https://www.wsj.com/articles/credit-suisse-failed-to-probe-nazi-past-senate-committee-says-129394ee

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Credit Suisse Failed to Probe Nazi Past, Senate Committee Says

An investigation unearthed details of relationships with some high-ranking Nazis that the bank hadn’t disclosed before

Credit Suisse Group AG failed to fully investigate recent allegations that it supplied bank accounts to Nazi party members before and after World War II, and pushed aside an outside lawyer it had charged with overseeing an internal probe into the matter, according to a Senate committee investigation.

The Senate investigation was prompted by the Simon Wiesenthal Center, which in 2020 said it believed that there were accounts at Credit Suisse holding money looted from Jewish victims, based on a list it had of 12,000 Nazi party members and a Nazi-affiliated labor union in Argentina.

Credit Suisse is one of Switzerland’s oldest banks, founded in 1856, and its second-largest by assets. After a cascade of financial losses and scandals, it was forced into a rescue last month by its larger rival UBS Group AG .

The Senate investigation reopens a painful chapter: Credit Suisse and other Swiss banks paid $1.25 billion two decades ago to settle claims and return money to families of Holocaust victims, as part of a soul searching in Switzerland that stirred antisemitism and forced a rethink of the country’s wartime behavior.

At the center of the Senate investigation are allegations by a lawyer the bank hired to oversee its probe of the Argentina list. He said Credit Suisse pulled back from fully exploring its Nazi links, including that it might have financed ratlines, or systems of escape for Nazi elites following the war, after having agreed to pursue leads.

The lawyer, Neil Barofsky, a partner at Jenner & Block LLP, said he was sidelined part way into the investigation, according to a report he provided to Credit Suisse after it ended his assignment last year. Credit Suisse said it continued the work without him.

Mr. Barofsky said Credit Suisse’s latest review unearthed details of relationships with some high-ranking Nazis that Credit Suisse hadn’t disclosed before, including when it and other Swiss banks entered a 1998 settlement with Holocaust victims.

Mr. Barofsky issued a report that said the bank found around 99 people of the thousands of names that were reviewed had accounts at some stage, with most opened in the decades following the war. Mr. Barofsky didn’t find any dormant or still-open accounts.

One such example was for an unidentified Nazi commander who had an account open until 2002. The amount of the account or reason for its closing wasn’t provided to the investigator.

Credit Suisse produced its own report on the matter, delivered to the committee last month, with additional details to some of Mr. Barofsky’s findings. It said the research had supplemented but not materially altered what was already known about the bank’s Nazi dealings. After meetings with the Senate Budget Committee this month, Credit Suisse said it would probe its role in ratlines.

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The Credit Suisse review looked at a list of people either in the Nazi party or a related union in Argentina, representing a large chunk of the German population in the country at the time. The bank also repeated an earlier review of a separate list compiled by the Simon Wiesenthal Center in 1997 of senior Nazi officials. The center, a Jewish human-rights organization, has hunted former Nazis and sought reparations for victims of the Holocaust.

But rather than taking a complete reckoning, Credit Suisse backtracked on its earlier cooperation as more details emerged, Mr. Barofsky said in his report, which the Senate Budget Committee obtained and released on Tuesday.

Mr. Barofsky said the bank pulled back from earlier commitments in June last year, including for him to issue a public report, and terminated his contract in November. He said that left questions unanswered about the bank’s Nazi ties. Mr. Barofsky blamed his dismissal on the arrival of a new general counsel at Credit Suisse.

Mr. Barofsky formerly served as an assistant U.S. Attorney for the Southern District of New York and later held a role as a special inspector general overseeing the financial crisis-era Troubled Assets Relief Program.

Senate Budget Committee Chairman Sheldon Whitehouse (D., R.I.) and Sen. Chuck Grassley, the panel’s top Republican, issued a subpoena for the documents in March. The committee has jurisdiction over budget itemizations for the Office of the Special Envoy for Holocaust Issues, which is tasked with developing policies to return assets to their rightful owners and secure compensation for Nazi-era wrongs.

“While Credit Suisse initially agreed to investigate evidence of previously unidentified Nazi-linked accounts,” Mr. Grassley said in a statement, “the information we’ve obtained shows the bank established an unnecessarily rigid and narrow scope, and refused to follow new leads uncovered during the course of the review.”

In 1998, Credit Suisse agreed to pay around one-third of a $1.25 billion settlement between Swiss banks and victims of Nazi persecution. The bank at the time provided information to panels set up in the U.S. and by the Swiss government, which found numerous examples of Credit Suisse aiding in persecution, including in the “Aryanization” of Jewish companies by forced transfers to non-Jewish owners.

However, those reviews didn’t fully explore Nazi-related accounts at the bank, and Credit Suisse hadn’t before reviewed the list of Nazis in Argentina for such ties.

Because of the country’s secrecy laws in place at the time of World War II, Swiss banks were a haven before the war for Jewish families and businesses, while also assisting Nazi organizations and officials in storing looted assets and moving money overseas.

Switzerland and its banks bought gold from the Nazi regime when other countries refused, and returned the assets and deposits of many Holocaust victims to their families only after lawsuits and sanctions threats by U.S. cities and states during the 1990s outcry.

Mr. Barofsky said some findings in the latest review raised questions about the accuracy of information Credit Suisse gave to the 1990s-era panels. Researchers at the time had found that a holding company of SS enterprises promoting the regime’s economic aims, including via seized Jewish businesses and labor from people in concentration camps, was a customer of the bank. Credit Suisse had said at the time it couldn’t locate any records but accepted it was a bank client.

Mr. Barofsky in his report said an account document was found in the bank’s papers for the 1990s reviews. Credit Suisse, in its own report, said it found an account registry card with the crossed-out name of a SS officer, and that the information wasn’t picked up by the bank or by the Swiss panel studying the matter in the 1990s.