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THE RESTITUTION OF ART OBJECTS SEIZED BY THE NAZIS FROM HOLOCAUST VICTIMS AND INSURANCE CLAIMS OF CERTAIN HOLOCAUST VICTIMS AND THEIR HEIRS

THURSDAY, FEBRUARY 12, 1998
U.S. House of Representatives,
Committee on Banking and Financial Services,
Washington, DC.

    The committee met, pursuant to notice, at 9:33 a.m., in room 2128, Rayburn House Office Building, Hon. James A. Leach, [chairman of the committee], presiding.

    Present: Chairman Leach; Representatives Lazio, Metcalf, Ehrlich, Kelly, Weldon, Snowbarger, Foley, Fosella, LaFalce, Vento, Schumer, Frank, Kennedy, C. Maloney of New York, Barrett, Ackerman, Bentsen, Jackson, Kilpatrick, and Sandlin.

    Chairman LEACH. Today the committee convenes another in its series of hearings on restitution issues related to World War II and the Holocaust. In previous hearings, we reviewed questions about Swiss bank accounts and the disposition of Nazi gold during and after World War II. The witnesses who appeared before the committee included not only American experts, but also historians and government officials from seven countries on three continents.

    Historical inquiry is not the usual function of a legislative body, but in examining the period in which the Holocaust took place, we are engaging in more than a review of history. We are plumbing some of the deepest questions of human existence: What, for instance, is evil? What is justice?
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    Specifically, the committee today is reviewing what is considered one of the seven mortal sins: avarice. The question is whether a desire to abscond with the assets of others, including personal property such as wedding rings and art objects, played a role in impelling the greatest mass murder in history? And if this is the case, does not civilized society today have an obligation to ensure that profiteering from Holocaust acts does not stand?

    This morning the committee will look at art. In the afternoon, we'll examine an aspect of finance—insurance—to complement the committee's prior review of certain wartime banking practices.

    With regard to art, the Nazis defined certain works as ''degenerate.'' The terms did not simply imply a subjective judgment of a certain style or school of painting or sculpture. ''Degenerate'' also, and perhaps most animusly, implied ''up-for-grabs art,'' objects of value that anyone with power, on the spot, could appropriate for himself and sell on the international art market, which experienced a wartime boom the likes of which was not seen again until the 1980's.

    ''Degenerate'' was thus a term that implicitly applied not only to the artwork or the artist, but to the owner, whether an individual or a museum. And so it is troubling that the most powerful Nazis collected for themselves treasure troves of art.

    Thus, Hitler, a former art student, surrounded himself with artworks, as did Goering and Himmler and others. These plunderers, whose acts of governance can only be described as evil, became perhaps the greatest art collectors of modern times.
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    The German art establishment felt pressure to purify its holdings as soon as Hitler came to power in 1933, and that pressure only increased as he pressed to realize his dream of a pure, Germanic empire. Hitler intended nothing less than the purification of Europe's cultural patrimony. In this, he found the willing cooperation of the occupation regimes. In France, the Vichy government declared that French Jews lost their citizenship and property rights if they left the country, whether voluntarily to a safe haven or in a boxcar to a concentration camp.

    The possessions of those who left were confiscated. Nazis occupiers carefully catalogued the artworks left behind so that the likes of Hitler and Goering could chose what they wanted. Goering visited Paris and took more than 600 items; Hitler, who had first choice, made his picks from albums of photographs. In due course, entire museums were emptied, thousands of dwellings were looted, and some of the greatest private holdings, many of them owned by Jewish families, among them such collectors as the Rothschilds, David David-Weil, and such dealers as Paul Rosenberg and Bernheim-Jeune, were expropriated and sold off. By the end of the war, the most massive displacement of art in history had taken place. Not hundreds, but hundreds of thousands of art objects, of every description, had been taken from their original owners and moved.

    U.S. and British forces, rejecting the hoary and cruel tradition that the spoils of war belonged to the victors, made unprecedented efforts to undo Hitler's fiendish work. Experts in art were attached to each of the main units of the Western Forces of occupation. Special collecting points were set up for the tons of paintings, sculptures, and other treasures that were brought out of the caves, salt mines, bunkers, castles, churches, even cow sheds in which the Germans had hidden them as the Allies closed in. So much art poured in to these collecting points that their holdings soon rivaled the pre-war collections of the world's greatest museums.
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    American military authorities eventually transferred these mountains of treasures to the governments of the countries from which they had been taken. Heirless property, which had been confiscated mainly from Jews, was turned over to the Jewish Successor Restitution Organization.

    What makes the fate of these plundered artworks especially important is that it is the responsibility of civil society to redress the greatest theft in history. This Congress has gone on record with passage of the Holocaust Victims' Redress Act—which is now awaiting the President's signature—that all governments have the obligation to return artworks extorted or confiscated by the Nazis to their original owners or their heirs. The operative principle is simple: stolen property must be returned. Pillaged art can not come under a statute of limitations. The rape of Europa must not pass without atonement.

    There is little doubt that, while the preponderance of art objects taken by the Nazis remains in Europe, some items assuredly have found their way into the United States, their tainted origin having been obscured along the way through multiple transactions and dubious or incomplete records of provenance.

    This morning we'll hear about this problem from the heads of four of our most distinguished art museums and a representative of art dealers, as well as groups involved in restitution efforts. They will tell us what measures have taken place to establish that artworks in their possession do not rightfully belong to someone else, especially Holocaust victims. And they will tell us how they approach the delicate judgments they must make when their responsibilities as fiduciaries for public institutions come into conflict with the potential legal requirement of honoring the legitimate claim of a previous owner from whom a work may have been stolen or extorted in the Nazi era.
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    Moral and legal issues abound: what is the responsibility of the museum, or auction house, or art dealer when they ascertain that a piece that a donor or client is offering to give or sell may be of tainted provenance? Is there a duty to inform the artwork owner of the existence of conflicting ownership claims and a further duty to report the situation to law enforcement authorities? Such questions are relatively new, although they are fast becoming commonplace, thanks in part to such writers as Lynn Nicholas, who testified before this committee in June, and Hector Feliciano.

    We need, it seems to me, new structures to come to grips with this problem—new databases, new clusters of experts, new international covenants, perhaps new domestic legislation—although Congress may have gone as far as it appropriately should on this subject in the Holocaust Victims Redress Act. The initiatives for all this should preferably come from the bottom up, and in this context, I am gratified at reports that museums are talking about establishing an experts group to consider disputes that may arise about the provenance of artworks. That is a step in the right direction—a recognition that a problem exists. And it is important.

    But, most importantly, we need new attitudes and new determination to resolve these profound issues. Here I can safely say that we in Congress stand ready to take a part, as symbolized by today's hearing, in raising public consciousness to the issues at stake and monitoring the progress of private sector actions.

    Mr. LaFalce.

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    Mr. LAFALCE. Thank you very much, Mr. Chairman. Since I began exploring these issues in December 1996, laudable progress has been made. Most importantly, a spotlight is now illuminating the dark and too long ignored recesses of recent history.

    What began as inquiries into Swiss banking practices during the Nazi era and now-dormant accounts has expanded to include other significant assets. Today, our committee is focusing on stolen artwork, how its ownership is tracked, and how restitution can be achieved. We also will explore the issue of insurance claims against European companies. Both of these areas pose difficult legal and ethical challenges and should not be approached or attempted to be resolved lightly.

    With respect to artworks, I am pleased to note that the Association of Art Museum Directors in the United States last week established a task force to develop a process for adjudicating claims and mediating outside the court system. We're advised that the task force report should be complete in June, and we look forward to its findings.

    My impression is that United States art museums are approaching the issue more openly than their European counterparts. If this impression is indeed the case, then United States art museums can strive to serve as models and leaders for handling art restitution claims. Of course, resolving claims on artworks are not as straightforward as one might expect or hope for.

    In addition to legal precedent that may not fit the unique circumstances of losses occurring during the Holocaust, there is the very difficult problem of provenance, or history of ownership. Records often were not kept. There is the real problem of legal buyers unwittingly purchasing stolen property years and several transactions later. And we may face conflicts between a legal solution and an ethical/moral solution.
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    Nonetheless, art museums have an obligation to do the right thing when the claim of a victim or heir proves true. And I note yesterday's press report of a happy ending for the Metropolitan Museum of Art's Van Gogh painting, ''Wheat Fields.'' Research discovered a past owner in the United States, but also proved that the Museum's ownership does not include a stolen past.

    Insurance claims appear to be more intractable. We need strong commitment and acknowledgment by European insurance companies of their role in disposing of Jewish assets during the Nazi era. Again, I believe it's important for insurance companies to seek the moral high ground, rather than exonerate their past through legal technicalities.

    I thank the Chair. I look forward to hearing from the witnesses.

    Chairman LEACH. Thank you, Mr. LaFalce. Did anyone else on the majority side wish to make an opening statement?

    Mr. Schumer.

    Mr. SCHUMER. Thank you, Mr. Chairman. First, I want to thank you and congratulate you on your work in bringing attention to these issues of restitution that have been overlooked for too long. Thank you again, Mr. Chairman.

    Fifty years after the Allies defeated the Axis powers and the end to the murderous death camps of the Holocaust, the Jewish diaspora is just beginning to heal. We are just beginning to come to terms with the depth of the tragedy. We are just beginning to speak, openly, about our experiences. We are just beginning to express the pain. We're just beginning to realize the loss. And we're just beginning to demand that the moral injustices be rectified.
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    Not forgotten. Not overlooked. And not ignored. But rectified.

    One poignant injustice for Jewish families was the loss of their family artworks. Art held a special significance for Jewish families, chosen not simply for aesthetics but because it reflected the family's soul. The thriving Jewish communities of Europe were the art world's greatest patrons.

    During the reign of the Nazis, Jewish art was systematically plundered by the Nazis, kept or bartered for works that better fit the Nazi ideal, laundered through complicit countries, and finally, hung in homes and galleries of often unsuspecting new owners.

    Fifty years later, we have the opportunity and the obligation to rectify these injustices. And this hearing, Mr. Chairman, is just the first step, but a very important first step.

    That is why, with my friend and New York colleague, Congresswoman Nita Lowey, I am introducing legislation that will help families locate their lost and stolen art. Together, we have worked with Jewish groups, art relocation groups and the museum world in order to craft a fair bill that will give families the help they need for their art to be restituted.

    I'd like to compliment the art and museum world, as well as the Jewish community, for their help and their constructive attitudes in this regard. We are not simply here looking to make a whole lot of speeches. We're looking for solutions. And I'm happy to tell you, Mr. Chairman, we are getting very close to coming to an agreement that will satisfy all of us, although not undo the past horrors.
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    The bill that Ms. Lowey and I have put together works for these families in three ways:

    First, we set aside funds that will go to organizations which help families relocate lost art. As panelist Ori Soltes, who has done a wonderful job here will attest to, there are a number of wonderful organizations who are dedicated to finding artwork that was plundered by the Nazis. Congress should offer its help to these organizations.

    Second, we ask that the Federal Government check its own art collections, to make sure that all the artwork our Government displays have rightfully purchased. The Federal Government must lead by example and can't ask others to do what it itself will not do.

    And lastly, we codify into Federal law a New York State court decision that asks anyone who makes an art purchase to do a reasonable title check of the artwork. This background check, known as a ''due diligence search,'' is very similar to what a purchaser of a used car would have to do.

    I want to make it clear that it is not the intention of my bill to point fingers of blame at anyone. On the contrary, many museums and collectors, particularly here in this country, as Mr. LaFalce noted, have already begun to meet the due diligence requirements laid out in our legislation. Our goal is simply to reunite these stolen and lost artworks with their rightful owners from whom they were so callously stripped.

    Congress can no longer turn a blind eye to the problem of stolen art. The time has come for action and to finally give back something to families that have lost so much.
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    Thank you, Mr. Chairman.

    Chairman LEACH. Thank you very much. If there are no more opening statements before turning—excuse me.

    Mr. KENNEDY. Can I just——

    Chairman LEACH. Please, Mr. Kennedy.

    Mr. KENNEDY. Thank you very much, Mr. Chairman.

    First of all, I want to just, on behalf of the Congress of the United States, thank all of the witnesses for coming here this morning and all of the organizations that have chosen to take the time to really research this issue and make certain that any of these artworks that were stolen from innocent families throughout the Nazi regime are going to be returned to those original owners.

    We have a principle of law in this country that if a particular good or service has been stolen and then resold, that second sale is not valid. We ought to adhere to that principle when it comes to stolen works of art. And whatever it takes, if the Congress of the United States ought to set aside some funds—the $5 million that has been requested in order to complete the database and make certain that we can go out and find where these works of art currently sit—we ought to go forward with that plan. And we ought to make certain that the families have their artworks returned.
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    I think it's important that you recognize that you have friends and allies here in the Congress that will stand with you and make certain that we not just go out and condemn people who they themselves might not have known that this was stolen artwork; but if somebody was just giving a wink and a nod when they knew that, in fact, the artwork that they were accepting—whether it be a museum or anybody else—was stolen first, then we ought to know that as well.

    We ought not to just sit back and let our most prestigious institutions off the hook if, in fact, they were complicitous in these crimes. I think that it is important that we set standards for these institutions in this country that ought to abide by making certain that we do check up and determine whether or not artwork, in general, was taken from countries in an illegal manner.

    This is not just true with works from Nazi Germany, but it's true in many other areas that need to be looked into as well. Whether it's some of the artwork taken from Latin America, some of the early artifacts taken from Africa, the fact is that there's a whole trade going on that needs to be looked into. And I just want to let you know that we want to, in fact, stand with you and help you and assist you in the pursuit of trying to get to the truth and try to make sure that families that have this artwork taken from them finally have it returned.

    Thank you very much, Mr. Chairman.

    Chairman LEACH. Thank you, Mr. Kennedy.

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    Let me turn to the panel, but first before doing that, I'd like to recognize in the audience Representative Sidney Yates. And Representative Yates is one of the deans of the House and clearly the dean of the artistic concerns in the House of Representatives. And we're very proud of Mr. Yates, and we think he's made one appalling decision in his life and that is to retire too young. With that appalling decision behind us, we welcome you.

    Mr. LAZIO. Mr. Chairman.

    Chairman LEACH. Yes, Mr. Lazio.

    Mr. LAZIO. I understand that full statements can be included for the record.

    Chairman LEACH. Absolutely.

    Mr. LAZIO. If not, I make a unanimous consent request.

    Mr. Chairman, as public trustees, museums have a considerable obligation to see that the issue of stolen art is properly and equitably addressed. The pleasure and privilege of viewing great art should never come at the expense of victims suffering at the hands of tyrants and thieves. We have heard a great deal about the materials looted as a result of World War II and the Holocaust in particular. However, we know relatively little about what became of the stolen art. I am especially sensitive to this issue because I represent New York, where the art trade in the U.S. is centered and where the greatest number of American Holocaust survivors reside.
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    Before us we have a panel of the most influential and knowledgeable members of the art community. Though our panelists have identified legitimate challenges of tracing the origin of many works, acquiring and identifying works of art are the core functions of a museum. Unlike most theft victims, museums have a wealth of expertise and art-world sophistication at their disposal. While victims suffered their losses involuntarily, museums and auction houses seek out and acquire works of art. Given the incredible pool of talent in the fine arts community and the level of expertise among arts dealers, museums, not victims, have an undeniable responsibility to investigate the legal title of the goods they acquire.

    In listening to our distinguished panel, we must keep in mind the pivotal position of U.S. museums in the international art market. Museums are principal participants in the market, and also receive extensive donations as a result of the charitable contributions deduction. As beneficiaries of public funding, museums occupy a position of trust and confidence with the American people. The code of ethics of the American Association of Museums recognizes this special status. The code proclaims that compliance with all legal obligations regarding museum collections is a ''bare minimum'' and accepts as a given that legitimate legal title to all materials in museum collections have been acquired.

    Much of the art stolen today is destined for the United States. Our own museums, particularly the public institutions, may become unwitting recipients.

    That concept, however, does not absolve them of responsibility for assuring the provenance of art. The privilege of being one of the most lucrative art markets comes with an obligation to do what is morally right. Museum administrators have a special duty to develop rules that balance conflicting interests. These rules must prevent the United States from becoming saturated with stolen art and protect the rights of theft victims without crippling the international art trade.
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    We all make extensive inquiries when we acquire or invest in things of substantially less value than fine art objects. However, dealing in stolen art is not the same as trafficking in other stolen property. Art theft not only robs the individual, but it also robs a nation and a people of their heritage. With this in mind, is it too much to expect that the museum community take reasonable, cost-effective precautions both against acquiring or displaying stolen art?

    I yield back the balance of my time.

    Chairman LEACH. Thank you for that thoughtful statement.

    Our first panel is composed of Mr. Phillipe de Montebello, who is Director of the Metropolitan Museum of Art in New York City; Mr. Glen Lowry, who is Director of the Museum of Modern Art in New York City; Mr. Earl Powell III, who is Director of the National Gallery of Art in Washington; and Mr. James Wood, who is Director of the Art Institute of Chicago.

    We welcome you all, and we will begin with the testimony of Mr. de Montebello. Please.

STATEMENT OF PHILIPPE de MONTEBELLO, DIRECTOR, METROPOLITAN MUSEUM OF ART, NEW YORK, NY

    Mr. de MONTEBELLO. Thank you, Mr. Chairman, Members of the committee, for the opportunity to testify before you today on an issue of deep concern to all of us—museum directors, museum goers, lawmakers, and, of course, victims and heirs of the brutal genocide of the Holocaust. It is a deeply disturbing aspect of an immense human tragedy that art—which has given so many people so much pleasure—could also have been a source of so much pain for those who treasured it and were ruthlessly and lawlessly deprived of it.
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    My name is Phillipe de Montebello. I am the Director of the Metropolitan Museum of Art. I suspect that you can tell from the way I speak that I was not born in the neighborhood of the Met. In fact, I was born in France in 1936. Actually, my most vivid early childhood memories involved running—keeping one step ahead of the Gestapo and the Vichy government, with a father who was serving as a leader in the Resistance. So I do know well, at least as a close-hand observer, the oppression that accompanies tyranny.

    Happily, I came to the United States while still a teenager. I attended school and college here, married an American. I even served as an artilleryman in the American army. I have been Director of the Met for 21 years, and the museum, as you know, is the largest in the Western Hemisphere. It has more than two million works of art from every part of the world, representing more than five millennia of human creativity.

    The primary mission of the Metropolitan as a public art museum is to collect, preserve, and exhibit original works of art and to make these collections accessible to the broadest possible public. Above all, the museum has a stewardship function: it preserves these great works of art on behalf of all people. And it has an educational function as well: to help visitors learn about and appreciate the collections and exhibitions.

    Now why is this important? Well, it's simply because works of art are the tangible manifestations of the highest aspirations of mankind and, to paraphrase the great historian Arnold Toynbee, ''They provide the most perfect avenue to our understanding of history, of civilization, and ultimately, of ourselves.''

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    Every year, some five million visitors, of all ages and all nationalities, come to the Metropolitan, and many return time and again to see their favorite masterpieces. What all these visitors see are works of art that are regularly subjected to the most rigorous scholarly scrutiny.

    The fact is that, as a matter of both policy and routine practice, museums conduct research on every facet of a work of art, including its provenance, or pedigree. To ask this is a scholarly obligation, because knowing the full record of ownership of a work of art increases our understanding of the history of collecting, of the history of tastes, and of society, all of which contribute enormously to our understanding of the work of art itself.

     Important works of art, by the thousands—and this is important, ladies and gentlemen—important works of art, by the thousands, are widely published, reproduced, frequently exhibited not only on our own walls, but at museums throughout the world to whom we lend on a regular basis. I should add that at least since World War II, we have listed every acquisition in our annual report, and it is very broadly disseminated. Works of art in American museums, ladies and gentlemen, are not dormant or hidden assets. Surely, there is a major difference between museums which display, publish, and invite dialogue on their collections, and the financial institutions, which have been shown to have hoarded for half-a-century, the spoils of war and genocide, not in the open, as with works of art, but in the darkness of total secrecy.

    Ladies and gentlemen, museums fully understand the nature of their legal and ethical responsibility. We abhor the spoliation of art that occurred during the Holocaust and World War II, and we have always been firmly committed to resolving questions when and if they arise.
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    In fact, we have often raised questions ourselves. I offer some examples in my written testimony. Two are not related to World War II and deal with works of art shown by our own research to have been stolen and which we then returned of our own volition and initiative.

    As far as World War II is concerned, only two claims have ever been lodged against the Metropolitan. Both are recent: one by Belgium concerning a 15th Century painting which the Met purchased at a public auction; the other, as the press has reported, by a non-Jewish German national for a well-known painting by Monet, given to the Met in 1994. The picture was allegedly taken by the Russians at the end of the war. We are now looking into both of these claims most seriously.

    Our willingness to respond to such claims remains unchanged. What has changed, though, is that the spotlight is once again aimed on the issue of art's spoliation in World War II, and this is a result of the confluence of a number of factors.

    The downfall of communism, for example, brought with it the opening of records whose existence was hitherto unknown. The availability of other archives, sealed since the war, encouraged new research by scholars and journalists. Newly formed groups, such as the International Foundation for Art Research and the Art Loss Registry, have also added to public awareness of art thefts. And more computerized research, now available on the World Wide Web, permits the dissemination of far more data than ever before.

