Associated Press

June 3, 1998

U.S. Claims Vatican Had Nazi Role

Filed at 7:57 a.m. EDT

WASHINGTON (AP) -- New evidence of Roman Catholic Church protection of brutal Nazi puppet leaders from Croatia is bringing a U.S. government appeal for the opening of Vatican archives to Holocaust researchers.

A report by the State Department cites intelligence documents showing that leaders of the Ustasha, accused of exterminating more than 700,000 people in Croatian concentration camps, used Vatican ties to escape from Europe after World War II with a possible fortune in plundered gold.

Researchers acknowledged, however, that they could not tie down reports that up to $80 million in gold -- much of it from murdered Serbs, Gypsies and Jews -- was kept by the Ustasha in Austria, Switzerland and the Vatican.

Vatican authorities told U.S. investigators they could find no records that shed light on the Ustasha and Nazi gold question, the report said. Papal spokesman Joaquin Navarro-Valls dismissed the report. ``I don't have anything to add to what was said in the past,'' he said, referring to past denials by the Vatican.

While no evidence has been found that Pope Pius XII or his advisers were directly implicated in covert activities of the Ustasha in Italy, ``it seems unlikely that they were entirely unaware of what was going on,'' the report concluded.

The account of a possible Vatican link in the protection of Ustasha leaders and their fortune is part of the second U.S. report on Nazi gold, which focuses on how neutral nations like Sweden, Portugal, Spain and Turkey provided Germany with materials for weapons and goods during World War II.

``A full accounting should be made now to achieve a complete understanding of these issues,'' Undersecretary of State Stuart Eizenstat said, referring to what the report said is an ``imperfect understanding of the fate of the wartime Ustasha treasury.'' He called for the opening of Vatican, Croatian and Serbian archives.

Eizenstat said Vatican officials told him such a search would be difficult.

But the report concluded: ``A full accounting of the events of the Ustasha period in Croatia and the postwar flight of its leaders, funded to some extent by the remains of the Ustasha treasury, has to be found in the archives of other nations and possibly the Vatican.''

Last year, the Vatican dismissed a report, based on U.S. intelligence documents, that said 200 million Swiss francs (about $47 million) ``was originally held in the Vatican'' before being moved to Spain and Argentina.

That allegation also was cited in the new report, but it said some of the intelligence estimates of the extent of Ustasha gold kept in postwar Europe are ``uncorroborated and speculative.''

The report noted that ruler Ante Pavelic, in an alleged 1947 interview cited by U.S. intelligence, claimed the exiled Ustasha had no more than $25,000 in all of Italy.

The report cited documents alluding to $5 million to $6 million in Ustasha gold entering British-occupied Austria, where Pavelic and 1,500 Ustashas were reported held for a time.

But Lord Janner, chairman of Britain's Holocaust Educational Trust, said, ``The British never acknowledged recovery of monetary or nonmonetary gold originating with the puppet Croatian Ustasha regime.''

After the war, U.S. and European concerns over communism at times overshadowed the pursuit of World War II criminals and their plundered wealth. Pope Pius XII was also staunchly anti-Communist.

``From the Vatican's point of view, the No. 1 enemy of civilization as seen by the Catholic church was communism,'' said Rabbi Abraham Cooper of the Simon Wiesenthal Center in Los Angeles.

The center asked Pope John Paul II late last year to open church archives to search for Ustasha regime and Nazi gold records. ``We're not holding our breath,'' Cooper said.

The State Department report said records from the immediate postwar period indicate that Allied leaders did not clearly understand the extent of Ustasha brutality, including ``mass shootings, clubbings and decapitation'' in Ustasha camps.

The Vatican had a representative in Zagreb throughout the war and was aware of the killing campaign, which began in 1941, the report said.

``Croatian Catholic authorities condemned the atrocities committed by the Ustasha, but remained otherwise supportive of the regime,'' it said.

The new report identifies a pontifical college in Rome, the College of San Girolamo degli Illirici, as a refuge for Pavelic and other Ustasha leaders. It describes the college as ``a center of Ustasha covert activity and a Croatian 'underground' that helped Ustasha refugees and war criminals to escape Europe after the war.''

The college was run by a brotherhood of Croatian priests who issued identity cards with false names to the fugitive Ustasha, ``allowing them to evade arrest or detention by the Allies,'' the report said.


Associated Press

June 2, 1998

U.S. Claims Vatican Had Nazi Role

WASHINGTON (AP) -- The Vatican may have helped leaders of the Nazi-backed fascist regime in Croatia escape after World War II with plundered gold and other valuables from Holocaust victims, a U.S. report concluded Tuesday.

