November 20, 1997
Since July, Fong has liquidated some $2 billion worth ofCalifornia funds in Swiss banks by not renewing short-terminvestments, and he has declared a moratorium on future deposits.
Fong took the publicly unannounced action after reading newspaperreports on the slow pace by Swiss banks in settling the accounts ofvictims and survivors of the Holocaust.
"As a banker, I questioned whether I could retain confidence in(Swiss) banks to handle my money, if they failed to identify theseaccounts and return the money," Fong said in an interview in his LosAngeles office.
However, to his surprise and chagrin, he received little feedbackfrom the Jewish community on his action, after it was finally madepublic in October. He even received some criticism.
"Because the Jewish community is active in so many other issues, Iwas surprised that I received very little input, pro or con, on this,so it doesn't seem to be as important to them as I had expected," hesaid.
The initial objections came from U.S. Under Secretary Stuart E.Eizenstat, who told Fong that the Swiss were taking a number ofinitiatives to rectify past mistakes and that the Californiasanctions would antagonize the Swiss people and provecounterproductive.
What seemed to upset Fong the most, though, was a letter from theAnti-Defamation League, signed by its national director, Abraham H.Foxman, along the same lines as the Eizenstat communication.
"That letter took me by surprise, coming from ADL, a respectedorganization," said Fong. "There were no phone calls, they didn't askfor a meeting, they just sent me this letter saying, 'butt out.'"
Commenting on Fong's remarks, David A. Lehrer, the local regionalADL director, said that, "This is a very complicated issue. While wemay differ on the best tactics, we applaud Mr. Fong's efforts andintentions."
The state treasurer had earlier received strong verbal supportfrom the World Jewish Congress and individual Jewish leaders, and,like many outside observers, he seemed baffled that the Jewishcommunity was not speaking in one, monolithic voice.
Fong, a leader in the Chinese-American community and son of formerCalifornia Secretary of State March Fong Eu, is a declared Republicancandidate for the U.S. Senate seat held by Democrat Barbara Boxer.The question was put to him whether his action against the Swissbanks was linked to the hope of attracting Jewish votes in nextyear's election.
He denied any ulterior motive. "I never even told anyone (aboutimposing the sanctions), because I believe in quiet diplomacy. If Ihad wanted attention, I would have stood in front of a synagogue andmade a big public announcement," he said.
As things stand now, Fong is reassessing his position but willmake no decision until he attends a Dec. 8 meeting in New York,convened by New York City Comptroller Alan Hevesi.
The meeting will bring together state and city officials who haveinitiated sanctions against Swiss banks, representatives of majorSwiss banks, and leaders of various Jewish organizations to explorefuture courses of action.
"I will be satisfied with a process in which we can 'trust' theSwiss bankers, but at the same time enable us to verify and monitortheir promises," said Fong.