Two New Jersey state legislators and one New York City pension trustee want to step up pressure on Switzlerland to return money belonging to Holocaust victims, survivors and their families, despite significant progress on addressing the controversy.
But Jewish groups in New York are distancing themselves from any further action by institutional investors.
Two New Jersey state legislators March 13 introduced a bill that in part would require the $57 billion (including $48 billion in pension assets) New Jersey Division of Investment, Trenton, to divest its holdings of Swiss companies' securities. State employee pension assets also could not be invested in any financial institution with outstanding loans to Switzerland.
And in New York, one trustee of the approximately $30 billion New York City Employees' Retirement System, who asked not to be named, expressed concern about the issue and plans to raise it at the fund's March 20 board meeting. It is unclear what, if any action NYCERS will take.
BEA Associates, New York, whose parent is CS Holdings AG, parent of Credit Suisse, manages $529 million in fixed-income securities and $173 million in an enhanced yield portfolio, for the New York system.
A BEA spokeswoman said Tim Taussig, the firm's vice president of marketing, had not received any client inquiries on the issue.
These actions come despite the fact that Swiss business and government leaders recently took steps to address the country's role in helping fund the Nazis during World War II. Following the creation of a $180 million Swiss private sector fund to help Holocaust survivors, President Arnold Koller this month announced the intention to establish a $4.7 billion Solidarity fund for humanitarian purposes that include helping Holocaust victims. Creation of the larger fund would require Swiss parliamentary approval.
The New Jersey bill goes further than New Jersey's previous divestiture bills, said Assemblyman Neil M. Cohen, co-sponsor of the bill. Among its other provisions, it would bar state government authorities from purchasing goods and services of any company doing business in or with Switzerland and make the companies ineligible to receive state-backed loans or buy state bonds.
After the bill is introduced in New Jersey, its co-authors, Mr. Cohen and state Sen. Robert Singer, will ask committee chairmen to withhold immediate action "until we can see if there has been legitimate progress made by Swiss officials to provide proper accounting and begin the process of returning funds to Holocaust survivors," said Mr. Cohen.
The sponsors also will ask legislators in other states to introduce similar bills. but will advise them to "hold movement" on them until Swiss intentions are clearer.
Division of Investments Director Roland M. Machold, early last week expressed some concern about the bill. "We'd have to see it," he said. But in the past, the division has "opposed any bill requiring divestments because our fiduciary mandate is to do the best possible investment job for the fiduciaries," he said.
The recent moves follow other pressure tactics employed by U.S. public bodies and institutional investors last year and in early 1997:
Last year, New York City Comptroller Alan G. Hevesi wrote to the three major Swiss banks and the Swiss Confederation urging action - in cooperation with Jewish groups - to return assets owned by Holocaust victims and families.
In January, George M. Philip, executive director of the New York State Teachers' Retirement System, Albany, wrote to Georges Blum, chairman of the Swiss Bank Corp., Basle, to "express our concern over reports of the failure of several Swiss banks to address allegations that they withheld assets belonging to Holocaust victims and their families." He pointed out that SBC subsidiary Brinson Partners "manages approximately $800 (million) of New York State Teachers' Retirement assets. We are also shareholders of your organization through our EAFE investments. We therefore urge you to take appropriate action."
Also in January, New York state Comptroller H. Carl McCall temporarily stopped making overnight deposits with Swiss banks from the state's short-term investment pool. The comptroller lifted the ban Feb. 28 after the "World Jewish Congress and other Jewish groups said they were satisfied with the way (the problem) was being addressed. We spoke (to the groups) and felt the situation was resolving itself," said Dennis Tompkins, a spokesman for Mr. McCall.
In fact, some Jewish groups in New York are reluctant to see more pressure exerted on the Swiss.
A spokeswoman for Elan Steinberg, executive director, World Jewish Congress in New York, said "Mr. Steinberg told me he had spoken to (Mr.) Cohen (and said that) under the circumstances, he didn't believe additional legislation was required. Progress is being made. We are on the right road now." Although a lot of things "still need to be done . . . (the Swiss) are trying to face their past," she said.
Kenneth Jacobson, assistant national director, Anti Defamation League, New York, said "the Swiss have acted in good faith with the steps taken, and we can monitor the situation." Measures that apply pressure "are not important now."
Citing an array of moves in Switzerland's private and public sectors to address Holocaust-related concerns, Silvia Matile, a spokeswoman for the Swiss Bankers Association, Basle, said she regrets additional pressure.
"We want transparency" about the problem, she said. "We will live with the results" of such disclosures. "We regret that people still think we don't want to (address the problem) because it's been proven we do."
As for the private-sector Holocaust fund that's been created around this issue, Ms. Matile said no decision has been made about how the assets will be invested. However, one Swiss banking source said that because fund payouts are expected in the near future, the money likely will be invested in short-term instruments.
Legal approval for the larger Solidarity fund, which would be created from a value reappraisal of Switzerland's gold reserves, isn't expected before next year.