``It seems unlikely that they were entirely unaware of what was going on,'' the report said of Pope Pius XII and his advisers, who helped run a Rome pontifical college where war criminals took sanctuary.

The Vatican connection was raised in the second U.S. report on Nazi gold, a document focusing on how neutral nations provided Germany with materials for weapons and goods during World War II.

Stuart Eizenstat, undersecretary of state for economics, urged the Vatican to search its records on Croatia's Ustasha regime, which may have escaped with up to $80 million.

``Answers may only exist in Vatican and Croatian and Serbian archives,'' Eizenstat said. ``A full accounting should be made.''

Eizenstat said Vatican officials told him such a search would be difficult. Previously, Vatican officials said they could not find any Nazi gold-related records.

A Vatican spokesman did not immediately return a phone call.

The United States has long known about the Rome pipeline for hiding fascist Croatian leaders because U.S. Army intelligence also used it to shuttle former Nazis secretly to South America, said the report, which relied on recently declassified U.S. documents.

With postwar concerns focusing on the Soviet Union, U.S. officials helped anti-Communist leaders and politicians, most notably Klaus Barbie, to safety despite their wartime records.

Pope Pius XII was anti-Communist as well.

``From the Vatican's point of view, the No. 1 enemy of civilization as seen by the Catholic church was communism,'' said Rabbi Abraham Cooper of the Simon Wiesenthal Center in Los Angeles.

His organization asked Pope John Paul II late last year to open its archives to search for Ustasha regime and Nazi gold records. ``We're not holding our breath,'' Cooper said, noting the Vatican only recently released documents on the Inquisition 500 years ago.

The report, produced mainly by the State Department with contributions from other government agencies, said the pontifical College of San Girolamo was a refuge for Croatian puppet ruler Ante Pavelic and other Ustasha leaders after they killed as many as 700,000 people in Nazi-style death camps.

Citing U.S. and British intelligence documents, the report said the college issued identity cards with false names to the fugitive Ustasha members. The prime mover behind the pipeline was the secretary of the college, Father Krunoslav Stefano Dragonovic, it said. A Ustasha colonel, he was sent to Rome as a Red Cross representative.

The report said Ustasha gold entered the British zone postwar Europe and speculated that it may have been given to the British authorities.

Lord Janner, chairman of Britain's Holocaust Educational Trust, said, ``The British never acknowledged recovery of monetary or non-monetary gold originating with the puppet Croatian Ustasha regime.''

As for the role of neutral countries, the report said Sweden supplied Germany with iron ore and ball bearings; Portugal and Spain provided tungsten used to produce weapon-grade steel; and Turkey provided chromite, used to harden steel to make armor. Argentina also did business in wartime goods, but was most helpful as a Nazi sympathizer and espionage center, the report said.

In all, those five neutral countries handled $500 million in German assets during the war and dealt in $300 million in looted gold, the report said. That would be $7 billion in today's dollars.

Switzerland held $250 million to $750 million in German assets, which contributed to wartime trade, the report said. In the initial U.S. report, the Swiss National Bank was identified as Germany's main banker, handling $400 million in gold, about $300 million of it looted from European banks.

``Whatever the motivation, whatever the pressure, it sustained the war effort,'' Eizenstat said of the neutrals' commerce with Nazi Germany.

Eizenstat said neutral nations sustained the fighting ``well past the point where, from the Allied perspective at the time, there was a genuine threat of German attack.''

Most nations examined in the 200-page report said they have set up commissions to study their wartime actions, and that their trading with the Nazis was never secret.

``The Americans can say what they want,'' said Portuguese Prime Minister Antonio Guterres. ``We are just interested in the truth.''

President Clinton has authorized a commission to examine U.S. actions of the time, including the handling of Holocaust victims' bank accounts.

Eizenstat noted the U.S. record has some stains, too, including accepting only 21,000 Jewish refugees and staying out of the fighting for two years until the Dec. 7, 1941 Japanese attack on Pearl Harbor.



June 2, 1998

U.S. report cites neutral countries in aid to Nazis

By Carol Giacomo WASHINGTON (Reuters) - Four countries deemed neutral in the Second World War -- Portugal, Spain, Sweden and Turkey -- were as crucial to the Nazi war effort as Switzerland, according to officials who Tuesday released a final U.S. report on looted gold from the Holocaust.

