Nazi Gold & the Vatican

http://newsinsider.cjb.net/editorials/Vatican_CIA.html

Vatican Sued for Looting Nazi Gold Under CIA, MI [Military Intelligence] Permission
The Lawsuit Against the Vatican and the CIA

By Jonathan Levy
17 January 2001

I am co-lead counsel for plaintiffs on two class action lawsuit involving WWII era restitution claims filed in the United States District Court for Northern California. I am the plaintiff in another lawsuit filed under the Freedom of Information Act that requests contemporaneous documents from the CIA and Army. The lawsuits are:

Alperin v. Vatican Bank C99-4941 MMC - A lawsuit by Serb, Jewish, and Ukrainian survivors seeking restitution and an accounting of the WWII Ustasha treasury which was laundered after the war with the help of the Vatican and Swiss Banks, Franciscan Order, and Croatian Liberation Movement.

Naumovic v. SNB C-00-3636 BZ - A lawsuit on behalf of gentile Holocaust victims from the former Soviet Union and Yugoslavia seeking an accounting of gold looted by the Nazis and their allies and processed through the Reichsbank, Swiss Banks, Bank for International Settlements, and the Vatican Bank during WWII.

Levy v. Army & CIA C-00-3103 PJH - A Freedom of Information Act lawsuit seeking declassification of Army and CIA files about the chief of the Vatican "ratline [1]" agent Fr. Krunoslav Draganovic.

The chief expert witness [2] retained for these lawsuits is John Loftus, former Department of Justice, Office of Special Investigations attorney (Nazi hunting unit), co-author with Mark Aarons of Unholy Trinity: The Vatican, The Nazis, and The Swiss banks; The Secret War Against the Jews and author of The Belarus Secret. The lawsuits themselves are based on the evidence unearthed by Loftus' research spanning two decades. Loftus was an important source for a 1998 US State Department report (Eisenstat/Slany Report: The Fate of the Ustasha [3] Treasury) [4], which focused attention on the Vatican's role in laundering the Ustashe funds.

In a nutshell, Loftus and others have theorized that the genocide of World War II directed at Jews, Serbs, Roma, Soviets, and others by the Nazis and their allies generated vast amounts of loot and plunder including gold coins, wedding rings, and dental gold from concentration camps. These genocide-tainted treasures were re-smelted at the Reichsbank and other central collection points [5] and laundered through the Swiss banks [\cite 6], Bank for International Settlements [7] and the Vatican Banks [\cite 8] during and after WWII. According to Loftus, much of the postwar Ustashe and Vatican activity was cloaked in the guise of anti-Communist activities and was encouraged or actively sponsored initially by British Intelligence and later the CIA and in particular Alan Dulles and James Jesus Angleton.

Most remarkable among the Nazis postwar were the Croatian Ustashe. Unlike the Germans whose major criminals faced a war crimes tribunal at Nuremburg, virtually the entire Ustashe hierarchy including their leader or Poglavnik [9], Ante Pavelic, escaped justice. And even more surprisingly they took with them into exile the monetary proceeds of the extermination of 750,000 Serbs, Jews, and Roma. Pavelic, known as the "butcher of the Balkans", was an honored guest at the Vatican between 1945 and 1947 [10] while other war criminals swing from a noose. Artukovic, the Himmler of Croatia, the man responsible for death camps where hundreds of thousands of Serbs were shot, burned alive, or bludgeoned to death with special hammers, lived openly in Southern California for over thirty years, while private Congressional bills assured his safety from deportation [11]. Other Ustashe, such as the sadist Luburic, purchased villas in Spain [12] or started new lives as businessman in Argentina, Brazil, and Venezuela. But, unlike other ex-Nazis, the Ustashe did not lose their fascist ideology, instead they openly reestablished their Nazi party in Buenos Aires and by 1956 were beginning a new campaign of terror which ultimately reached the United States in the 1970s and 1980s resulting in hijackings, bombings, and murders [13].

John Loftus and coauthor Mark Aarons and other researchers, notably Christopher Simpson in Blowback and the Andersons in Inside the League, have theorized that the postwar Ustashe revival was no accident. The Ustashe [14] even in their pre WWII days, had been one of the best organized terrorist organizations in Europe, successfully assassinating King Alexander II of Yugoslavia and the French Foreign Minister Louis Barthou in Marseilles in 1934. After WWII, the Ustashe's knowledge of codes, smuggling, and black marketeering served them well. The Ustashe also had powerful patrons among the Catholic Church hierarchy, including the Franciscan Order and Vatican Secretariat of State [15]. But this did not explain entirely their phenomenal success in evading war crimes tribunals. The Ustashe were not only tolerated postwar but nurtured by the American and British intelligence agencies, including first the OSS and later the CIA. And while the cast of character involved is immense, Loftus points the finger at Philby and the anglophiles Angleton and Dulles who tried to manipulate the Vatican and Ustashe operatives for their own ends.

