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Swiss back in good graces
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August 13, 1998: 5:44 p.m. ET
Officials drop threat of sanctions after Swiss banks settle suits over Nazi gold
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NEW YORK (CNN) -- Financial officers representing American states and cities are turning off the heat on Swiss banks by dropping the threat of sanctions.
In a move expected after the settlement of class action suits against the banks, the officials Thursday ended their threat to cut off new business and borrowing with the private banks.
"The reason for the sanctions was to urge the Swiss banks to make a deal, and they made a deal for the Holocaust survivors," said a spokeswoman for New York City Comptroller Alan Hevesi, who led the executive committee representing some 800 state treasurers and city comptrollers.
"The only reason they did the sanctions was because the talks broke down in June," the spokeswoman said.
On July 1, financial officers lifted their moratorium on punitive moves against the banks.
Hevesi and New York State Comptroller Carl McCall announced they were canceling city and state sanctions that were scheduled to start on Sept. 1.
The executive committee recommended that all other states and cities do the same.
California, the only state that already had imposed sanctions, immediately followed suit.
"As of today these banks will be treated like any other firm with whom I conduct business," said state Treasurer Matt Fong.
The state, which controls $32 billion in investments, had blocked Swiss banks and firms from new deals including bond issues and loan opportunities.
"It was a New York-California coalition that really, I think, sent a very strong economic signal to the Swiss banks that they were going to have a difficult time pursuing business if they extended their obstinacy in resolving this issue quickly," Fong said. He felt it was a "bottom-line matter" for the Swiss banks to settle.
Rabbi Marvin Hier of the Simon Wiesenthal Center said at the press conference the settlement is historic and is a victory for truth and justice.
Hier added the settlement with the Swiss banks is not about money saying, "It would be very sad if the memory of the Holocaust was reduced to a gold bar. Anybody that thinks that all of this has to do with gold and money would be sadly mistaken. It has to do with correcting an injustice."
"This is not an indictment of the Swiss people or of the Swiss government," Hier said, "What it (the settlement) does say very clearly is that this is funds that belong to victims of the Holocaust."
Hier also said the opinion of the Simon Wiesenthal Center is that all of the money should go to the victims of the Holocaust, rather than, as some feel, to institutions or the state of Israel.
One Holocaust victim, Si Frumkin, was asked if he was grateful for the settlement. "No I am not," he said, adding, "I'm gratified that the thieves were finally forced to give back what they had stolen 55 years ago and to what they were holding on as hard as they could, but grateful? No." 
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