Several other European countries followed a similar path. France officials at the National Bank shipped their treasure to the United States. At the end of 1939, Belgium authorities entrusted the French with $223 million for safekeeping. Soon after the German invasion of the Low Countries, Belgium urged France to ship their gold to London aboard military cruisers. However, the French transferred the gold to Dakar, in its West Africa colony of Senegal. After the fall of France and negotiations with Vicky France, the Nazis received the Belgium gold.
In July 1942, the United States issued the blacklist of individuals and companies. This list of Proclaimed List of Blocked Nationals prohibited trade in the Americas with any name appearing on the list. Names appearing on the list were deemed hostile to the defense of the Americas. Throughout the war names were continually added to the list, which reached several thousands names by the wars end.
On January 5, 1943, the Inter-Allied Declaration Against Acts of Dispossession Committed in Territories Under Enemy Occupation or Control, better known as the London Declaration, was announced. The measure declared the allies would no longer recognize the transfer of property in occupied countries, even if it appeared legal. The allies were aware the Nazis were forcing people in occupied countries to sell or transfer their property to them. Up to this date the Nazis had painstakingly created the illusion that such transfers were legal.
On February 22, 1944, the United States announced the Declaration on Gold Purchases. The United States declared that it would no longer recognize the transfer of looted gold from the Axis. The United States further declared that it would not buy gold from any country that had not broken relations with the Axis. England and the Soviet Union made similar declarations.
On December 6, 1944, Operation Safehaven was organized
On December 10, 1944, the State Department released a paper urging a soft-line towards Switzerland. This date marks the first step in sabotaging the efforts to return the assets to the victims of the Holocaust. In essence, it is a continuance of the feud between the Treasury Department and the State Department on the terms of peace and the 4Ds program of the previous chapter.
In February 1945, the Yalta Conference agreed that reparations would be exacted from Germany. The conference also established the groundwork for the Allied Reparations Commission.
Operation Safehaven by far is the best known and the largest operation the Allies launched to recover assets looted by the Nazis. Leo T. Crowley, Director of the Foreign Economic Administration (FEA) first proposed the need for a Safehaven organization in a letter, to the Secretary of the Treasury on May 5, 1944. Moreover, William T. Stone, Director of FEA’s Special Areas Branch, called for including the British as well as various other US agencies in a letter to Livingston T. Merchant in the State Department, on May 15, 1944. Since, Safehaven involved elements from both the State Department and the Treasury; it was plagued from the very beginning by the intense rivalry between the two departments. Safehaven would suffer the same fate as the 4Ds program that led to the hindrance and prosecution of war criminals and the denazification of Germany.
In May 1944, Samuel Klaus, Special Assistant to the General Counsel of the Treasury Department, proposed a plan for a fact-finding mission to neutral countries dealing with the problem of hidden Nazi assets. The initial planning for the trip included just Klaus and Herbert J. Cummings, a State department official. Once the Treasury Department was aware of the trip, the Treasury department sent several officials to catch up with the Klaus delegation. From August to October, Klaus visited London, Stockholm, Lisbon, Madrid, Barcelona, and Bilbao to encourage implementing the Safehaven program. The mission canceled plans to visit Switzerland and Portugal. The mission was only marginally successful. In his final report, Klaus outlined his current thinking in broad areas of concern, as the excerpt below shows:
"It [Safehaven] is only in its narrowest, and relatively less important, aspects flight of enemy capital. In its most important aspects it is the use of neutral countries as bases for maintaining the assets, skills and research necessary for the conversion of Germany to a war basis at an appropriate future date. The hiding out of stolen jewels or pictures, even if it exists, is truly important from the point of view of war crimes retribution. But the presence of I.G. Farben personnel in Spain, the expansion of Siemens production in Sweden, or the presence of German military technicians in Argentina are of more far-reaching significance, and constitute as well the most difficult Safehaven activities."
Hayes was aware of the importation of oil into Spain. On February 26, 1943, he commented the oil products available in Spain were considerably easier to get than on the East Coast of the United States. Hayes revealed the gasoline and petroleum products available equaled the full capacity of Spain’s tanker fleet. This gasoline was supplied by none other than Standard Oil, from its oil fields in South America. It also presented the Roosevelt administration with a Pandora’s Box of dilemmas. Forcing Standard to stop the shipments mostly likely would have resulted in Standard interrupting the supply of oil to the Untied States. At one point in the war, Standard had threatened to interrupt the supply. Secondly, the most likely response of US citizens suffering through the limited supply of gasoline available through ration cards would have been to rebel against the rationing system on learning that an American company was supplying the Nazis with oil. A similar commotion could be expected of the troops, many of which were drafted into service. With the President’s hands effectively tied, the oil shipments to Spain continued. If you are rich enough, even treason is not considered a crime.