Philby, who was appointed head of the SIS anti-Soviet section in 1944, infiltrated the Ustashe ratline and Vatican Intermarium [16] with Soviet spies [17], while Angleton and Dulles chose to ignore the ultra Fascist leanings of their Croatian assets. In the middle of this maelstrom of competing interest for 25 years was a single central figure, the master spy and creator of the ratline, Fr. Krunoslav Draganovic who worked at various times for the Ustashe, Vatican, Americans, British, Tito's Yugoslavia and perhaps Soviets as well [18].

Loftus likens trying to untangle this intrigue of Nazi gold, war criminals, and intelligence agencies to trying to paste the leaves back on a tree after a violent storm has passed. Compounding the difficulty of the situation is that some of the leaves may have been "altered", in other words disinformation planted in internal files to confuse any future researchers from trying to untangle this web. The Vatican ratline was initially exposed in 1983 in the Klaus Barbie case [19] but its full extent is still unknown. Levy v. Army and CIA has triggered a new declassification of several hundred documents never before released, which may yet shed some additional light on the ratline.

Dulles and OSS in Bern originally made contact with the Ustashe [20], British Intelligence, either MI5 and/or MI6, also had contacts. At the end of the war, the OSS ceased to exist but operatives like Dulles simply merged into Army Intelligence forming their own faction. While some Army CIC units were chasing down Nazis, others American units aligned with Dulles and British intelligence were busy recruiting and protecting Nazis as valuable intelligence assets in the anticipated war against Communism. Dulles' own group formed an alliance with the 430th Army CIC unit in Austria, while elements of the CIC in Italy opposed these designs.

Key to these confusing happenings was the disposition of the mass murderer Pavelic and the Ustashe treasury in Rome and their assets in Switzerland [21]. Pavelic and part of his treasure were captured in Austria by the British, a deal was struck, Pavelic and his high command proceeded to the Vatican with British aid and the gold was soon to follow from Austria and Switzerland [22].

Pavelic and other Nazis were housed and protected in Vatican castles and monasteries, often taking the guise of priests [23]. The Ustasha loot was used to set up the Ustashe as an anticommunist freedom fighter. So-called Ustashe Krizari (Crusaders) fought a rearguard action against Tito, who was in a standoff against the Americans at Trieste. The Krizari were unsuccessful and it is likely that Kim Philby may have sabotaged these efforts. It is also likely that the Croatians exaggerated the numbers and effectiveness of their fighting force, in order to stave off arrest [24].

Fr. Draganovic was a war criminal wanted by Yugoslavia for the brutal ethnic cleansing of Serbs in 1942 in Kozara, the same region where another Nazi, Kurt Waldheim had operated. In 1943, the Croatians sensed the changing tides of war from the East, the loyalist of Nazi allies, the Croatian Legion had fought at Stalingrad and been destroyed there. As insurance against an eventual Allied victory, Pavelic sent Draganovic to Rome as chief of intelligence, where postwar he was to become the chief facilitator of Ustashe plans. Curiously, Draganavic also functioned as an American and British agent and may have later worked for the Tito government. As to where Draganovic's ultimate loyalties lay is a mystery.

Draganovic ran the so called Vatican ratline procuring for Croatians but also other Nazi war criminals, like Adolf Eichmen, false papers and passage to new lives in South America and elsewhere. By 1946, Draganavic was an American intelligence asset and soon the CIA was using the Vatican ratline and, according to some, funding it well into the 1950's as a method of sending anti-communist ex-Nazis to Latin America. There it was anticipated their services might be required some day in the battle against Communism. Croatian mercenaries fought against Lumumba in the Congo and were recruited by Draganovic for an operation in the Dominican Republic in 1966 [25]. Juan Peron's government recruited Ustashe as shock troops before he was turned out by the military [26], as did General Stroessner, the fascist dictator of Paraguay, whose support for the Ustashe continued well into the 1980s [27].

