Flotsam & Jetsam: Operation Safehaven and Nazi stolen art

Recent stories about museums not returning art stolen by the Nazis brings to mind a remarkable discovery I made about my father years after his death. He was working for the New Deal and then World War II came along....

Sam Smith -  After war broke out, my father, then over 40, went to work for the Foreign Economic Administration in Dakar, buying things West Africa needed and buying from West Africa things the military needed such as fats and oils. Richard Saltonstall in a chapter on my father in Pilgrimages, wrote that he "conducted extremely high-level and sensitive business missions for the government, including the purchase of the fuel oil that got Paton's tanks rolliing again across Germany." In a letter of recommendation in 1945, the Army's Adjutant General, James Ulio, said he had purchased $20 million in commodities for the U.S. Army, the equivalent about about $240 million in 2010.
In West Africa he acquired two phobias: bare feet and airplanes.

Nearly a quarter century after my father's death, I was tinkering with an old family desk that I knew had several hidden compartments. A piece of wood suddenly moved and I found myself staring at a small cache of typewritten letters between my parents in the last year of the war.

On March 2, 1945 he wrote my mother from Bern. He describes catching an 8:29 am train to Zurich: "There I talked three hours to the head, or one of the heads, of the Swiss National Bank, named Mr. Hirs and then took the train back here."

Then:

    "Tuesday I go to Paris probably - if so with the Currie Mission on their train. I come back in a day or two. No gestapo follows me, except possible the Swiss, for they have a wonderful one."

And at the end:

    "Tell mother that there are plenty of Swiss spies but not German and no female spies. I haven't time for them either."

Then on March 14:

    Paris is cold and damp. We left in two 2 1/2 ton six wheel trucks and a jeep with six soldiers, all with guns to protect the load on the way back. . . German tanks and trucks burned up, and turned over off the road, wooden repairs to iron and steel bridges, German prisoners marching off to work, a warning by an MP that two German parachutists had dropped, a railroad locomotive off the bridge and beside the road. . . factories and oil plants destroyed. . .

Author's father on the way from Paris to Bern in March 1945. Lawrence Smith carried a noncombatant certificate which said that if captured he was to be treated as a field grade officer (major to colonel). At his right is his driver carrying a pistol. Smith wrote home: "We had six tommy guns and plenty of ammunition. At one point we were warned two [German] paratroopers had dropped behind the lines."

What my father was doing on this trip from Paris to Bern remains a mystery. A post war resume he prepared didn't even mention his work in the FEA. About two years were missing.

The photo of my father and the soldiers continued to puzzle me, especially since it was accompanied by another showing a Swiss moving van backed up to one of the Army trucks. Then in 2009, I was having some art appraised and in the course of a conversation with the appraiser's assistant, who also happened to be a member of an OSS history group. I recounted the story of my father's strange journey and other WWII materials I had found. She said, "It sounds like he might have been part of Operation Safehaven."

She took my materials to an OSS history group meeting and came back with a note from one ot its oldest members: "It appears that Mr. Smith was indeed a member of the Safehaven mission."

My father had never used the phrase, there had never been a hint of any connection with OSS, but the more I investigated, the more it seemed that I had discovered something deliberately hidden all these years.

Operation Safehaven was a secret World War II project aimed at recovering stolen and hoarded Nazi gold, art and other valuables. In the course of my research I came across an OSS summary stating that Safehaven's purpose was "above all, to deny Germany the capacity to start another war." A CIA report below called this purpose its "overriding goal."

Decades later, the Observer reported, "By some estimates, around five million cultural heritage objects changed hands inappropriately during World War II alone, and that doesn’t count the decade leading up to it, when the Nazis were forcibly seizing works of art from their countrymen."

The Safehaven operation was started by the Foreign Economic Administration, for which my father was working. But, while inventing the project, the FEA soon found itself over its head and called on the OSS for help. In classic government tradition the two agencies apparently alternately cooperated and competed. The State and Treasury departments' involvement helped to make it even more complicated.

The Currie Mission, with which my father was involved in some manner, was headed by Laughlin Currie, head of the Foreign Economic Administration. According to one account, "In early 1945, Currie headed a tripartite (U.S., British, and French) mission to Bern to persuade the Swiss to freeze Nazi bank balances and stop further shipments of German supplies through Switzerland to the Italian front."

That was the trip my father had taken. The Currie Mission, according to the National Holocaust Museum, reached an agreement with Switzerland to stop cloaking enemy assets, gold purchases from Germany, assist in the restoration of looted property, and conduct a census of German assets in Switzerland. It adds that Switzerland "reneged on commitments."

