Swiss investment bank Credit Suisse failed to review “all relevant records” of potential Nazi accounts while also firing an outside lawyer who was overseeing an internal probe of the issue, according to an investigation conducted by the U.S. Senate Committee on the Budget.
In March 2020, the Simon Wiesenthal Center (SWC), a Jewish human rights organization, informed Credit Suisse that the bank might be holding Nazi-linked accounts which have not yet been disclosed. That month, SWC revealed the names of 12,000 Nazis in Argentina, many of whom held bank accounts at Credit Suisse. After receiving SWC’s notification, the bank voluntarily agreed to conduct an investigation into the matter.
Forensic research firm AlixPartners Ltd. was hired to conduct the review. In June 2021, Credit Suisse retained Neil Barofsky of Jenner & Block LLP to serve as an independent Ombudsperson and oversee the review.
In June 2022, Credit Suisse’s newly-hired General Counsel Markus Diethelm temporarily paused the review after learning about the investigation. In October 2022, AlixPartners was allowed to continue the review. However, Barofsky was terminated a month later in November.
Senate Probe
In February 2023, Chuck Grassley (R-Iowa), a ranking member in the U.S. Senate Committee on the Budget, received information about potential wrongdoing at Credit Suisse regarding the Nazi accounts investigation, including the questionable removal of Barofsky. He also learned that Barofsky had drafted a report of his findings with the bank but had not released it yet.
Grassley approached Sheldon Whitehouse (D-R.I.), chairman of the committee, and both of them eventually agreed to pursue the matter. They received full bipartisan support. As a result, the committee issued its first subpoena since 1991, which sought to compel Barofsky to produce his report. Credit Suisse then took actions that forced Barofsky to decline to present his full report without redactions.
The committee found that “Credit Suisse did not review and investigate all relevant records and did not use a full dataset of the bank’s predecessor entities for portions of its review,” according to an April 18 press release.
As an example of the bank’s failure to review all relevant records, the committee pointed to a record belonging to a Nazi who lived in Bolivia. Credit Suisse did not review the account because the individual was living in an area that the bank automatically excluded per its search parameters.
“Even after the discovery, Credit Suisse did not expand the search parameters. Legal entities were also excluded, potentially eliminating additional individuals and accounts associated with identified legal entities from the review.”
Barofsky had also suggested that 366 individuals, who were identified from historical books on Nazi Ratline activities, be included in AlixPartners’ review. However, the bank refused to add the names to the review even though there were no technical challenges. Ratlines refer to escape routes used by Nazis to flee to other nations after the Second World War.
Nazi Records
Credit Suisse “appears to have maintained accounts” for at least 99 individuals who were either senior Nazi officials in Germany or were members of Nazi-affiliated groups in Argentina.
“Seventy Argentine accounts with plausible links to Argentina-based Nazis were opened with Credit Suisse after 1945, and at least 14 of those accounts remained open into the 21st century—some even as recently as 2020.”
AlixPartners identified 21 accounts from a list of high-level Nazis that was provided by SWC. Among the identified individuals were a Schutzstaffel (SS) commander who was convicted and a Nazi commander who was sentenced at Nuremberg. SS was an elite corps within the Nazis.
The Nazi commander’s account was open until 2002. Credit Suisse has not provided details regarding the assets held in this account or in the other 85 identified accounts.
The bank also maintained accounts belonging to a Nazi scientist who was imprisoned throughout the Nuremberg trials as well as a German executive who was tried and later acquitted at Nuremberg.
“A senior SS officer and representative for Nazi company Deutsche Wirtschaftsbetriebe GmbH (DWB) held an account at the bank,” the release said.
Credit Suisse Investigation
Credit Suisse claims that in the two years spent probing the matter, investigators “found no evidence to support the SWC’s allegations that many individuals on an Argentine list of 12,000 names” had accounts at Schweizerische Kreditanstalt (SKA), the predecessor bank of Credit Suisse, according to an April 18 press release.
The bank claims it had appointed 50 professionals from AlixPartners who spent over 50,000 hours investigating the matter.
“The bank is aware of an account of the former ombudsperson’s limited engagement containing numerous factual errors, misleading and gratuitous statements, and unsupported allegations that are based on an incomplete understanding of the facts. The bank strongly rejects these misrepresentations,” it said.
The second-largest bank in Switzerland by assets, Credit Suisse has been plagued by losses and scandals in the past few years. In 1998, it paid $1.25 billion together with UBS bank to settle lawsuits filed by survivors of the Holocaust and their heirs.
Credit Suisse has been a failing institution and the bank was going to be purchased by rival UBS in a deal worth more than $3 billion, brokered by the Swiss government to prevent a national banking crisis.
However, the Swiss parliament’s lower, and larger chamber, pushed back against the rescue package. This signals a marked opposition to the merger, although it is expected to go through.
Grassley criticized Credit Suisse’s handling of the matter. “When it comes to investigating Nazi matters, righteous justice demands that we must leave no stone unturned. Credit Suisse has thus far failed to meet that standard,” he said.
“Its removal of an Independent Ombudsperson and insistence on redacting portions of his report as well as its initial refusal to pursue leads on accounts that may be associated with Nazi ratlines is no way to conduct a thorough and complete investigation.”
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Naveen Athrappully