    Indeed, it should be known, and it has been noted, I'm to glad say, that last month the Association of Art Museum Directors dedicated itself more proactively to the issue of the widespread looting of art by the Nazis. The Association created a special task force, which I chair, comprised of a number of directors from the country's leading art museums, including my colleagues here present. The task force has already recommended the creation of a mechanism for the fair resolution of World War II claims, such as mediation, arbitration, or other forms of alternate dispute resolution, reconciling the interests of individuals or their heirs who were dispossessed of works of art with the complex legal obligations and responsibilities of art museums to the public to whom they hold works of art in trust. And I'd like to emphasize that museums are also committed to a process of more directed research, continued vigilance, and to the enhanced use of new technologies in order to access records as they become available.
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    Our expectation is that resulting claims are likely to be few. After all, our collections have been in the public domain for generations. But you may be assured that should any case arise—and even a single case is an extremely serious matter—we will, as always, address it to the best of our ability.

    I thank you very much, ladies and gentlemen for this opportunity.

    Chairman LEACH. Thank you, sir, and without objection, your complete statement will be put in the record. I notice you summarized in several points, as will the complete statements of all our witnesses.

    Mr. Lowry.

    Mr. LOWRY. Good morning, Mr. Chairman.

    Chairman LEACH. If I could just interrupt briefly. I apologize that this is a morning in which there will be votes. And there's vote that's put on, and we will have to interrupt the panel as the committee is asked to vote. So please proceed.

    Mr. LAFALCE. Mr. Chairman, may I just have 10 seconds to also indicate that a meeting has been called between House Democrats and Senate Democrats with the President at 10:30 a.m., and that will diminish the number of Democrats attending.

    Chairman LEACH. Mr. Lowry.
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STATEMENT OF GLENN D. LOWRY, DIRECTOR, MUSEUM OF MODERN ART, NEW YORK, NY

    Mr. LOWRY. Thank you very much, Mr. Chairman.

    Good morning, distinguished Members of the Banking Committee. On behalf of the trustees of the Museum of Modern Art, I want to thank you for this opportunity to discuss the role of America's museums in addressing the fate of works of art stolen or misappropriated during the time of the Second World War. All of us at the museum are deeply sensitive to the incalculable pain and loss suffered by victims of the Holocaust, a loss and suffering that I know personally.

    Let me begin, then, with an unequivocal statement: The Museum of Modern Art does not and will not knowingly exhibit stolen works of art. Like our sister institutions, we maintain our collections with scrupulous regard for our professional and ethical obligations. Within this context, however, it is crucial to understand the enormous complexity and practical problems of resolving issues of provenance. But museums have always been able to address conflicting ownership claims responsibly and ethically, and there is no reason to believe that these long-standing professional practices will change.

    As Mr. de Montebello has pointed out, provenance research is an ongoing and routine process in our museums. You might be interested to know that, to date, no claims relating to the Nazi looting of art have been made against works of art in the Museum of Modern Art's collection. However, in light of the new information becoming available that Mr. de Montebello mentioned, we have begun a systematic review of our collection, and we will continue to review our holdings as more information emerges.
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    Within this context, I am honored to be serving on the Association of Art Museum Directors task force, chaired by Mr. de Montebello, and I am proud of the Association's timely response to this issue. I am convinced the task force will provide the kinds of guidelines and recommended actions necessary to ensure that America's museums set the standard for ethical behavior in this respect.

    In order to illustrate for you the complexity of the issues involved in this kind of work, let me offer an example of the time and effort that must go into provenance research: The Museum of Modern Art recently acquired a truly great painting, the ''Yellow Curtain,'' by Henri Matisse. At first glance the painting had an impeccable provenance, having been in the French collector Alphonse Kann's collection before the war, and then in several distinguished American and European collections after the war.

    During our research on the painting, however, we learned that it had been confiscated by the Nazis and even appears in a war-time photograph of the Jeu de Paume, the Parisian building used as a repository for looted art by the Nazis. Crestfallen, we ceased to pursue the painting and alerted the dealer to the problem. But this is not the end of the story. For subsequent research revealed that despite being looted, the painting had actually been restored to Mr. Kann prior to his death, and that he, in turn, had sold it to a European collector in the 1940's. In order to be sure that this had happened, the Museum contacted Mr. Kann's heirs through an intermediary and obtained a letter from them assuring us that all was in order. This process took over a year-and-a-half despite the renown of both the painting and the Kann collection.

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    While this kind of intensive research is standard for all works of art we acquire, I believe that it is the exception rather than the rule to be able to so clearly document the history of such a work of art.

    Let me then cite another example that highlights this issue and also deals with the important question of loans as opposed to works of art owned by a museum.

    Just a few weeks ago, on New Year's Eve, the Museum of Modern Art received letters from two families claiming to be the rightful heirs of two different paintings by an Austrian artist named Egon Schiele. We had borrowed both paintings from a foundation financed by the Austrian government and had exhibited them, along with about 150 other works by the same artist, without incident at the Museum for three months. We had no reason to believe that there was any cloud on the paintings' past. Both of the pictures had been exhibited around the world for decades and reproduced extensively.

    The exhibition closed on schedule over a month ago. But the two paintings remain in New York because the Manhattan district attorney decided to subpoena the pictures. As far as I am aware, neither of the families claiming ownership has actually filed suit to obtain their paintings.

    From the information recently revealed in the press, it appears that the claim of at least one painting is based on the belief of two people, both actually now deceased, who thought themselves to be the sole heir of the pre-war owner. According to the following story recently published in the Austrian press, when the Nazis annexed Austria in 1938, a Viennese man named Fritz Grunbaum owned the painting called ''Dead City III.'' Mr. Grunbaum died tragically in a concentration camp, and his wife apparently did not survive the war, either.
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    After the war, the sister of Mr. Grunbaum's wife endeavored to have herself declared his sole legitimate heir—he had no children—and took title to the painting ''Dead City III,'' as well as his other personal property. The sister-in-law sold the painting to a gallery in Switzerland in the 1950's. Through various owners, including a gallery in New York City, it ended up being bought by the Austrian government on behalf of the Leopold Foundation.

    After three months at the museum, during which time the picture was seen by hundreds of thousands of people and widely reviewed in the press, a woman in New York and her sister-in-law asserted that they were the true owners of the painting and demanded that the museum return it to them. I met with the woman to discuss her claim, which is based on the fact that her late husband's father's cousin was Fritz Grunbaum, the pre-war owner. Apparently, her husband had obtained a German document in 1965 declaring him Grunbaum's heir, long after Mr. Grunbaum's sister-in-law had sold the painting through the Swiss gallery.

    I mention this example not to discuss the merits of the claim, but to explain how very murky such claims can be and why no museum is in a position to resolve them. In this instance, the museum borrowed the art. Whatever logistical and financial difficulties exist for examining one's own collection are multiplied for loans. There is no effective way to determine the provenance of, in this case, 150 works of art arriving for a three-month loan. And even if a person were able to establish that one of the borrowed works of art were his, it is certainly not for a borrowing institution to adjudicate the claim.

    The district attorney's action in barring the paintings from returning to the lender has the potential of seriously affecting the future of art loans in this country. Unless we can assure lenders that American art museums will return borrowed works of art, lenders, fearing seizure, will simply not lend. That would be a disaster for the American public, which has come to expect first-class exhibitions at art institutions across this great land.
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    It is, of course, equally important to be able to satisfactorily resolve ownership issues. It is precisely because of our deep sense of moral obligation to the past and our commitment to fulfilling our responsibility to the public we serve, that the Association of Art Museum Directors has called for the creation of an appropriate process for resolving all claims related to art looted by the Nazis. Several groups and individuals, such as the World Jewish Congress' Commission for Art Recovery, are already doing important work in this regard.

    Beyond that, however, we believe the interests of all concerned, and particularly victims and heirs who have waited so long, would be best served by a process specifically dedicated to these questions, which could act with speed, impartiality, and without the excessive costs often associated with litigation.

    I hope that my comments have outlined some of the issues involved in the restitution of art stolen by the Nazis. The Members of this committee should be assured that American art museums understand the importance of dealing appropriately with any stolen material, and we are particularly sensitive to the issues of art stolen during the Nazi period. American museums have set international standards for the quality of their collections and programs, as well as the probity of their policies. We will not countenance the acquisition or display of stolen art, and we are committed to doing everything possible to ensure that our collections are untainted by the stigma of the Nazi past.

    Thank you very much.

    Chairman LEACH. I thank you, Mr. Lowry. And before turning to Mr. Powell, let me note that there is a vote on the House floor with just a few minutes to go before it elapses, and so I'd like to withold your testimony until the committee comes back, and so the hearing is in recess.
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    Mr. ACKERMAN. Mr. Chairman.

    Chairman LEACH. Yes.

    Mr. ACKERMAN. I did have an opening statement. I would like to request unanimous consent to place it in the appropriate place in the record.

    Chairman LEACH. Without objection.

    Mr. ACKERMAN. Thank you.

    Chairman LEACH. Of course, Mr. Ackerman.

    The hearing is in recess pending the vote.

    [Recess.]

    Chairman LEACH. Our next witness is Mr. Earl Powell III, who is the Director of the National Gallery of Art, and we welcome you, sir.

    Mr. Powell.

STATEMENT OF EARL A. POWELL III, DIRECTOR, NATIONAL GALLERY OF ART, WASHINGTON, DC
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    Mr. POWELL. Thank you, Mr. Chairman.

    It's an honor to be here. I'm Earl Powell, the Director of the National Gallery of Art. Good morning, Mr. Chairman and Members of the committee.

    As many of you may know, the National Gallery of Art was established by a joint resolution of Congress in 1937 as a result of a gift to the Nation from Andrew W. Mellon. As provided in the joint resolution, the gallery is supported in its maintenance and operations with annual Federal appropriations. All works of art in the gallery's collection, as well as its two landmark buildings have been given by private donation. It is considered one of the world's finest collections of Western achievements in painting, sculpture, and works on paper of European art, from the Middle Ages to the present, and of American art, from colonial times to the present.

    From its beginning, the National Gallery has served the country by preserving, collecting, exhibiting, interpreting, and encouraging the understanding of great works of art. Last year, it welcomed over 5.5 million visitors, reflecting constituencies from every State and Territory, as well as more than 80 foreign countries. I'd like to thank you for this opportunity to meet with the committee to discuss the important subject of restitution of works of art seized during the Third Reich.

    We join our museum colleagues in expressing our profound concern for the victims whose artistic treasures were pillaged during the Holocaust. The National Gallery has been involved since the end of World War II with the international effort to recover looted works. On June 23, 1943, President Roosevelt established the Roberts Commission to promote the preservation of cultural properties and to protect Europe's treasures in war-ravaged areas. An independent presidential commission, it was headquartered at the National Gallery, and several gallery officials as well as members from the Metropolitan Museum of Art and other distinguished institutions served on this Commission.
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    The Commission promoted the establishment of the Monuments, Fine Arts, and Archives, or the MFAA section of the U.S. Army in post-war Germany which, among other things, established ''collecting points,'' where art objects retrieved from the Nazis could be inventoried and protected before their restitution.

    Certain records of these and other restitution activities are available for research at the National Gallery Archives. For example, copies of the glass slides and gelatin negatives of the roughly 60,000 works of art in one of the Army collecting points, called the ''Munich Collecting Point,'' are available for research in our photo archives. As a matter of interest to the committee, your recent witness, the historian and author, Lynn Nicholas, spent time at our archives while researching her important book, ''The Rape of Europa: The Fate of Europe's Treasures in the Third Reich and the Second World War.'' The last several years have brought forth an extraordinary amount of new scholarship regarding the fate of many cultural treasures during and after this terrible period. But more is needed, and we are hopeful that new revelations will shed further—and much needed—scholarly light on this subject.

    The National Gallery, along with other museum directors represented here, is participating in the Association of Art Museum Director's task force dedicated to finding solutions to these complex problems. We welcome the opportunity to join with our colleagues in the museum community to explore ways of continuing restitution as new information becomes available.

    The National Gallery follows the practice of American art museums of publishing annually a list of all art acquisitions. It has done so since 1938. In addition, the gallery has undertaken an extensive project, which began over a decade ago and which will take several years more to complete, of the publication of a projected 30-volume, detailed, systematic catalogue of its entire collection. Each volume, written by gallery curators or other scholars, is devoted to a particular school of painting, sculpture, or decorative arts area with comprehensive scholarly essays on each work articulating the history, style, content, and context, with the technical notes and artists' biographies, summarizing and expanding upon the literature in the field. Ten of these volumes have been published, three more will come out in 1998, and the other volumes are in progress. Additionally, research on works of art in the gallery's collection is often available in special exhibition catalogues. As all of this new scholarly research is published, the details regarding the history of ownership, or provenance, are added to our curatorial records, which are open to researchers. In an effort to make as much information as possible available to the public around the world, the National Gallery launched its World Wide Web site a year ago. A cornerstone of this site is the collection section, which contains detailed provenance information on thousands of works of art in the National Gallery collection.
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    In similar vein, we practice the same care as other museums in the acquisition of new works of art. We seek full provenance details, including export licenses where required and ask for a warranty of title when purchasing art. Where a question is raised, we will consult the Art Loss Registry.

    Despite these precautions, it is not uncommon for there to be gaps in the recorded provenance of works of art which could well cover a long period of time. For example, when a work of art has been sold at auction or through a dealer or several, a previous owner's name may have been withheld for any number of legitimate reasons.

    In the case of art looted by the Nazis, the picture is further complicated by the fact that through the efforts of the Allied governments and the courts, many such stolen works of art were returned to their legitimate owners. Records of these returns, many of which are held by foreign governments, are often not easily available.

    We are pressing on in our efforts to complete as thoroughly as possible any additional provenance research that appears necessary, but this is a costly and time-consuming task. At this time, Mr. Chairman, I can assure you that we have never received a single claim against any work of art in the gallery's collection; but if such happened, it would be given our fullest and immediate attention.

    In closing, I would like to thank you and the committee for this opportunity to discuss these important matters.

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    Thank you, sir.

    Chairman LEACH. Thank you very much, Mr. Powell. We appreciate that thoughtful statement.

    Our final witness represents the heartland, and you're very welcome, representing the Art Institute of Chicago, Mr. James Wood.

STATEMENT OF JAMES N. WOOD, DIRECTOR, ART INSTITUTE OF CHICAGO, CHICAGO, IL

    Mr. WOOD. Thank you.

    Mr. Chairman and distinguished Members of the Banking Committee. On behalf of the Art Institute of Chicago, I would like to thank Chairman Leach and the committee for the opportunity to contribute to the discussion of one of the most pressing and difficult questions facing American art museums today. The trustees and staff of the Art Institute deplore the systematic and unlawful confiscation of art, which remains one of the most vexing and unresolved legacies of the Second World War.

    During periods of violence and intolerance, art has always been destroyed and dispersed. But as Lynn Nicholas has documented so painfully in her testimony to you, no period in recorded history experienced such widespread and systematic human and cultural destruction.

    The acquisition policies of the Art Institute are longstanding and unequivocal. They state that no object that has been stolen, removed in contravention of treaties and international conventions to which the United States is a signatory, or illegally imported into the United States may be acquired. We have no claims against a work in our collections. However, should such questions arise, our standing policies would guide us in how to address them.
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    The question of the history of ownership of works of art is an extremely complex and difficult issue. I say this with confidence and humility, as we have spent years, considerable financial resources, and much of our professional staff's time researching our collections.

    The Art Institute contains over one-quarter million works of art, ranging from monumental altar pieces that were once the integral parts of vast religious structures to exquisite coins that could easily be transported in the palm of one's hand. They have been acquired through gift and purchase over the past 100 years, and only a small fraction of the total were created within the present day United States.

    I note this to stress the obvious: we are a young Nation. The collections of America's greatest art museums—just as the rich diversity of its population—have been repeatedly enriched by import and immigration from abroad. The result is that our museums have the most varied and comprehensive collections of any in the world. But the painful corollary is that we often do not know everything about their previous history.

    Research and the publications which have resulted from it have both added immeasurably to our knowledge and confirmed its limits. Scholarly research, and particularly the establishment of the history of prior ownership, is not a science. While our goal is to assemble the facts, we are frequently dependent on inconclusive documents and secondary sources. Just as with our efforts to determine the authenticity of a work of art, absolute verification is elusive. Most art is portable, and clearly-documented transactions tend to be the exception rather than the rule.
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    By contrast, the title search on a piece of real estate benefits from a longstanding tradition of documentation and the fact that, regardless of how often ownership changes, the land does not move. Finally, the vast archives that have become available in the post-Cold War period will provide an invaluable source of new information and throw into question the conclusions of past scholars. While it has been more than a half century since the conclusion of World War II, it is only within the past several years that we have gained access to information that will be fundamental to establishing the provenance of works that changed hands during this period.

    We owe much to such independent scholars as Lynn Nicholas and Hector Feliciano for the information they have uncovered and the example they have set for scholars within our own institutions. Simultaneously, we must not lose sight of a fundamental fact: that museums collect to make art public and to put it to an educational purpose. They're a source of information that, by their very nature, should enable more claims to come to light. We acquire art to display it in galleries, not to hide it in vaults. Museums make visible and understood what can often be invisible and unknown.

    Public exhibition and widely dispersed publication is a major source of knowledge about the whereabouts of art. This constant addition of works to the public and international marketplace of ideas and images is a fundamental contribution toward the recovery of stolen artworks, particularly when combined with the fact that American law and our judicial system make this country among the most sympathetic in the world to the claims of those trying to recover stolen property.

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    Similarly, special exhibitions of loaned works of art have not only been a tremendous addition to the cultural lives of Americans of all ages, but an invaluable source of new information. Taken together, the exhibitions of the past two decades and their accompanying catalogues have not only provided pleasure and nourishment for a broad public, but have also been a vehicle for much of the finest recent scholarship by art historians.

    The free flow of information and knowledge is the ally of restitution and the first step to awareness and eventual recovery. It is no coincidence that a number of the cases currently pending came to light as a result of works being included in loan exhibitions and their publications.

    The Art Institute, in its own policies and actions, and in conjunction with the member museums of the Association of Art Museum Directors, will respond professionally and sympathetically to any concerns regarding our collections and exhibitions. We are sensitive to the outrages suffered by the victims of Nazi art theft and to the rights of their heirs to legitimate claims for the restitution of stolen art. Experience is teaching us that each situation is the result of a unique human and legal circumstance that must be reconciled with our responsibilities to the public for whom we hold these works in trust. We accept the mandate to redouble our efforts to determine the fullest possible history of the works in our possession to ensure that claims of lawful ownership are rightful and fact based and to make restitution where appropriate.

    The twelve years of the Nazi era witnessed the greatest displacement of art in history. The holes in our knowledge are so gaping and the personal tragedies so sensitive, that there are clearly no easy solutions. In my opinion, what is most needed at this highly charged moment is the means to deal in a non-confrontational way with each individual situation on a case-by-case basis. We need not only increased research, but also the means for disseminating its findings and the mechanism for the fair resolution of claims. An essential step toward achieving this goal would be the strengthening and consolidation of databanks, capable of being updated continually and widely accessible. We are ready and willing to dedicate the manpower and resources to new research, but we need more focus with regard to what we are looking for.
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    The first step is to increase our knowledge of the facts and create a forum in which they can be objectively discussed. The question of restitution and compensation also needs careful study to determine what precedents exist and what remedies may be appropriate. I look forward to my role as a member of the AAMD Task Force to explore what these remedies might be.

    Ladies and gentlemen, thank you for this opportunity to share my concerns.

    Chairman LEACH. Well, thank you. And let me thank you all for such thoughtful testimony. You represent not simply reputable museums but, I suspect, in a broader context, the most reputable institutions of any kind, of any nature in the world today. So your presence today is very appreciated.

    I will tell you, as Chairman of a committee of Congress, that I have a personal view that art is not simply for museums; it's for everyone and for public spaces, and you're in a room with a Kenneth Nolan and a Harry Prune painting. We also have in various rooms of the House Office Building a series of works by Luzansky, Burford, Ochnical Calder, Donald Judd, Samuel Donnelnay, Peter Max, Apel Lipschitz, Manray, Roffer, Roshenberg, Rivers, Kekoshnikatz, Zaiwu Sheehan and others. And so anyone who's interested in prints in particular is welcome to visit the House of Representatives' art collection, and you're happy to see them.

    Let me just begin by saying that one is extraordinarily impressed with the thoroughness of your individual institutions. And yesterday, in a private conversation—and I'd like a response to this publicly—the question is obvious: are there such things as rogue institutions, or are you very confident in the entirety of the American museum world? And I'd like to begin with Mr. Wood on that.
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    Mr. WOOD. I personally am very confident with the museum world in the United States, particularly the larger museums which make up the AAMD and the American Association of Art Museums. We have a very rigorous accreditation process which each of these museums subjects itself to willingly, and I really do not feel that we should be concerned about rogue museums. There are clearly large areas of information none of us know yet, and we all want to pursue this and find the facts. But I don't think our concerns should be something as glaring as that.

    Chairman LEACH. I preached to that, and yesterday you pointed out the nature in which boards of directors responsible to the museum and the community is very powerful in the United States, which then leads to the next question: that as extraordinary as our museums are, how do they relate with Europe and European law? It's my understanding, for instance, that in one sense in Holocaust art there is no statute of limitations, particularly in the United States.

    On the other hand, you have a legal principle in many European countries that if one buys an object through a reputable dealer or auction, that the standard of evidence may be slightly different. And so you have international conventions that may or may not be precisely in concert with law. And is there an incentive, for example, for a work of art that may have questionable provenance to keep it in Europe rather than bringing it to the United States? Is that a dilemma or is that a theoretical unlikelihood? Would anyone wish to comment on that?

    [Laughter.]

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    Chairman LEACH. Mr. Lowry.

