A PAINFUL HISTORY

Number 45 Bahnhofstrasse is an imposing building in central Zurich. Its monumental columns are topped by the sculpted heads of a peasant patriot, a mother, the god Mercury and William Tell, the mythic Swiss hero. This secular temple is the main branch of the Union Bank of Switzerland. Inside, there are acres of reddish brown Tessin marble. The ornate overhead moldings frame a 20-ft. by 30-ft. skylight. A uniformed guard approaches: "Who are you? What are you doing? Identification papers, please." Is this brusque aggressiveness necessary? "I am only following orders," he says in German.

Swiss banks have been following orders for the past 50 years. And for most of that time, one standing order has been to stall and stonewall when Holocaust survivors ask about their dead relatives' accounts. Passbook, please; death certificate, please; that's the law; those are the orders.

Now the orders are changing. Under pressure from home and abroad, two high-level commissions named by the Swiss government are examining the issues of Holocaust-era bank accounts; Swiss gold purchases and commerce with the Nazis; and the country's less than hospitable treatment of Jewish and other refugees. The poking and prodding are forcing the Swiss into an uncomfortable bout of national soul searching in which their image as a proud neutral country--founder of the Red Cross, defender of democratic values, oasis of peace and multiethnic harmony--is being challenged by a more sinister image: that of a self-centered mercantile nation that prospered from its dealings with Hitler, showed little sympathy for his victims and emerged unscathed from a conflict that devastated its neighbors.

The Swiss are not alone in examining their conscience--and account books--in these closing years of the 20th century. The Swedish government has ordered a commission to look into its purchases of Nazi gold and the bank accounts of Jews who died in the war. The Bank of Portugal is examining the origins of the nearly 300 tons of gold it bought from the Nazis. In France investigations are now under way to identify confiscated Jewish properties owned by the city of Paris and stolen artworks held by the Louvre and other museums.

The Swiss thought they had dealt with the past, at least in legal terms, through their 1946 agreement with the Allies to return $60 million worth of gold that was believed to have been looted by the Nazis from the central banks of occupied states. The issue of dormant private accounts first came up in 1962. Prompted by Jewish agencies and the state of Israel, the Swiss Bankers Association ordered its members to search for deposits abandoned by Holocaust victims. The process netted a mere $7 million, and though only 26 of 500 banks had bothered to respond at all, the bankers considered the matter settled.

What shook them out of their complacency two years ago was the 50th anniversary of V-E day, when Swiss newspaper articles, TV talk shows and historical documentaries launched a painful reappraisal of the country's wartime role. Those looks back refuted the comfortable notion that half a million citizen-soldiers hunkered in their "Alpine Redoubt" had deterred a Nazi invasion. The forgotten truth was that Switzerland was safeguarded by its role as the Third Reich's main money launderer and trading partner as well as a key arms supplier. "The main reason we kept our independence is that people could do business with Switzerland and put their money here," says a senior Swiss bank official. Switzerland's defenders argued that the country had had no choice: it was surrounded by Nazi-controlled nations, and its overseas assets were frozen by the Allies. Moreover, they noted, neutral Switzerland also traded with the Allies and allowed U.S. intelligence to operate out of Bern.

But nothing tipped the moral balance more powerfully than the revelation that Switzerland had turned away 30,000 Jewish refugees from its borders, many of whom were handed directly to the Gestapo. The government even asked the Germans after 1938 to stamp Jewish passports with a conspicuous red J so Swiss border guards could more easily recognize them. The country did admit some 28,000 Jews but charged the Swiss Jewish community and other organizations a head tax for their upkeep.

It was the refugee episode that spurred Kaspar Villiger, then president of the Swiss Confederation, to express "deep regret at [our] unforgivable errors," at a V-E day memorial service in May 1995. "Countless Jews were sent to a certain death because they were denied access to Switzerland," Villiger admitted. Foreign Minister Flavio Cotti pointedly added that "we must face the challenge of our history."

