By Diana Jean Schemo
Albert Blume died 14 years ago, an outcast and a mystery to his relatives, buried in a poor man's grave. As odd as his life was his legacy -- a $4 million fortune in luxury watches, rings, gold bars and gold teeth for which an aging aunt has been battling in court since his death.
The case might have ended unnoticed this year, with a court-appointed executor finally handing over the treasure to Mr. Blume's aunt, Margarida Blume. Instead, it has caught the attention of Brazil's first commission to investigate Nazi war criminals who fled here with looted Jewish property, as well as those who helped them flee.
Rabbi Marvin Hier, head of the Simon Wiesenthal Center in Los Angeles, said the Blume case ''appears to be the first concrete discovery of a perpetrator's account, which is where we believe the lion's share of the Jewish wealth was hidden.''
Suddenly the bizarre details and contradictions in Mr. Blume's life are kindling interest among Brazilians in a chapter of their past that once seemed remote, irrelevant or taboo -- a South American counterpart to the scandal over Swiss banks that swallowed Jewish assets.
Theories about Mr. Blume's treasure abound, but for now they are only theories.
Some say that Mr. Blume, who lived out his life as a pawnbroker, fled to Brazil to escape Nazi persecution of homosexuals and that the gold was merely collateral for loans.
But Rabbi Henry Sobel, the Chief Rabbi of Brazil, who heads the Brazilian commission, and others contend that Mr. Blume never owned the fortune. More likely, they say, this German-born member of the Nazi Party was sent to Brazil in 1938 as a spy and was later used as a conduit for stolen gold that now lies in a bank vault in his name. They believe that Mr. Blume was holding it for a similarly named war criminal in Argentina, whose Nuremberg death sentence was commuted in 1951.
By raising these questions, the investigating commission is challenging Brazilians to color in the pages of an era that has only been outlined until now -- the history of Operation Odessa, a German plan devised in the final days of World War II to smuggle senior Nazis to South America.
The commission is reporting on stolen masterpieces, like a $1 million Madonna by Raphael that came here, and on dormant accounts opened by Nazis who fled here that are worth $15 million. One result, after decades of public indifference, is a belated national assessment of how Odessa worked and why South Americans allowed it to work so well.
As Defeat Loomed, Nazis Hid Loot
If the ''final solution'' was the industrialized murder of European Jewry, the looting of the dead was no less systematic.
From August 1942 to late 1944, the Nazi SS organized scores of shipments -- of currency, jewelry and gold teeth -- from death camps to the Reichsbank in Berlin, the journalist Ladislas Farago wrote in his 1974 book, ''Aftermath: Martin Bormann and the Fourth Reich'' (Simon & Schuster). At one point, he wrote, some 30 clerks were needed to sort and repackage the valuables.
With defeat imminent, senior German officials began hiding looted property in foreign accounts as part of a vast operation that the Allies code-named Safe Haven. Some of that money helped finance Odessa, an underground railroad for Nazi officials who were fleeing Germany and expected arrest.
Their escape routes crossed Spain, Portugal and Italy, with Argentina the most frequent destination. Rabbi Hier says they received help from within the International Red Cross, which gave travel documents to fleeing Nazis, and from within the Vatican, where Bishop Alois Hudal gave shelter and false travel papers and passports.
In Argentina, President Juan Domingo Peron was openly sympathetic and only too ready to accept Nazi gold. Kim Gordon Bates, a spokesman for the International Committee of the Red Cross in Geneva, said the Red Cross did not knowingly help Nazis escape justice. ''We assist people in need,'' Mr. Bates said. ''We don't establish the bona fides of people who come to us for help.''
In the past, the Vatican has maintained that Bishop Hudal and his overseer, Msgr. Giovanni Battista Montini -- later Pope Paul VI -- acted out of Christian charity. Asked whether the Pope at the time, Pius XII, had known of Bishop Hudal's role, the Rev. Ciro Benedettini, deputy spokesman for the Vatican, said in a telephone interview, ''Generally the Vatican leaves this problem to the historians, because much time has passed and it's difficult to say what happened.''
Arriving in South America, the fugitives relied on Nazi networks built up throughout the continent before and during the war, said Stanley Hilton, author of ''Hitler's Secret War in South America'' (Ballantine, 1977).
Among the fugitives was Klaus Barbie, the Gestapo chief nicknamed the Butcher of Lyons, who lived openly in Bolivia for years until he was finally extradited in 1983 for trial in France.
In Brazil, Dr. Josef Mengele -- the ''Angel of Death'' who selected victims for the gas chambers at Auschwitz and conducted medical experiments on humans -- picked up his scalpel again, performing illegal abortions without anesthesia in the state of Parana. Though he used an alias, the Brazilian secret police knew of his past for 11 years before his death in 1979, the Brazilian press reported in the 1980's.
In Chile, successive Governments refused to extradite Walter Rauff, who was responsible for the mobile gas vans that killed 97,000 Jews in Eastern Europe. In Brazil, courts turned down a West German request for Gustav Franz Wagner, second-in-command at the Sobibor death camp, in 1979.