    Mr. LOWRY. I think if the question pertains to whether an American museum would ever engage in such practice, I think it's fair to say it would not. I do not believe that a single art museum in this country would countenance knowingly possessing stolen works of art.

    Chairman LEACH. Then the second question is: Is that standard an absolute standard in Europe as well?

    Mr. de MONTEBELLO. Sir, if I may answer, Mr. Chairman, I think that is a very good question. It catches us a little bit unawares. We spend every waking hour worrying about our museums and American museums, and I must say I don't think too many of us have thought of extending specifically our ethical codes to European museums. There is an organization that is called ICON that has also codes of ethics that are meant to govern museums around the world. And you actually implant an interesting thought, at least in my mind, which is there are other associations—certainly in Great Britain, in France, and elsewhere—that regroup the museums of those countries. And I would not be surprised if, over the coming months and years, a higher pitched dialogue might not actually be engaged among those institutions. But for the moment, the answer is: there is an Atlantic Ocean between us, and it's quite wide.

    Chairman LEACH. Well, let me just ask as a final question then. It is my understanding that your museum association has set up a committee to deal with this issue. Would anyone like to describe precisely its jurisdiction and its mandate?

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    Mr. de MONTEBELLO. I suppose as Chairman of this committee I might answer that question. The committee was formed as a result of the increased awareness we've all discussed this morning and the refocus on looted art during World War II. And as an association which regroups the very large museums—medium-sized to very small—we feel, at a certain level, an obligation to serve the whole AAMD and the whole body. The very small museums that may have works of art also acquired from Europe—not only American works of art or Native American works—do not have the resources, whether it be counsel on staff and so forth, to be able to react with the same degree of maturity and sophistication conceivably as the larger museums. And so through the AAMD, we provide as a collegial body help for these organizations.

    So, our thought was let's put together a set of guidelines, of structures, conceivably a framework that we would explicate to the general body so that they can confront possible claims or issues of due diligence in working out provenance, according to the highest possible standards that we will help set, the ten of us—there are ten on the committee—for the rest of the body. And we will report back to them in June, and nothing that we do is kept private. And I'm sure that that would become common knowledge at the time.

    Chairman LEACH. Thank you very much.

    Mr. Ackerman.

    Excuse me, Mrs. Maloney.

    Mrs. MALONEY. Thank you, Mr. Chairman. In the interest of time, I'd like to request that my opening statement be put in the record as read.
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    Chairman LEACH. Without objection.

    Mrs. MALONEY. And I would just like to state that it is truly amazing to me how the incredible tragedy of the Holocaust continues to affect the lives of many Americans, and today's hearings on art and insurance truly illustrate how broad and deep that horrible event actually was. And I compliment the Chairman for calling these hearings.

    Really, the question before us today in this hearing—and I believe it will be a long deliberative process—is truly: How can we fairly and accurately establish who may be the rightful owner of a piece of art? And I would like first to ask the panel, in order to get a sense myself of how broad this problem is. And I thank you for coming. You represent some of the greatest art institutions in our country and in the world, and we thank you for all your hard work in bringing art to the public. But I'd like to ask, beginning with Mr. Wood, how many claims there are against your institution stating that the art within your institution may be stolen or in some way tainted by the Nazis? I would particularly like to ask Mr. Lowry, who is from the great city of New York, which I have the honor of representing, if you would not only, in answering the question, comment on the recent dispute of art at the Museum of Modern Art. Recently, those in New York read about it, but I think that that example may shed some understanding on the problem. And if you would, Mr. de Montebello, there was an article in the New York Times yesterday on ''The Missing Link and a Van Gogh's Ownership.'' If you would elaborate on this article, I believe it would help us understand the processes that you're going through. But if I could ask each one to go down and explain to us how far—how many claims have come between a gangster institution alleging stolen art tainted by Nazi horrors.

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    Mr. WOOD. Certainly. In the case of the Art Institute, we have had no claims from individuals or governments with regard to this period. I say that it's very clear. At the same time, I don't want that to be perceived as diminishing in any way our concern about what we don't know. As I pointed out, we spend a great deal of time and effort researching our collections. We will continue, and frankly, we are going to do more in the future than we have done in the past. And until that is done, and that is a process which literally is endless, as scholarship is not a scientific experiment where you come to a finite end, we will not know everything about the collections. So I can say definitively, as of now, there's not been a claim, but we are ready to respond if any claim were to arise.

    Mr. POWELL. The National Gallery has likewise never had a claim against its collections. Our research on the collections is constant. I mentioned earlier we've published ten volumes of the catalogs of the collections, and with three more to come. It is very much a scholarly detective game, finding the provenance. I think the information base, the pools of information that may now become more available with the opening of archives in Europe, in particular, will add a dimension that we have not had before, and that should lead to, I think, new levels of knowledge that might be very helpful in this path.

    Mr. LOWRY. The Museum of Modern Art has a collection in excess of 100,000 works of art, and to date there has not been a single claim at the museum relating to art looted by the Nazis. But like my colleagues I am increasingly aware of new information that is surfacing from documents that have been declassified, or archives in Europe that are becoming accessible. And we are fully committed to ensuring that we absorb that material and check and double check our collections to ensure that we don't have any works of art that are the result of Nazi looting.
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    The recent exhibition at the Museum of Modern Art involving the display of Egon Schiele's work from the Leopold Foundation, an Austrian foundation, took place during the last three months of 1997, and several hundred thousand visitors saw that show. At the end of the exhibition, two families claimed that they each were the rightful heirs of two separate works of art that were in the exhibition. It was a very difficult situation for us. We had an obligation, contractual, with the Leopold Foundation to return their works of art. We hoped that an impartial, international panel could be convened to assess the validity of those claims and get to the truth of the matter. And the Leopold Foundation, I understand, was prepared to go forward with that process. But in the end, the district attorney of Manhattan intervened and subpoenaed the pictures, and so 150 of the works of art in the exhibition were returned to Austria, two remained in New York. As far as we can tell from published reports, at issue is really a question of ownership claims: how works of art were restituted after the war, and which side—at least in one case—which side of a family has proper title to those works of art? There is a larger question that is raised by this incident, which has to do with how may American museums assure their colleagues around the world that works of art lent to them may be securely returned to them after exhibition? And this is a potentially troubling and difficult situation and one that I think should cause us all to pause and be concerned because this country has achieved, over time, one of the broadest and finest exhibition programs collectively of any place in the world, and it's something that benefits all Americans.

    Mrs. MALONEY. I know my time is up, but could Mr. de Montebello answer the question, too? And if he could respond to this article, please, Mr. Chairman.

    Mr. de MONTEBELLO. I'll be very brief, if the time is short. Very simply, in the last 53 years since the war, we have received a total of two claims in a collection that is in excess of 2,000,000 works of art. Those two claims were in the last few months, as I stated in my statement—one from the Belgian government and one from a German family claiming that the works had been stolen by the Russians after the war. I want to interject a statistic that, I think, may be right here that addresses the issue of the magnitude of what might be found, which is that, as far as I know in terms of the totality of the claims against all American museums since World War II, if you were to triple the number of claims all of a sudden, you would still be below 12 works of art and 12 claims. This is just to put into perspective the nature of the problem.
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    The article in the New York Times, written by Judy Dubrinsky, who does not give herself enough credit for much of the detective work involved, I think is a very interesting case that demonstrates, in terms of burden of proof or burden of guilt of a work of art, that even when there is a gap in our knowledge about the provenance, the result would not necessarily arrive at the work of art was looted. In this particular instance, in fact, Mrs. Maloney, there was no missing link. What there was is missing absolute confirmation of what we had known, which, indeed, the Mendelson family, had managed to survive the war, escaping to Sweden. They had recovered the works that they had lent to friends living outside of Berlin, moved with the paintings to Switzerland, and sold them directly through dealers, Natan, that we knew of, and so forth.

    So what we now have, fortunately, is such a confirmation. What it tells us to a certain degree, and I think it will certainly complicate future job descriptions for curators is that curators used to be art historians only and exhibition organizers, and just how much we will ask art historians to also become genealogists and investigative reporters, I don't know. But we'll all do our best if cases arrive in looking at our collections to try and come as close as we can to confirm what we may suspect.

    Thank you.

    Mrs. MALONEY. Thank you. My time is up. I do have further questions. I hope you'll have another line.

    Chairman LEACH. Thank you, Mrs. Maloney.

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    Mr. Lazio.

    Mr. LAZIO. Thank you. I want to thank the panel for their testimony, for their interest, for their engagement, and for what they've already done. I know that virtually all of you have already been involved in a group which has been formed to, among the heads of the largest art museums in the nation, to try and come to terms with this problem.

    I wonder if I could begin by asking, is there any uniformity of standards in the process of establishing provenance? Does each museum go about it a different way or is there any established procedural standards that most leading museums use?

    Mr. WOOD. I would say there is great consistency. If you were to look at the published major catalogues from the four of our museums, you would find a great consistency in the discipline. The individual work, the period in time, a Sassanian silver plate versus an Impressionist painting, the entry you will get describing that work will be very, very different. But the, I think it's fair to say, the scholarly discipline—the approach—first you look for primary sources, secondary sources, published materials—the approach is quite uniform. But I must stress that this is not a science, and it varies, to some degree, between the talents of individual researchers.

    Mr. LAZIO. Do you think that museums, especially those that are, I loathe to say, second tier, but those that are not in, say, the largest cities with the broadest, largest collections would benefit from more guidance and more uniformity in terms of establishing provenance? And the second question is, do you think there is a greater likelihood in smaller museums that there would be discovery of a piece of art that might have a questionable provenance?
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    Mr. WOOD. I wouldn't come to the conclusion, to answer your second question first, that there is a greater likelihood. No. I think the smaller museums, in many ways, would benefit from more resources. I think that is probably what keeps them from being able to research their collections more than, you know, having trained curators. A large museum such as Chicago will have the resources to bring in an outside specialist to research a particular area of the collection. I must say the National Endowment for the Arts has been a tremendous asset over the years in grants, helping us with basic things like research.

    Mr. LAZIO. Is it more difficult—and anybody can answer—is it more difficult to establish provenance when the last owner is a private dealer as opposed to any number of other sources, whether it be auction or public holding? Does that present particular problems?

    Mr. LOWRY. I don't think on the whole it necessarily presents particular problems when it's a private dealer. Institutions endeavor, in acquiring works of art, to follow the same procedures, whether it's a private dealer, or an individual, or an auction that they are acquiring the work from. And that is to assure themselves, to the best of their abilities, of the history—the ownership history—of a work of art. There are often in the art world transactions where a previous owner is simply listed as a private individual for reasons that are many; and, therefore, in the re-creation of that chain of ownership, one runs across the fact that an owner might have been a private collector in London. That doesn't necessarily mean one stops there, but it just means that one has to engage in intensive research to try and identify who that previous owner might have been.

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    Mr. LAZIO. But would you say that most——Oh, I'm sorry.

    Mr. de MONTEBELLO. Excuse me. Glenn Lowry said, if I may? Glenn Lowry said something very interesting that I want to expand upon, because I don't want this committee to think that our research into provenance is to be equated exclusively to a title search. We are just as important, just as interested in finding who owned the work of art, because it tells us a great deal about the work of art. We know about some collectors who specialized in fakes, others in authentic works. So you're better off in your provenance having the collector who had originals rather than the one who had fakes.

    In many instances, you know that a work of art goes back to a major dealer, whether it's Kanveiler or Bernaime. That is better than a totally unknown name in a bad neighborhood. And in some instances, and I could cite quite a few which I won't take the time for this committee, authenticity of a work of art can depend, especially for Old Masters, on who might have owned it originally, who might have commissioned the work. So our interest is a combination of is it entirely, I mean, is proper title going to be transferred, but it is also an intellectual and very important exercise.

    Mr. LAZIO. Could I ask unanimous consent for one additional minute, Mr. Chairman.

    Chairman LEACH. If you just hold for one second, you may have that. Let me mention one thing, if I could—an apology to the panel. I've just been asked by my leadership to meet with them and the Secretary of the Treasury about the principal issue before the committee this Spring, and I'm obligated to leave for about 15 minutes. And so I'd like to ask Mr. Lazio to take the chair, and without objection, his unanimous consent request is acceded to.
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    [Laughter.]

    And he will be in charge of the process himself. And so if you'll excuse me.

    Mr. LAZIO. [presiding]. But my last question really has to do with what safeguards we might expect we could build into private holdings that would discourage looted art from being transferred, particularly to our public institutions? I imagine most private holdings have insurance policies, and if I'm incorrect in that presumption, I'd welcome your correction. Is it possible that insurance policies could note or require that clouded provenance be reported in some way? Is that a mechanism to deal with the problem?

    Mr. WOOD. My understanding is that most insurance policies now do not cover seizure. They cover almost everything else, but seizure is often excluded.

    Mr. LAZIO. Would it be—could you imagine that as a condition of coverage, whether it's for fire or damage or whatever the case might be—that establishing some provenance would be a reasonable request? And how helpful would that be to you?

    Mr. WOOD. That's very difficult for me to answer because I'm getting into an area of expertise that's not my own. I don't know how that would be received by the different kind of risk there, obviously.

    Mr. LAZIO. I think we need to think long and hard about how we can—
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    Mr. WOOD. The more we can insure for a reasonable premium, I'm in favor of.

    [Laughter.]

    Mr. LAZIO. You should be up here on this panel, I think.

    Mr. Ackerman.

    Mr. ACKERMAN. Thank you very much, Mr. Chairman.

    First, I'd like to thank this extraordinarily distinguished panel for their appearance and presentation and thoughts here today. I did want to comment in the presence of Chairman Leach, but I'll do so behind his back. I wanted to thank him for pointing out the great works of art that are here in the Capitol. So few Members are as cultured as Chairman Leach, and have probably not noted most of the artwork. Nonetheless, I do have to state for the record that it has not contributed one iota to the civility of this body.

    [Laughter.]

    Perhaps if we had a curator, we wouldn't need a sergeant-in-arms.

    I want to say that I am so proud to be an American today, listening to the thoughts of this panel, and this particular industry, if I can ''collectivate'' it as such, for their extraordinary attitude on this very sensitive issue. We have seen in recent months an entire industry mishandle the issue of ill-gotten gains regarding the Holocaust, involving charges of cover-up, dealing, of course, with cash, which is very fungible, but denying basic daylight and exploration of charges and complete denials. It is absolutely refreshing to see a group of individuals—which I believe is representative of the industry—being so determined to explore every avenue and possibility, not just as an intellectual pursuit which, of course, is important for historic documentation of any piece of artwork, and functioning what appears to be first 100 percent within U.S. law, which, of course, precludes the dealing in stolen works of art, but going well beyond that and dealing with the questions of morality and making the determination that a—where it is determined that a piece of art was obtained, not by them, but by somebody else throughout its chain of history, from its origin, that that work of art would be returned to the rightful owners of that piece of art.
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    Several things, from one of the discussions that were mentioned before between the panel and the Chairman, it was noted that the same standards that are applied here in the United States are not necessarily applied in Europe or elsewhere in the world. And Mr. Chairman, I think that that might give way for us, and perhaps with Chairman Leach, to explore the possibility of co-jointly working with our colleagues and those of us who sit both on this committee and the International Relations Committee a Sense of the Congress Resolution urging the United Nations to adopt a standard or policy through an appropriate body therein, and perhaps holding up the American example for the way the world should treat these kinds of things.

    One of the questions that I do have to ask the panel is, if you would, to some extent, elucidate for us the notion of the international database, and how that might be set up and how helpful that might be in addressing the problems that we're discussing today?

    Mr. POWELL. I'd be glad to at least begin that.

    Mr. LAZIO. Thank you, Mr. Powell.

    Mr. POWELL. I think that's one of the most important things that could happen. How it could happen, I don't have any particular insight to. But the missing links involve missing information. The fact that Lynn Nicholas' book and Hector Feliciano's book have only appeared really within the last few years indicates the difficulty of doing research in these areas.

    If there could be an international database, that would be ideal. I suspect that's not practical, but there are a number of groups represented here in this room, as well as all of us at this table, who can and are putting their information on the World Wide Web. The more information—and I suspect this will be involved in a multiplicity of different avenues, different levels of research that are accessible that way—would be terribly advantageous in our provenance researches and other investigations into the history and exhibition histories of works of art.
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    I don't know that it would be possible to have one central database, such as the Library of Congress in a way, but steps are being made. Our website is open. We add to it as information on our collection becomes available. It's accessible. We would certainly applaud the creation of more of these. If it could be centralized, so much the better. But I think the technological access to information is so available now that I think more and more information will become available, especially as archives in Europe open.

    Mr. LOWRY. I would just echo Mr. Powell's comments that the more information available to the public—museums as well as potential claimants—the more we are going to know. What is at stake today is an issue of discovery, trying to ascertain the order of magnitude of the situation. And the key to that process of discovery is knowledge. And to the degree that there is a centralized database, to the degree that one can get to documents that are still classified in this country, as well as to documents elsewhere in the world, it is going to dramatically facilitate our ability to resolve the question mark that is before us.

    Mr. WOOD. I would just urge that there are some groups already existing, the most obvious being the Art Loss Registry, which has done an extraordinary——

    Mr. LAZIO. I'm sorry, the——

    Mr. WOOD. The Art Loss Registry which has functioned, which all of us use. I think there are groups existing in this country which with more resources, could improve what they do and reach out and bring more things into a unified sphere. One of the most obvious problems is language. I mean, bringing all this from different directions, getting it in language so that it's available—I'm talking of the smaller museums now—in several, you know, centralized languages that most of our curators are capable of reading.
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    Mr. ACKERMAN. Is there discussion among museum organizations to come up and co-jointly fund this kind of a database? Or would you be——

    Mr. WOOD. I think that's going to be one of the first agenda items for our task force, frankly.

    Mr. ACKERMAN. I see that my time has expired, Mr. Chairman. I just wanted to say thank you to this panel representing so many in the art world for allowing us to maintain the confidence in the art community and not letting that deteriorate, for setting a standard for yourselves that others should really try to strive for.

    Mr. LAZIO. I thank the gentleman.

    Mr. Foley.

    Mr. FOLEY. Thank you very much, Mr. Chairman, and gentlemen, for joining us today.

    I'll ask this question of all of you, if you can answer simply yes; if no, maybe expound on your answer. Under U.S. law a stolen object remains stolen no matter how many times and under what circumstances it changed hands. In European countries like Switzerland, however, a person who buys stolen art is entitled to keep it if he or she has made the purchase in good faith. The European approach makes restitution more difficult. Would you support an international convention to change these rules of ownership?
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    Mr. de MONTEBELLO. To change the European rules?

    Mr. FOLEY. Correct. An international convention to establish—If an artwork is stolen, it's stolen. And if you perceived to have bought it and thought, ''Well, this is nice. I bought the art,'' but it then turns out to be stolen. Under U.S. law, it remains stolen, and you can recover the art. Obviously, under Swiss law, you bought it in good faith—it's your art. Would you support an international convention utilizing American law as an approach to recovery?

    Mr. de MONTEBELLO. Yes, I would—I can't. Morally, as an individual, I would have to say that stolen work remains stolen.

    Mr. FOLEY. Thank you.

    Mr. Lowry.

    Mr. LOWRY. Yes, I would agree with that.

    Mr. WOOD. I certainly would, yes.

    Mr. FOLEY. Thank you.

    Mr. Wood, although your testimony does not address it, there has been a recent press report that the Art Institute has in its possession a Degas pastel entitled ''Landscape with Smokestacks,'' which the Simon Goodman family says was originally stolen from Simon's grandfather, Holocaust victim Frederic Guttman. What is the status of that dispute?
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    Mr. WOOD. The work is not the property of the Art Institute of Chicago. It's the property of a private individual. That individual is a trustee of the Art Institute. The case is in litigation. I do not know a great deal about it, nor can I really comment about the status of the litigation. But I would like to stress that it's not a work in the collection of the Art Institute and never was.

    Mr. FOLEY. Thank you.

    Director Powell, you note in your testimony that the National Gallery has never been faced with a contested piece of art. How is it that the Gallery has been able to avoid such problems emerging elsewhere? Are your provenance standards higher than other museums?

    Mr. POWELL. I think our provenance standards are the equal of other museums. Mr. de Montebello commented earlier I think an interesting statement that of all of the claims against known American collections, if they were multiplied by three, they would only amount to 12. So it's really not just the National Gallery that hasn't had claims against its collection. It's, I think, most major institutions I'm aware of. I could speak to my 12 years as director of the Los Angeles County Museum of Art as well, and we had none then.

    Mr. FOLEY. You all suggest you're determined to purge your collection of tainted art and return pieces to their rightful owners if any are found. You also support groups such as Mr. Lauder's and HARP that are trying to identify art extorted or pillaged from Holocaust victims. How much access to object files are each of you prepared to give such groups?
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    Mr. LOWRY. Extensive. I think the Commission for Art Recovery, of which Connie Lowenthal is Executive Director, and I know she's here as well as Ronald Lauder who is the Chairman of that commission, who's also a trustee of the Museum of Modern Art, as well as other groups that are working on this problem. We share a common concern, and I believe that among the issues that the task force of the Association of Art Museum Directors is going to address is how to work together collaboratively to ensure that the kind of archival database previously mentioned can be established.

    Mr. FOLEY. Let me follow up, Mr. Lowry. Does a museum with a collection of modern art run a lower risk of acquiring looted art since the Nazis apparently found such art ''degenerate''? Or does it run a higher risk because a good deal of such art was sold by the Nazis?