Following the defeat of the Krizari in Yugoslavia, Pavelic's presence in Rome was becoming a liability for the Vatican. American special agents not compromised by Dulles had located Pavelic and were preparing to capture him when the order was countermanded [28]. Pavelic escaped via the ratline to Argentina, where he became a political advisor to Juan Peron. Other Ustashe were welcomed in fascist Spain. The Ustashe treasury soon followed Pavelic to Buenos Aires and the Ustashe were reconstituted in 1956 as the Croatian Liberation Movement (HOP), establishing an effective government (recognized as a legitimate government by several countries including Taiwan and Paraguay) in exile with a terrorist arm the HVO [29].

By 1958, Draganavic's usefulness had waned and he was turned out of the Vatican. Nonetheless, he continued to function as agent for the Army until 1962 [30], and perhaps 1967, for the CIA. In 1967, Draganavic either defected or was kidnapped by Yugoslav intelligence. His fate was surprisingly mild; he was interrogated or debriefed and allowed to retire to a monastery in Croatia. Loss of Draganovic triggered a lengthy report from CIA Director of Plans Karamessines to the State Department, Deputy Assistant Secretary for Security. But whether Draganovic was really kidnapped or his repatriation was part of some larger scheme is unknown. The answer is in the still secret files of the Yugoslav intelligence agency.

The Ustashe were undeterred by Draganaovic's departure. Still under the guise of anti-Communists they rearmed and began to carry out terrorist operations, that eventually came to the USA. Misinformation or lack thereof, hampered law enforcement efforts to curb them [31]. Indeed, the Chicago chapter of HOP (Croatian Liberation Movement) was viewed by the FBI as an essentially non-violent organization at the same time its "revolutionary" wing was on a rampage of murder, hijackings, assassinations, and bombings. The FBI had been mistaken; money from the Chicago HOP paid for terrorism worldwide.

Christophen Simpson describes the Ustashe as an example of "blowback". Blowback is jargon for an unexpected negative effect domestically from a covert operation abroad. The CIA therefore unwittingly aided a terrorist organization and the intense secrecy that surrounded the CIA sponsorship of the Ustashe and other fascists prevented the agency from learning from its own past mistakes [32].

Fifty years have passed since the events described herein transpired, the Independent State of Croatia has been reestablished with ensuing bloodshed and turmoil in Yugoslavia. Yet the Vatican and CIA continue to suppress information about past operations, information that, if widely known, might have helped provide another perspective on the unfortunate fate of modern Yugoslavia.


© The News Insider 2001

Jonathan Levy is a California attorney who has represented organizations and individuals in a variety of Holocaust related lawsuits including banking, insurance, and slave labor matters. For more information go to the Vatican Bank Claims website.


[1] The escape route that provided Nazi officials with new identities and safe passage out of Europe. The headquarters of the ratline was San Girolamo, a monastery in Rome. The principal facilitators were the Ustashe priest Draganovic and the Franciscan Treasurer Mandic. The ratline served not only the Ustashe but the Vatican inspired Intermarium, American and British Intelligence, and anyone else who could pay Draganovic's price.


[2] When knowledge of a technical subject matter might be helpful to a trier of fact, a person having special training or experience in that technical field, one who is called an expert witness, is permitted to state his or her opinion concerning those technical matters even though he or she was not present at the event.


[3] The preferred usage according to Serbs is Ustashe.


[4] A full version available at US Embassy to Sweden website.


[5] Switzerland and Gold Transactions in the Second World War Interim Report, Independent Commission of Experts (Bergier Report), July 1998, available here.


[6] Ibid.


[7] Nazi Gold, The London Conference, The London Stationary Office, 1997 at pages 43-60 (Conference paper by Piet Clement, Chief Historian of the Bank for International Settlements).


[8] John Loftus, Unholy Trinity, St Martins Press, 1998 at pg. 289.


[9] Poglavnik, an honorific similar to Fuehrer or Duce.


[10] Exhibit - Ante Pavelic, Army CIC, Sep. 12, 1947, Pavelic at Vatican, contacts are very high, Draganovic source of information.


[11] See Exhibit - 87th Congress, First Session, HR 2185, ex- Archives of the World Jewish Congress , Jan. 6, 1961, Private bill by Congressman Utt of California which allowed Artukovic to remain in the United States despite the fact he was a Nazi and had entered the country under a false name. Artukovic beat two extradition attempts in the 1950's but was eventually extradited by DOJ/OSI to Yugoslavia in 1986 where he died shortly thereafter in prison. Artukovic was the highest-ranking Nazi war criminal to enter the United States, he had been Minister of Justice in Nazi Croatia.


