Forward - 10.18.2002

Forward

Justice Remains Beyond Grasp Of Too Many Holocaust Victims

 

By Stuart Eizenstat

Nearly two years after I concluded the last of the major Holocaust-era negotiations in the waning hours of the Clinton administration, justice is still beyond reach for too many aging victims. The unfinished business from World War II includes: incomplete return of Jewish communal property still in the hands of Eastern European countries; delays in paying Holocaust-era insurance policies; an impasse preventing property claims from being satisfied in Austria; continued problems of opening wartime archives, and a final accounting still owed by the American government itself.

My negotiations with Switzerland, Germany, Austria and France on behalf of the Clinton administration helped to produce some $8 billion for victims — Jewish slave laborers and non-Jewish forced laborers, owners of dormant bank accounts kept by Swiss banks for five decades and owners of unpaid life-insurance policies, property owners whose property was "aryanized" to the profit of the regimes and the banks that underwrote them. Much of the roughly $8 billion has been pledged by private companies, which have, for the first time in history, been required to pay for their role in wartime atrocities. In addition, looted art and property is being returned to its true owners.

And money is now flowing, at long last. Under the expert guidance of Judge Edward Korman in Brooklyn and his special master, Judah Gribetz, payments are being made to families with dormant Swiss bank accounts, averaging more than $90,000 apiece. The Germans and Austrians have paid more than 1 million coerced workers. But it is unconscionable that the achievement of justice remains delayed at a time when Holocaust survivors are dying at the rate of more than 10% per year.

Restituting Property
The first problem remains the incomplete return of Jewish communal property — synagogues, schools, hospitals, community centers and cemeteries — that was confiscated by the Nazis and then nationalized by the postwar communist governments in almost a dozen Eastern European countries. The Catholic, Orthodox and Greek Catholic Churches have also had difficulties in certain countries, but the problems of the Jewish community are more pervasive.

More crucially, these properties are critical to the survival of reemerging Jewish communities, double victims of Nazism and communism, which are struggling to provide religious and cultural programming as well as social programs for youth and the elderly.

The American government has had to fight for restitution country by country, property by property, with help from the World Jewish Congress, American Jewish Committee and American Jewish Joint Distribution Committee.

Why was the American government more engaged in this process than the Israeli government? For the United States, it was a combination of history, promotion of democracy and domestic politics.

The United States liberated the death camps of World War II and won the Cold War against communism. We saw property restitution as helping rebuild both religious life and promote democracy in the former Soviet-dominated East Bloc. Moreover, Edgar Bronfman, then president of WJC, used his personal relationship with President Clinton and then-first lady and now Senator Hillary Rodham Clinton to put the full weight of the American government behind property restitution and all the negotiations that followed.

There have been multiple barriers. In many countries, like the Czech Republic, municipal governments control most of the properties and are unwilling to return them. In others, such as Latvia and Lithuania, only "religious" properties are being returned, like synagogues, which are costly to repair and maintain, not "secular" ones on which a profit could be made. In Poland, where more than 3,500 Jewish communal properties could potentially be returned under a 1997 law, the process has been slowed by a debilitating four-year dispute between the local Jewish community and the World Jewish Restitution Organization over control of the properties. Only this year was the impasse finally resolved.

There have been other systemic barriers to recovery. Many are reflections of the difficulties of former communist states in adopting democratic norms such as rule of law, transparent administrative processes and independent judiciary. In Bulgaria, the government has for years ignored its own Supreme Court's decision that the profitable Rila Hotel and adjoining property should be returned to "Shalom," the recognized Jewish communal organization. In Belarus and Ukraine the situation is worse, not only for the Jewish community, but for the Orthodox and Greek Catholic Churches as well. And more than a decade after the fall of communism, Poland has no law in place to govern the return of or compensation for private property confiscated by the Nazis and the Communists, much of it Jewish-owned.

For sure, there has been real progress in many countries. The Czech Republic will return more than 200 properties in the hands of the national government and some 7,500 art works, and has created a $7.5 million fund for Holocaust victims. The Hungarian government has funded a Jewish Heritage Foundation with $5 million, returned seven communal properties and considerable artwork, and has paid another $52 million to the Hungarian Jewish community to settle claims on more than 150 properties. A recent breakthrough in Slovakia will create an $18.5 million fund to settle property claims.

