Lawsuit charges that Nazi gold funded Vatican ratlines

 The background
Racial mythology invented to sanction religious persecution

To head the new government of their Croatian puppet state the Fascist leaders, Hitler and Mussolini, installed Ante (Anthony) Pavelíc. The two major groups in Pavelíc's new state were the Serbs and the Croats. Both of these are ethnic South Slavs and they even share the Serbo-Croatian language. However, Pavelic was not one to sacrifice his racist ideology to ethnic or linguistic facts. Shortly before he came to power he published "a Croat lexicon, cutting out all 'Serb' words, an ambitious task, since the languages are almost identical". [1] Pavelíc even maintained that the Croats were completely unrelated to the Serbs. He informed the Catholic Croats that they were “Aryans” (Ancient Goths, no less), and that the Orthodox Serbs, alone were “Slavs”, which made them, in the Nazi scheme, “Untermenschen”. And, of course, in the Catholic scheme, since 1054 AD they had also been “schismatics”. Pavelíc and his Ustasha government decided that Croatia must be ethnically and religiously cleansed. The Serbs would have to go: a third to be converted to Catholicism, a third to be driven out and a third to be killed. And while they were at it, the Jews and the Roma could be conveniently included, as well. 

The Croatian Holocaust

This is the “hidden Holocaust” which, though well-known to scholars, is rarely, mentioned elsewhere, presumably because of the active involvement of the Catholic Church, which used the terror to win an estimated 200,000 to 300,000 new converts. [2]  The current lawsuit is on behalf of  three groups of victims in the Croatian Holocaust: the Serbs, who were obliged to wear blue armbands marked with a “P” for Orthodox (Pravoslavac), the Jews, who had to wear the Star of David, and the Roma (whose extermination by the Nazis is called the Porajmos). The suit no longer involves the means by which  the funds were obtained, only their disposal. However, no serious historian disputes the claimants’ account of the origin of the “victim gold”:

Serbians, Jews, and the Roma were slaughtered in their villages after unspeakable tortures or burned alive in their churches. Those that were not murdered were expelled to Serbia proper after being despoiled of all their property or forcibly converted to the Roman Catholic faith by Franciscan and Roman Catholic clergy. Many were used as slave labourers. The remaining people were taken to concentration camps where the majority perished. [3]

 

The Fuehrer (Poglavnik) Pavelic in the military boots beloved of fascist leaders
and surrounded by Franciscans

 

“From money stolen from the gold teeth of my relatives, the Vatican enabled Nazis to escape to Argentina,” claims William Dorich. [4]
 

Together with other survivors of the little-known “Croatian Holocaust”, Dorich launched a suit against the Vatican Bank and the Franciscan order to try to prove this. His claims concern the funding of the “ratlines” [5], the network of escape routes for Nazis and other fascists fleeing Europe at the end of World War II. His suit claims that the Vatican Bank and the Franciscans helped members of a brutal, pro-Nazi regime in Croatia hide and launder millions of dollars worth of loot, including gold and jewellery taken from concentration camp prisoners and the proceeds of slave labour.
 
These Holocaust survivors charge that all or a portion of the treasury of Croatia’s government, the Ustasha, “was transferred to cooperative Roman Catholic clergymen and Franciscans for transport to Rome” where the funds eventually “found their way into the hands of the Vatican Bank, among other recipients.” [6]
 
The Vatican Bank and the Franciscans have sought to have the suit dismissed on multiple grounds. [7] This has prolonged it precisely at a time when more and more of the aged claimants are dying off. It was originally brought before a California court in November 1999, but in 2003 lawyers for the Vatican Bank and Franciscan successfully argued that the case was outside the jurisdiction of a US court because it involved issues of foreign policy. However, in 2005 an Appeal Court overturned the earlier judgement and allowed some of the claims, those for restitution, to proceed. The Holocaust survivors could continue to pursue restitution of lost and looted property, what is known as “victim gold”. At the same time, the court also argued that “We are not a war crimes tribunal”. [8] Hence it disallowed the political, human rights, and war-related claims against the Vatican Bank and the Franciscans. [9]

The Vatican Bank and the Franciscans then challenged this ruling and, at the end of 2009, succeeded in getting the case further whittled down. The appeal court upheld the lower court ruling from 2003 that Vatican bank was immune from such a lawsuit under the 1976 Foreign Sovereign Immunities Act, which generally protects foreign countries from being sued in U.S. courts. Thus the US court didn't have to rule on the allegations themselves. [10]

This double exclusion saves the Vatican from the airing in court of some potentially very damaging evidence. Disallowing the human rights part of the original claim removes from consideration what Robert Lee Wolff, professor of History at Harvard calls 

a historic fact that certain members of the Croat Catholic hierarchy […] endorsed the butchery, and some members of the Franciscan order took an active part in the forced conversions of the Serbs and also in the massacres. [11]

Similarly, disallowing the claim of money laundering against the Vatican Bank keeps the spotlight off an institution whose dealings are, as the appeals court delicately put it, “murky”. [12] 
 

The Vatican Bank, officially known as the Institute for Religious Works, has an impenetrable organisation, with three separate boards of directors. It also boasts another curious feature: it is said to be “never audited” hence, funds deposited there may simply vanish without a trace. [13] Furthermore, the Vatican Bank denies that it has any records from the World War period, and even maintains that it adopts the remarkable practice of destroying all of its records every ten years. [14]
 
Nonetheless, according to the claimants, other records do exist in German and American archives, and these indicate that what is being claimed for Croatia in fact happened in Germany. There the records show Nazi transfers of funds from the Reichsbank to the Vatican Bank and further transfers of funds from the Vatican Bank to Nazi-controlled banks in Switzerland. [15] In other words, the Vatican Bank appears to have acted as an intermediary in order to help spirit Nazi gold from Germany to the safe haven of secret Swiss bank accounts, where it would then be available to fund the ratlines, without leaving any trace.
 
