SLAVE
LABOR
Background
The Conference on Jewish Material
Claims Against Germany is an instrumental player in the recent series of
slave labor talks that began in 1998. Other parties to the talks include
the U.S., Israeli and German governments, five Eastern European governments
(Russia, Poland, Ukraine, Belarus and the Czech Republic), plaintiffs’
lawyers as well as a group of German companies and banks.
In February 1999, about a dozen
prominent German firms, including DaimlerChrysler, Volkswagen, BMW and
Siemens, together with Deutsche and Dresdner banks, agreed to create a
foundation to compensate former slave and forced laborers who worked for
German industrial enterprises. Since that time, other companies have pledged
to join the fund, bringing the total number of German firms and banks to
35.
It was hoped the structure of the
foundation and the criteria for eligibility for payment from the foundation
were to be agreed between the negotiating parties by September 1, 1999,
the anniversary of the start of World War II. However, this deadline could
not be met due to the difficult nature of the talks.
Jewish leaders, including representatives
of the Claims Conference, urged German Chancellor Gerhard Schroeder in
early September to intervene in order to accelerate the process because
of the age of Holocaust survivors.
In addition, German industry leadership
has called on the German government to designate funds for compensation
for people who worked for the public sector or in agriculture. German government
representatives have pledged to create a federal foundation for forced
laborers.
The negotiations are co-hosted by
U.S. Deputy Treasury Secretary Stuart Eizenstat and Count Otto Lambsdorff
of Germany.
The members of the Claims Conference
negotiating team include Benjamin Meed and Roman Kent of the American Gathering
of Jewish Holocaust Survivors; Noach Flug of the Centre of Organization
of Holocaust Survivors in Israel, Israel Singer of the World Jewish Congress
in addition to staff members.
Major
Issues
A number of important issues, detailed
in our position paper on slave labor, which is attached, have surfaced.
Some of the most important issues:
Moral
Nature of Issue
The slave labor negotiations ultimately
are a moral matter. No amount of compensation can ever make up for the
atrocities of the Third Reich. Part of the settlement must be an appropriate
acknowledgement of the responsibility of German industry for the morally
unjustifiable use of slave labor during the Second World War.
Slave
Labor vs. Forced Labor
All parties to the negotiations
now accept the essential distinction between slave labor and forced labor,
and a working group was formed specifically to address this issue. The
Nazis slaughtered Jews in three ways: slave labor, shooting and gassing.
As such, the conditions of slave laborers, who were "worked to death,"
were fundamentally different than those of forced laborers. Forced laborers,
many of whom also suffered tremendously, were not marked for death and
sometimes had conjugal rights and vacation time. Therefore, the structure
of any compensation program must reflect this distinction. The Claims Conference
is pressing for the ratio of payments between slave and forced laborers
to reflect the differing degrees of suffering of these two groups.
Legal
Closure
The companies want assurance that
by forming this fund, no future claims will be brought against them. The
driving force behind this requirement is the class-action lawsuits filed
in U.S. courts. A working group was also formed for this issue, which,
for the most part, is resolved.
Banking
Claim
The German Foundation Initiative
must also include a component that specifically addresses the wrongs committed
by the banking industry. The banking industry must accept moral responsibility
for its active participation in the aryanization of Jewish assets. As the
official 1946 Report of the U.S. military government of Germany indicates,
the three largest German banks often bought Jewish property, businesses
and securities at below market price for their own account and otherwise
profited from aryanization through the provision of loans and receipt of
commissions, brokerage fees, etc. The basic moral principle of all restitution
is that the parties that engaged in and/or profited from unconscionable
acts are not entitled to retain such profits. Therefore, the banks
are required to divest the profits that resulted from their active participation
in this program.
Current
Status
The negotiations generally alternate
between Bonn and Washington. The latest round of talks was held the first
week of October in Washington, D.C.
At those meetings, the German industry
and government offered to establish a joint foundation that would provide
funding as follows: Slave labor DM 2.2 billion; forced labor DM 2 billion;
assets (banking & insurance) DM 600 million; special hardship fund
DM 400 million and future fund DM 700 million--a total of approximately
DM 6 billion.
This has not been accepted either
by us or by the class-action lawyers. Although the Germany
industry representatives indicated that this was a final offer, there will
be a further discussion in Bonn in mid-November.
In addition, two U.S. federal court
decisions issued on September 13, 1999, in the cases involving Degussa,
Siemens and Ford rejected the legal basis of slave and forced labor claims
under U.S. law. The judges said such matters fell into the realm of governments,
not courts. The position of the Claims Conference is that this is an issue
of morality and that the process of finding a just and fair resolution
of these issues for slave laborers is one that will continue regardless
of court decisions and with maximum speed.
