Nazi Victims Ask EU to Probe Vatican on Looted Assets

Holocaust survivors from the formerYugoslavia accused the Vatican of helping Nazi allies laundertheir stolen valuables and have asked the European Commission toinvestigate their claims. 

“We are requesting the commission open an inquiry intoallegations of money laundering of Holocaust victim assets byfinancial organs associated with or which are agencies of theVatican City State,” Jonathan Levy, a Washington-based attorneyfor the survivors and their heirs, wrote in a letter dated Oct.20 to Olli Rehn, the European Union’s economic and monetaryaffairs commissioner. Levy provided the letter to Bloomberg.

The request follows a decade-long lawsuit in U.S. courts onbehalf of Holocaust survivors and their heirs from the formerYugoslavia and Ukraine. 

That case, basing its claims on a U.S.State Department report on the fate of Nazi plunder, allegedthat the Vatican Bank laundered assets stolen from thousands ofJews, gypsies and Serbs killed or captured by the Ustasha, theNazi-backed regime of wartime Croatia. 

The Vatican repeatedlydenied the charges and the findings of the 1998 U.S. report.

Amadeu Altafaj, Rehn’s spokesman, said in Brussels todaythat the commission had received Levy’s letter and contactedVatican authorities about it. Vatican spokesman Father Federico Lombardi declined to comment on Levy’s request to thecommission.

Vatican Immunity

The U.S. case, which sought as much as $2 billion inrestitution, was dismissed last December by a U.S. appeals courtin San Francisco on grounds that the Vatican Bank enjoyedimmunity under the 1976 Foreign Service Immunities Act, whichmay prevent foreign governments from facing lawsuits in the U.S.

The commission should have the authority to probe theInstitute for Religious Works, or IOR, as the Vatican Bank iscalled, according to Levy’s letter. 

It cites a monetary accordsigned on Dec. 17 of last year. Under the agreement the Vatican,which uses the euro and issues euro coins, pledged to implementEU laws against money laundering, counterfeiting and fraud.

Rome prosecutors have also sought to show that the Vaticanbank is covered under European law. Last month they seized 23million euros ($32 million) from an Italian account registeredto the IOR as they opened a probe into alleged violations ofmoney-laundering laws by the 

Vatican Bank.

“We looked at all the places where the Vatican may havesurrendered sovereignty,” Levy said in a telephone interview.“The only place we could find was with the euro, where theyplaced themselves under the jurisdiction of either the EuropeanCentral Bank or the European Commission.”

Swiss Payout

Levy initially contacted the legal office of the Frankfurt-based ECB and was told to take the claim to the commission, hesaid. An ECB spokeswoman confirmed that after being contacted byLevy, the central bank advised him to go directly to the EU’sexecutive arm.

The U.S. lawsuit was first filed in 1999, one year after anofficial Swiss commission concluded that Switzerland receivedthree times more gold taken from Nazi victims than previouslyestimated by the U.S. government. 

The same year, UBS AG andCredit Suisse AG, the biggest Swiss banks, agreed to pay $1.25billion in compensation to Holocaust survivors and their heirs.

In his letter, Levy said “gold and other valuables”stolen in the “genocidal” murder of 500,000 Serbs, Jews andgypsies “were deposited at the Vatican in 1946,” according to“contemporaneous documents authored by Allied investigators”and “the sworn testimony of former U.S. Special Agent William Gowen.” 

He interviewed and investigated the Ustasha involved intransferring the loot while stationed in Rome after the war.

Euro Coins

Under its agreement with the commission, Vatican CityState, a sovereign nation outside the EU, may issue a maximum of2.3 million euros in coins in 2010 through the Italian mint, notincluding a further variable amount. 

The Vatican also pledged toimplement EU legislation against money laundering by year-end.

Rehn said the Vatican has submitted its first draft laws“on the prevention of money laundering and the fight againstfraud and counterfeiting” and the commission is analyzing them,according to his reply to a question from a member of theEuropean Parliament, posted on its website on Sept. 9.

Lombardi on Oct. 23 declined to say whether the Vaticanintends to meet the Dec. 31 deadline for implementing the EUlegislation.

SIC: Bloomberg/INT'L