    Mr. LOWRY. It's sort of both, in fact. We run a lower risk in absolute numbers, because much of the art that was looted by the Nazis was, in fact, Old Masters—16th-, 17th-Century antiquities and so on. So that there is a relatively narrow band that we collect in, which is only a small subsection of the larger totality. However, it happens to have been an area that was extensively affected by Nazi looting. And, therefore, it is, of course, an issue of great concern to us.

    One of the things that we are very conscious of, and I think it's important for this committee to understand, is that all of the art looted by the Nazis was looted in Europe. The vast majority of that art was restituted in Europe. What remained that was ill-gotten circulated in Europe as well as the United States and elsewhere. Some of that may have percolated to American museums. Much of it may still be in private collections or with dealers. Some of it may have even been returned to Europe. Therefore, as an order of magnitude question it is not as large a problem, I believe, for American museums as it is necessarily for European museums, or Asian museums, for that matter.
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    Mr. FOLEY. Thank you. Let me ask a final question. Since the Chairman's occupied, I'll sneak off with this.

    [Laughter.]

    Mr. de Montebello, you mentioned in your testimony a Monet painting that was acquired by the Met which, it was later reported, may have been stolen by the Russians after World War II. Could you elaborate on the scale of Nazi-looted art as opposed to Russian-looted art at the close of World War II?

    Mr. de MONTEBELLO. Oh, well, the whole issue of the East and of Russia is sui generis, and is very different from the one that we're talking about here in terms of the U.S. problem. The whole, and I don't think any of us here is really qualified to deal with it. We're talking here about a global jurisprudence, about geopolitics. It's a matter, certainly from the Russian point of view, of war reparation. What is happening in the East is much more complex, in a very different way. And I don't begin to have the competence to pass judgments or give any recommendations on those issues.

    Mr. FOLEY. Thank you. Let me just thank the panel. This is a very sensitive issue obviously, and your appearance today is extremely important. We thank you for that.

    Mr. LAZIO. I want to thank the panel as well. You're very helpful. I appreciate the time.
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    Mrs. MALONEY. Mr. Lazio, would it be possible for a second round, just for brief questions?

    Mr. LAZIO. I'm sure. Yes.

    Mrs. MALONEY. Thank you.

    Mr. Wood, you were questioned about contested art in private hands, and you mentioned that it was under litigation. And I think the question really raises a broader question of who's going to decide whether someone has a claim? Who will be the adjudicators? And I'd like to really ask all the panel members, who will decide? You think it's going to end up in litigation so that it is basically lawyers deciding or will it be art professionals and art historians? And then, a side question to it, what will the standards be, the standards of proof? And who will determine when such standards are satisfied? Because as you stated, or someone on the panel stated, with the declassification of documents after World War II, 50 years after the war, there may be other documentation, more disputes? Is this just going to turn into litigation for lawyers, or where do you see this going? Is it just going to be a lawyers' fight? Or, how is this going to be decided? Who's going to adjudicate?

    Mr. WOOD. I think your statement is the first piece of our agenda for our task force. It's something we're wrestling with. None of us would like to see the only way of solving these problems the courts. The courts obviously are the correct place of last resort. But hopefully, through mediation, as I said before, if we can accumulate as many facts as possible, get people together in a non-confrontational context, explore the possibilities of arbitration, I sincerely believe this should be the way of dealing with many claims. Whether it will solve all of them, I have no idea.
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    Mrs. MALONEY. I'd like all of the members of the panel to really respond to the question if they would, if they have additional insights.

    Mr. POWELL. We have already discussed this matter. It's front and center on the agenda to discuss among the AAMD committee. Obviously, the so-sue-me approach is not one I think any of us feel is the best way to handle claims. But in terms of the constitution of a board of mediation or dispute resolution, that needs some very, very serious study; and something that we'll all be giving it.

    Mr. LOWRY. I'd certainly endorse what Mr. Powell said. I think that at the end of the day, to agree that some kind of impartial, independent process can be established, possibly even an international process, that allows claims to be fairly and swiftly adjudicated, without having to go through the burden, financial particularly, of the court system.

    Mrs. MALONEY. Do you see government having a role in that process? Or, who is going to be in that process? How do you see that process?

    Mr. LOWRY. Well, at this stage, there are a number of different interested parties, from museums to groups like the World Jewish Congress. And I think, at least from the point of view of museums, it is going to be an issue that we need to think through thoroughly.

    Mrs. MALONEY. And then another issue. What if they find a piece of tainted art that the Nazis stole, yet there are no heirs? Then what is the solution?
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    Mr. LOWRY. Well, on the issue of tainted art, stolen art, no museum wants that stolen art, and I think it's going to be up to organizations like the World Jewish Congress, among others, working perhaps with museum groups to try and find some valid acceptable, morally acceptable means of dealing with those questions. We don't have the answers. I hope that the work of the task force that Mr. de Montebello chairs will certainly help provide some guidelines and some approaches that can be endorsed by other groups.

    Mr. WOOD. I might add, and I certainly can't speak for others, but in discussions with certain people who have suffered losses, some of them have said that it is not the return of the property that is the only thing they want. If there were a situation where the history of the object could be credited properly, they might well chose to keep it in the public domain.

    Mrs. MALONEY. Mr. de Montebello.

    Mr. de MONTEBELLO. I would hope that the struggling answers of my three colleagues would give this committee some measure of the understanding of the task that our committee is going to face over the next few months in struggling to find an answer. And picking up on what Jim Wood has just said, we have heard, and on the matter of an heirless situation, I just want to quote my friend, Elie Weisel, who feels very strongly that the most important thing is not to lose memory. And in various discussions, because it is a subject that comes up at cocktail parties, at dinner parties, and everywhere now, I have heard a number of prominent Jews tell me, would the museum put a label next to a work of art that had no heirs that was proven to have been looted, giving its history? And my answer would be, if that is what is wanted, we are perfectly prepared to do so. I think—I agree it is a chapter in history, the memory of which can certainly be commemorated next to the poignancy of a work of art now available to the—multitudes and yet that was so closely tied to an individual tragedy.
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    Mrs. MALONEY. I would just like to add my voice thanking all of you for your testimony today. You have certainly given us a great deal to think about, and you have approached it truly in a very deliberative way and I look forward to continuing to work with you on a solution. Thank you.

    Mr. LAZIO. I thank the gentlelady. I thank the panel for their exceptional testimony. I look forward again to cooperating with you in the future.

    Mr. LOWRY. Thank you.

    Mr. POWELL. Thank you.

    Mr. de MONTEBELLO. Thank you.

    Mr. WOOD. Thank you.

    Mr. LAZIO. Have a good day. I want to ask the second panel to please step forward.

    I will begin by reiterating that all of the testimony that has been provided to the committee, all of the written testimony, will be included in the record. And if the witnesses should see fit to summarize their comments that does not preclude their complete statement to be in the record.

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    We have an exceptionally distinguished panel. I am very grateful for the four of you coming before this committee.

    First testimony will be given by Ronald Lauder, who is a distinguished and renowned New Yorker, the Chairman of the Commission for Art Recovery, established by the World Jewish Congress. I also note that he's Chairman of the Museum of Modern Art.

    Second testimony will be given by Gilbert Edelson, Vice President of the Art Dealers Association of America.

    Third, we will hear from Stephen Weil, Emeritus Senior Scholar from the Smithsonian Institution. Welcome.

    And finally, we'll be hearing from Ori Z. Soltes, who is the Director of the B'nai B'rith Klutznick National Jewish Museum. I welcome you as well.

    Mr. Lauder, it's a pleasure to see you again. I'm very much grateful for all the work you've done in many different fields—cultural, political, and economic. We welcome you here to the committee.

STATEMENT OF RONALD S. LAUDER, CHAIRMAN, COMMISSION FOR ART RECOVERY, WORLD JEWISH CONGRESS

    Mr. LAUDER. Thank you very much.

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    Mr. Chairman, Members of the committee, I am pleased to appear before you today as Chairman of the World Jewish Congress Commission for Art Recovery.

    Mr. LAZIO. I'd just ask, Mr. Lauder, would you please suspend—could we please close the doors in the back so that the witnesses could be heard? Thank you very much, Mr. Lauder.

    Mr. LAUDER. Thank you. Again, I am here as Chairman of the World Jewish Congress Commission for Art Recovery. I have here a 12-page statement that has already been put into the record, and rather than reading it, I'd like to, if I could, make a statement, answer some of the questions that were asked in the panel before, and also enlighten, I hope, the committee on some of the problems we face.

    Myself and Ori Soltes are probably the only two people today here who represent the victims. We have a different point of view as to what has to be done. And I first became involved the whole question of art restitution when I was Ambassador to Austria. In 1986, I visited a monastery in a place called Mauerbach, just outside of Vienna. There, I saw something about 2,500 pieces of art—paintings and statues, pieces of furniture, porcelain and rugs. Everything there was stolen by the Nazis and taken from Jewish homes in Vienna and throughout Austria. This was what remained of a civilization that the Nazis tried to extinguish.

    These works of art I spent 10 years trying, with the World Jewish Congress, to find heirs for.

    Before we had heard that there's only been a few claims by individuals or museums. The reason there's been so few claims is that the people who originally owned these pieces of art have long since perished. Their children are now elderly, and most of them do not remember what their parents had.
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    And in the case where we had 2,500 works of art that we knew were stolen from Jewish homes and—were in fact—should have been returned, we could only find a few hundred people who were the heirs to it. The remainder was sold in the Fall of 1996 at auction in Vienna for the survivors of the Holocaust. The money went both to the Jewish community of Austria as well as to Israel, as well as to the people throughout the world, the Jewish survivors of the Holocaust throughout the world.

    In answer to Congresswoman Maloney's question about heirless art, if there is a piece that is heirless and was definitely stolen, I believe that it should be either returned, not necessarily because you can't return it to the heirs necessarily, but to the Jewish community for the survivors of the Holocaust. That is probably a different point of view than I'm sure many of the people in the museum world would feel, but I do feel it's a very important aspect.

    And I have also had the honor to sit on the Volcker Commission. We were looking at the various assets that have been taken by Swiss banks in one way or another. That also goes for art. There are thousands of works of art that were put into Swiss banks that we have yet to find.

    And in regard to the question about a law that would, in fact, not make good title when someone purchases it, I do believe that is a critical question.

    We here in the United States are one of the only countries that do have this type of a law, and it would help us enormously in our commission if such an international law could be done. I don't know the possibility of it happening, but I think it's something that we should do everything we can to make it happen. There are, for example, as you've heard mentioned in earlier testimony that Mr. Hector Feliciano drew the world's attention to the something like 2,000 works of art in French museums that have never been made part of the museum's inventory that are parts that were stolen.
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    I do believe that this is a scenario that we should look at, and look at very carefully. It becomes easier when it's not been made part of the inventory of a museum. It gets much more difficult in the case of certain German museums where they have been actually made part of the inventory, and we do know which pieces belong to Jewish families and were stolen and purchased by German museums. Although what I can say is that our commission, which is being put together as we speak and its director, Connie Lowenthal, is sitting behind me, will be working very closely with museums, with the Art Dealers Association, with the various other organizations, Mr. Soltes' organization, to try and come up both with a database of what we need to be done, as well as certain ideas of how we can accomplish the releasing of what we call ''the last prisoners of war.'' Thank you.

    Mr. LAZIO. I thank you, Mr. Ambassador.

    Mr. Edelson.

STATEMENT OF GILBERT S. EDELSON, ESQ., VICE PRESIDENT, ART DEALERS ASSOCIATION OF AMERICA

    Mr. EDELSON. Mr. Chairman, Members of the committee, I greatly appreciate the opportunity to appear before you this morning. I thank you not only for holding hearings on a matter of great importance, but for the sensitive approach which the committee has taken.

    I have submitted a written statement which I understand will be made a part of the record, and that statement describes the Art Dealers Association of America, which is an association of the nation's leading dealers in works of fine art, which we call ADAA and also describes art as experience in matters involving stolen and missing works of art.
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    ADAA was, at is happens, the pioneer in this field in this country. It began keeping records and circulating notices of stolen and missing works of art in the 1960's, and we continued that work for nearly 20 years when we turned it over to the International Foundation for Art Research, and that's since been passed along to the Art Loss Registry. I must tell you that we made no charge to anyone, anywhere in the world for circulating a notice of a stolen or missing work of art and the information that was provided to us.

    Among ADAA's members are dealers who, themselves, or whose families emigrated to the United States because of Nazi oppression and also who had works looted from them by the Nazis, or their families by the Nazis. The first president of the Association, Alexandre Rosenberg, of the firm of Paul Rosenberg and Company, was a victim. Alexandre is now dead, but his widow, Elaine, continues still today to search for works of art which the Nazis took from Paul Rosenberg and Company. We are now coming to grips to with difficult and complex problems involving works looted more than 50 years ago. That looting was on a massive scale, unprecedented in history; and we all know that Jewish families were among the principal victims.

    We have always known that there was looting, but the details have never been brought to our attention in such a vivid, scholarly, and detailed manner as we find in the recent books by Lynn Nicholas and Hector Feliciano. And even these important books don't have all of the facts. There is still a considerable amount of work to be done.

    Some of the works looted by the Nazis have found their way into American museums and private collections. In the past year or so, a number of claims for recovery have been asserted by the families of those from whom works have been looted; others will, no doubt, follow.
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    But we don't yet know the extent of the problem, because we don't have the necessary information. We may never have all the facts, but we have to make a start.

    I understand that various governmental and non-governmental agencies and organizations are in the process of gathering information relating to the identity and ownership of works looted by the Nazis. These efforts are commendable. They deserve support. But they are not coordinated, and they're not enough.

    Many of the works seized by the Nazis were eventually returned to their owners, but many works were not returned and are still being sought by the original owners or their families. We need information about the identity of those works and the identity and location of the present claimants. The most effective tool which collectors, museums, dealers, and auction houses could utilize in determining whether a given work has been stolen or missing is a reliable, central source of information.

    We should, I urge, do now what should have been done many years ago. There should be a central registry and database where claims for the recovery of looted works could be registered, kept on file, and where the information would be made available to all interested parties. Such a registry and database would serve a number of purposes.

    First, if I represented a Holocaust victim or the family of a victim searching for works looted by the Nazis, I'm not sure where I could turn for help—how I could inform the art community that there is a claim for the recovery of certain works. A central registry would be such a place.
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    At the same time, museums, collectors, dealers, auction houses, and law enforcement agencies would have important information available to them. Dealers and auction houses, for example, would be able to learn quickly whether there is an outstanding claim for the recovery of a work which appears on the market. Museums would also be able to learn quickly whether there is an outstanding claim for a work in their collection or in a work which they propose to borrow for an exhibition. In addition, the registry would be useful in determining the extent of the problem with which we are dealing.

    The usefulness and importance of the registry is apparent. Before we can resolve claims, we must know that they exist. It is important that the establishment and operation of a registry be a collaborative effort among the organizations involved in the problem of works taken during the Holocaust. It is important that there be one unified effort that all information is shared and that the funds available be efficiently employed in a single effort and enterprise. There should, in sum, be a single registry and not duplicative efforts.

    It is also important that any registry be staffed by trained art professionals who know art and the art community, who have the confidence of the art community, who know what questions to ask, what data is important, and who can do the research necessary to fill gaps in the information provided. In addition, it's important that the registry employ the best and most advanced computer technology to respond quickly to inquiries.

    The registry which we suggest will not solve all of the problems—there remains the difficult matter of the resolution of claims—but it would be a beginning and a foundation for further action. ADAA, of course, will make its knowledge and experience in problems of stolen art available and cooperate to the extent of its ability in the establishment of a registry with whoever undertakes the project.
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    The factual and legal issues involved in cases of Nazi looted art are difficult, complex, and emotional. They do not lend themselves to easy solution. We understand that legislation in this field is contemplated. In that regard, we believe that there should be, and we hope and believe that there will be consultation with the visual arts community.

    On behalf of ADAA, let me again compliment the committee and its staff on its balanced, professional approach to this very serious and difficult problem. And thank you all for your efforts.

    Mr. LAZIO. I thank the distinguished gentleman.

    Mr. Weil.

STATEMENT OF STEPHEN E. WEIL, EMERITUS SENIOR SCHOLAR, SMITHSONIAN INSTITUTION'S HIRSHHORN MUSEUM AMD SCULPTURE GARDEN, WASHINGTON, DC

    Mr. WEIL. Thank you, Mr. Chairman. My name is Stephen Weil and prior to my retirement in 1995, I was Deputy Director of the Smithsonian Institution's Hirshhorn Museum and Sculpture Garden for 21 years. I am also a member of the New York bar and the coauthor of two books on art law published in 1974 and 1986.

    I was invited this morning to discuss some of the legal obstacles that the original owners of stolen works of art are likely to encounter in this country when seeking to recover those works from individuals or institutions that may subsequently have acquired them through wholly good faith transactions. Paramount among those obstacles are the various state-formulated statutes of limitation that can serve to bar such recovery efforts entirely.
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    Cases to recover stolen works of art have generally involved a collision between two deeply cherished principles: justice and fairness. Justice is embodied in the traditional legal rubric that nobody can acquire good title from a thief. Taken alone, that would mean that neither the original theft of a work of art or any subsequent transfer, whether made in good faith or not, could impair the original owner's property rights in that work. It ought, accordingly, logically follow that the original owner should be able to trace the chain of possession and always recover the work wherever and whenever she may ultimately find it.

    Crosscutting the claims of justice, however—at least in many instances—are the conflicting claims of fairness. Fairness dictates that the subsequent owner of a stolen work of art, particularly a good faith purchaser for value, should not remain indefinitely exposed to the risk that he might have to defend his right to that work against increasingly stale or ancient claims. Fairness requires that there should come a time when, in his ownership of that work, he can enjoy what the law terms ''repose.'' This fairness principle is embodied in statutes of limitations that are intended both to prod those with cognizable legal claims to assert those claims in a timely manner and also to assure that such claims, once asserted, can be adjudicated fairly before, in the words of one commentator, ''evidence has been lost, memories have faded, and witnesses have disappeared.''

    Describing the interplay of these principles, one New York court observed: ''The statute of limitations is a statute of repose. At times it may bar the assertion of a justice claim. Then its application causes hardship. The legislature has found that such occasional hardship is outweighed by the advantage of outlawing stale claims.''

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    To my knowledge, nobody has ever argued in the course of a litigation that statutes of limitation should not be applicable to cases seeking the recovery of stolen art, including art stolen from victims of the Holocaust. The more complicated question that the American courts have had to face, however, concerns how those statutes are to be applied and, most particularly, when the limitation periods they prescribe should begin to run. In most legal contexts—negligence cases, for example, or breach of contract—the normally applicable rule is that the statute of limitations begins to run when the underlying action accrues. In the case of stolen art, however, to start running the statute at the moment of theft, a moment that may be decades before the original owner is able to discover the whereabouts of her stolen property, would produce so manifestly unjust an outcome that no court appears to ever seriously have considered it.

    What has emerged instead in recent years is the so-called ''discovery'' rule that attempts to strike a balance between justice and fairness. In California, that rule is statutory. The California Civil Code specifically provides in the case of stolen art or artifacts for a 3-year statute of limitations that does not begin to run until the discovery of the stolen property's whereabouts. Elsewhere a roughly similar rule has been formulated by the courts. New York, however, has a rule uniquely its own. There, pursuant to a 1969 decision involving a Holocaust-related theft of a Marc Chagall painting, the statute of limitations does not begin to run until the original owner has not only discovered the whereabouts of the property, but also has demanded its return and had that demand refused. Of the various American rules, New York's is clearly the one most favorable to an original owner seeking to recover her stolen property and, correspondingly, least favorable to the property's subsequent good faith purchaser.

    Intertwined with these overarching limitation rules are a tangle of lesser ones. Some of the most problematic of these deal with diligence. Should the original owner lose her recovery rights entirely if she never made any effort to locate her stolen property? If so, how much effort is required to avoid that? Under New York's demand-and-refusal rule, must a demand be made within a reasonable time after discovery of the stolen property's whereabouts? What diligence is required, in turn, of a subsequent purchaser to qualify as a good faith purchaser? As databases, such as the Art Loss Register, become more widely available, might courts hold purchasers culpable for their failure to consult these?
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    Choice of law rules are also problematic. When the British nephew of the original owner discovers that the painting stolen from his aunt in Brussels now belongs to a New York collector who purchased it in California, which statute of limitations applies? Problematic, finally, are matters of proof. What evidentiary rules are appropriate or even sufficient some 50-plus years later to get at the truth of events that occurred in the bewildering chaos of war-torn Europe?

    What this strongly suggests is that seeking to restore the tens of thousands of works of art looted or otherwise displaced by World War II to their original pre-war owners through the routine channel of object-by-object litigation is not a practical approach. Given the daunting obstacles that must be overcome, only a handful of cases have been brought. Those few, in turn, have proven for the most part to be unexpectedly complicated, expensive, and protracted. If we are to provide an effective means to restore to their original owners works of art stolen during the Holocaust that might today be found within the United States, it will require the establishment of some alternative mechanism—an imaginative mechanism that is both just and fair and one that will permit claims for the return of such art be resolved in some simpler, swifter, less costly, and more satisfactory manner than is now the case.

    Thank you.

    Mr. LAZIO. Thank you, Mr. Weil.

    Mr. Soltes.

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STATEMENT OF ORI Z. SOLTES, DIRECTOR, B'NAI B'RITH KLUTZNICK NATIONAL JEWISH MUSEUM

    Mr. SOLTES. Yes. Thank you, Mr. Chairman for this opportunity. I'll just read what I think are the salient extracts from my testimony.

    Mr. LAZIO. And your statement will be included in the record—your full statement.

    Mr. SOLTES. Yes, my full statement. Thank you.