The negotiations with Germany were
the topic of discussion at two recent sets of hearings: the U.S. House
Committee on Banking and Financial Services, chaired by Republican Jim
Leach of Iowa, and the Executive Monitoring Committee, a panel of nine
financial officers representing more than 900 U.S. financial officials,
chaired by the Comptroller of New York City, Alan Hevesi. Both panels called
on Claims Conference representatives for testimony.
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HARDSHIP
FUND
Background
In 1980, we reached an agreement
with the German federal government for the establishment of a special hardship
fund primarily for compensation to the Holocaust survivors who left Eastern
Europe and the Soviet Union after the expiration date of the filing periods
under the original German Federal Indemnification Law (BEG). The Claims
Conference administers this fund. By the end of 1998, a total of 181,428
payments were made to survivors under the Hardship Fund.
Article
2 Fund
We entered into talks in 1990 with
the newly unified Germany. The talks focused on new compensation measures
for the benefit of Holocaust survivors who previously received no or only
minimal compensation. As a result of this effort and the strong support
of the U.S. State Department, we concluded an agreement with the German
federal government to establish the Article 2 Fund, which provides pensions
for survivors meeting the agreed-upon eligibility criteria. Between 1995
and 1998, the Claims Conference, which administers the fund, paid out in
excess of DM 1.5 billion to Holocaust survivors. By the end of 1998, a
total of 41,265 payments were made to survivors under the Article 2 Fund.
Central
and Eastern European Fund
In 1998, the Claims Conference was
instrumental in the creation of the Central and Eastern European Fund,
known as the CEEF. This fund entitles some of the most persecuted Nazi
victims to compensation for the first time. It helps survivors whose living
conditions are much different than in Western Europe, Israel and the United
States. We have set up a liaison desk in nearly every office covered by
the CEEF. Under the CEEF, about 18,000 people will receive compensation.
Issues
With all these funds, the Claims
Conference continually presses for the liberalization of eligibility criteria.
For example, concerning the Article
2 Fund, we are arguing for the inclusion of Holocaust survivors who:
were in forced military labor battalions
and in concentration camps not currently recognized as such by Germany;
lived under false identity, while
older than 18;
were subjected to persecution for
periods of time less than currently stipulated;
were confined in open ghettos;
have income in excess of the current
income ceiling; or
were Western Europeans at the time
of persecution and have not received compensation under programs from their
native countries.
In addition, we are pressing for
cost of living adjustments and increased funding for one-time payments.
Current
Status
After a recent series of intense
negotiations, the Claims Conference was able to increase significantly
the numbers of Holocaust survivors able to qualify for pensions. Until
these talks, eligibility was restricted to those survivors who met all
fund criteria and whose income in the United States, for instance, was
not greater than $16,000 for a single individual or $21,000 for a married
couple. We successfully pressed for the liberalization of these limits
as of January 1, 1999, with the exclusion of Social Security payment in
the computation of annual income for persons who are age 70 and older and
who meet all other fund criteria.
Also as of January 1, as a result
of the Claims Conference, additional groups of survivors were declared
eligible for the Article 2 Fund, including those incarcerated in special
camps in Austria for Jews, forced labor camps on the Austro-Hungarian border
or the Bor copper mines, as well as survivors of forced military labor
battalions for Hungarian Jews on the Ukrainian front.
Concerning the Hardship Fund, a
substantial increase in funding will help to diminish the backlog of cases,
most of which involve elderly survivors from the former Soviet Union who
are trying to establish new lives in the West.
In the case of the CEEF, Germany
is contributing DM 200 million to the fund over the next four years, in
equal annual installments, beginning January 1, 1999.
We are awaiting a date for the next
round of negotiations with the German government and hopes to begin talks
in the near future. Again, the need for continued talks is urgent; as too
many of us are well-aware, Holocaust survivors are dying every day.
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INSURANCE
Background
The International Commission on Holocaust
Era Insurance Claims, chaired by former U.S. Secretary of State Lawrence
Eagleburger, was established in October 1998 by the National Association
of Insurance Commissioners in conjunction with several European insurance
companies (including Generali of Italy, Allianz of Germany, AXA of France,
and Zurich and Winterthur of Switzerland), European regulators, representatives
of several Jewish organizations (including the Claims Conference) and the
State of Israel.
The commission is charged with establishing
a just process that will expeditiously address the issue of unpaid insurance
policies issued to victims of the Holocaust.