Switzerland, which has been the main target of criticism for its key role in turning gold looted from Holocaust victims and Nazi-conquered countries into Swiss francs, was the ``financial facilitator'' for the Nazis, Undersecretary of State Stuart Eizenstat told reporters.

But Portugal, Spain, Sweden and Turkey ``played an equally critical role in sustaining the war effort'' by providing Nazi Germany with minerals essential for making weapons, he said.

``You couldn't have had one without the other,'' said Eizenstat, citing a ``seamless web of interrelationships.''

``Clearly if the gold hadn't been transferred to Swiss francs, then they (Nazis) wouldn't have had a medium of exchange. On the other hand, if the other (neutral countries) hadn't supplied the raw materials, then the gold would not have been terribly useful,'' he said.

Eizenstat, head of U.S. efforts to determine the fate of Nazi gold, oversees economic affairs at the State Department.

Aided by department historians and other agencies, he produced a first American report in May 1997 that described in detail how Switzerland assisted Hitler and stymied efforts to recover the Nazis' stolen gold after Germany's surrender.

Since then, he has also taken the lead in trying to defuse Swiss anger over the report. The second -- and final -- report released Tuesday appears to strike a more balanced chord, making a point of Switzerland's difficult wartime position as a landlocked country encircled by German forces.

It also praises Switzerland for taking the lead among wartime neutral countries in its commitment to provide concrete ''justice'' for Holocaust victims even though Jewish groups and others are fighting legal battles with the Swiss government and three major Swiss banks over the hoarding of Nazi-era wealth.

``This is not intended to be an indictment of any country,'' Eizenstat insisted at a news briefing.

The new report showed that about $300 million in looted Nazi gold, worth $2.6 billion today, was used to pay Portugal, Sweden, Turkey and Spain for war materiel and ``three-quarters of this amount was transferred from Germany through the Swiss National Bank.''

``This study shows that with the exception of Argentina, each of the wartime neutrals made a substantial contribution to the economic foundations of the Nazi war effort,'' it said.

Portugal and Spain provided Germany with almost 100 percent of Germany's wartime supply of wolfram, ``the essential mineral in processing tungsten for steel alloys used in machine tools and armaments, especially armor-piercing shells,'' it said.

Sweden provided Germany with a ``major portion -- in some war years up to 90-100 percent'' -- of the iron ore needed for weapons and armored vehicles and ball bearings, while Turkey sent chromite, including 100 percent of Germany's 1943 requirement, for hardening steel to make armor.

Beginning in 1943, when it seemed Germany's own supply of critical commodities would be exhausted, the Allies warned the neutrals to stop trading with the Nazis and told them directly they were trafficking in looted gold, the report said.

But the neutrals' trade with Germany ended only late in the war, partly as a consequence of Allied embargoes and after the United States and Britain were forced to try to deny supplies to the Nazis by buying wolfram and chromite at inflated prices on the open market, the report said.

Sweden was also faulted for allowing German soldiers to make 250,000 trips across its territory to reach Finland in order to fight against Soviet occupation forces.

But the report held that neutrality in the Second World War had more to do with questions of law than morality and human rights, which are more recent concepts. The Nazi era was a time of ``severe pressures ... (when) there were no easy choices for countries to make,'' the report said.

It also emphasized that several wartime neutral countries aided the Allied victory, including offering refuge to more than 250,000 Jews fleeing the Holocaust.

The United States by contrast had ``one of the worst records'' of accepting wartime refugees and remained neutral for the first 27 months of the war, Eizenstat said by way of demonstrating a U.S. commitment to historical fact.

Other major new findings include: -- More than $40 million measured in today's dollars was in an infamous ``Melmer account,'' named for the German SS officer who administered it. That account, double previous estimates of $20 million, contained gold bars made from the smelted tooth fillings, wedding bands and other personal effects taken from Holocaust victims, including from Nazi death camp ovens.

-- The Utasha regime in Nazi Germany's wartime puppet state of Croatia amassed about $80 million by robbing, murdering and deporting Serbian, Sinti-Romany and Jewish populations. Utasha leaders took refuge in the College of San Girolamo in Rome in 1945 and the college was ``most likely funded at least in part'' with this money ``with at least the tacit acquiescence of some Vatican officials.'' There is no evidence Pope Pius XII knew of this activity, Eizenstat said.

The House Banking Committee Thursday will hold a hearing on the report and vote on the U.S. Holocaust Assets Commission Act, which would set up a panel to ferret out Holocaust-era assets that came under U.S. government control after Hitler took power in 1933.