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Croatia: Report Reveals More Evidence About Nazi Gold Sources

Washington, 3 June 1998 (RFE/RL) -- A new U.S. study on what happened to gold looted by the Germans in the Second World War, presents new findings on the use it was put to, but raises more troubling questions about the role of the Vatican, the behavior of so-called neutral countries and the unknown fate of Croatian Ustasha treasure.

The 200-page report, released Tuesday, includes a special section on what a senior U.S. official called "the strange story of Ustasha gold."

Those were the words of U.S. Under Secretary of State for Economic Affairs Stuart Eizenstat, chief coordinator of the report, introducing it at a press conference Tuesday.

He said the Ustasha regime, installed by Nazi Germany to rule the wartime state of Croatia, "systematically and mercilessly robbed, murdered, or deported its Serbian, Sinti-Romany gypsy and Jewish populations."

After sifting through millions of U.S. documents and records captured from the Nazis, U.S. historians and analysts came across new findings suggesting that gold and other valuables taken from the victims were made part of the Ustasha treasury worth as much as $80 million (close to $800 million in today's value).

Some of the loot was transferred to Switzerland and some of the stolen assets helped fund a sanctuary for escaped Ustasha leaders in Rome after the war. But most of the funds remain unaccounted for, the report said.

Eizenstat said the pontifical College of San Girolamo held fugitive Croatian war criminals, including the Ustashi leader Ante Pavelic, and operated "at least with the tacit acquiescence of some Vatican officials."

He said there is no evidence that then pope Pius XII knew what was going on. But Eizenstat urged the Vatican to take another look into its archives to disclose its dealings with Nazi Germany and the Ustasha regime.

The U.S. findings on "this terrible legacy of the Ustashi", he said are incomplete and a full accounting should be made. He said "the opening of relevant archives in Croatia, Serbia and the Vatican and cooperative international research will be essential in this effort."

Eizenstat welcomed a recent commitment by the Croatian government to study the issue and urged all countries with a stake in these matters "to intensify efforts to examine their own records and confront their own history."

He said the U.S. salutes some 16 countries, including the three Baltic states, Turkey, and Croatia, that have established historical commissions to address the most troubling questions, lingering more than half a century after the end of World War Two about the looting and ultimate disposition of Holocaust-era assets.

Eizenstat said it is still not entirely clear why there was so little cooperation after the war with the Allied powers in returning looted Nazi assets, or why countries that remained neutral continued to trade with Germany long after 1943, when the tide of battle turned and it became clear that Germany was losing the war and was no longer a threat to them.

The main findings of the report are that there was much more looted gold flowing from Germany to and through Switzerland than previously believed, and that it was used primarily to import materials for Germany's war machine.

According to the report, without the espionage and smuggling of a sympathetic Argentina, the iron ore and ball bearings from Sweden, or the wolfram from Portugal and Spain, and the chromate ore from Turkey, and the gold converted into Swiss francs that paid for them -- Germany's production of planes, tanks, ammunition and artillery and even submarines, would have come to a grinding halt long before the actual end of the war in 1945.

The report estimates that $240 million worth of gold (about $2.2 billion in today's value) was sent to the neutral countries in payment for these critical war materials.

That was part of a bigger pile of $316 million (as much as $2.8 billion in current prices) -- the estimated total looted gold received by Switzerland during the war years.

Only a fraction of the money has ever been recovered from Switzerland and other neutral countries, in spite of what Eisenstat called "protracted and contentious negotiations by the U.S., Britain and France with the wartime neutrals," that stretched out in some areas until 1958.

He said the postwar negotiations failed to meet the goal of restitution, partly because of the intransigence of the neutral countries and partly because the United States did not press hard enough for fear of offending countries that could be allies against the Soviet, Union.

Eisenstat said "the great preoccupation of policymakers after the war was the threat of communist subversion and aggression...and the effort to incorporate these neutrals into the Western family during the Cold War."

He also stressed that little was black and white during this dreadful period in human history and that some of the neutral countries, including Switzerland, gave safe haven to thousands of fleeing Jews at the same time they were supplying Germany with the means to kill them.

He said this duality existed even within the same families, citing the Swedish Wallenberg family where one member profited from sending vital war supplies to Germany, while another - Swedish diplomat Raoul Wallenberg - saved tens of thousands of Hungarian Jews by supplying them with visas and fake passports.

Eizenstat said the report "is not intended as an accusation or indictment" but as "part of a cleansing process" an incentive to intensify efforts to come to "a moral accounting of this lingering ledger of grief."

He praised Germany for having come to terms with its past and for continuing to try to atone.

Eizenstat noted that Germany has paid $60 billion in restitution to Holocaust survivors and recently set up a fund of $110 billion to compensate Central European and other survivors who could not register claims while living under communism behind the Iron Curtain. The fund should be operational by the end of this year, Eizenstat said.

He said about a dozen countries have pledged to contribute to a new Nazi Persecutee Fund set up earlier this year. The U.S. is going to donate $25 million to the fund, Eizenstat said, adding "this is the way to convert a painful past into a more hopeful future."