Tardily, Brazilians Begin the Chase
Only now are Brazilians bringing to light official complicity in helping the Nazis, said Maria Tucci Carneiro, author of ''Anti-Semitism in the Vargas Era (1930-1945).'' Despite the interest overseas, which peaked with Adolf Eichmann's kidnapping from Argentina in 1960 for trial in Jerusalem, textbooks here never addressed Government policies that allowed known Nazis to enter Brazil while barring Jewish refugees, she said. ''It was taboo.''
But with recent worldwide revelations of assets stolen from Jews, which led to the creation of the Brazilian commission, that is changing.
''In 1989 and 1992,'' said Otavio Costa, managing editor of Manchete, the magazine that revived the questions that first surfaced in 1989 surrounding Mr. Blume's estate, ''there was nothing similar happening in the rest of the world that this was a part of. Right now, it's the opposite.''
Marcelo Ponte, managing editor of Jornal do Brasil, a Rio daily, said the interest was more on the level of soap opera. ''The Blume story has an element of mystery that fascinates people, that awakens their curiosity,'' he said. He pointed out that this is a country where crimes typically go unpunished thanks to connections or bribes and there remains a tendency to view war criminals as just a variation on that theme.
At the same time, the Brazilian commission, with the help of the World Jewish Congress, has identified 14 dormant Nazi accounts worth $15 million, and it has taken testimony from Brazil's Holocaust survivors about their losses.
But its most intriguing inquiries involve Mr. Blume and the panel's efforts to determine whether the fortune he left behind came from victims of the Holocaust.
A lawyer for the Blume family, Fernando Simas, said there was no way to prove where the contents of the vault came from, though he acknowledged that they included gold teeth and fillings.
''I don't know how to explain them, but how can someone prove they belonged to the mouth of a Jew 50 years ago?'' said Mr. Simas, who is married to a cousin of Mr. Blume.
The Manchete article described Mr. Blume as a key figure in Operation Odessa, relying heavily on research by Ben Abraham, a Holocaust survivor and historian.
In an interview, Mr. Abraham said that among Mr. Blume's papers -- copies of which were passed to him by a journalist several years ago -- were identity documents and Gestapo promotions belonging to a Col. Walter Blume, who was sentenced at Nuremberg to hang for killing Jews in Eastern Europe.
Because Albert Blume's way of life appeared miserly, Mr. Abraham reasoned that the fortune must not have been his to spend. He contends that Mr. Blume came to Brazil as a spy and later helped resettle Nazis.
Rabbi Sobel, working independently of Mr. Abraham, said he recently received two volumes of diaries that he was told had belonged to Mr. Blume. In one, the author wrote that he had received money from a colleague in Germany, for which he would serve as guardian.
Rabbi Hier said Walter Blume commanded Unit 7-A of Einsatzgruppe B. The Einsatzgruppen followed the German Army into the Soviet Union, killing hundreds of thousands of Jews and Communist officials, often in mass slayings like the one at Babi Yar in Ukraine.
Testifying at Nuremberg, Colonel Blume said he had killed 200 civilians; the judge estimated 1,000. In Lithuania, Colonel Blume ordered the destruction of the ghetto at Vilnius, a celebrated center of Jewish learning and life.
Colonel Blume's 1948 death sentence was commuted in 1951 to 25 years and was reduced further by German judges in 1955. After release, he is believed to have gone to Buenos Aires. It is not known whether he is still alive.
Letters That Ended With 'Heil Hitler'
As for Albert Blume, he was a remote figure even to his relatives, said Ricardo Penteado, a court-assigned executor who is ferreting through family records to determine Mr. Blume's legal heir. They disapproved of his homosexuality and had broken ties with him.
Mr. Penteado said papers in the vault showed that Mr. Blume joined the Nazi Party in 1933 but was reprimanded two years later for not being an active enough member and expelled in 1936. In 1938 he came to Brazil to work for E. Schlemm & Company, a concern that acted as an agent for German companies trading in Brazil.
Mr. Penteado said he doubted that Albert Blume had had any ties to Nazism in Brazil. The gold dental work, he said, could have been collateral for Mr. Blume, a pawnbroker, although there are no records showing that he lent money for teeth. Nor were gold bars unusual. ''Anybody can buy gold bullion,'' he said.
Mr. Penteado said he did not know when, or why, Albert Blume began using the nickname ''Willi,'' a seemingly odd choice, since his family tree shows a brother by that name. Or why, after he had been expelled from the party, Mr. Blume still signed his letters ''Heil Hitler.''
Margarida Blume, 95, who stands to inherit the wealth, has remained largely cloistered in a modest home in Santa Catarina. She reportedly asserted that she had seen Mr. Blume only once, but said, ''I do not believe my nephew was a Nazi.''
Mr. Penteado said he would recommend that the court grant Margarida Blume the fortune. If the commission believes that it came from Holocaust victims, he said, they will have to battle the Blume family in court to retrieve it. ''My job is not to worry about where this money came from,'' Mr. Penteado said, ''but where it should go.''