    I'm testifying today in two interrelated capacities: as the Director and Curator of the B'nai B'rith Klutznick National Jewish Museum and as the Chairman of the Museum's Holocaust Art Restitution Project. The two roles intimately interconnect: the National Jewish Museum covers the 4,000-year sweep of Jewish history and culture, and its interface with the cultures and civilizations where Jews have been, from antiquity to the present. Our permanent collections, our changing temporary exhibitions and array of programs focus on art, history, and ethnography, and always ask the same essential question: what is Jewish about this? And how does this narrative—be it of abstract late 20th Century painting or the history of Tunisia—connect the Jewish to the non-Jewish world in what simple or complex patterns of influence and counterinfluence?

    One of the consequences of these concerns was the museum's initiative in September, 1997, of hosting a large panel discussion on the legal and moral implications of art restitution and in which, among others, Connie Lowenthal and Hector Feliciano and Lynn Nicholas participated. While the discussion was broad, it inevitably came to focus most fully on World War II and the Holocaust, and it was in the context of both organizing the panel and considering the specific and enormous subject of art spoliation and restitution in the Holocaust context—and in recognizing that this issue is sui generis, that is, that the systematic and comprehensive devotion of the Nazi regime to art spoliation dwarfs any and all such acts in the long history of war looting, and is hugely significant, even half a century after the catastrophe. In that context, I eagerly acceded to the request of my colleagues Marc Masurovsky and Willi Korte, to undertake the Holocaust Art Restitution Project as an initiative of the National Jewish Museum.
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    The project has as its purpose four elements: to record and document all Jewish cultural losses at the hands of the Nazi government and its collaborators between 1933 and 1945; to computerize these data into a rugged, state-of-the-art database, which will be on-line and available for anyone to consult its contents; to produce exhibits pertaining to spoliated collections and their collectors for the purpose of educating the public further to this issue; and to publish accompanying monographs focused on Jewish collections, their developments prior to and their dispersal during and after the Second World War for the same educational purpose.

    The database will bring under one roof information needed to reconstruct the Jewish cultural contribution to European life and modernity in the 20th Century, provide greater understanding of the extent of Nazi depredations against a centerpiece of Jewish life—art and aesthetics—and trace the sinuous and tortured paths of dispersal of many of these works of art on canvas, on paper, as well as rare books, manuscripts, and religious objects dear to the Jewish faith. Its purpose is to produce a fully instantly searchable worldwide electronic archive of heretofore unseen documents pertaining specifically to Jewish cultural losses in Europe between 1933 and 1945.

    Simply put: the kind of research in which HARP is engaged means that questions of ownership history during the 1933–1945 era, with respect to works in both the permanent collections of our museums and the loan exhibitions which we all seek, will not be as difficult to answer as they might have been in the past, certainly far less difficult than the legal proceedings that follow some accusation of holding a Holocaust-looted artwork, either permanently or temporarily.

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    I might reiterate what Mr. de Montebello earlier said this morning, by the way, in this context: that provenance is not necessarily the issue. Your records may show that a painting was owned in 1908 by so-and-so in such a city, exhibited in that same city in 1922, owned by someone else in Rotterdam in 1930, and owned by someone else in 1947 in New York, with no indication of what happened between 1930 and 1947 and how it got from owner B to owner C, and from Rotterdam to New York. So it isn't a matter simply of checking our provenance records, but perhaps of checking more. And this project would have as its goal to at least make that not simple, but simpler.

    Indeed, the results of HARP's efforts are likely to be a primary source for the World Jewish Congress' Art Recovery Project. Working together with substantive and cordial discussions and relationship will also include, no doubt, the newly formed International Research Center for the Documentation of Wartime Losses that Elaine Rosenberg Clark, the granddaughter of Paul Rosenberg, to whom Mr. Lauder earlier alluded, has been in the process of organizing. This also complements the efforts of organizations such as the Society to Prevent Trade in Stolen Art, otherwise known as STOP, Transart International, and the aforementioned Art Loss Registry. Each of these organizations will, in different ways, be useful in addressing what is at issue—both the exploration of the past and, in the context of a congressional committee such as this, the shaping of laws that will help prevent art theft and art fencing in the future, whether the art is specific to Holocaust-era spoliation or not.

    With the growing volume of unresolved cases—because as this has become an issue of which more have become aware, there will be more cases, Mr. de Montebello's assertion that therefore there have been few cases notwithstanding—in which Holocaust victims having been dispossessed of livelihood, normative patterns of living, and, in many cases, the lives of loved ones; having had to reconstruct their lives under enormously difficult conditions; having learned that artworks, which are the only unaltered tangible tie to their pre-war lives, and to the family members destroyed by that war, are in the possession of public institutions or private collectors; and finding themselves in the unbearably ironic position of being denied restitution of such works; moral and legal questions interweave each other and require address, however unsimple that may be. And that will apply to museums and collectors and dealers and auction houses, but above all it does apply to us museums. Just a last statement about that: that all aspects of the history of a work of art, as my colleagues earlier this morning reiterated, one after the other, are our concern.
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    We who are presumably trained not only in the aesthetics of style, but in the kind of connoisseurship that distinguishes different versions of the same subject, real works from fakes, and includes in the context of this discussion the history of who has owned them, we museums must be in the forefront of confronting such issues and ensuring the moral, ethical, and legal legitimacy of the works that we own and borrow for exhibition. That's the only way that we can assert that we are sources of civilized values and preservers of human culture and stewards of that culture and educators of our public. Thank you.

    Mr. LAZIO. I thank the gentleman. I thank the panel.

    Let me begin by sort of establishing some context to all this before we get involved in the legalities and potential dispute resolution panelists, and if I could turn to you, Mr. Ambassador, and ask you, in 1933 the Germans enacted a law which basically allowed the Nazis to begin looting various property of Jews migrating for survival. And I'm wondering if you could tell us how that actually occurred?

    Mr. LAUDER. How the law of 1933 occurred?

    Mr. LAZIO. How the looting occurred?

    Mr. LAUDER. Well, it was a systematic effort by the Nazis starting probably after 1933. It would probably be starting 1934–1935 that various laws were put forth outlawing certain aspects and making it very, very difficult for Jewish people to follow their profession or their business in Nazi Germany. What the law also said is that it limited what people could take out of the country when they left. What happened is that when somebody left, they were forced either to sell their works of art or, in many cases, they just had to leave and to not be able to take it out.
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    The question comes in, and it's a very delicate question, not only what happened in Germany, but what happened in other countries where people before they left were forced to sell, for example, works of art at one-hundredth or one-thousandth of its value, and the question was, is that a legitimate sale? Is a legitimate sale something that is done under duress? In several cases, when in 1948, various people who had in fact sold works of art to get out of various countries came back, they were confronted with a contract of sale that said, you sold this legitimately. Although the price may have been extremely low, this was a legitimate sale. So it's a very delicate aspect of what is looting and what is a legitimate sale.

    Mr. LAZIO. Let me ask Mr. Edelson and Mr. Weil and anybody else who wants to jump in here. Do you believe that the problems raised by Nazi-looted art and the problems suggested by Ambassador Lauder just now can be effectively addressed by the arts community and law enforcement community in the current legal framework, the current law? Or is new law required in order for us to address these problems effectively?

    Mr. EDELSON. If new law is required, I can't at the moment think of what it is. Certainly, in New York, the law is in place, in the sense of the issue of the statute of limitations. There virtually is no statute of limitations on stolen and missing works of art. It begins to run from discovery and demand and there you go. So I can't think of anything offhand to aid the victims and certainly in New York, where, I think, which is now the center of the art community and you know——

    Mr. WEIL. I'd like to frame the answer differently for the museum ownership and private collector ownership. I think museum ownership is a problem that, I think, can really be handled within the confines of the museum community. I thought it was, you know, remarkable testimony we heard from the first panel this morning about the advances that have been made in addressing this. In the case of the private collector, you have got this real statute of limitations problem, and I think it could be exacerbated. And we've got to be very careful when we talk about the databases, for instance. Were you to make a readily accessible on-line database of all stolen art, you might also immediately start triggering statutes of limitations in many jurisdictions, where that would be treated as giving the original owner the opportunity to find the art, where he could have discovered it by reason of that, and unwittingly might cut off the claims of many people. So that if you think about databases, for instance, and thinking about some legal involvement with them, at the same time I think you've got to consider what statute of limitations problems would that raise.
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    Mr. SOLTES. May I add to that, Mr. Chairman?

    Mr. LAZIO. Sure.

    Mr. SOLTES. A note, and that is that the amount of due diligence with respect to research and title that we require, that our law—or at least the automobile and real estate professions—requires that if you buy a used car, if you buy a piece of real estate, if you buy a whole number of possible things, is not required in the matter of art. And that may be something that needs to be considered which brings with it its complications, the same complications one has when one buys a house or car, which we've all suffered at one time or another.

    Mr. LAZIO. Let me ask you, Mr. Weil. Should there be a presumption or a requirement to consult a database, presuming, of course, that we have a thorough and comprehensive database that's established, and presuming, of course, that there is a fair sharing of information between our museums and art dealers with the database?

    Mr. WEIL. The question is relevant as to who is a good-faith purchaser, and I think the definition of a good-faith purchaser is a floating definition that is undergoing real change as these databases appear. So that it seems to me that a great majority of courts, in all likelihood, would find somebody who had made no effort whatsoever to look into the background of a work of art not to be a good-faith purchaser.

    Say that if somebody knocks on your door and offers you, as was the case in the famous Durer, a Durer painting for $50, that was not a good-faith purchaser.
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    Mr. LAZIO. On its face.

    Mr. Vento.

    Mr. VENTO. Well, Mr. Chairman, I just arrived, but I do think it's important to try to get the perspective of the specialists in this area in terms of rectifying and addressing the issue. Unlike the gold issue, which is more fungible, these works of art persist.

    I think the question is whether or not there has been a cataloging, I guess, of these so that there is an awareness of them. As I say, in some cases, they suggest there are hundreds; in other cases, they suggest there are thousands. And apparently law varies in Europe, as in the United States, with regard to the claiming.

    Mr. Edelson was asking one of the legal questions. Maybe others would like to add to this, but do you foresee some type of a broad-based suit to address and to settle and to establish a procedure in terms of rectifying this matter?

    Mr. EDELSON. I don't think there will be a broad-based lawsuit because different claims have different facts to them and I don't think they lend themselves to a broad-based lawsuit.

    The basic law is in place. The problems are really not the basic law, but problems of proof. How do you prove that this picture was yours and how do you prove—well, basically, how do you prove that this picture was yours and that you have a right to it today? Some of these claims go back 50 years.
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    Mr. VENTO. Does the law actually address the issue in which, where a transaction occurred—actually, I think if this is still in the possession of someone that had acquired it during the 1930's or 1940's, during this period where we'd think of it as being taken improperly either through a forced sale or just simply a simple theft, that's one thing.

    But where it's actually been a sale, have most of these—can you change your jurisdiction, or does it go on the basis of where that event occurred at that time? For instance, if I buy something——

    Mr. EDELSON. Well, in other words, are you saying what is the definition of stolen?

    Mr. VENTO. Well, I'm talking—I'm not asking that so much as I am of a good-faith sale. If you make a good-faith sale, apparently in Europe, you are——

    Mr. EDELSON. The buyer gets good title, generally speaking. In this country, the buyer doesn't get good faith.

    Mr. VENTO. But if you are now residing in the United States, which law prevails—if you brought that work of art into the United States?

    Mr. EDELSON. From Europe.
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    Mr. VENTO. So, in other words, most of these transactions then—in all likelihood, most of those transactions occurred where? Can you give us any idea of what the numbers are that have occurred percentagewise or otherwise with regard to where these transactions occurred?

    Mr. EDELSON. Well, one of the problems, as I say, is that we don't know the extent of the problem. There are hundreds of thousands of works that pass through the art market in this country every year. And so far as I know, in the past 40 years, there's been just one case involving a claim for Holocaust art that's been litigated. There may have been others that were settled quietly.

    Mr. VENTO. This is the Chagall painting.

    Mr. EDELSON. There is only one case that I know, Menzel vs Liszt, in which Mrs. Menzel, who was the victim, who had the work stolen from her, taken from her by the Nazis in Belgium. The work found its way to a Paris gallery, was bought in Paris and brought to this country, and Mrs. Menzel recovered it.

    That case made important law. It's still on the books, and as I say, it's the only case involving art stolen from a Holocaust victim that I know of. There are a number of cases involving looted art. There are three or four of them, as a matter of fact. It's sort of curious that the Germans looted hundreds of thousands of works. But of the cases in law here, there are four I know of that involve looted art; three of them involve art which was looted by American troops after the war. And it's——
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    Mr. VENTO. We don't want to talk about that.

    Mr. EDELSON. But the law is the same.

    Mr. VENTO. I understand.

    Mr. EDELSON. Good title doesn't pass.

    Mr. VENTO. Mr. Weil, I think, was——

    Mr. WEIL. I just wanted to add that in addition, there is the case referred to earlier, which is currently being litigated in Illinois, the Degas that the Goodman family had originally owned and wound up in a private collection in Illinois.

    Mr. VENTO. I was concerned, Mr. Weil, about your response to the Chairman with regard to putting some of these—trying to, in fact, document and share the information as to what is stolen, and that somehow that then would, in fact, start the statute of limitations.

    Because, obviously, if you don't know where it is, and you go to an index to report that it has been stolen and you don't know where it is, you really can't—I don't know, it seems to me there is a point of law—I'm not an attorney, but there would be a point here that I think would be debatable as to whether or not the statute would start running at that point.
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    Mr. WEIL. I think very much it depends on what is being put onto the database. If we were putting onto the database the whereabouts of art and art that may have come out of Europe, very clearly, it creates a problem.

    If we are making a database simply of what is stolen, then it should not be a problem.

    Mr. VENTO. Yes, of course, that then would give us the information and perhaps provide us a policy-path solution.

    Mr. WEIL. But it's the crossing of two databases which can begin to——

    Mr. VENTO. Yes, well, I appreciate your distinction.

    Mr. LAUDER. I'd like to say something, if I could, about the statute of limitations. Although I realize the difficulty of putting them on a database, I want you to know that every day survivors of the Holocaust are dying. They desperately need anything they can before they die, and the idea is we shouldn't wait.

    Even if we take a chance, that we start—whatever law is passed, it should go on a database and it should go on immediately. The problem is that there is no one database. We, as the World Jewish Commission on Art Recovery, are getting together databases from all over. Hopefully, in the next three to six months, we will have one database that will, in fact, cover all different areas.
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    But as far as I'm concerned, for the survivors of the Holocaust, we have to do everything we can immediately.

    Mr. VENTO. Thank you very much.

    Mr. LAZIO. I thank the gentleman. We have a vote right now. I apologize.

    Mrs. MALONEY. Could I just ask a question? I'll run.

    Mr. LAZIO. Yes, you have a question for the panel?

    Mrs. MALONEY. Yes.

    Mr. LAZIO. OK, then briefly. Then I think we're going to have to recess and come back.

    Mrs. Maloney.

    Mrs. MALONEY. All right. First of all, I'd like to thank all of the panelists, particularly Mr. Edelson and Ambassador Lauder who are from the district that I am honored to represent. And I thank all of you for your sensitive and thoughtful testimony.

    I would really like to ask you the same question that I asked the previous panel. Even though there have not been a lot of claims with the declassification after World War II, the Nazi War Crimes Disclosure Act, which I authored, and other pieces are going to bring more information out into the public.
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    But who do you see deciding what the standards of proof will be, and who will determine when those standards are met?

    And second, who will be the adjudicator? Who will decide whether a claim is correct or not?

    And as Mr. Weil said in his testimony, he did not like the approach of an object-by-object litigation. Is this going to turn into a lawyer fight or is this going to—are we going to set up a panel worldwide?

    And then Ambassador Lauder really raised the point that many of these works of art are not in our country. They are in France, they are in Germany, they are in other countries. How can we enforce a standard in countries that are not our own, and do you see a World Jewish Congress panel or an independent arts panel? How do you see this being enforced?

    Mr. Ambassador.

    Mr. LAUDER. I think the question of what type of panel it is, is an area that we have to look at very carefully, and it has to be an impartial panel. The World Jewish Congress' Commission for Art Recovery obviously will play a role, and a key role, in it. But it has to be a panel that all parties agree will look for the proof and will be impartial.

    That is an area that I have spoken about with the various people in the museum world, and some of the people that testified today, and they agreed to have such a panel. I think that would be a major step forward, to have an area that we could, in fact, turn to and say, OK, what should be the answer on this question?
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    Each one of the areas you have to look into takes months and months of looking into. As Glenn Lowry said today about the Matisse, it took us a year, a year-and-a-half, to get the exact information about. So, it's a very, very time-consuming process, but it's a process that has to start immediately.

    Mr. LAZIO. I'm just going to interrupt now, if I can. If any of the witnesses wish to answer further, if somebody wants to come back, they are free to reconvene the panel, if you want.

    Mrs. MALONEY. No, I have another—I have to go to—I will be back, but I have to go to another meeting in between. So, if anyone would like to add in writing a response to the question, I'd appreciate it.

    Thank you.

    Mr. LAZIO. I'm going to excuse the panel. I want to thank you very much for your effort and resourcefulness in being here.

    Thank you.

    [Recess.]

    Chairman LEACH. [presiding]. The hearing will come to order.

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    Much of the discussion about financial assets looted or extorted by the Nazis from victims of the Holocaust has today focused on lost deposits in Swiss banks.

    We examined this subject in this committee in hearings this year, as it's been examined on the other side of the hill. Today, we're going to discuss insurance, whether claims made in policies bought by Holocaust victims were appropriately handled by European insurers in the aftermath of World War II.

    In retrospect, it would appear that there was an extraordinary level of collusion between leading European insurance companies and the Nazi Regime. In one case, a German insurance provider, the country's largest, was headed by a man who became Hitler's first Minister of Economics. He liked to come to his office wearing an SS uniform.

    Recently, documents have been uncovered that reveal how policies bought by Jews who were later sent to concentration camps were paid out to the Third Reich. It is unclear how much compensation was later given to these victims by the post-war German government, but it is clear that any profit derived from genocide is unconscionable and that pure compensation is due victims.

    The irony is not lost on Holocaust families that victims have not received the benefits of insurance policies for which they paid, while victimizers, surviving SS veterans, are receiving state pensions.

    Today, there is new management in the companies that sold policies to Holocaust victims. While these new managers cannot be considered personally responsible for the moral transgressions of their predecessors, the companies themselves must remain accountable for their wartime policies.
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    In this regard, there are victims of the Holocaust today who say they have been turned away time and again when they have attempted to find out information regarding policies held by family members who perished at the hands of the Nazis. Only very recently, it is suggested, under the threat of sanctions and civil liability, have these companies recognized a moral responsibility to assist these claimants.

    There are many who believe these efforts have not been enough, and that life insurance, as well as casualty policies that go as far back as the dawn of the Nazi era and include coverage for damage and injuries sustained during Kristallnacht, the infamous rampage of November 9, 1938 which marked the start of the physical assault against Jews, remain unacknowledged and unpaid.

    We will begin this part of our hearing with a congressional panel. Three of our colleagues from the other side of the Capitol, Senators D'Amato, Specter and Torricelli, have come to present their views before this committee, along with two of our own House Members, Representatives Foley and Engel. This is surely an indication of the high public interest in the insurance issue.

    I want to thank you all for joining us. We will begin with Senator D'Amato. Let me just say before this, I know of no Senator who has spent more time on a particular issue than Senator D'Amato. Everyone thinks they know you, Senator.

    But I will tell you, I find it absolutely extraordinary, and you're the first I've ever known in this Congress in either party that has ever put together a staff to research history. I think that's an extraordinary phenomenon, and I think the Congress is in your debt.
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    Please begin, Senator D'Amato.

STATEMENT OF HON. ALFONSE D'AMATO, A UNITED STATES SENATOR FROM THE STATE OF NEW YORK

    Senator D'AMATO. Thank you very much, Mr. Chairman, and distinguished Members of the committee.

    Let me commend you, Mr. Chairman, for your perspicacity, for your moving forward in such a thoughtful manner and devoting so much time and interest. And I want to thank you for the manner in which your staff has worked in such a collaborative effort with our staff in the work that we've undertaken.

    As you know, this is the third hearing that you, under your auspices of the House Banking Committee, has held with respect to the topic of looted assets of the Holocaust victims and their heirs, particularly as it concerns the conduct of European life-insurance companies during and after World War II.

    I want to thank you for allowing me to appear once again before this committee. Our two committees have examined the matters of Nazi gold and the greed of the Swiss bankers. Today you will focus on the conduct of another group that profited directly at the expense of the victims of the Holocaust, the European insurance companies.

    From the historical information that we have uncovered—that is, both of our staffs—it is clear that the European insurance companies undertook a deliberate effort to target European Jews for profit before the Nazis targeted them for destruction. These companies sought and obtained premiums up-front with no expectation of paying the claims in the end.
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    In of the most important historical works on the Holocaust, ''The Destruction of the European Jews,'' Raul Hillberg wrote that insurance policies would be an interesting problem if, and I underscore if, any documentation was available. Today, fortunately, there is information available, and it is disturbing.

    In his short section on the subject, Hillberg pointed out that the insurance companies deliberately sought to avoid paying the proceeds from the policies to the heirs and families of Holocaust victims. Because of this, he concluded, and I quote, ''We may assume, therefore, that the life-insurance companies got away with the profits.''

    Mr. Chairman, Raul Hillberg could not have been more correct. In the two years that the Senate Banking Committee has been researching the role of the Swiss banks during and after the war, we found a wealth of information on the operation of insurance companies as well. And it leaves no doubt as to the validity of Hillberg's conclusion.