The Holocaust survivors wanted to try to prove that the Vatican Bank laundered the proceeds of the Ustasha genocide in Croatia in a similar manner, but now they will have to limit themselves to trying to prove the involvement of the Franciscans. There is only one known witness to the role of the Order of Friars Minor, as they are officially called: former US Army Counterintelligence Special Agent William Gowen. According to his deposition, Vatican official Fr. Krunoslav Draganovic admitted to Gowen that he received up to ten truckloads of loot in 1946 at the Franciscan controlled Croatian Confraternity of San Girolamo in Rome. Gowen also testified that the leader of the treasure convoy, Ustasha Colonel Ivan Babic, boasted to Gowen of using British uniforms and trucks to move the gold from Northern Italy to Rome. As for the Ustasha Treasury’s ultimate destination, Gowen concurred that it could have gone nowhere but the Vatican Bank. [16]

 The Vatican Bank and the Franciscans have demanded that Gowen's testimony not be published, but a copy was obtained by the Israeli newspaper Haaretz which posted an online article in January 2006. It uses the evidence of this former American counterintelligence agent to accuse Montini, the future Pope Paul VI, of involvement in the laundering of money for the ratlines. According to the Gowen, a top Vatican official, Monsignor Draganovic, admitted being the mastermind behind the smuggling and deposit of the Ustasha Treasury at the Vatican bank. Draganovic, who was charged with overseeing Croatian affairs in Rome, reported directly to Montini. [17] 

MF 

Notes

The best single online source, continually updated, is “Vatican Bank Claims”, the website of the lawyers representing the victims of the Croatian Holocaust. http://www.vaticanbankclaims.com

[For the first box]

[“murderers”] Jasenovac, Illustration # 4.
http://www.jasenovac-info.com/cd/biblioteka/vecni_pomen/jasenovac_en.html
[“one great slaughterhouse”] Misha Glenny, Balkans: Nationalism, War, and the Great Powers, 1804-1999. New York: Penguin, 1999, p. 486. http://dissertations.bc.edu/cgi/viewcontent.cgi?article=1175&context=ashonors
 

[For the text]

1. Richard West, Tito and the Rise and fall of Yugoslavia, (Sinclair-Stevenson, 1994), p. 78.
2. Gail Harmon, War in the Former Yugoslavia: Ethnic Conflict or Power Politics? Dissertation, Boston College, 2007, p. 100.
http://dissertations.bc.edu/cgi/viewcontent.cgi?article=1175&context=ashonors
3. US District Court, Northern District Of California, San Francisco, filed 21 January 2000, Alperin v. Vatican Bank, § 31.
http://www.skolnicksreport.com/suit.html
4. Ron Grossman, “Lawsuit accuses Vatican Bank of role in World War II crimes”,
Chicago Tribune, 8 July 2005’
http://www.vaticanbankclaims.com/tribune.htm
5. “Ratlines”, Wikipedia.
http://en.wikipedia.org/wiki/Ratlines_%28history%29
6. “Court clears way for suit against the Vatican Bank for Nazi gold”, Silicon Valley / San Jose Business Journal, 18 April 2005.
http://www.bizjournals.com/sanjose/stories/2005/04/18/daily9.html
7. “Nazi gold-Vatican Bank ruling [US Ninth Circuit Court of Appeals],  Jurist [University of Pittburgh School of Law], 18 April 2005. http://jurist.law.pitt.edu/gazette/2005/04/nazi-gold-vatican-bank-ruling-9th.php
8. US Court of Appeals, Ninth Circuit, Opinion No. 03-15208, D.C. No. CV-99-04941-MMC, Alperin v. Vatican Bank. Argued and Submitted October 7, 2004—San Francisco, California. Filed April 18, 2005; p. 46.
http://www.ca9.uscourts.gov/ca9/newopinions.nsf/0BFF2CFAE79835FD88256FE7005BEA8C/$file/0315208.pdf?openelement 
9. Ibid., p. 8.
10. Nicole Winfield, Associated Press, “US appeals court nixes Vatican Bank Holocaust suit”, New York Times, 30 December 2009. http://www.nytimes.com/aponline/2009/12/30/business/AP-EU-Vatican-Holocaust-Suit.html
11. “What was fascism?: Reply by Istvan Deak” [Professor of History, Columbia University], New York Review of Books, Volume 30, Number 9,  2 June 1983.
http://www.nybooks.com/articles/6208
12. “Court clears way for suit against the Vatican Bank for Nazi gold”, op.cit.
http://www.bizjournals.com/sanjose/stories/2005/04/18/daily9.html
13. John Loftus, former US Department of Justice prosecutor with the Nazi-hunting OSI unit, quoted by Jonathan Levy, “The Vatican Bank”, ed. Russ Kick, Everything You Know Is Wrong: The Disinformation Guide to Secrets and Lies, 2002, p. 19.
http://books.google.com/books?id=T75G7hLlk80C&pg=PA19&lpg=PA19&dq=loftus+%22osi+unit%22&source=web&ots=ABfGVLzusl&sig=SeGIC9RubNBDZGHwzRXVsUEh96U#PPA20,M1
14. Franzo Grande Stevens, Vatican Bank's attorney, quoted ibid.
15. Levy, op. cit.
16. Vatican Bank Lawsuit Plaintiffs, “Current Update:Vatican Bank Lawsuit Progressing”, Press release, 23 February 2006. http://www.vaticanbankclaims.com/update.htm
17. Yossi Melman, “Tied up in the Rat Lines”, Haaretz, 17 January 2006.
http://www.haaretz.com/hasen/spages/670245.html