As originally proposed, Safehaven was to be entirely operated by FEA, with guidance from the Treasury Department on the financial and informational side and guidance from the State Department on the policy setting side. However, the intense rivalry between the State Department and the Treasury Department, and differences with Britain weakened the role of the FEA. Resolution VI of the Breton Woods Conference gave Safehaven firm legal footing. The resolution stemmed from Polish and French proposals about blocking funds in neutral countries to prevent the Nazis from using looted assets. On December 2, Treasury, State, and FEA agreed to the roles of the participating agencies. Each agency was given some measure of individual operational freedom. All the data and intelligence was to be centralized in London.
In the fall of 1944, the long-standing debate over treatment of neutrals arose between the FEA and State Department. The FEA wanted to keep the controls in place while the State Department wanted to lift the economy blockade after the end of hostilities. By this time, the State Department had the stronger voice in the operation of Safehaven. In October, 1944, Morgenthau, Treasury Secretary, Joseph O’Connell, General Counsel for Treasury, and Harry Dexter White, Director of Monetary Research for the Treasury Department, agreed that Treasury---trained agents should be dispatched to supplement the staff of Embassies in neutral countries.
On December 6, 1944, the State Department released its long awaited Circular Instruction to U.S. Missions about Safehaven matters. The release of the Circular marked the beginning of the political and diplomatic phases of Safehaven under the Department of State.
Collecting data and evaluating the data were largely confined to the OSS. Within the OSS, Safehaven was confined to the SI (Secret Intelligence) and X2 (counter-intelligence) divisions. X2 often played the dominant role within the OSS, especially with the more important neutrals of Switzerland, Portugal and Spain. X2 was particularly involved in the German effort to transfer looted assets to foreign countries. For the OSS, this meant little more than a redirection of its intelligence operations to obtaining economic data. Cooperation between the OSS and Safehaven was on an informal basis until November 30, 1944. At the end of November, instructions sent out to all OSS stations detailed the intelligence requirement expected to be generated by the Safehaven program. In substance, Safehaven was piggybacking on already active OSS operations.
Under such conditions, it is hardly surprising that Safehaven was dependent on the personalities of the various OSS station chiefs. As already mentioned, the OSS operation in Spain was compromised because of the ambassador. In Switzerland, Allen Dulles was the station chief. Dulles had already been exposed by an earlier operation in a joint program with the British of spying on Americans and was suspected of being sympathetic with the Nazi cause. Dulles had deliberately been sent to Switzerland where he would have the most temptation to help his clients. By the time Dulles had reached Berne, he was aware that he was being watched. Dulles knew he was unable to use official channels to help his clients in the United States. Thus, Dulles used his Vatican connections to help the Nazis and Vatican couriers to help his clients in America, as the Vatican couriers held diplomatic immunity. The Vatican readily agreed to help Dulles in their zeal to regain their own assets in Germany and further their fanatical anti-communism philosophy.
Declassified files show that Slovenian bishop, Gregory Rozman, was trying to arrange the transfer of huge quantities of Nazi-controlled gold and Western currency that had been discreetly secreted in Swiss banks during the war. The bishop had been sent to Berne with the aid of Dulles’ friends within the intelligence service. For a few months, the Allies were successful in preventing Rozman from receiving the funds. Then suddenly, Rozman had the funds for his Nazi friends residing in Argentina. Dulles had fixed it. This action may be only the tip of the iceberg. In 1945, the U.S. Treasury Department accused Dulles of laundering the funds from the Nazi Bank of Hungary to Switzerland. Similar charges were made against Dulles’ agent Hans Bernd Gisevius, who had worked as an OSS agent while serving at the Reichsbank. The State Department quickly took over the case from the Treasury, after which the investigation was silenced and quickly dropped. Gisevius may have also been involved in the ratlines.
Given Dulles’ close association with German industrialists, he was unwilling to give attention to Safehaven that Washington expected. In November1944, with the Allies now in control of France, a land route to Switzerland had been reestablished, which made it possible to send an X2 agent to Berne to help run the Safehaven program there. By April 1945, X2 in Berne had unearthed a large amount of information on Nazi dealings. Included in the dealings:
Additional funds sent by the Deutsche Verkehrs-Kreditbank of Karlsruhe to Basel.
Stocks and bonds held in Zurich by private firms for the Nazi Party.
Hoards of Swiss francs credited to private accounts in various Swiss banks.
Cash and property held in Liechtenstein.
Over 2 million francs held by the Reichsbank in Switzerland.
Forty-five million Reichsmarks held in covert Swiss bank accounts.
From the beginning, Safehaven was an ambitious project with several goals besides its immediate goal of forcing the neutral countries to stop trading with the Nazis. The Secondary goals of Safehaven are listed below.
To restrict German economic penetration outside the borders of the Reich.
To prevent Germany from sequestering assets in neutral countries.
To ensure that German assets would be available for postwar reparations and to rebuild Europe.
To prevent the escape of those members of the Nazi ruling elite who had already been marked down for war crimes trials.