Vatican Sued for Looting Nazi Gold Under CIA,
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.
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
Bank for International Settlements, and the Vatican Bank
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 " agent
Fr. Krunoslav Draganovic.
The chief expert witness  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  Treasury) , 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
and dental gold from concentration camps. These genocide-tainted
treasures were re-smelted at the Reichsbank and other central
collection points  and laundered through the Swiss banks
[\cite 6], Bank for International Settlements  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 , 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  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 . Other Ustashe, such as
the sadist Luburic, purchased villas in Spain  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 .
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  even in their
pre WWII days, had been one of the best organized terrorist
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
The Ustashe also had powerful patrons among the Catholic
Church hierarchy, including the Franciscan Order and Vatican
Secretariat of State . 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
the anglophiles Angleton and Dulles who tried to manipulate
the Vatican and Ustashe operatives for their own ends.
who was appointed head of the SIS anti-Soviet section in
1944, infiltrated the Ustashe ratline and Vatican Intermarium
 with Soviet spies , while Angleton and Dulles
chose to ignore the ultra Fascist leanings of their Croatian
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 .
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  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.
and OSS in Bern originally made contact with the Ustashe
, 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
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 . Pavelic and part
of his treasure were captured in Austria by the British,
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 .
Pavelic and other Nazis
were housed and protected in Vatican castles and monasteries,
often taking the guise of priests
. 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
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 .
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
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.
ran the so called Vatican ratline procuring for Croatians
but also other Nazi war criminals, like Adolf
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
of sending anti-communist ex-Nazis to Latin America.
There it was anticipated their services might be required
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
1966 . Juan Peron's government recruited Ustashe
as shock troops before he was turned out by the military
did General Stroessner, the fascist dictator of Paraguay,
whose support for the Ustashe continued well into the
Following the defeat of the Krizari in Yugoslavia,
Pavelic's presence in Rome was becoming a liability for the
American special agents not compromised by Dulles had located
Pavelic and were preparing to capture him when the order
was countermanded . Pavelic escaped via the ratline
to Argentina, where he became a political advisor to Juan
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
(HOP), establishing an effective government (recognized
as a legitimate government by several countries including
and Paraguay) in exile with a terrorist arm the HVO .
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 , and perhaps 1967,
for the CIA. In 1967, Draganavic either defected or was
kidnapped by Yugoslav intelligence. His fate was surprisingly
he was interrogated or debriefed and allowed to retire
to a monastery in Croatia. Loss of Draganovic triggered a
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.
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 . 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.
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
Fifty years have passed since the events described
herein transpired, the Independent State of Croatia has been
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 2001Jonathan
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.
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
 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.
 The preferred usage according to Serbs is Ustashe.
 A full version available at US Embassy to Sweden website.
 Switzerland and Gold Transactions in the Second World
War Interim Report, Independent Commission of Experts (Bergier
Report), July 1998, available here.
 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).
 John Loftus, Unholy Trinity, St Martins Press, 1998 at
 Poglavnik, an honorific similar to Fuehrer or Duce.
 Exhibit - Ante Pavelic, Army CIC, Sep. 12, 1947, Pavelic
at Vatican, contacts are very high, Draganovic source of
 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.
 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.
 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.
 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.
 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)
 Intermarium was an anti-Soviet Vatican run organization,
Draganovic was the Croatian representative on its Board.
 Unholy Trinity, pgs. 214, 217.
 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
 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.
 Exhibit -Croatian Gold, OSS Bern, Dec. 22, 1944, OSS
monitored Croatian transactions with Swiss.
 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.
 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.
 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
 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).
 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.
 Exhibit -Ustashi Activities in Argentina, CIA, July
1951, Croats recruited as shock troops for the Peronista
 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.
 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.
 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.
 Exhibit -Army, Jan 23, 1962 Draganovic terminated with
prejudice as an asset.
 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.
 Christopher Simpson, Blowback, Wedenfeld and Nicolson,
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