With the end of the Cold War in 1989, former Communist countries in Eastern Europe opened their borders and their state archives. Jews who had survived the Holocaust began petitioning the governments in Warsaw, Budapest, Prague and elsewhere – often with the help of international Jewish organizations such as the New York-based World Jewish Congress (WJC) – for return of property that had been seized by the Nazis. In summer 1995, the fiftieth anniversary of the end of World War II prompted apologies from many Western governments for their activities during wartime. Swiss President Kaspar Villiger officially apologized for the introduction of the “J” stamp in the passports of German Jews and for Switzerland’s closing its borders to Jewish refugees at the height of the Final Solution. Meanwhile, WJC researchers had been recording case after case of Holocaust survivors being refused access to their dead relatives’ accounts in Swiss banks, often on spurious grounds such as not providing a death certificate. They began to smell a rat, and turned to the US National Archives, which held official wartime government records tracking the flow of money through Switzerland. They uncovered records showing that the Swiss banks were not just sitting on the assets of dead Jews, but that they had also accepted vast quantities of obviously looted gold as part of a hitherto only guessed-at secret, semi-official network of economic collusion with the Third Reich.

The story rapidly hit the headlines, and pressure built for official investigations to begin. In early 1996, the Swiss Bankers’ Association disingenuously announced it had uncovered a mere Fr.39m in heirless accounts. Pressure built throughout the year, with the WJC and other organizations – Jewish and not – demanding full access to banks’ archives to get to the bottom of the story. In January 1997, a security guard working at UBS, Christoph Meili, made public the fact that the bank was secretly shredding large quantities of prewar documents. Meili was fired for violating the bank’s secrecy and prosecuted shortly afterwards, but became something of a folk hero, not least to liberal-minded Swiss who were getting increasingly uncomfortable with the banks’ attitude. It was becoming clear to the Swiss establishment that the game was up: in March, the President, Arnold Koller, attempted to head off the oncoming onslaught by proposing the financing of a Fr.7 billion fund from the gold reserves of the Swiss National Bank to support Swiss and foreign victims of oppression and natural disaster – the so-called Swiss Solidarity Foundation. Then a local newspaper revealed that Credit Suisse – another major Swiss bank – had opened an account for the Nazi SS during the war and that the Bank for International Settlements in Basel had acted as a safe conduit for much of the Reich’s looted gold, and the WJC publicized documents from the US National Archive stating that Japan, wartime ally of the Nazis, had also used Swiss banks. Meanwhile, the banks themselves were scrabbling to prove their good faith: by July, Fr.17m that had lain in dormant accounts since the war had been returned to the descendants of account holders, but 24 hours after the publication of a new list of 2000 accounts supposedly opened by non-Swiss citizens before 1945 – which the banks claimed to have been unable to trace – it transpired that many of the names appeared in current phonebooks in Switzerland and elsewhere, and would have been traceable with minimal effort.

The affair was souring international relations. Switzerland made official complaints to the BBC over a documentary entitled “Nazi Gold”, which it claimed was inaccurate and inflammatory. Canada was forced to admit that it had laundered at least six tons of Nazi gold via Switzerland and Portugal. Bill Clinton and the US Congress granted the bank security guard Christoph Meili asylum, and UBS dropped the case against him in the Swiss courts and apologized. Amidst the tide of accusation and counter-accusation, the Red Cross issued an unprecedented statement admitting a “moral failure” in not having spoken out during the war against the ongoing genocide of the Jews.

In October 1997, the Swiss Bankers’ Association released a new list of 14,000 dormant accounts opened before 1945. Shortly after, a committee of historians chaired by Jean-François Bergier reported that, in addition to the $389m of gold purchased from Nazi Germany by the Swiss National Bank (approximately $4 billion in modern-day terms), some $61m of Nazi gold had been bought by the Swiss commercial banks (among which were UBS and Credit Suisse), three times more than previously thought. In mid-1998, the Bergier commission confirmed that the Swiss National Bank had known that much of the gold they were buying had been looted from occupied countries, and also that officials had been aware that the Nazis were robbing Jews and other persecuted groups before exterminating them.

With an array of lawsuits brought by tens of thousands of Holocaust survivors making their way slowly through the US courts, and escalating threats of a Swiss–US trade war, the international pressure on the Swiss banks to acknowledge culpability for their wartime activities and their subsequent attempts to block investigation was inexorable. In June 1998, after two months of negotiations with lawyers acting for Holocaust survivors, the three largest banks, Credit Suisse, UBS and SBC, offered $600m as a universal sum to settle all claims connected with Holocaust-era assets, and declared it to be their final, top offer. Two months later, desperate to see an end to the story, they agreed to settle for twice as much – $1.25 billion, the so-called global settlement sum, to be paid in four instalments into a bank account in the US each November (1998–2001), awaiting final negotiations on distribution of the money. According to a poll, less than half the Swiss population declared itself content with the outcome, most of them believing $1.25 billion to be too high a settlement figure. Meanwhile, the damaging revelations continued to emerge, most notably in February 1999, when the Red Cross was forced to acknowledge deep regret over the fact that in 1949 it issued Josef Mengele, the infamous doctor at the Auschwitz death camp, with a permit to travel through Switzerland.

In December 1999, after three years’ research, two official commissions set up to look into the whole affair issued their final reports. The Volcker Commission, which examined Swiss bank accounts from the Nazi era, found almost 54,000 accounts that had been opened between 1933 and 1945, and, in addition to the thousands of names already declared, advised the banks to publish a further 25,000 names of account holders suspected to have been victims of the Nazis. It estimated that, at current prices, these accounts totalled between $200m and $440m. The report of the Bergier Commission, set up to investigate Switzerland’s wartime treatment of refugees, merely confirmed what many already knew, that Switzerland had deliberately blocked the entry of refugees, condemning Jews and others to certain death at the hands of the Nazis. It identified a strain of “cultural, social and political” anti-Semitism that ran through the country at the time. The report prompted Swiss President Ruth Dreifuss – the only Jewish woman to have served in the post – to reiterate the government’s official apology of 1995 and to acknowledge the major flaws in Swiss asylum policy before and during the war. Final plans to allocate the global settlement sum were delayed until mid-2000 in order to give time to absorb the reports of both commissions.

The whole sorry saga of the 1990s struck deep at the heart of Swiss self-confidence. Statements like those issued by the Bergier Commission that “Switzerland declined to help people in mortal danger” ran counter to all the notions of ethical behaviour that postwar Swiss generations learned from their parents, from each other and from their history books. For some, it has been almost too much to bear: the anger and frustration that has been stirred up in the proudly nationalistic working people of the inner heart of the country in particular, has coincided with the rise of the rightwing demagogue Christoph Blocher, who has channelled it into a coherent, extremist political strategy directed against foreigners of all kinds, embodied in the EU, the UN and the many asylum seekers and guest workers resident in Switzerland. In the mood of the late 1990s, Blocher is able to accuse organizations such as the WJC of blackmail with impunity. The proposal to establish the Swiss Solidarity Foundation (see opposite), backed by liberal-minded Swiss, has also been stymied by Blocher, who wants to put the millions into a scheme to bolster state pensions instead. A referendum on the issue, set for March 2000, could go either way. What is clear at the turn of the millennium is that the idea of Sonderfall Schweiz, Switzerland as a “Special Case”, is dead.