Only fifty years too late

The tragedy of the Jews who confided their money to secret bank accounts turned to farce last week when the Swiss banks took out three- page advertisements in national newspapers to list two thousand names of account holders who they had been unable to trace.

Many of them could, of course, have been Jews who vanished in the Holocaust - though in the event they included people who could by no stretch of the imagination have been described as war victims, among them the deeply catholic Sr Ramon Serrano Suner, who was not only Franco's brother-in law but also his foreign minister. Others, presumably, were the banks' run-of-the-mill clients, then as now, wealthy individuals avoiding taxes or rapacious wives.

Today, 50 years later, it is exceedingly unlikely that more than a small proportion of these cases will lead to restitution. The exercise will merely leave a bad taste , and a continuing delusion among some Holocaust survivors and their descendants that they are being cheated of money that was never there in the first place.

So it is easy to claim that the whole exercise is largely pointless. Educationally it may be useful in reminding the world just how far the Nazi war effort depended on supposedly neutral helpers; how they all - the Spanish, the Portuguese as well as the Swiss - provided invaluable ways of laundering gold stolen from the central banks of occupied countries as well as the possessions of the millions slaughtered in the concentration camps. Nor can the victorious allies enjoy more than a moment's smugness: obsessed as they were in the late 1940s with the need to roll back the red tide, they allowed the Swiss to enjoy their ill-gotten gains, and enabled them to continue to launder the assets of prominent Nazis (it was always said that Hitler's man of business, Max Amman, kept an account on behalf of the Fuhrer in the Union Bank of Switzerland).

Nevertheless the turmoil also represents a major opportunity to repair the harm done by Swiss banks to the world's taxpayers, and above all to the poorest inhabitants of developing countries, by taking in vast sums of untaxed money impartially from wealthy tax-dodgers and even wealthier Third World dictators. The banks would, as always, cry foul if they were pressed to reveal information about their deposits, but, after recent events, especially since the UBS was caught shredding most of the documentation on its activities during the war, the banks are unlikely to attract much sympathy.

Actually, and contrary to popular belief, there never was that much German Jewish money deposited in Swiss banks in the first place. Even in 1933, the vast majority of German Jews simply weren't frightened enough of the future to take steps to hide their assets abroad. When, in the late 1950s, the Jewish authorities tried to prise from the Swiss details of lost accounts, the bankers proved obdurate, but eventually a few thousand accounts were uncovered.

By their own secretive lights the Swiss behaved better than the Swedes. They - and in particular the Enskilda bank in Stockholm - were the natural bolthole for the many thousand Jews in Poland and the Baltic states who lived in a state of perpetual apprehension and who were natural potential clients for the nearest neutral financial centre. But the Swedes - in particular the then minister of justice, the late Olaf Palme, that paragon of international correctness - refused to help. Indeed the beleaguered Swiss would be perfectly entitled to ask why no one is putting pressure on the Swedes, who were just as enthusiastic to help the German financial and industrial war effort as the Swiss.

In the past quarter of a century the banks have been subject to mounting pressure, mostly from the United States, to mend their ways. In the 1970s a particularly determined US District Attorney, Robert Morgenthau, attacked the banks which were then acting as vital financial refuges for the Mafia (a habit which can be traced back to the 1930s and the late Mayer Lansky, most subtle and successful of Mafia bosses). But the attacks petered out: American banks rallied to the support of their Swiss brethren; the Americans were frightened that the Swiss would remove their funds from the US; and Swiss banks were proving useful for Nixon's business supporters who, for instance, used them to channel much of the money raised for his re-election campaign in 1972. (Democrats are in no position to be pious: old Joe Kennedy made a handsome profit when his sons Jack and Bobby did a squalid deal with the Swiss over the American subsidiary of the German chemical giant IG Farben. The Swiss had got into the act when the shares in the subsidiary, once owned by Farben were bought up - cheaply - by Swiss investors, led by the inevitable UBS.)

Over the past 20 years the Swiss position has been steadily undermined. In a book published 15 years ago I demonstrated that the basic Swiss moral defence - that they had introduced banking secrecy in 1934 to help German Jews - was seriously flawed, and that in reality it had been enacted in a panic after the names of hundreds of prominent French tax dodgers (including several senators, generals and a couple of bishops) had emerged after a police raid on the Paris office of a major Swiss bank. More importantly, there has been steady and increasing pressure on the Swiss to reveal the accounts of the Third World politicians who deposit so much of their wretched subjects' money in the country. Despite recurrent scandals within the Swiss banking community and the success in uncovering money from the late President Marcos, among others, the Swiss defences have remained pretty solid.

They could have remained intact but for an accident of political history. It was the efforts of Senator Alphonse d'Amato to win the votes of the rich and powerful Jewish lobby in New York which triggered the present campaign. The combination of an ambitious senator and the Jewish lobby has proved irresistible

So it only requires a relatively minor international effort now to harness the present mood of revulsion to help winkle out from the Swiss banks the funds deposited by what President Theodore Roosevelt called the "malefactors of great wealth" from the developing world. After all, if the Swiss banks have been prepared to break their code of banking secrecy in one good cause, that of helping the descendants of Jewish victims of the Holocaust, they cannot, logically, refuse to help it in another - returning stolen money to some of the world's poorest citizens.

Of course the task is difficult and delicate because most of the dictators involved have ensured that their money has been deposited through friends and relatives, often using local intermediaries such as lawyers and accountants. Nevertheless the Swiss banks claim that they know the effective beneficiaries of all the assets deposited with them and cannot therefore claim that they are helpless. Governments of industrialised countries have much to gain, too, and their support for demands from developing countries could be ensured by broadening the pressure to include the use of Swiss banks - and the banks, lawyers and accountants in other tax havens such as Lichtenstein, Panama and the Cayman Islands - as refuges for financial manipulators and malefactors.

How could it be done? It would be easy to say that any government recognised by the United Nations could ask for the bank records of any of their citizens. But this, of course, would lay the proposals open to the legitimate charge that any dodgy general taking over a banana republic in a coup could get at the funds deposited by his democratically elected predecessors. But it should not be impossible to devise a formula for requesting co-operation through an internationally respected body - say the International Court of Justice.

A routine request would suffice for details of, say, the status of the Lichtenstein foundations through which the late Robert Maxwell concealed his affairs, or the elaborate system erected by the equally late Sir James Goldsmith to avoid any inheritance taxes. A more elaborate formula would be needed before successors to President Marcos or General Mobutu would be allowed access to their ill-gotten gains. And if the banks did not comply? Well, most have subsidiaries in every major financial centre, subsidiaries on which they depend for a rising proportion of their profits. In this climate of moral indignation it would be easy to suspend these banks' operations until they complied with international regulations. Short and curlies ... hearts and minds following and all that.