How can we prod reluctant new democracies to move forward? Congress needs to make clear its own interest in helping the Jewish community and other religious groups and in encouraging democracy as the administration continues pressing for material progress. The WJC, AJCommittee and JDC have joined the administration in pressing for real restitution processes and adequate laws which, before and after accession to the North Atlantic Treaty Organization, produce real results. But the Jewish community could and should be more vocal on the issue. Time is of the essence. Almost all of the countries involved have aspirations to become members of NATO and the European Union. Poland, Hungary and the Czech Republic already belong to NATO and in November several more Eastern European nations will be invited to join. NATO is more than a military organization; it is a transatlantic community of nations committed to common democratic principles. These certainly include respect for property rights.

The administration and Congress should make it clear to former communist countries that NATO membership goes hand-in-hand with progress on property restitution for the Jewish, Catholic and Orthodox communities, and that their progress will continue to be measured after they become members.

Insurance Policies
No Holocaust-related issue has been more complex and frustrating than assuring payment of Holocaust-era insurance policies. The Nazis' treatment of Jewish insurance policies was efficient and brutal. Jews in Germany and Austria had to cash in their policies to pay exorbitant property and flight taxes. Insurance companies in occupied areas were forced to pay the German Treasury the cash surrender value of policies owned by people the Germans were simultaneously exterminating.

While postwar Germany generally did a good job of paying policies where there were surviving beneficiaries, many families were entirely wiped out. Several European insurers denied payment to those who survived on the ground that premiums were not maintained when the owners were in concentration camps. Communist countries nationalized many of the companies and never made an effort to pay policies.

With the blessing of the Clinton administration, the International Commission on Holocaust Era Insurance Claims was created in October 1998 by the National Association of Insurance Commissioners, the World Jewish Congress, the State of Israel, and five major European insurance companies — Allianz, the German insurance giant; Generali, the largest insurer of Jews in Eastern Europe; Zurich; AXA, and Winterthur. Under pressure, the insurers pledged to create a process to expeditiously pay unpaid insurance policies issued to victims of the Holocaust. The companies agreed to open their files, publish lists of policyholders, and pay claims. The state insurance commissioners agreed to provide them with a "safe harbor" from economic sanctions if they cooperated. We all agreed to treat ICHEIC as the exclusive remedy to satisfy Holocaust-era insurance claims.

After 18 months of negotiations, in July 2000 my team and I reached a $4.5 billion settlement with Germany on slave labor, in which several hundred million dollars were set aside to pay claims according to ICHEIC rules. A further sum was to be passed through to ICHEIC for a humanitarian fund, a surrogate for the thousands of policies that would never be paid because the beneficiaries had perished.

But everything soon fell apart. Several state insurance commissioners continued to threaten sanctions, particularly against Allianz. ICHEIC ran up $40 million in expenses but paid only a fraction of that in claims. Congressional hearings castigated ICHEIC. Ferocious battles occurred within ICHEIC between the insurance companies and the World Jewish Congress over the extent to which the companies should publish policyholders' lists, how to value policies after the passage of more than half a century, and Allianz's demand to deduct its costs in ICHEIC from what was owed under our settlement with the Germans. Things were so bad that the chairman of ICHEIC, former secretary of state Lawrence Eagleburger, threatened to resign on several occasions and actually did resign for a short period of time. Eagleburger told me it was harder to negotiate with the parties in ICHEIC than with the Soviet Union or anyone else during his long and distinguished diplomatic career.

I believe Eagleburger and ICHEIC have gotten a bum rap from critics. For sure, ICHEIC has not been a model of efficiency. But its problems were caused largely by internal dissension. Its high costs resulted from an expensive but necessary worldwide outreach program to notify potential claimants, establishing a claims process that would be free to victims and subsidizing costly travel to meetings in Jerusalem, New York and Washington. None of these costs will come out of the benefits to claimants. The delays resulted largely from the German companies trying to disregard obligations we felt they had made two years earlier.

Finally, last month a breakthrough agreement was reached. There will be no offsetting reductions to Allianz's obligations. The 1938 German census will be used to compare claimants' names with policyholders. And, at last, claims should be paid promptly and at 10 times their face value to compensate for the passage of time. But given the complexities of insurance, continued vigilance will be necessary.

Austria's Coming to Terms
Austria has begun to come to terms with its complicated wartime past. Austrians had taught themselves they were Hitler's first victims, when in fact they were also his willing accomplices.

Under the strong leadership of Chancellor Wolfgang Schüssel, $400 million is being paid to forced laborers, mostly non-Jews; $150 million will go to 21,000 Jewish Holocaust survivors from Austria for losses of apartments, furniture and jewelry, and a $210 million fund has been established for property claims.

