Some commentators found it problematic that the amount of funds eventually disbursed significantly exceeded what was ultimately found in Swiss banks (as determined by the Volcker Commission) and that the final settlement was not based on an exact amount owed, but on a compromise between the World Jewish Congress and Swiss financial institutions amid the backdrop of the threat of U.S. sanctions against Switzerland.
Swiss banking secrecy laws prevented bankers from answering questions about account holders to individuals they deemed had no evidence that they were connected to the original depositor.
In return, the Allies waived further claims against the Swiss National Bank, whose activities during the war, in particular the purchase of German looted gold, were controversial.
[8] Further, the Swiss government pledged to show "goodwill" and explore the identification of any dormant assets belonging to Holocaust victims, in an unpublished letter that was a binding addendum to the agreement.
[10] [11] In 1949, Switzerland signed a treaty with then-communist Poland to trade Swiss bank accounts held by Polish depositors, from whom nothing had been heard from since before World War II.
The position taken by the Swiss Bankers Association, which backed the deal, was that depositors were responsible for understanding the laws of the banking jurisdictions to whom they entrusted their money, which included unforeseen circumstances related to dormancy of accounts.
The Swiss government, however, rejected the notion that a "secret deal" had been signed with Poland, citing the widespread press coverage (including in U.S. newspapers)[16] in the aftermath of the confidential clauses eventually being revealed in 1949.
They alleged improper difficulties in accessing these accounts because of requirements such as death certificates (typically non-existent for Holocaust victims), along with deliberate efforts on the part of some Swiss banks to retain the balances indefinitely.
The causes for claims eventually expanded to include the value of art works purported to have been stolen, damages to persons denied admission to Switzerland on the strength of refugee applications, and the value or cost of labor performed by persons being maintained at Swiss government expense in displaced-person camps during the Holocaust, along with interest on such claims from the time of loss.
[20] At the behest of President Bill Clinton,[21] Undersecretary of Commerce Stuart Eizenstat testified at these hearings and commissioned a report[22] which accused Switzerland of being "Nazi Germany's banker."
It contained no new historical information on Nazi victims' deposits into Swiss banks, and criticized the decisions of U.S. officials who negotiated settlements with Switzerland after the war as being too lenient.
A warrant was issued for his arrest for violation of banking secrecy laws, and he fled to the U.S.. UBS claimed the records were not relevant to dormant Jewish assets.
Other individuals who testified included British author Tom Bower, who had written a book titled Blood Money: The Swiss, the Nazis and the Looted Billions.
[30] The U.S. Federal Government, despite endorsing the WJC campaign in general terms, formally opposed any sanctions against Swiss banks fearing negative effects on relations with Switzerland.
Negotiations involving the banks, the WJC, and Undersecretary Eizenstat ultimately resulted in a settlement of $1.25 billion in August 1998, agreed upon by the parties in front of Judge Edward Korman.
The Bergier Commission reached similar conclusions about the banks' conduct in its final report,[36] and found that trade with Nazi Germany did not significantly prolong World War II.
On November 22, 2000, Judge Edward R. Korman announced a settlement of this case with his approval of a plan[37] featuring the payment of $1.25 billion into funds controlled by the Israeli Banking Trust.
[39] The success of the plaintiffs in bringing forth a settlement inspired further lawsuits against foreign banks and corporate entities under the Alien Tort Claims Act.
Ed Fagan, one of the main attorneys representing the plaintiffs in the WJC case against Swiss banks, would again file suit against Credit Suisse and UBS in 2002, this time on behalf of South African Apartheid victims.
[41] Fagan would later be disbarred in multiple states due to failing to pay court fines and fees and for stealing client money and escrow trust funds from Holocaust survivors, some of whom he represented during the World Jewish Congress lawsuit.