, saying he looked forward to restarting a "constructive dialogue" with Switzerland.
A shredding session
But just as this exchange was being negotiated, another apparently unconnected event overwhelmed Swiss authorities.
A security guard, Christoph Meili, came upon a huge shredding operation of files and books under way in the Union Bank of Switzerland -- one of the big three commercial banks whose archives could play a vital role in inquiries to clarify Switzerland's dealings with Nazi Germany and its handling of dormant accounts.
The bank said that the shredding operation had been ordered by an archivist and that it did not involve material related to the Holocaust and had been a huge mistake.
But the incident contributed to a sense among some Swiss diplomats and bankers that the crisis was spinning out of control and that, as Rainer Gut, head of Credit Suisse, put it in a published interview, Switzerland's international credibility faced its sharpest challenge since World War II.
Swiss bank stocks had already dipped, and there was a fear that the economy would suffer permanent damage if Switzerland came to be regarded as untrustworthy and even sneaky.
Gut timed his remarks so that they would appear last Wednesday to coincide with the regular weekly meeting of the Swiss government.
Borer met in Zurich the next day with representatives of the country's banks and insurance companies and announced later that a "major step" had been taken: Even though it did not commit itself to a financial contribution, he said, the government would now take the lead in establishing a Holocaust fund to be supported by the banks and insurance groups.
Pub Date: 1/26/97