The Victim's Fortune: Inside the Epic Battle over the Debts of the Holocaust

Chapter One

For Want of a Chair

It was a little after one o'clock on Thursday, September 14, 1995, when Israel Singer stepped out of the Swiss presidential palace in Bern. A sprightly figure, with a black yarmulke perched at a rakish angle over his white hair, Singer relished what lay ahead of him. As he bustled along the cobbled streets, the fifty-three-year-old rabbi from Brooklyn was leading a group of six Jewish leaders toward lunch with some of the most powerful men in the financial world.

Singer and his friends hurried as they turned into Theaterplatz, a narrow arcade ending at the Zytglogge, a huge clock tower that has efficiently ticked out perfect Swiss time since 1530. It reminded them how late they were. Ignoring the Alpine peaks of the Eiger and the Jungfrau towering in the distance, their Swiss host guided them to the Théâtre de Musique, an ornate eighteenth century building decorated with carvings of lyres and mandolins, and steered them through an unmarked door to an unremarkable vestibule. The men climbed a broad flight of stairs leading to a pair of heavy wooden doors, which bore a discreet plaque bearing the inscription: Cercle Privée de la Grande Société.

Singer was no stranger to the exclusive circles of power and money. For more than a decade as secretary-general of the World Jewish Congress, he had courted some of the wealthiest businesspeople in America and cultivated the country's most influential politicians. Always immaculately presented in tailored suits and monogrammed shirts and sporting afresh splash of cologne, Singer was no ordinary rabbi.

Beside him was Edgar Bronfman Sr., an urbane Canadian who strode into La Grande Société with the confidence of the fabulously rich. Bronfman was ready to hand over to his son the reins of Seagram, the family's huge distillery and entertainment conglomerate, and was throwing his estimated $3.3 billion personal fortune behind Singer. As president of the World Jewish Congress, Bronfman had even used his private jet to fly the delegation from Brussels to Switzerland that morning.

Together Singer and Bronfman were proud of the international battles they had already fought and won for Jewish causes. They had helped to free Jewish dissidents in the Soviet Union and successfully exposed the hidden war record of the Austrian president, Kurt Waldheim. Now they were ready for the biggest battle of their lives -- confronting Switzerland's secretive banks about something buried in their vaults for fifty years. The Swiss banks, for centuries a refuge for the wealth of Europe, were clinging to money deposited by desperate Jews on the eve of the Holocaust. Rather than return the cash to bereaved families at the end of the war, Singer and Bronfman believed, the banks had brushed the victims aside with decades of pettifogging excuses.

Inside La Grande Société, the Swiss Bankers Association waited to meet their accusers. Singer's allegations were not new. Indeed, suggestions that the banks had profited from "dormant assets" had rumbled through the Swiss body politic for decades. In the first seven years after the war, the banks had conducted surveys three times to try to identify accounts that might be dormant. Since then, Switzerland had carefully cultivated a wholesome image based on its finest institutions: the International Committee of the Red Cross, the nation's highly democratic local government, and its neutrality in times of hot and cold war. Now the banks found themselves in the firing line as Switzerland began to admit that its record during the Nazi years was less than snow-white.

Only a few months earlier, on the fiftieth anniversary of the end of the war, Kaspar Villiger, the Swiss president, apologized to the many Jewish refugees refused entry to Switzerland during the war. But his noble act provoked a new wave of international scrutiny into the banks' conduct, both during and after the Nazi years. Globes, Tel Aviv's biggest business newspaper, claimed that as much as $7 billion in Holocaust survivors' money lay dormant in Swiss banks, while the Wall Street Journal printed a front-page article on the struggles of Holocaust survivors to retrieve their accounts. Even some of Switzerland's bank regulators were agitating to clear the record. Feeling stung, the Swiss banks launched an internal audit, and they had just released preliminary results. They found 893 dormant accounts worth only 40.9 million Swiss francs, or about $24 million.

Singer and Bronfman entered the red-carpeted, chandeliered splendor of La Grande Société, convinced that there was more money waiting to be found. As they headed straight for the feast waiting for them in a far room, Georg Krayer, president of the Swiss Bankers Association, gestured for them to stop. First, he said, they should go to the anteroom for aperitifs and his welcoming speech. A charming if somewhat professorial man, Krayer headed Bank Sarasin, the largest private bank in Basel, where he was familiar with extremely wealthy clients like Bronfman. He had labored over his brief speech of welcome, aiming to seem open to discussion while firmly denying the Israeli media's wilder estimates of the missing money. As the association had no offices in Bern, Krayer had chosen La Grande Société, an elite private club often used by Bern's diplomatic community. He reasoned that meeting in the club's ornate corridors would be almost like inviting the Jewish dignitaries into his private circle, and made sure to order a kosher meal.

It perturbed Krayer that his guests were late -- a cardinal sin in Switzerland. Moreover, despite an agreement to keep the meeting private, a group of journalists accompanied the Jewish delegation and were gathered in the cobbled street outside. The supposedly private meeting felt like an ambush in the making.

The two groups clutched their cocktails and lined up uncomfortably in the small anteroom, which Bronfman angrily noted had no chairs. Next to Krayer stood Hans Baer, the chairman of Bank Julius Baer and a rare...