Swedes Reassess How Neutrality Assisted Nazis

STOCKHOLM -- On the overall moral balance sheet of the Holocaust, Sweden and the name of one of its great industrialist families, Wallenberg, are revered. While others stood by as Jews were slaughtered, Sweden took steps to rescue them, deploying, most famously, diplomat Raoul Wallenberg, whose heroism in occupied Hungary saved thousands of Jewish lives.

Fifty years of scholarship has reinforced that proud part of Sweden's story as a neutral nation during World War II.

But it is only part of the story. The other part is that Sweden, and the vast Wallenberg financial empire, made money and acquired looted gold from doing business with the Nazis. While this is an old story of Sweden's wartime past, compared to the prettier chapters it has been ignored, a story of questions rarely asked, answers rarely furnished.

Half a century later, the silence is coming to an end.

With information from newly plumbed archives casting light on the era throughout Europe, new allegations are being made against Sweden's wartime government and the Wallenbergs -- not Raoul, who remains untainted, but particularly his uncles Jacob and Marcus, who ran the family enterprises. From some of the media here, from the Jewish community and from others, pressure is growing for an accounting.

The initial responses from the government suggest that there may indeed be a reckoning ahead. It has appointed a commission of inquiry into the gold questions, and the Wallenbergs have announced that their records will be open to the government commission, should it choose to examine them.

"I'm afraid we will see many things that are not comfortable," said Jan Nisell, president of the Jewish Community of Stockholm. "Why bring it up now? It's a matter of cleaning up your own history. I can have no respect as a Swede, as a Jew, until we do."

For Arne Ruth, editor in chief of Dagens Nyheter, the Swedish daily paper that has led the reporting here, it is scandalous that Swedes have "not investigated these matters, laid bare the truth of an extremely important period of our history." Sweden, he said in an interview, "will have to confront this mat ter, including the Wallenberg involvement."

Sweden's general posture during the war has been well researched by historians. Sweden, like Switzerland, worked hard to maintain its traditional neutrality under international law.

But with strong cultural and economic ties to Germany, a current of what is now described as "upper-class antisemitism," and a fear of being overrun by the Nazis along with neighbors Denmark and Norway, Sweden tilted in many ways toward Germany. It allowed German troops to pass through Sweden on military missions. It sold crucial war materiel to the Nazis -- especially iron ore and ball bearings. During the earlier war years, the government tried to muzzle the Swedish press to prevent stories offensive to the Nazis and denied refuge to Jews fleeing occupied territories.

And the central bank bought gold from the Germans, which paid for the trade and allowed Germany to obtain currency to be used elsewhere. Much of that gold -- the exact proportion is still at issue -- was stolen by Germany from central banks in countries it had occupied.

In the last year of the war, however, Sweden sought ways to cooperate with the advancing Allies. It gave diplomatic cover to Raoul Wallenberg, who arrived in Budapest in July 1944 on an American-funded mission and saved thousands of Jews by distributing Swedish safe-conduct passes until his arrest by invading Soviet forces in January 1945 and eventual death in a Soviet prison.

Jacob and Marcus Wallenberg -- the brothers who ran the family holding company -- were involved in most Swedish trade, since their holdings were so vast. A Wallenberg company supplied ball bearings to the Nazis, for example. Indeed, the Swedish government appointed Jacob Wallenberg as trade representative to Germany and Marcus Wallenberg as trade representative to the Allies.

As neutrals, Swedish diplomats and businessmen were in relatively close contact with Nazi officials and were among the first to learn of Hitler's "final solution" for Europe's Jews. Gradually, the Swedish government became involved in rescue efforts -- including Raoul Wallenberg's -- even while continuing to trade with Germany and buy gold until March 1944.

All this was known. But last month, a series of new disclosures came from Dagens Nyheter and Swedish radio, driven in part by the research of a retired Swedish diplomat. They suggested that Sweden's wartime officials turned a blind eye to the origins of billions of dollars' worth of gold received from Germany during the war, and that after the war they returned only a portion of the gold they suspected of being stolen.

The policy, said an article in Dagens Nyheter, was "Don't ask . . . just buy it."

After the war and prolonged negotiations with the Allies, Sweden returned roughly 14 tons of gold to Belgium and the Netherlands. As far as Sweden was concerned, the issue was settled.

But retired ambassador Sven Frederik Hedin and Swedish Radio reporter Goran Elgemyr, through recent archival research, found evidence that the Swedish central bank actually had determined that another 7 1/2 tons was, in the bank's words, at "maximum risk" of having been stolen.

What about that discrepancy, asked the article. What about the "remaining balance?" To whom might that belong?

That remains to be answered by the commission set up by the government.

In addition, the Wallenberg family has come under scrutiny, as it has from time to time in the past. The Wallenbergs -- through their holding company, Investor AB -- have been called "the Rockefellers of Sweden," with holdings that account for an estimated 40 percent of the value of the Swedish stock market.

A 1989 book by two Dutch writers accused the Wallenberg companies of a variety of wartime misdeeds, but it was noted and then largely forgotten in Sweden. Now, newly released postwar documents obtained by the World Jewish Congress and by a Swedish television station are raising the same questions again.

The documents from U.S. archives obtained by the World Jewish Congress include a February 1945 memo from Treasury Secretary Henry Morgenthau Jr. to Joseph C. Grew, acting secretary of state. "As late as 1943," said the memo, the Wallenberg bank (then Enskilda Bank) "made substantial loans" to a German-controlled company "without receiving any collateral."

The bank also has "been repeatedly connected with large black market operations in various foreign currencies, including dollars reported to have been dumped by the Germans" and "was the cloak" for "German interest" in a number of companies, acting "for German interests in their attempt to conceal the ownership."

Jacob Wallenberg, the memo said, also "recently indicated that he was willing to sell to the Germans a Swedish plant in Hamburg for gold, provided the price was high enough to compensate for possible future complications from the Allies."

Most recently, Sweden's TV 2 brought Jacob Wallenberg into the story with the discovery of a central bank document alleging that as late as August 1944 -- after Sweden had halted gold purchases -- Wallenberg contacted the central bank seeking its blessing to purchase additional gold from Germany, a request that was denied.

The Wallenberg group has declined to comment on specific allegations. Top executives of Investor AB, the Wallenberg holding company, said in interviews that while they don't know enough about Jacob Wallenberg's or the company's activities during the era to comment in detail, they are confident nothing illegal was done.

"The problem," said Erik Belfrage, senior vice president of Investor, "is it is difficult to defend yourself, because historical research takes time and it's not finished."