    During this time, we could not help but find evidence of the devious and unsavory practices of the insurance companies. These companies have hidden behind the claim that the policies of the Holocaust victims have already been paid.

    I would like to know who received the proceeds if it was not the policyholder or their heirs?

    European insurance companies deliberately sought out Jewish clients in order to obtain insurance premiums from them before the Nazis moved in. For Rudy Rosenberg of New York, this was the case. The Winterthur Insurance Company of Switzerland, according to Mr. Rosenberg, targeted Jews in Brussels in the few years before the deportation of Jews.
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    The agents sold his parents a policy requesting half the premium up front, the other half the next year. The only problem was there was no next year for the company to collect premiums. Soon afterwards, the Rosenbergs, like most of the Jews, were deported from Belgium by the Nazis.

    Mr. Rosenberg also remembers that the agents asked his parents for other families to visit to sell them policies under the same conditions. Mr. Rosenberg's story has yet to be resolved. One only wonders how many other families were victimized this way.

    Another claimant is Grace Pillard from New York, who wrote to me on behalf of her mother, Else. Else's father-in-law, Paul Graupe, took out an insurance policy with the insurance company Swiss Life in 1927. Mrs. Graupe was able to furnish the policy number and the pertinent dates of the policy.

    With this, we wrote to Swiss Life and asked them what information they had on the policy. To our surprise, they answered within a few weeks and provided detailed, but incomplete information about Paul Graupe's insurance policy.

    Now we know the amount of the policy, the payment history, and most importantly, we learned that the policy had been surrendered. Specifically, we know that the policy was surrendered on October 31, 1940. But neither the records nor Swiss Life can tell us with certainty the disposition of the benefits.

    In fact, we know Mr. Graupe's heirs did not receive the benefits. I believe the insurance company either voluntarily surrendered this policy to the Third Reich or falsified its records and never paid out the proceeds.
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    I want to note that this voluntary surrender or falsification occurred more than a year before the Nazis passed laws requiring all insurance policies for Jews to be surrendered to the Third Reich.

    Most disturbing is that this corporate misconduct occurred two years before Paul Graupe died after being deported to Minsk, according to his family. If Swiss Life kept such detailed records about Mr. Graupe's policy, how can they claim to have no knowledge, details or information about whom they surrendered it to? This critical information is conspicuously missing from the file. Clearly, Mr. Graupe did not receive the payment, nor did his family.

    In further letters to Swiss Life, we pressed these points, yet they refused to answer these important questions. Finally, Swiss Life informed me that they were discontinuing their correspondence with us on this subject, and to this date, we have not had a satisfactory answer from Swiss Life as to the disposition of Mr. Graupe's policy.

    Now, can you imagine that a responsible insurance company would admit to paying benefits on a policy and then claim ignorance about who received the payments? This is not believable. And I'd still like to know who got the proceeds from the policy. And we expect an accounting from Swiss Life for Mr. Graupe's family.

    Swiss Life has raised numerous questionable excuses to avoid responsibility. For example, they maintain from the beginning of our correspondence that Mr. Graupe opened the policy in the company's Munich branch; they were not responsible. That's what they claim. We have also heard this argument from other companies. This excuse is morally and legally inadequate.
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    As early as November 1942, a member of the British Embassy in Washington wrote a letter to the Treasury Department on this very principle. In his letter, F.W. McCromb wrote, quote, ''I know of no general principle that a debtor who has a claim upon a corporate entity cannot pursue that claim either where he finds the entity or where he can attach its property.''

    Clearly, Mr. McCromb was right, and it is disingenuous for Swiss Life to deny the responsibility for Mr. Graupe's policy simply because it was opened in Munich. The fact remains that the branch in Munich was part of Swiss Life. Therefore, the company is fully responsible for making the payment. They are dodging their responsibility, and they must do what is right and just and make proper restitution to Mr. Graupe's heirs now, before it is too late.

    Mr. Chairman, there are several proposals regarding insurance that we have submitted in recent weeks. We must examine the most comprehensive way to begin to solve problems like the ones facing Rudy Rosenberg and Grace Graupe-Pillard. To this extent, I would recommend a three-prong approach.

    First, I would propose the creation of an independent commission to review a company's records along the lines of the Volcker Commission, created in 1996 to examine the records of the Swiss banks.

    The commission would be funded by the insurance companies. It would be a fully independent operation with historians, forensic auditors, lawyers and other experts in the field. I would suggest that the commission include representatives from the State insurance regulatory community in this country, the World Jewish Congress and a Holocaust survivor. Appointments could be made by a group including two European insurance regulators and two U.S. insurance regulators.
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    The second component of this proposal would involve the State insurance regulators, and utilize their enforcement powers to conduct their own reviews and penalize uncooperative companies where appropriate. To this end, we should seek any necessary statutory changes at the State and Federal level.

    And third, I would suggest that upon entering into this agreement, each company would also contribute to an interim fund to be used to provide some comfort to the heirs and survivors of the Holocaust before it is too late.

    For their sake, and the sake of the survivors, I think it would be in the interests of the companies to agree to this proposal. I am quite sure that the individual companies do not want to be in the same situation that some Swiss banks have placed themselves in. I would think that they care about their good name.

    And moreover, it is important for these companies to understand that they do a great deal of business in the United States. I am quite sure they would not wish to jeopardize that business.

    Another problem that needs to be discussed is the nationalization of insurance companies by the Communist governments of Eastern Europe after World War II. If we are to get at the heart of the problem, it would be wise for us to approach this along diplomatic lines, since many of these nationalized companies remain in some form or another, state-owned enterprises.

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    I would urge the Administration to seek serious and detailed discussions with the countries of Eastern Europe, whose previous Communist governments actually nationalized these companies. I think of no one more suitable for the task than the man who has so ably and skillfully directed the Administration's efforts on looted assets thus far, Undersecretary of State Ambassador Stuart Eizenstat.

    Ambassador Eizenstat could, in his discussions with these governments, push them to end this 50-year problem and provide the proper restitution and open their records for proper research and analysis.

    Because the governments still control the companies to some extent, they are directly and financially responsible. In this manner, we could gain what is needed: justice and proper documentation.

    Mr. Chairman, we are talking about justice for the victims of the Holocaust. European insurance companies, like the Swiss banks, have escaped justice now for over half a century. This is patently wrong. The time for deliberation and debate is over. Swiss Life, Winterthur and other European insurance companies, must realize that we will not allow the business-as-usual attitude of these companies to continue.

    The actions of these companies before, during and after the war was immoral and unjust. These companies must resolve to correct the misdeeds of the past. What we are seeking here is simple justice. After 50 years of stonewalling, proper and speedy restitution to the families that both need and deserve their assets is the only proper course.

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    I want the insurance companies and the Swiss bank, as well, to hear that this Senator will not stop until justice is served and the victims' dignity is restored.

    On another note, Mr. Chairman, I'd like to conclude by saying that I am tremendously pleased to announce that Generali Insurance Company, one of the largest international insurance companies, has already announced agreement this morning with the idea of an international commission, that which I have just put forth. I would hope that other companies would soon join Generali in this important and necessary effort.

    Once again, I thank the Chairman for his diligence, for his leadership, and for the great and cooperative effort that he has extended to our staff and to all of those who are concerned with rectifying these injustices.

    Chairman LEACH. I thank the Senator for his thoughtful statement.

    We'll now turn to one of our most extraordinary United States Senators and someone for whom we have the highest regard, Senator Arlen Specter.

STATEMENT OF HON. ARLEN SPECTER, A UNITED STATES SENATOR FROM THE STATE OF PENNSYLVANIA

    Senator SPECTER. Thank you very much, Mr. Chairman.

    I think it is really extraordinary that we are at a hearing in the U.S. House of Representatives more than 50 years after the fact, and just debts are not being paid to Holocaust victims and Holocaust victims' families. It is just the most extraordinary circumstance which brings us here today to try to solve a problem which should have been solved decades ago.
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    I commend my distinguished colleague, Senator D'Amato, for all that he has done on this subject and related subjects. And I'd like to commend Congressman Engel and Congressman Foley, but they're not here. I heard the buzzer go off on votes. So, instead, I will commend those Members of the committee who are here, who are listening to us.

    Senator Torricelli and I have collaborated on a resolution which would condition admission to NATO of Poland, Hungary and the Czech Republic with those three countries doing something about this problem, because in those three countries the insurance industry was nationalized by the Communists and the governments of those three countries are successors to their assets and liabilities and have a legal responsibility to do so.

    I have never had so many calls, Mr. Chairman—and I have been around the Capitol a while—by people who were so concerned about a prospective legislative piece or a resolution that I have found in the last 24 hours.

    The White House called. More specifically, somebody in the White House, saying that these issues—I'll be glad to tell the Chairman if he asks me, I'll be glad to tell you, Alfonse, if you ask me—who says that he believes these issues are best settled in a nonconfrontational manner.

    Well, I do, too. The victims, the beneficiaries have been nonconfrontational for more than half a century. How long do you have to be nonconfrontational? The White House has called people who yesterday were in favor of the idea which Senator Torricelli and I have, and suddenly they are not in favor of the idea anymore.
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    And I'm not unaware of the fact that we're playing for big stakes if we want to stop the admission to NATO of Poland, Hungary and the Czech Republic. Or we want to condition the NATO entry of these three countries to see that they get something done on this kind of a problem.

    But how is it going to be addressed? As I've reviewed the materials on the matter, there are the most extraordinary positions taken by insurance companies. And I'm not unfamiliar with extraordinary positions taken by insurance companies in the United States. But these insurance companies say that they will not pay a claim unless they are presented with an official death certificate for the insured.

    How extraordinarily insensitive or illogical can you be when they know that these deaths occurred in Auschwitz and other Nazi death camps? I mean, who is kidding whom about a death certificate out of the concentration camps?

    Some of the companies refuse to pay on the grounds that the insured party stopped paying premiums. Well, of course, the insured party stopped paying premiums because the insured party was dead, or the insured party was in a concentration camp.

    The kinds of answers which are being considered here are just really extraordinary, and it seems to me that the only way to get this job done is really to put the most extreme pressure on these governments who have taken over the assets of the insurance companies, the successor governments, to face up to this issue and to see that restitution and payments are made.
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    Now, I hadn't really anticipated, as I just discussed with Senator Torricelli, the kind of a response that this proposed resolution has brought. And I'm prepared to talk to the White House, and I'm prepared to talk to all of the interested parties. But I think that the time for discussion is really gone.

    And if and when the Senate by treaty admits these three countries, I do not know where there will again be a sufficient pressure point to get the job done. The hearings are scheduled, the final one before the Senate Foreign Relations Committee, late this month, and the Senate is due to consider these issues in March. And between February 12 and March, mid-March, there is time to do a lot toward the solution of these problems.

    And that, Mr. Chairman, is what I am going to be looking for as I decide what to do about this remedy which appears to be potentially a very, very effective remedy.

    I thank the Chair and yield to my distinguished colleague.

    Chairman LEACH. I thank you, Senator Specter, for those very thoughtful observations. Senator, I think we'd be wiser to ask you to defer rather than let me cut you off a minute or two into your statement, if that's all right with you. And I apologize to the panel. We do have a vote on, and it'll probably be about a 10-minute recess.

    Senator SPECTER. We understand votes, Mr. Chairman.

    Chairman LEACH. Fair enough. So the hearing will stand in recess pending the vote.
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    [Recess.]

    Chairman LEACH. If the hearing could come to order. Our next witness is the Honorable Bob Torricelli. Bob had the privilege to serve with distinction in this body before his demotion and we welcome you, representing with distinction the other body.

STATEMENT OF HON. ROBERT G. TORRICELLI, A UNITED STATES SENATOR FROM THE STATE OF NEW JERSEY

    Senator TORRICELLI. Thank you, Mr. Chairman and Members of the committee, very much. The most extraordinary thing about this issue is that 50 years later there's a need to discuss it at all. It is almost unbelievable, indeed, it is unbelievable that this Congress would be revisiting an issue that we believed, in large measure, our parents began to deal with at Nuremberg, and has been revisited on so many occasions, and yet now has new aspects that have never been addressed at all.

    In large measure, I think it is important to separate that the street crimes that were investigated at Nuremberg have a white-collar component. The white-collar crimes of the Holocaust include the looting of gold and bank accounts of Holocaust victims by Swiss banks, now estimated at $1.3 billion; the theft of art and personal property of Jewish homes, estimated at nearly 2,000 items; and now, the failure to pay on insurance claims for victims of the Holocaust themselves.

    In some ways, the failure of insurance companies to pay on claims of Holocaust victims may be the most insidious of these three pillars holding the white-collar crimes of the Holocaust, because they preyed upon the fears of European Jewry in the 1930's.
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    With the rise of Fascism, insurance became an important commodity for Jewish families who sought to protect themselves and their heirs against an unknown and increasingly fearful future.

    All too often, the proceeds of these policies were wrongfully withheld, concealed, and eventually converted to cash, not simply in a theft against Holocaust victims, but incredibly often, it appeared, to finance the Nazi war machine itself and line the pockets of war criminals.

    Two companies, Allianz and Generali, served as the primary insurers in Europe before World War II. While Allianz insured mostly Western Europe, Generali sold its policies principally to citizens of Poland, Hungary and the Czech Republic.

    We know now that the relationship between these insurance companies, and the Third Reich war machine was extremely close. For example, Dr. Kurt Schmidt was a general manager of Allianz Berlin before becoming Hitler's Minister of Trade and an SS general.

    When the Nazis invaded a country, the assets of local insurance companies were taken over by Allianz and Generali, who essentially were under Nazi control. For the most part, these assets were hidden from the rightful owners and converted into hard currency to finance the Nazi war effort.

    I understand that representatives of Allianz will be testifying later in this hearing, and I hope the committee will begin to press for a full accounting, not only of what is owed to victims of the Holocaust, but indeed, of their complicity with the war machine.
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    In the post-World War II period, this complicity continued. When Stalin's hand reached into Eastern and Central Europe, private companies vanished, and almost overnight, state-run monopolies continued in their place. Those monopolies indiscriminately assumed the assets and properties of private companies.

    For example, Generali, the primary insurer in the region, lost control of 184 offices and 14 companies, along with all records and assets. To date, these companies, all of their assets, whatever was compensated or failed to be compensated, has been lost to government or state-run companies.

    The United States Government, for its part, beginning in 1947 through the State Department, began to advise U.S. citizens to pursue life-insurance claims with private companies through their successors in Communist-bloc governments. There was no information. There were no payments. There were no claims that were met.

    Fifty years later the majority of these claims have never been met. While the citizens of Poland, Hungary and the Czech Republic may have been compensated by their governments, survivors in the United States and Western Europe continue to hold policies that have never fully been met with their obligations.

    Mr. Chairman, as extraordinary as all this may be, there is still a chance. Some survivors remain with family members who were lost, who may have actually gone to their deaths in the death camps believing that their sacrifice in paying premiums on life-insurance policies at least would bring some security and comfort to their survivors.
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    These Holocaust victims were abused twice. They were murdered by the Nazis. They were stolen from by disreputable companies who not only did not keep their promise to Holocaust victims, but victimized their successors again.

    There is still a chance to do right. Senator Specter and I will offer on the floor of the Senate a condition on membership in NATO for the Czech Republic, Poland and Hungary. They failed as the successors to these private companies to make good on these claims in the last 50 years. Now they seek to join the world's most important military alliance. I have a price. You seek to join NATO, to join the most respected alliance in the world, make good on your claims, treat our citizens right.

    How, Mr. Chairman, would you or any Member of this committee explain to a citizen of Iowa, Texas or New Jersey, a taxpayer of the United States, that we are going to defend these nations, welcome them into NATO, pay the price of their membership; while these countries, the successor of these private corporations, hold the insurance policies of victims of the Holocaust that they failed to pay, having looted their assets, often to fuel the Nazi war machine itself. But if not, to have profited by those unpaid claims all of these years.

    Mr. Chairman, I join Senator D'Amato in asking for a full accounting, an international investigation. I know to some it seems like a lot of years. Many of the victims have died. Some claimants could not be found. But it is not enough to address the horrors of Nazism by putting to death its architects or even to understand the history of how Nazism rose.

    As the years have passed, we have learned late, but we have learned, that there are other collaborators. The Swiss banks that converted the savings of European Jewry into hard cash for the Nazi war machine were a part of the evil. So, too, were these insurance companies.
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    Nazism didn't just happen by storm troopers or rioters in streets, or even by the soldiers who led its advance. There were also the financiers, the bankers, the insurance companies. It isn't only setting history right. It isn't only justice for victims of the Holocaust, as if that is not enough. It is also learning the seeds of this evil, lest it never happen again.

    Thank you, Mr. Chairman, very much for the opportunity.

    Chairman LEACH. Well, thank you, Senator Torricelli.

    Our next witness is Congressman Mark Foley, who has introduced legislation on this subject, and has been a leader in House efforts in this regard.

    Congressman Foley.

STATEMENT OF HON. MARK FOLEY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA

    Mr. FOLEY. Thank you, Mr. Chairman.

    First, let me thank you for the expeditious manner in which you have held hearings on this very, very important issue. And let me stress to you, Mr. Chairman, and to my colleagues, I am not here today to seek pride of authorship, but pride of resolution.

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    I'm here today as other witnesses who will follow, including insurance commissioner Deborah Senn and resident of Florida, Dr. Weiss, to try to bring to closure one of history's darkest and most depraved chapters, the Holocaust.

    It has been more than 50 years since its end. But even today, the Holocaust continues to haunt us and elude explanation. We vow that it will never, ever happen again. God willing, it never will.

    There has been one good consequence to this horrendous chapter, however. It is that it has spun the strongest unifying thread to emerge in our fight against evil, and in our commitment to human rights. We have been forced by the very baseness of the Holocaust to reckon with it and account for every soul lost, every crime committed, and every piece of property stolen.

    Those who acted with malice took the lives and the dignity of their victims because of hate. They took their property and material good because of greed. Today, the survivors and surviving heirs are struggling to regain their dignity, their trust and their rightful property. They are struggling, by doing so, to regain their sense of self and family.

    We cannot fully know their sense of pain and loss in their effort. But we can offer to help. The world has made progress in this respect in many ways, most recently by exposing the dormant accounts in Switzerland. But whether it's bringing the Holocaust's remaining perpetrators to prosecution, returning lost and stolen works of art or accounting for unpaid insurance policies, there is far more work yet to be done.

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    With this in mind, I began months ago working on legislation to address the issue of insurance policies lost and stolen during the Holocaust. Many types of insurance policies were written then: life insurance, property insurance, even education insurance. They were written in different countries and in different languages and paid for with different currencies. And during the Holocaust, they were confiscated.

    Under 1933 German law, anyone who emigrated out of Germany was subject to having their property seized. In a mindboggling interpretation of that law, the Nazis declared all Jews who were forcibly deported to concentration camps emigrants and thereby seized their properties, including insurance policies.

    To this day, we have no accurate idea of how much money may be owed to the victims of the Holocaust. But in reaching this, a common denominator struck me. Some files and records exist in Europe. The majority of insurance companies that were doing business during the Holocaust survived the war and many have extensive collections of Holocaust-era insurance files. These records are the basis of proof to obtain restitution. So any legislative effort we make must begin by forcing the disclosure of these insurance files.

    The bill I have introduced, and which is pending before this committee, to accomplish that disclosure is the Comprehensive Holocaust Accountability in Insurance Measure, known as CHAIM, the Hebrew word ''life.'' The CHAIM bill will prohibit 16 foreign insurance companies and their American subsidiaries from conducting any business in the United States unless and until they disclose to the U.S. Attorney General any financial dealings they have had with all individuals who survived or died in the Holocaust. The bill would prohibit these companies from doing business with any Federally insured depository institution or their foreign subsidiaries until those disclosures have been made.
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    Under the CHAIM bill, the Attorney General's office must certify that the insurance companies in question have complied with the bill's first title and disclose their files in order for the insurance companies or their American subsidiaries to conduct business in the United States, or do business with an insured American depository institution.

    When the files are disclosed, the Attorney General can take appropriate action to make the information available to the heirs of the Holocaust victims, so they may substantiate the validity of their claims.

    Insurance companies that knowingly withhold or provide false information will lose the ability to conduct business in the United States and would likely face perjury charges.

    This bill is not a silver bullet to fully resolving the insurance policy issue. But it is an important and necessary first step, because disclosure of insurance records from the Holocaust years is fundamental to making restitution.

    Without release of these names and policies, the task of substantiating a claim for restitution is virtually impossible, since the paperwork was stripped and stolen from the original policyholders during the Holocaust.

    The committee well understands that this is a very complex issue. Beyond disclosure, things become murky. We can estimate how many claims were stolen, but we cannot know for certain. We may suspect widespread guilt in the insurance industry, but it has not been proven in a court of law.
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    Moreover, we may never resolve how much is really owed, since currencies have changed. Some policies may have been lost or destroyed, or others turned over to the Nazis. The truth is we do not completely know what is in the archives of these insurance companies and we never will unless they are forced to disclose.

    But I do know that the survivors and heirs of the Holocaust are very angry. I have received letters from survivors, constituents of mine in Florida, and have spoken with survivors. They feel cheated, and they need closure.

    One of my constituents wrote to me of how a German insurance company did, in fact, settle the life-insurance policy of his father, who perished in the Holocaust. And at what price did the insurance company place the value of this policy? Between $20 and $30. The company claimed the amount was so small because the original currency in which the policy had been written had lost considerable value since the war.