The job of overseeing the two investigations of Swiss liability has gone to Thomas Borer, 39, a career diplomat who formerly served in Washington, listens to Buddy Holly records and is engaged to a former Miss Texas. His fluent English and can-do spirit make him well equipped to deal with American critics. But these days Borer is feeling frustrated. "All we had done to contain the problem by last December was destroyed by that regrettable declaration," he says.

The declaration in question came late last year when outgoing Swiss Federal President Jean-Pascal Delamuraz accused the American Jewish lobby of "ransom and blackmail" and charged that Switzerland's detractors sought to "demolish its financial center." He added, "Sometimes I have to wonder if Auschwitz was in Switzerland." Delamuraz's aides say he was angered by a report of Borer's Dec. 9 meeting in New York City with World Jewish Congress leaders, who had threatened nine specific anti-Swiss reprisals unless the government set up a $250 million Holocaust fund within two months. Then last month, Switzerland's ambassador to Washington, Carlo Jagmetti, resigned after the publication of a leaked memo urging his government to "wage war" against allegations that the Swiss banks had failed to account for the missing funds.

But the most damaging blow to Swiss credibility came on the night of Jan. 9. During regular rounds at the main Union Bank of Switzerland office in Zurich, security guard Christoph Meili, 29, peeked into the shredding room. There he saw two carts full of documents waiting to be destroyed. Meili noticed that some of them concerned dealings with Germany during the 1940s, including sales of confiscated properties. All of them were protected by recent Swiss regulations forbidding the destruction of any documents that might help clarify Switzerland's wartime banking role.

Meili, a devout Protestant who believes that God led him to the documents, made off with two large ledger books and pages from a third. He gave them to a Swiss Jewish organization, which then handed them over to the police. Immediately suspended from his job by the private security firm that employed him, Meili is now being investigated for violating bank-secrecy laws. Bank president Robert Studer insists that no Holocaust-related documents were destroyed but admits that the shredding was "clearly a mistake, and we have to take responsibility for it." Studer, whom a Swiss court found to have defamed Meili by publicly suggesting "other motives" for his action, now bemoans the incident as a "catastrophe for our credibility."

Even if the banks and government now see the need to respond to Jewish demands, there is a lot of resentment on the part of ordinary Swiss citizens who feel unfairly accused of collaborating with the Nazis. Says army veteran Daniel Besson, 77, of Vuarrens: "I bitterly regret the five winters I spent under arms during the war, with all the privations that involved, in order to guard that mountain of Jewish gold [in the Swiss banks]. If they want to revive the anti-Semitic sentiments of before the war, they couldn't go about it any better."

The fear of such anti-Semitic backlash makes some Swiss Jews wish the Americans would back off a bit. "Many Swiss resent that they are made to feel guilty," says Rolf Bloch, 66, president of the Swiss Federation of Jewish Communities. "If they are attacked in a collective way, they will react. One reaction is anti-Semitism. In Switzerland today, there is not as much anti-Semitism as in the '30s. But it's flaring up again."

"Jews are not our enemies," says Borer. "Americans are not our enemies. Our history is not our enemy. But the way we deal or not with our own history--that could be the enemy." It will be a difficult exercise, for the Swiss seldom probe their past. "I have spent 10 years in this government," notes Foreign Minister Cotti, "and until last year no one, I mean no one, spoke of the fundamental necessity of re-examining Swiss history. Now I realize this must be done because a country that has not really faced its past cannot decide its future."

The hardest part of facing history is accepting guilt--not as individuals but as a nation. "Switzerland never said, 'We're sorry,'" says a Swiss banker. "We didn't do the worst things, but we did things we are not proud of--awful things. No one today has any guilt relating to that time. But we must acknowledge that the Swiss made mistakes, say we're sorry, then make the proper gestures."

Inevitably the historical debate will lead to a questioning of Switzerland's most quintessential institution: neutrality. One lesson of the wartime experience is that, in a conflict between good and evil, neutrality is morally indefensible. In the post-cold war era neutrality seems both an anachronism and a source of isolation. "The world doesn't need a neutral Switzerland anymore," says Frank Meyer, publisher of the Ringier Press Group. Remembering Switzerland's dark past may have served the unintended purpose of preparing the nation for the future.