[12] Exhibit - Luburic, Maks, CIA, July 1950, Luburic just arrived in Rome from Spain. Former Chief of all concentration camps in Yugoslavia. Luburic had been dispatched by Pavelic to assassinate Yugoslav diplomats and kill unreliable Croatian elements. While in Rome Luburics stayed at home owned by the Franciscan Order.


[13] A very short list includes 1972 bombing of a JAT airliner, a 1976 TWA Hijacking, bombings in the USA and worldwide, murders of political opponents in the USA, and numerous assassinations of political opponents and diplomats including the Yugoslavian Ambassador to Sweden and the Uruguayan Ambassador to Paraguay.


[14] The Ustashe was founded by Pavelic in 1929 with funds received from Mussolini, Edmund Paris, Genocide in Satellite Croatia, American Institute for Balkan Affairs, 1962, pg. 20.


[15] Exhibit - Memo in Italian, CIC, May 10, 1946 - Source P (Pavelic?) reports Pavelic has frequent secret meetings with the Vatican Secretary of State Montini (later Paul VI)


[16] Intermarium was an anti-Soviet Vatican run organization, Draganovic was the Croatian representative on its Board.


[17] Unholy Trinity, pgs. 214, 217.


[18] Exhibit - see pg. 6 for accusation of being a Soviet spy of Draganovic, CIA, Jan 9, 1968, a remarkable 7 page report from CIA Director of Plans Karamessines to the State department, Deputy Assistant Secretary for Security giving a history of the ratline and Draganovic on the occasion of Draganovic's 1967 disappearence


[19] Alan Ryan, Jr., Klaus Barbie and the United States Government, University Publications, 2084. Ryan was head of DOJ/OSI and headed the ultimately successful investigation of Klaus Barbie in the course of which the Vatican ratline was uncovered as well as the involvement of the 430th CIC. Ryan however failed to realize the extent of American involvement with Draganovic and accepted the explanation that the Barbie case was the exception rather than the rule.


[20] Exhibit -Croatian Gold, OSS Bern, Dec. 22, 1944, OSS monitored Croatian transactions with Swiss.


[21] Exhibit -Transfer of Croatian Gold to Argentina, CIA, April 16, 1952, Pavelic was still transferring gold from his hoard in 1952. In this case 200 kilos of gold and five million Swiss francs. The CIA reports some of the treasure had been hidden in a wall near Salzburg in 1945.


[22] Exhibit -Croatian Gold Question, CIA, Feb. 1951, 6 page document giving details of the Ustashe Treasury but also how a deal was struck with the British permitting Pavelic and his treasure to proceed to Rome.


[23] Exhibit -Pavelic, Army, May 19, 1947, typical report about Pavelic indicating he had taken on the disguise of a priest, this was standard procedure for many of the Ustashe fugitives.


[24] Exhibit -Pavelic , ex-Army CIC, Oct. 1947, a typical and likely inaccurate entry in which Pavelic is described as leader of the Ustascha resistance with contacts with [anti communist] partisans fighting in Poland and Czechoslovakia. (by 1947 all these groups have been compromised by the Soviets).


[25] September 2000 interview with former CIC translator of Draganovic's reports JPM. JPM told me that Draganovic always submitted his reports in several languages, often duplicating the contents in hopes that additional pages would result in higher payment.


[26] Exhibit -Ustashi Activities in Argentina, CIA, July 1951, Croats recruited as shock troops for the Peronista Party


[27] Exhibit -Paraguay Welcomes Croatian Terrorist, State Dept., Dec. 1987, State dept. report on welcoming of paroled Croatian terrorist by Paraguayan government, also noted that Baresic was an officer in the Paraguayan Army.


[28] Exhibit -Pavelic, Anton, CIC, July 7, 1947, Pavelic located and request to arrest him made, handwritten "hands off" order written July 14, 1947. US agents permitted Pavelic to escape.


[29] Scott and Jon Anderson, Inside the League: The Shocking Expose of How Terrorists, Nazis, and Latin American Death Squads Have Infiltrated the World Anti Communist League, Dodd & Mead, 1986, pg. 42.


[30] Exhibit -Army, Jan 23, 1962 Draganovic terminated with prejudice as an asset.


[31] Exhibit - Dr. Ante Bonafacic, FBI, Nov. 2 1976 - FBI found that though Bonifacic was head of Chicago HOP, he was nonviolent - In reality Bonifacic was a ratline beneficiary and a wanted war criminal, the HOP was never nonviolent and is simply the Ustashe. The FBI noted the HOP was founded by Pavelic but apparently failed to realize the significance.


[32] Christopher Simpson, Blowback, Wedenfeld and Nicolson, 1988.