    There are legitimate questions about the devaluation of currencies and the impact that this has had on insurance policies. Some European currencies have disappeared altogether. I also understand that the value of many policies may have been pegged to the U.S. dollar for stability, which would have preserved the policy's value.

    Whatever the value and however the issue of devaluation is reconciled, the first step must be to take full disclosure of the policies held. Until these disclosures are made, we will never know the amount due victims and their heirs, nor can we craft a fair way of making restitution, whether that ultimately is through settling individual claims or having the insurance companies make a lump-sum payment to an international group for distribution to needy Jewish survivors and heirs.
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    I strongly believe that the responsibility of Congress is to help the survivors and heirs of Holocaust victims establish the validity of their claim. And in closing, I'd just like to note from the letter or article that appeared in the Miami Herald today that Carol Rosenberg wrote about a member who lives in my community.

    When James May's father fled Nazi Germany in 1939, he left behind family, a once-flourishing dry goods business, and a life insurance policy he'd paid premiums on for years. Today, nearly a half century after his father's death, the Lakewood, Florida industrial designer is still struggling with his father's German insurance to collect the benefits that they denied his mother.

    He states further in the article, ''In May's case, his mother, now dead too, could not collect on her husband's insurance policy, he said, because she was unable to produce an original copy of the policy to satisfy the family's insurer in Germany.'' He says, and I quote, ''They asked for such stupid things as canceled checks and receipts, obviously all of which were stolen by the Nazis.''

    Again, I want to thank the Chairman, my colleague, Mr. Engel, and others, and the Senators for their testimony today in working together in a bipartisan spirit to resolve this very important pending question.

    Thank you, Mr. Chairman.

    Chairman LEACH. Well, thank you, Congressman Foley.
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    Congressman Engel is an old friend, and we really welcome you to this committee, Congressman.

STATEMENT OF HON. ELIOT L. ENGEL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW YORK

    Mr. ENGEL. Thank you, Mr. Chairman, for the opportunity to appear before your committee. I want to personally thank you for holding those hearings and it shows the commitment that you have to this very, very important issue.

    For years, of course, the world has known the story of the Jews of Europe during the first half of the 20th Century. It was a tale of death, death camps, pogroms, ghettos and genocide.

    Not only the Jews were persecuted, Gypsies, homosexuals, and others also faced the wrath of the Nazis and their collaborators. Now, however, we are learning that the Holocaust did not only involve massive deprivation of life and liberty, it also involved theft on a monumental scale.

    During the past year, we have learned about the robbery of Jewish money from Swiss banks, gold looted by the Nazis and the theft of Jewish-owned artwork. In the last few months, however, the world has awakened to the existence of another injustice, the denial of insurance benefits to many victims of the Holocaust and their heirs in the wake of World War II.

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    Prior to and during the war, Jews and other victims of the Holocaust took out life, property and other types of insurance policies issued by companies in Germany, Italy, Switzerland and other countries. Relying on the strong reputation of the European insurance industry, most were reassured that if anything happened to them or to their assets, at least their heirs would be protected.

    However, when survivors of the Holocaust approached insurance companies to collect the proceeds of their own or their murdered relatives' insurance policies, they were roundly turned away. Having just survived the world's worst genocidal campaign, Jews and other refugees were told that they lacked the necessary death certificates or other documentation of the deaths of their relatives, the policies they held or the loss of property.

    As we sadly know, in most cases, almost all family members were killed in death camps and their possessions and records destroyed or seized. Surviving heirs, if there were any, had no documents to show the insurance companies.

    At the same time, following the war, insurers made little or no effort to locate beneficiaries. Nor did they establish procedures to assist with these inadequate records.

    Even worse, in some instances, beneficiaries were able to produce substantial documentation but were still rejected. For instance, the National Association of Insurance Commissioners, which is investigating this issue and testifying today, recently heard testimony from a man whose father purchased an annuity worth $50,000 in Czechoslovakia before he was murdered in a concentration camp. Although the family has substantial documentation, including the name of their insurance agent, the company has refused to honor the claim.
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    Even more tragic and ironic, there are numerous accounts of insurance companies collaborating with the Third Reich and paying the proceeds of policies not to legitimate heirs, but to Nazi plunderers.

    Today, Mr. Chairman, I am releasing two documents which add weight to allegations of connections between insurance companies operating in Europe and the Nazis.

    First, a recently declassified U.S. intelligence document dated August 17, 1943, suggests that five American insurance companies operating in Europe, Equitable of the United States, Hartford Fire, Mercury Insurance, New Hampshire, and Saint Paul Fire, were managed by a Mr. M. Guinot, who was allegedly a Nazi collaborator.

    Second, an article from the Yorkshire Post of June 6, 1944 reports on insurance taken out by Nazi leaders. In particular, Goebbels, 662,500 pounds; Himmler, 158,750 pounds; Goering, one million pounds; and Ribbentrop, 416,250 pounds.

    I today call upon insurance companies which sold insurance policies in Europe prior to and during World War II to release information on policies issued to Nazi leaders, the policies' values and whether they paid out the policy.

    Mr. Chairman, I ask unanimous consent that these documents from the U.S. National Archives be included in the record.

    Chairman LEACH. Without objection, they will be placed in the record.
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    Mr. ENGEL. Thank you. While the information contained in these documents is unconfirmed, it underscores the need for a full accounting by the insurance industry.

    I have therefore introduced H.R. 3121, the Holocaust Victims Insurance Act. This bipartisan legislation, now cosponsored by 15 Republicans and Democrats, is designed to shed light on this question and force insurance companies to pay the money long overdue.

    The bill forces the insurance companies to pay the proceeds of the policies to victims of the Holocaust or their heirs. It directs the insurance companies to compare their records of policies issued between 1920 and 1945 with victims of the Holocaust.

    Because records of victims of the Holocaust are inadequate, the bill allows the insurance companies to say why they don't have records of policies and directs the U.S. Holocaust Museum to create a registry of victims against which lists of policies will be compared. It urges companies to set up a fund derived of proceeds of heirless policies. And finally, it prevents the statute of limitations from blocking claims.

    Before concluding, I would like to commend this committee, the National Association of State Insurance Commissioners, Senator D'Amato and the other Senators, Congressman Foley, and others who have worked on this issue, and those filing the class action suit on behalf of claimants for the fine work they are doing to shed light on this important issue.

    For more than 50 years, Holocaust victims and their heirs have been denied what is rightfully theirs. I see my bill, the Holocaust Victims Insurance Act, and the efforts of others as efforts to correct this injustice.
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    Thank you for the opportunity to testify.

    Chairman LEACH. Well, thank you very much, Congressman.

    Mr. Bentsen, do you have any questions? Thank you.

    Well, let me thank the both of you for your leadership on this issue. It's been very extraordinary and I'm personally very appreciative. Thank you.

    Mr. ENGEL. Thank you, Mr. Chairman.

    Mr. FOLEY. Thank you, Mr. Chairman.

    Chairman LEACH. Our next panel will include three insurance claimants, in effect, victims of policy denial. The first is Dr. Thomas Weiss, who is an M.D. The second will be Mr. George Goldberg, and the third will be Mr. Tibor Vidal.

    Unless this panel has made arrangements among yourselves, I'll just go in the order of introduction. Is that all right with each of you?

    Dr. Weiss, if you'd begin, and if you could put the microphone rather close, it's easier to deal with.

STATEMENT OF DR. THOMAS WEISS, CHAIRMAN, DIVISION OF OPHTHALMOLOGY, MIAMI HEART INSTITUTE, MIAMI, FL
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    Dr. WEISS. Thank you.

    Mr. Chairman and Members of the committee, my name is Thomas Weiss. I am a practicing ophthalmologist in Miami Beach, Florida, and currently Chairman, Division of Ophthalmology at Miami Heart Institute.

    I want to thank Chairman Leach and committee Members, and especially Congressman Mark Foley from my home State of Florida for having this hearing today to learn about the Holocaust-era insurance issues. So much has been kept under wraps for so many years. I know I speak for thousands of survivors and family members of Holocaust victims in thanking the United States Congress for commencing this inquiry.

    I also hope that by sharing my family's experiences here today, others, like me and my parents, will ask the necessary questions about their possible stolen insurance policies before all of the memories are too old to reconstruct their family histories.

    I also want to especially thank commissioner Deborah Senn of the State of Washington for taking the lead on this issue, and commissioners Quackenbush of California, Nelson of Florida, and Levin of New York, for adding their prestige to these inquiries.

    I was born in Prague in 1949. My father was 54 years old. He survived Auschwitz at the age of 50, although his first wife and three children perished there. My mother was 42 years old. She had no children prior to her internment. Her first husband died in the camps.
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    I found myself in Miami Beach at the age of 6 months, through the courtesy of HIAS, which was a relief organization based in New York that aided survivors of the Holocaust who had entry permits to emigrate to America.

    Growing up in Miami Beach was wonderful. I fished, I scuba dived. We did all the things that Miami and Florida are famous for. It was only as I started getting older that I realized there was a huge, dark, deep secret that my community, including my parents, were suffering with and were unable to talk about. They were ashamed and depressed, and I couldn't understand why.

    It became clear that a huge tragedy had occurred and that I and others of my generation were heirs to an unspeakable horror. The details that have now become more public, as in the movie by Spielberg, Schindler's List, only speak to the surface of the fear, of the atrocities, and of the rape of an entire nation.

    My father was born in a place called Nodsevlus, now Vinogrado in 1895, which was at that time part of the Austro-Hungarian Empire, the Hapsburg Empire. He was born to a landed gentry family that had large holdings in real estate, cattle, vineyards and agriculture.

    When my father finished his schooling, including German schooling, he set up a commodities business in the years 1933–1935 that had offices in Prague, Budapest and Nodsevlus that sold sunflower oil kegs, walnuts and grains through the ports of Bremen, Hamburg, Danzig and on the Adriatic.

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    At that time, there was an insurance agent in the town by the name of Mr. Joseph Schreiber, who constantly pestered my father to buy insurance. Mr. Schreiber's business was located at the desk in the Duna Bank. The Duna Bank had on its marquee the royal lion of the company Assicurazioni Generali.

    Mr. Schreiber successfully convinced my father to purchase property, casualty, fire policies, and an annuity. Before the Second World War, my father was in the privileged position of being extremely wealthy himself and of marrying a younger woman who had an unusually large amount of money, her dowry.

    He had much more money than he needed at that time and wanted to find a secure place for some of his family's wealth. Remember, there was no such thing as FDIC insurance for banks at that time. In 1937, Mr. Schreiber induced him to buy an insurance policy with Generali, which was considered a pillar of financial stability at the time. The policy was a Czech crown policy that was linked to the American dollar.

    My father estimated that at the time, the value of the policy dollar-wise was in excess of $50,000. Keep in mind that one crown was able to buy many kilos of bread, and there were 50 crowns to the dollar. We're talking about an unusual sum of money.

    I know this committee has heard many of the tragic stories of our peoples' internment, murder, financial victimization. My parents' experience was not atypical. The town had been taken over by the Hungarian/German army. The army had a very precise, almost checklist procedure. Their procedure was to take the wealthy men in town and convince them, by method of beating on their testicles, that they needed to reveal the location of their assets and how the Jewish residents were going to transfer this to the Hungarian Nazi authorities.
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    My mother remembers being taken back to her house about two days after she was in the ghetto because her husband, who was a dentist at that time, had not properly revealed, after a long series of beatings, where the gold from his dental practice was. So my mother revealed it because she wanted to stop the beatings her husband was receiving.

    In May of 1944, my parents and all the Jewish residents of Nodsevlus and environs were sent to Auschwitz by train. My father was taken to various work sites. As you know, Auschwitz was ringed by 17 sub-workgroups, including IG Farben and Krupp, and they worked as slave laborers in different locations there. The corporations paid the Reich for their work.

    My mother was transferred October 28, 1944, along with her two sisters and other Czech women, to a work camp, Gross-Rosen, in a town called Zittau, situated in southern Germany. She made speedometer parts for the firm of Messerschmidt, a subdivision of the Henkel Corporation.

    My parents were liberated in approximately the spring of 1945. My father had typhus in Dachau and was liberated by Patton's army. He was nurtured back to health by the medical corps. When he and other people went back to their town, the Jewish houses were completely filled up with Russian populations that had been ushered into the area.

    The Russians had been moved into the area to create on-the-ground facts. The Russians then had a vote, and the population voted to secede from Czechoslovakia to become part of the Ukraine, which occurred.

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    Of course, many people had no papers, because the Russian populations had disposed of all the personal articles that were left by the survivors and had burned them. For those new residents, there was no reason to keep papers and photographs of strangers.

    As I mentioned before, my father was never very communicative about his war experiences. Talking about these kind of things brought back too much pain, which caused him to cry uncontrollably, and it was only after many years that I was able to understand the story as I have outlined it here.

    In fact, he never mentioned this insurance policy to me until 1984. At that time, he marveled at how the insurance company beat him. Since Mr. Schreiber had sold policies to many other people in this region, and using the name of Mr. Joseph Schreiber, I wrote to different companies throughout the area, starting in 1984, to see if we could trace down the policies and the results and claims thereof.

    Generali wrote back and said that Czechoslovakia had nationalized Generali's assets, and so they weren't even going to look for my father's policy. Further, they stated, that no actual insurance policies existed because they were destroyed during the war or by the Communists.

    Most people in my father's position were also met with desultory rejections in trying to claim insurance proceeds, beginning with the fact that they had no piece of paper and including many other excuses, which you will, I am sure, hear about today.

    I urge you to be very skeptical of the insurer's smooth presentations. Their practice to date is to make technical, but misleading, pronouncements and recede, trench by trench, only after someone else establishes a fact that they cannot deny.
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    In 1984, they told my father that there was no policy and no way to find the policy, and even if there was a policy, they had no legal or moral responsibility. In October of 1996, Generali publicly denied the existence of certain prewar insurance records because, quote, ''documents and details relating to specific policies were normally kept in the Prague branch office,'' unquote.

    But in March of 1997, after press reports of an archive in Italy, they admitted that, in fact, there was an archive in Trieste which contained, quote, ''a number of documents relating to the insurance business it had carried out in central Eastern European countries,'' unquote.

    You will also note that in these early press releases, rejecting responsibility because of the Communist nationalizations, Generali never mentioned that it had received a substantial sum of money, specifically 2.6 billion Italian lira, approximately $10 million, in 1966 from the Czech-Italian Settlement Treaty.

    Now they admit the Treaty, but assert a narrow interpretation which would require Holocaust victims to look to the Czech government for payment of these funds—funds, remember, which the company itself received, but never paid out.

    That same March 1997 press release said that Generali would agree to a procedure for an examination of its records in Trieste, quote, ''which would enable an agreed acceptable body to identify Jewish policyholders in Central and Eastern Europe,'' unquote.

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    Later, in 1997, Generali published its open letter to the families of Holocaust victims in major urban newspapers and in several Jewish publications in the United States. In that letter, Generali invited families of Holocaust victims to send in their names to obtain an archival search of their archive in Trieste, an archive they did not admit existed six months earlier.

    I submitted such a request in June of 1997, which Generali acknowledged in writing. But I have received nothing else since then from Generali. What is even more disturbing is that Generali is conducting its records search by itself with no independent verification whatsoever. This, despite their earlier commitment to an agreed acceptable body to identify Jewish policyholders.

    I understand that to this day they have also refused voluntarily to allow the State insurance commissioners to conduct an independent audit of their records.

    In summary, it is important to realize that there was a huge transfer of wealth from populations in Europe to these insurance companies. And I think, Congressmen, that you realize and you have stepped forward because you know in your gut that the Swiss bank accounts pale by comparison to the net-asset value of these companies.

    What needs to happen here and what can you do? The total universe of companies and policies needs to be identified. The projected payout from that period needs to be quantified. Archivists, actuaries, insurance regulators, lawyers, and researchers need to be brought into the physical locations of these insurance companies to supervise the work that needs to be done.
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    Unfortunately, the insurance companies themselves cannot be relied upon to accurately complete this job. Their slick and cynical disclosure of history that I just reviewed proved that the authority of this Congress, State regulators and the American judicial system should be brought to bear to correct this financial crime against humanity.

    In my individual case, this is a matter of preventing the insurance company from being unjustly enriched at the expense of my family. For hundreds of thousands of Holocaust survivors whose lives after the war should have been eased somewhat by the return of the Jewish people's assets, this is a matter of ensuring a matter of human dignity for people whose suffering cannot be measured.

    In conclusion, you are fighting the good fight. This is nothing less than the remaining vestiges of World War II, the same way that World War II was the last good fight that we all agreed on of good versus pure evil. I would say to you, do not let these insurance companies laugh at you by holding onto the trillions of dollars that they have illegally, unjustly, and immorally enriched themselves with. You have the ability to do what's right.

    Thank you.

    Chairman LEACH. Thank you very much, Dr. Weiss.

    Mr. Goldberg.

STATEMENT OF GEORGE GOLDBERG, CLIFTON, NJ
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    Mr. GOLDBERG. Thank you, Mr. Chairman.

    Chairman LEACH. Excuse me. If I could ask you to pull it very close, it's easier on you. Pull it closer yet. Thank you.

    Mr. GOLDBERG. Thank you, Chairman Leach, Members of the House Banking and Financial Services Committee, and Senators and Congressmen for the interest in the insurance problem.

    My name is George Goldberg. I live in Clifton, New Jersey. I was born in Brno, Czechoslovakia. My father, Jindrich Goldberg, was a successful sales engineer for a German company which made equipment for oil fields. My father purchased three different life insurance policies from the Assicurazioni Generali in its branch located on Behounska Ulice in Brno, Czechoslovakia.

    On August 28, 1924, he purchased Generali policy number 572661 with a value of 20,000 kc. On November 29, 1927, he again purchased policy number 108783 from Generali for an additional 20,000 kc. Finally, on January 31, 1932, my father purchased another policy from Generali, policy number 125795 for 30,000 kc. Premium payments were paid up until the time Hitler invaded Czechoslovakia.

    My family escaped in June of 1939 via train to Amsterdam. Six months later, we boarded the Simon Bolivar, a boat headed for Chile from Amsterdam. I was nine years old at this time. All my family's possessions were on the boat. The boat was double-mined, and the only things left in our possession were some important documents which were tied up in a plastic bag around my neck, including important documents, such as my birth certificate and documents which contained policy numbers and bank amounts that were left in the banks in Czechoslovakia.
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    These policies—the actual policies were lost. I had once seen the policies themselves. They prominently displayed the name of Assicurazioni Generali in Trieste. I have with me today an article from two London newspapers describing the ordeal which mentions our names and contains pictures of me and my father. And my mother was pulled by her hair to get into a lifeboat.

    We were rescued and landed in a hospital in England. It was HIAS that helped us to get to our feet, since we did not speak English. My father died on October 22, 1944 in London, in large part due to the stress exposed to during the years leading to the Nazi occupation. Despite his attempts as early as 1939 to recover cash for his policies with Generali, he was not successful.

    In 1945, my family went to the Czech consulate in New York to register all the assets that were left with my father's name. Nothing was ever received on account of these efforts, because Czechoslovakia was under the Nazi rule.

    I came to the United States in 1945. One year later, my mother died. I wrote to Generali in Trieste in the 1950's and 1960's informing Generali that my brother and I were the legal heirs of my parents' estate. I enclosed the will of my mother and a death certificate of my father. I advised Generali that I was unable to file claim with the office before that time since it was required to perform a lot of investigating and searching in order to submit proof to Generali, since the policies were purchased in Brno.

    A record of these policies was verified by Generali's home office. Generali responded that its portfolio in Brno was nationalized by the State Insurance Institute, of which Generali transferred its reserves.
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    I have with me copies of Generali's letters denying my claims. Since my family had previously registered our lost assets through Czech Consulate, corresponding seemed fruitless. I continued to correspond with Generali in the 1960's, feeling that the reasons for denying my claim were not sufficient.

    To my knowledge, my family bought the policy from the big and reputable Generali firm because they did not want to trust their savings to a small local entity. They purchased from the well-known Italian company on representation that the entire company's assets stood behind the policy.

    I have seen other samples of Generali policies which indicate that the assets of the company in Trieste should stand behind Generali's obligation.

    To this day, nothing was received on account of these policies. In addition, we made applications though the German United Restitutions Organization for these policies, as well as other matters. The only compensation I ever received was $3,000 on account of loss of education. As Ben Gurion stated many years ago, ''Let not our murderers also become our heirs.''

    Thank you, Chairman Leach, Senators, Congressmen for your efforts in this claim.

    Chairman LEACH. Thank you for that profound testimony.

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    Mr. Vidal.

STATEMENT OF TIBOR VIDAL, ENGLEWOOD, NJ

    Mr. VIDAL. Mr. Chairman, Senators, Congressmen, insurance regulators, my name is Tibor Vidal. I now live in Englewood, New Jersey. I was born in 1920 in KosAE1ice, KosAE5ice Czechoslovakia. My family moved to SAE5ahy, Czechoslovakia, where my father became an insurance agent for Riunione Adriatica di Sicurta, Trieste.

    My father's name was Samuel Weilar. This is the copy of my father's birth certificate from 1894, and here is the picture of my father. My father worked for the Riunione Adriatica di Sicurta from about 1924 until approximately 1941. My father sold policies for Riunione Adriatica first in Czechoslovakia and later in Hungary.

    I remember, as a child, seeing some of the original policies my father sold. The words ''Riunione Adriatica di Sicurta, Trieste'' were prominent. Here is a sample of the name as it appeared on the policies I used to see.

    In about 1939, anti-Jewish laws were passed and my family's fate was sealed and doomed, along with millions of others. My father's license was taken away. Riunione Adriatica di Sicurta fired him, and my family was sent to ghetto and then to Auschwitz.