Here the cause of delay with property claims is not with the Austrian government, but, ironically, with the head of the Austrian Jewish community, Ariel Muzicant, his American lawyer, Charles Moerdler, and federal Judge Shirley Wohl Kram of the Southern District of New York. Muzicant wants to have the Austrian government provide financial support to the small, struggling Austrian Jewish community — a reasonable desire.

But to hold up implementation of our agreement is unreasonable, since his demands were not a part of the class action suits on which our negotiations turned. Muzicant and Moerdler have convinced Kram not to dismiss two remaining cases that stand in the way of satisfying the property claims of elderly Holocaust victims. Virtually all the lawyers who brought the class actions have agreed to drop their cases and urged Kram to dismiss the remaining ones, given the favorable settlement, but to no avail. It is time to end this unseemly impasse, dismiss all the cases and allow the funds on which we agreed nearly two years ago to flow. At the same time, I hope that the Austrians will be able to negotiate an agreement with Muzicant for the benefit of the tiny but vital Austrian Jewish community.

Opening Wartime Archives
The final memory of the Holocaust should not be money, but transmitting the truth to future generations. That is why we have encouraged more than 20 countries to establish historical commissions to examine their role in handling looted assets and why we helped create the Holocaust Education Task Force comprising more than a dozen countries, dedicated to teaching the lessons of the Holocaust around the world. But truth can emerge only when documents are open. Problems still remain in Russia, Hungary and the Vatican.

Thanks to the splendid leadership of Ronald Lauder and his Art Recovery Commission, a landmark agreement has been reached with the Russian government to open their art archives to help determine how much Nazi-looted art, recovered after the war by the Red Army, remains in Russia's possession. Russian President Vladimir Putin is also to be congratulated for this agreement. Now implementation is key. Hungary, while generally supportive on restitution, has also been lagging in opening key archives, citing privacy concerns that should be easily overcome with goodwill.

The Vatican is a tougher and more frustrating case. I twice visited the Holy See to urge that their World War II archives be open, but was met by a stone wall. A Jewish-Catholic commission established to break the impasse collapsed in disarray when the Vatican refused to turn over records in its possession. It would be a final tribute to one of Catholicism's greatest popes, John Paul II — who has done so much to improve Catholic-Jewish relations — if access was permitted to diplomatic archives so that the role of wartime pope, Pius XII, can be examined once and for all.

Examining American Culpability
Last is the United States itself. We won the war. Now we have to complete our own unfinished business. The Hungarian Jewish community is seeking justice for the Hungarian "gold train" incident. In the waning days of the war, American troops intercepted from pro-Nazi Hungarian troops a so-called "gold train" carrying the effects of Hungarian Jews. After the war, the train was moved and most of its cargo was stored in an American military warehouse in Salzburg, Austria.

A presidential commission appointed by Bill Clinton and ably led by Edgar Bronfman found that some of the items were used by high-ranking American military officers to decorate their homes, in a rare departure from the generally exemplary conduct of the American army in handling Nazi-looted assets. Despite repeated requests from the Hungarian Jewish community to be permitted to identify the stolen property, the bulk was apparently sold or otherwise distributed.

Whatever the merits of the class action suit brought against the federal government in U.S. District Court in the Southern District of Florida — and despite a ruling by Judge Patricia Seitz that parts of the case may proceed, the legal basis of the claims is suspect — the American government is morally obliged to provide an accounting for what was lost, an apology if wrongdoing is found, and some token payment to the Hungarian Jewish community. During the Clinton and Bush administrations, the American government has properly called upon other countries to face their past. If an investigation finds that we made a mistake, we can do no less.

One other matter still remains for the American government. The Bronfman commission did a commendable job in beginning to examine whether any Holocaust-era assets remain in American hands. But there is more work to be done. Senator Hillary Rodham Clinton of New York and Rep. Brad Sherman of California are seeking to complete the job by creating a new foundation to assist claimants looking for assets. I have joined with Ronald Lauder and Edgar Bronfman to support this approach. I hope this last piece of Holocaust justice can be put into place.

It is time now, more than 55 years after the end of World War II and nearly two years after our team completed its work, to finish at last the unfinished business of World War II and to bring justice to elderly Holocaust survivors. They must wait no longer.

Stuart Eizenstat was special representative of President Bill Clinton on Holocaust issues and also served as American ambassador to the European Union (1993-96), undersecretary of commerce (1996-97), undersecretary of state (1997-99) and deputy secretary of Treasury (1999-2001). A partner at Covington & Burling, a Washington-based law firm, he is the author of the forthcoming book "Imperfect Justice: Slave Labor, Looted Assets and the Unfinished Business of World War II" (Public Affairs, 2003).