RECOVERED HISTORY: OPERATION SAFEHAVEN

Sam Smith

I have recently found that it is highly likely that my father was involved in Operation Safehaven, a secret World War II project aimed at recovering stolen and horded Nazi gold, art and other valuables. In the course of my research I came across some fascinating information, not the least of which being an OSS summary that stated that Safehaven's purpose was "above all, to deny Germany the capacity to start another war." The CIA report below calls this purpose its "overriding goal."

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

From a 1997 report of the CIA's Center for the Study of Intelligence by Stuart Eizenstat

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. Implementation of SAFEHAVEN depended on action in four major areas:

- To restrict German economic penetration outside the borders of the Reich.

- To prevent Germany from sequestering assets in neutral countries.

- To ensure that German assets would be available for postwar reparations and the rebuilding of Europe.

- To prevent the escape of those members of the Nazi ruling elite who had already been marked down for war crimes trials. . .

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. . .

The Importance of Switzerland

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. . .

Sweden

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. . .

By April 1945, X-2, using [strategic intelligence] sources as well as its own, was able to document German transactions converting Swedish Kronar 100,000,000 (about $25 million) in gold and currency into German goods (chiefly chemicals, drugs, and textiles) stored in Swedish warehouses. . .

With the end of the war in Europe, first the OSS and then the SSU began to shift resources away from support of the SAFEHAVEN program into other areas, especially collection against the Soviet Union. Efforts by FEA and State Department representatives in Europe to revitalize SAFEHAVEN ran up against the stone wall of budgetary limitations. . .