Two weeks earlier, my father had "talked three hours to the head, or one of the heads, of the Swiss National Bank, named Mr. Hirs." Mr. Hirs, it turns out, was only the deputy head, of whom David Sanger of the NY Times would write decades later:

    When the war ended, the Swiss offered a series of backtracking explanations of their behavior [with Nazi loot] . . When bank records or intelligence reports surfaced, it turned to legalistic defenses, arguing that under the rules of occupation the Nazis had clear title to anything they looted from central banks.

    Lengthy negotiations were held in Washington over this prickly subject. A particularly duplicitous deputy head of the Swiss National Bank, Alfred Hirs, blurted out to the Americans, ''Do you want to take 500 million Swiss francs of gold'' -- worth roughly $1.25 billion today -- ''and ruin my bank?'' It was a telling moment, because until his outburst the Swiss had not acknowledged holding anywhere near that much looted gold.

The record of my father's role in all this remains blurred. He was a serious art collector and art was one of the things the Nazi had looted. He had also held a high position in the Justice Department so he was used to keeping his mouth shut.

In fact, according to one news account, Operation Safehaven didn't even become publicly known until the mid nineties, more than a decade after my father's death.

In 1997, Stuart Eizenstat compiled a report for the CIA's Center for the Study of Intelligence. In it, citing two countries in which my father operated, he wrote;

    The overriding goal of Safehaven was to make it impossible for Germany to start another war. Its immediate goals were to force those neutrals trading with Nazi Germany into compliance with the regulations imposed by the Allied economic blockade and to identify the points of clandestine German economic penetration. . .

    It is quite clear that Safehaven planners had a good idea of what they wanted to achieve, but it also is apparent that they did not have the slightest idea of how to do it. Although it was evident from the outset that Safehaven would be primarily an intelligence-gathering problem, it does not appear to have occurred to anyone to consult the intelligence services, which were excluded from the planning and implementation of Safehaven until the end of November 1944. Bureaucratic rivalries predominated. Indeed, Safehaven was nearly destroyed by internecine quarrels among the FEA, State, and Treasury, each of which wanted to control the program and to exclude the other two from any participation. . .

    The decision was finally taken to invite the formal participation of the OSS. Once the OSS was brought into the Safehaven fold, all the advantages of a centralized intelligence organization were brought to bear. . .

    The unique character of Safehaven, which was both an attempt to prevent the postwar German economic penetration of foreign economies and an intelligence-gathering operation, meant that the OSS counterintelligence branch, X-2, also had an important role to play. Safehaven thus emerged as a joint [Strategic Intelligence]/X-2 operation shortly after its inception, especially in the key OSS outposts in Switzerland, Spain, and Portugal, with X-2 not infrequently playing the dominant role. . .

    In Nazi Europe, neutral Switzerland carried out business as usual, providing the international banking channels that facilitated the transfer of gold, currencies, and commodities between nations. Always heavily dependent on Swiss cooperation to pay for imports, the Reich became even more so as the ultimate defeat of the National Socialist regime became obvious and neutrals grew more wary of cooperating with the Axis belligerents. . .

    In this critical situation, the Swiss banks acted as clearinghouses whereby German gold--much of which was looted from occupied countries--could be converted to a more suitable medium of exchange. An intercepted Swiss diplomatic cable shows how, allegedly without inquiring as to its origin, the Swiss National Bank helped the German Reichsbank convert some $15 million in (probably) looted Dutch gold into liquid assets. . .

    Fortuitously, the restoration of access to Switzerland through France in November 1944 made it possible for the first X-2 operative in Switzerland to enter the country by the end of the year. By January 1945, X-2 was up and running in Switzerland, and by April it was able to provide OSS Washington with an extensive summary of Nazi gold and currency transfers arranged via Switzerland through most of the war. . .

    Despite its liberal democratic traditions, Sweden was Nazi Germany's largest trading partner during the war and almost the sole source of high-grade iron ore and precision ball bearings for the German war machine. . .

Another CIA report states:

    Within the OSS, Safehaven fell largely under the aegis of the Secret Intelligence Branch, responsible for the gathering of intelligence from clandestine sources inside neutral and German-occupied Europe. But the unique character of Safehaven, which was both an attempt to prevent the postwar German economic penetration of foreign economies and an intelligence-gathering operation, meant that the OSS counterintelligence branch, X-2, also had an important role to play.

What my father's precise role in all of this, I'll never know, but if I hadn't stumbled upon that hidden compartment in my parents' desk, I would have had no idea that he had been somehow part of the one of a major secret operation designed in part, amazingly, to prevent the Nazis from ever starting another war.