Issues
Some of the issues before the commission
have been resolved; for instance, the panel has agreed on a complex formula
pegged to long-term government bonds for valuing policies from before World
War II. This amounts to the face value of policies multiplied by a factor
of an average of 10, depending on the country in question. The Claims Conference,
represented by Moshe Sanbar of the Centre of Organizations of Holocaust
Survivors of Israel, had argued that Holocaust survivors or their heirs
should be entitled to the "real value" of the policy; there should be no
loss of the value of the policy as a result of postwar currency devaluations.
The insurance companies did not
accept this, arguing that survivors should suffer the ravages of currency
devaluations as all other persons residing in Europe did. After a long
and difficult battle on this issue within the commission, Eagleburger eventually
ruled largely in our favor.
In addition, the insurance
companies had initially contended that the assets of their Eastern
European subsidiaries and branches were nationalized by the Communist governments
and thus the Communist governments, not the companies, were liable to Holocaust
survivors and their heirs for these policies. The Claims Conference vigorously
argued that the companies were liable to pay the beneficiaries regardless
of nationalization.
The insurance companies and the
Jewish representatives were deadlocked, and Eagleburger decided that Holocaust
survivors with nationalized policies would have to be paid at an adjusted
real value.
In addition, the Claims Conference
was one of the parties that successfully argued for the creation of a fast-track
mechanism to compensate aging Holocaust survivors and their families who
have insurance policies, pending final assessments of their claims.
Still, some issues remain unresolved.
A sticking point has been the publication of lists of unpaid policies from
the companies' archives. Once these lists are made public, Holocaust survivors
and their heirs will be in a position to check to see whether family members
held insurance policies with the participating companies. Roman Kent, of
the American Gathering and a member of the Insurance Commission,
has continually pressed for the publication of lists of names of unpaid
policies.
However, the companies now participating
in the negotiations only compose a portion of the prewar European insurance
market. Eagleburger also has contacted other insurance companies, including
German insurance giant Munich Re, Dutch insurer Aegon NV, Germany's Gerling
Konzern and Swiss Life, to ask them to join the panel.
The Claims Conference is working
with the insurance commissioners in New York, California and Florida in
pursuing administrative and other methods available to them to encourage
companies with local offices that are not currently members of the commission.
Current
Status
The commission recently decided
to delay the launch of the claims handling process from October 29, due
to some technical hiccups, but the delay should not be long. A new date
should be announced at the next meeting, on October 21 in Washington.
More than 500 claims have been sent
to the insurance companies from the U.S. state insurance offices for processing
as part of the "fast track" mechanism. We are closely monitoring the processing
of these claims.
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AUSTRIA
Background
Through our Committee for Jewish
Claims on Austria, we have recently intensified its restitution and
compensation efforts in that country.
In addition, the International Steering
Committee on Restitution in Austria was established earlier this year.
It comprises the Association of Jews from Austria, the Jewish Communities
of Austria, the Claims Conference and the World Jewish Congress. The International
Steering Committee is chaired by Ronald Lauder, former U.S. ambassador
to Austria.
Issues
Certain plaintiffs attorneys have
signed a settlement agreement with Bank Austria/Creditanstalt concerning
its involvement in aryanization and other war time activities. The Claims
Conference believes that the settlement is unfair to Holocaust survivors
in and from Austria and distorts the involvement of Creditanstalt in the
aryanization of Jewish assets in Austria by hiding behind the skirts of
the German banks. Our research has shown that prior to the ownership
of Creditanstalt by Deutsche Bank, Creditanstalt actively and enthusiastically
participated in the aryanization of Jewish assets. Our opposition
to the settlement is not merely based on the amount of the settlement,
but derives from our commitment to ensure that truth and justice prevail.
We are currently negotiating with
Bank Austria to reconsider the release of the 1,400 Austrian companies
that are listed in the Settlement Agreement from future claims for the
use of slave labor as well as the structure of the settlement agreement.
Meanwhile, in March 1999, the International
Steering Committee presented a statement of principles to Austrian Chancellor
Viktor Klima:
All assets robbed from 1938 to 1945
should be returned to the victims or their heirs.
Stolen assets that have not been
returned should be returned to victims or their heirs as quickly and as
in direct a manner as possible.
In cases in which the assets as
well as the identity of the victim or heir can be established, but direct
restitution is not possible due to technical, legal or other reasons, a
method of compensation must be found.
In cases of legal uncertainty, or
in which the necessity for restitution cannot be clearly determined, negotiations
toward immediate clarification must be undertaken.
If there is a case for restitution,
but neither victim nor heir can be found (heirless assets), then a form
of restitution should be negotiated with representatives of the victims
as well as for the method of distribution of such assets.
Identifiable assets of Jewish associations
or institutions, or Jewish communal property that has not yet been returned,
must be restituted.
Current
Status
Austria held elections October 3,
and we plan to hold discussions with the new government once it is formed.
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