    We had to leave all valuables behind. About 200 of my close family members were tortured and then gassed. This is a picture of my mother's family, of my family and part of her family. I was taken to the Hungarian labor camp when I was approximately four years old.
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    In 1944, I escaped from the labor camp to Slovakia, where I worked on false identity papers until December 1944, when the Gestapo arrested me and sent me to the concentration camp, Sered. Then, from there to Therezienstadt, where I contracted spotted typhoid fever. I was liberated on May 7, 1945 by the Russian army.

    After the war, I went to Prague and later to Israel and fought in the 1948 War of Independence. While I lived in Israel, I decided to go back to Trieste, Italy to Reunione Adriatica di Sicurta headquarters to reclaim my father's and my family's policies and benefits.

    Here is a copy of the visa showing when I was in Trieste. The company representative refused to let me into their offices to explain my claims. He was rude, arrogant and insulting. His attitude toward me and what I was claiming was that is not their problem, go away and leave us alone. I expected a warmer reception and an honest willingness to listen and try to help, or at least an explanation to a former employee's son.

    I was very upset and thought there was nothing to do. From 1945 until now, no one from Riunione Adriatica has ever contacted me, let alone paid the policies. In 1997, I learned, through news articles, that finally victims like me were demanding complete disclosure and payment on policies sold by Riunione Adriatica and others. My father's memory and rights compelled me to get involved.

    Since 1997, I have been actively involved in the fight to regain what is rightfully ours. However, these companies are trying to hide who they are in the U.S.A., and they are playing the same game now that they played with me in 1958 in Trieste. Only now, they hide behind ''shot-lines,'' big accounting firms and millions of dollars worth of advertising campaigns.
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    Riunione Adriatica is owned and controlled by Allianz Ansell Gesellschaft Germany. I am advised that Allianz has hired the accounting firm of Arthur Andersen to audit the files of the life insurance unit of Allianz in Germany.

    I understand the testimony of Allianz in prior hearings that the audit does not extend to Riunione Adriatica. Riunione Adriatica, together with the other Italian firm, Generali, sold the majority of the policies in Eastern Europe. Riunione Adriatica takes the same position as Generali. That is, that they are not responsible for policies sold in Eastern Europe, like my family's policies.

    Allianz cannot have a clean bill of health if it does not account for the policies sold by its subsidiary RAS, Riunione Adriatica di Sicurta.

    I have seen the advertisement of Allianz in the newspapers. The ads pretend to address Allianz Ansell Gesellschaft's efforts to handle claims. Allianz Ansell Gesellscaft's obligation to us is not over until they satisfy the obligation of Riunione Adriatica and the claims of the subsidiaries of Allianz.

    Mr. Hansmeyer, we are not paper. We are not statistics, and we won't go by numbers anymore. This is my father, and this is my mother. Open your records and pay the claims.

    Chairman Leach, Senators, Congressmen and the insurance company regulators, these were my parents. Please help me make Mr. Hansmeyer and other companies like Allianz open their records and pay the claims.
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    Thank you for listening to me.

    Chairman LEACH. Well, thank you for your testimony.

    I might say in the normal course of events, we hear testimony for and against issues and why, and what the three of you have really laid forth is a family history which is part of the fabric of the history of the century, which is of a more extraordinary kind. And for that, this committee is very grateful.

    Mr. Foley, do you have any questions?

    Mr. FOLEY. I do. Thank you, Mr. Chairman.

    Mr. Goldberg, I know this is painful, and during your testimony, obviously, it was with some great emotion that you recounted when you were forced out of your native country.

    One of the statements from a constituent of mine was the fact that the insurance companies were asking them to produce canceled checks or records of their policy. Would you again—I apologize for having to ask, but would you again describe for the panel what you took with you when you were forced from your homeland?

    Mr. GOLDBERG. We had all our belongings up to the time that we got to Amsterdam, Holland. All our belongings, meaning furniture, everything that we owned was on the ship. And it was a law or a commitment—every person that boarded the ship had to have a plastic—it wasn't plastic at that time, it was like a rubber bag around the neck toward the chest which held important documents. I had it, my brother had it, my father had it, and my mother had it. So if the ship did go down, this was a precaution. These documents would be safe wherever you landed.
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    Like I say today, I really don't have to see the movie Titanic; I lived the Titanic. We were 2 1/2 hours in the water without lifeboats. My mother was pulled up by her hair.

    So that's my story. And then we landed in England and, like I said, HIAS was very good at what they did in those days. They gave us a place to live, and they got us on our feet financially to be able to subside.

    Mr. FOLEY. But you were not only stripped of your dignity, but you were really stripped of any way to make claims against the insurance companies, because you——

    Mr. GOLDBERG. That's not true. It was a German mine. It wasn't a mine that was laid by either England or any other country. It was a German mine that was laid.

    When we emigrated from Czechoslovakia to Holland, I remember as a child we were on a train. And the train was stopped in Dresden and they cut the train in half, and my father grabbed myself, my brother, mother and led us to the front of the train so we would not be left in Germany. My grandmother was left; she went to Auschwitz.

    Mr. FOLEY. Dr. Weiss, could you explain why you feel it is important for Congress to address this issue?

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    Dr. WEISS. The reality is that you are looking at an entity that probably is the largest reserve of money in the world today, and in the history of mankind. The true value of these companies is not fathomable. In order to get one's hands around the complete picture, we would need an army of accountants.

    As you know, before Mercedes Benz was brought onto the New York Stock Exchange, the accounting principles in Europe were so opaque that it was not possible to determine their true values.

    In terms of what Congress can do, I think it's only going to be Congress and the efforts of people like Deborah Senn and commissioners Quackenbush, Nelson and Levin and other commissioners to break open this stone wall that has been put in terms of securing the information that needs to come forward.

    Mr. FOLEY. Mr. Vidal, a final question. Do you believe that pressure from this committee and other public forums have caused the companies to be more responsive?

    Mr. VIDAL. Excuse me, which companies? I mean, the insurance companies?

    Mr. FOLEY. Yes, sir.

    Mr. VIDAL. If they want to do business in the United States, they should. They should be responsive, they should help, and they should commit themselves to restitute the people that they took business.
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    I don't know, I don't understand why the United States, the biggest country in the world, should do business with European insurance companies if they don't commit themselves to reimburse the people.

    Mr. FOLEY. Would the panel agree, though, based on the fact that the public attention is getting closer to all the companies? Wouldn't you suggest it would be in their best interest to expedite?

    Mr. VIDAL. Yes, I don't know why—oh, that's for you. Sorry.

    Mr. FOLEY. Anyone, whoever cares to.

    Dr. WEISS. If I may. The response is that you're dealing with people who are super, super-sophisticated and slick. You're dealing with the cream of European society that have evolved into professionals at not paying the claims. These companies have enriched themselves beyond our ability to fathom by not paying the claims.

    If they had paid the claims normally in the course of their business, they would not be the hydra-headed, multi-headed entities that actually have offices and money in every corner of this planet.

    So you're looking at a very unusually and highly sophisticated evolved entity that I think we need to bring Star Wars and deal with them.
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    Mr. GOLDBERG. I also feel that if you paid the premiums all along the way, and then were forced that you couldn't pay the premiums, I think that the premiums show that there was good faith on the part of the people paying the premiums, and they should pay the claim for what they originally committed to.

    Mr. FOLEY. Thank you, Mr. Chairman.

    Chairman LEACH. Thank you, Mr. Foley.

    And let me thank this panel very much. I think you've put a human face and historical perspective on an issue that is very important to all of us today. And so your willingness to come here at your own volition is very much respected, and certainly, some of the stories have been difficult to tell. So we thank you very much.

    Our next panel will be composed of Ms. Deborah Senn, who is insurance commissioner from the State of Washington; Mr. Chuck Quackenbush, who is Insurance Commissioner from the State of California; Mr. Elan Steinberg, who is Executive Director of the World Jewish Congress; and Mr. Terrell Hunt, who is President of Risk, International.

    And let me just say in introducing Ms. Senn and Mr. Quackenbush, their leadership in their own States, as well as within the State commissioners on this issue, is very much appreciated.

    Ms. Senn.
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STATEMENT OF DEBORAH SENN, INSURANCE COMMISSIONER, STATE OF WASHINGTON

    Ms. SENN. Thank you, Mr. Chairman, Members of the committee. I want to say a special thank you to you for inviting us here today to speak about this very important issue and for your leadership in holding these hearings and proposing and passing legislation on the subject.

    I am Commissioner Deborah Senn, the Insurance Commissioner of the State of Washington. I am one of 55 insurance regulators in this country. State insurance regulators created the National Association of Insurance Commissioners, or the NAIC, in 1871 to address the need to coordinate regulations of multi-State insurers and, of course, now multi-national insurers.

    That includes the development of uniform financial reporting by insurance companies, new levels of expertise in data collection and delivery, and a commitment to even greater technological capability. It has moved the NAIC forward in its role as a multidimensional regulatory support organization.

    There are two very important bases for State regulatory jurisdiction that apply here today. Number one, we as regulators directly regulate any insurance entities that are licensed or authorized to conduct business within our State boundaries.

    And second, we have the authority to advocate and act on behalf of residents in our State in their dealings with any insurance entity, even when the insurer is not doing business in the State.
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    I'd like to take just a few minutes to tell you about the genesis of NAIC Holocaust Insurance Issues Working Group that was created in September of 1997 to deal with this issue. Several months before then, last May, I actually read an article in a trade journal reporting that several Holocaust survivors were trying to make insurance claims.

    And I, as many of you, probably sat back and said, ''Oh, my gosh, insurance, of course people have not been paid for their insurance claims.'' I approached several other commissioners, including Commissioner Jay Angoff, Commissioner Quackenbush, Commissioner Levin of New York, and the leadership of the NAIC, and we put together a working group which consists of 25 States that are interested and committed in the issue in order to protect the survivors in their States.

    There are about 150,000 survivors in the United States, and the magnitude of the claims, we believe, is staggering. In fact, we are still developing a methodology to estimate the number of dollars involved.

    When we started the working group, I took the initiative in Washington State to send a letter out to our survivor community to see if people indeed had claims. And we received from about 150 letters, 50 responses, and we actually have 50 active files.

    And it's every type of insurance. You've heard about life insurance, property and casualty, and of course, dowry insurance. It took a few moments to figure out what it was, because it's obviously not sold here in this country, but it's a policy that—it's an annuity-type policy that is issued on the birth of a child and it matures at age 21, and it's used to pay for the wedding.
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    As I said, 25 States have joined the working group, and that's unprecedented participation in a group at the NAIC. There are three important actions that the working group is taking, and I just want to quickly outline them.

    First, we have been having public hearings around the country. Our first hearing was in Washington, DC. We went to Chicago, Miami, Los Angeles, Seattle, Philadelphia last Friday, and New York on Monday, next Monday.

    We have had survivors from across the country testify and tell stories as you heard today, harrowing stories. We have had survivors in front of us who have pointed to scars from bullet holes, who have talked about being pushed into a pit and surviving and being rescued in the middle of the night. And they have talked about the fabric of their lives, their families and the hard work that their families engaged in, in order to give their families the security through insurance that was so important.

    Second of all, the States have agreed to coordinate activities. We are working on a uniform claims form, and we are discussing joining together to submit claims to the insurers in order that no records be lost or misplaced.

    And third, we are having a dialogue with the insurers. We met recently in Washington, DC with both Generali and Allianz, and we have made a request to them with regard to examination of their books and records.

    And I just want to note today that Mr. Hansmeyer of Allianz approached me before the hearing and he has indicated that through the German regulators, Allianz will agree to have the insurance commissioners examine their books and records. And that is a positive step forward.
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    Now let me very quickly talk about some of the issues identified by the working group. Obviously, the issues and the documentation is very complex, although we actually have more documentation than we ever expected, and that's because people were able often to smuggle out pieces of paper.

    We have copies of policies like the Yugoslavian and the current Bosnia policy that is in your materials. Some people have premium receipts. Some people policy numbers. And some people have excellent memories of names of companies, types of insurance. But, of course, the bulk of the policies and the bulk of the claims have no documentation. And of course, the heirless are unaccounted for.

    So the question that has been facing all of us is how do we get at the records? And that is why the commissioners are requesting an examination of the books and records of the companies on-site. That is what we do normally as insurance commissioners, and that is what we do best.

    We can verify—excuse me, we can examine company records to verify specific claims. And that we call the micro approach. But we also have suggested a macro approach. We have asked the insurers to release complete lists of policyholders, as have the Swiss banks released names of accounts, so that they may be cross-referenced with Holocaust registries contained at Yad Vashem or at the Holocaust Museum here in this country. We make that suggestion because it will save everyone time, effort and expense.

    Finally, let me say that there are other sources of outside data. However, we do want to get inside the companies and look at their books and records. Risk International, here today, will testify that they've uncovered documents of conveyance of insurance policies by insurers to the Gestapo. We also believe that there are records of insurance policies in the Russian archives.
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    But, as I said, going directly to the company records is the most important step that we can take with regard to verifying the claims and getting them resolved.

    Now let me just very quickly talk about the relationship between the European insurers and the United States. Insurance commissioners have the jurisdiction over companies and subsidiaries that do business in the various States. And we have a veritable toolbox of oversight. We have State holding-company laws. We have unfair practice statutes. We have regulations on lost policies. We have good-faith statutes. We have licensing requirements. And we also have the ability to license and to revoke.

    Now, let me talk about the relationship of the European insurers with the United States. Allianz—which folks have talked about here today—Allianz is the parent company of Fireman's Fund. Fireman's Fund is licensed in practically every State in this Nation.

    And, in fact, we included with your materials a sample list, and we have the full list, of all the subsidiaries of the insurers around the country. Generali, for example, is the parent company of Businessmen's Assurance of Missouri. Now, that company is licensed in many States, and the domiciliary State is Missouri. Winterthur, the Swiss company, is the parent of Unigard, and Unigard's domiciliary State is the State of Washington. So we have quite a bit of interconnecting relationships. I won't go through the companies now, but there is an extensive number of companies, and we have provided some of those materials in your packet.

    Generali itself does business in the State of Washington, as it does business in the State of California. And as commissioner Quackenbush will discuss, he recently has subpoenaed records of Generali in the State of California.
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    So those are the nexus in the relationship with the various States to these insurance companies. Let me just emphasize, insurance is an international business, and we believe that these companies do do business in this country, notwithstanding the argument that is being made in Federal District Court in New York with regard to jurisdiction.

    Now, let me just very briefly go over some of the questions that have arisen, because it is so important for Congress and the States to work together on this issue for survivors.

    Clearly, there are serious international issues involved in finding an equitable resolution of these unpaid claims. Just as the commissioners in the NAIC are well-equipped to tackle the research and regulatory action needed on behalf of survivors, Congress and the Federal Government have considerable clout to move on the international issues, as we heard here today.

    Already you have passed Chairman Leach's bill to facilitate the archival research and translation services that could move all Holocaust claims closer to resolution. Senator D'Amato and Special Envoy Stuart Eizenstat have played key roles in pressuring the Swiss government and banks to cooperate in the gold investigation.

    We ask, then, that you consider resolutions to pressure European insurers and governments to participate fully in the efforts to reconstruct the insurance coverage from the era and to determine the extent of unpaid claims and dispose of the assets associated with the policies.
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    Finally, let me say that there are many questions, legal questions that have arisen here today. You will hear the argument that Generali's assets were nationalized. That's what they've told us in hearings, and there are many questions surrounding those issues with regard to language in the policies, with regard to the liability of those assets. So these are not black-and-white arguments; they are complex arguments.

    Allianz will tell you that the German government stood in their shoes with regard to restitution and has taken the responsibility. Once again, there are serious questions with regard to those arguments.

    We have questions about whether there were unclaimed asset funds within these companies. We want to know if these companies made efforts to find missing claimants and were the companies enriched unfairly.

    In conclusion, Congress and the States can work together to demand the opening of the records and the release of the names and information with regard to the survivors and to the heirless.

    I, as insurance commissioner, and other insurance commissioners in this country are committed to using our full authority to secure redress for our survivors. There are many groups working on this issue, and I commend every one of them: the Congress, the Members that were here today and testified, the commissioners, the American Jewish Congress, the lawsuit.

    And let me just say it is important that we not lose focus on the goal to maximize the recovery for survivors and determine what should be done on behalf of the heirless. In many of the hearings, the survivors have said, ''I am going to give the money to charity,'' or they've been apologetic about making the claim. The survivors need not apologize for wanting a return of their hard-earned assets stolen by the Nazis.
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    At its heart, the Holocaust insurance issue is about justice. The unpaid claims of survivors, their heirs and the heirless victims of the Holocaust represent families and hard work and hard-earned premiums paid to the insurers

    The work before us is simply the pursuit of justice after so many years of neglect. The survivors are aging and many are in ill health. So we must act quickly and decisively.

    Thank you very much.

    Chairman LEACH. Thank you for that extraordinary testimony.

    Ms. SENN. Thank you.

    Chairman LEACH. Your governor is well-served.

    Ms. SENN. I'm an elected commissioner.

    Chairman LEACH. Excuse me.

    [Laughter.]

    Your citizens of the State of Washington are exceptionally well-served.

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    Ms. SENN. Thank you, if I may point that out.

    Chairman LEACH. Thank you.

    Mr. Quackenbush.

STATEMENT OF CHUCK QUACKENBUSH, INSURANCE COMMISSIONER, STATE OF CALIFORNIA

    Mr. QUACKENBUSH. Thank you, Mr. Chairman.

    I am Commissioner Chuck Quackenbush from California. I am also elected, but I get along great with my governor.

    Ms. SENN. I do, too.

    Mr. QUACKENBUSH. Mr. Chairman, when this issue was first brought before us at the NAIC last fall, I was initially surprised and somewhat skeptical that such a fraud could have been perpetrated for 52 years since the end of World War II. But after a lot of discussion and meetings and after many hearings, I have come to the realization that we have a very serious problem on our hands affecting insurance consumers in the United States and in the States that we regulate.

    I would commend Commissioner Senn for her yeoman work on this. The leadership role that she has taken on this issue has been extraordinary, bringing it forward to the NAIC and getting all of us in such a large working group focused on bringing this matter to a conclusion.
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    We've learned a great deal about how some insurance companies have treated claims by Holocaust victims and their families. We've learned about the extent of the collaboration between some of the companies and the German government during the pre-war and war years. We've learned that this collaboration involved the marketing and sale of insurance policies, typically life and property, that these companies never intended to honor.

    Indeed, many of these policies were paid not to the beneficiaries, but to the policyholders' captors, the Nazi regime who murdered millions of their citizens and the citizens of Eastern European nations that the Nazis conquered before and during the war.

    What we've learned is that we're not dealing with a few isolated incidents of payments not made to policyholders, but a widespread industry practice to enrich themselves at the expense of those people who were first relocated, terrorized and subsequently butchered by the Nazi regime.

    The reasons for denial are several, and they are the kinds of reasons we hear all the time at the department of insurance—lack of backup for the claim, no death certificate, proceeds of the policy sold to Jews were already paid to the Nazis, reparations to Holocaust survivors were made by the German government, and cover insurance proceeds, a rather novel concept, we find.

    Companies located in Eastern bloc countries were taken over by Communist regimes and so there were no assets available to pay the claims. No one ever seems to talk about the policyholders in this regard, just the financial health of the companies.
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    It's estimated that if these policies were paid today at present value with the currency adjustment and with interest, by the way, the total due could reach into the billions of dollars. In the 1930's and 1940's, insurance was sold extensively throughout Europe to middle and working-class people, and many people invested their money in life insurance policies and annuities as retirement planning tools. Pensions were not widely available at the time. Dowries and education policies were also very common. Commissioner Senn discussed that.

    As the repression preceding World War II spread, and later, as the war and Holocaust developed, more and more people purchased these products in an effort to secure their assets to be used when, and if, they survived this horror.

    Insurers marketed policies to this vulnerable population for this purpose. Insurers offered, for extra premium, policies that would pay in New York dollars because of the rampant instability of the various currencies of the time.

    Many of the claimants actually have insurance policies and/or numbers. Most of the claimants were children during the war, and many are certain that their parents and relatives had insurance, because they recall the agent coming to their house for payment. This is a recurring theme of seeing the agent coming in for payment and the discussion of the actual policies that were purchased from these different companies.

    The majority of the claimants have no actual knowledge of whether or not their parents were insured, but think they must have been because they owned businesses. They were successful upper middle class people.
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    There is also a vast potential group of heirless policyholders, those who perished in concentration camps before they had children, and whose whole family perished with them. Many of these people had insurance.

    These issues have been discussed in the previous testimony, but now what are we doing about all this? In December of 1997, the California department of insurance filed a motion to intervene in a Federal class-action suit in order to protect the interests of California claimants. That will be discussed shortly. Arguments on this request to intervene in the lawsuit are scheduled to be heard March 20, 1998.

    I have a variety of administrative powers, similar to what Commissioner Senn discussed, to subpoena and go after companies to compel testimony on many of these issues. They are included, but not limited to, the power to subpoena, to answer questions about their claims practices and the ability to go in unannounced, completely unannounced, and examine files and records.

    Now, California could go it alone on this issue, just as Washington could. But I think we are a lot stronger working together on this issue. I would propose a coordinated approach involving American and European insurance regulators and private firms with accounting and legal expertise to gather, review, and analyze the archives of each of these insurance companies who did business in Europe during the pre-war and war years.

    The information should be compiled into a database for the retention of the policy information and claimant information. The on-site teams should be supervised—and this is very important—by an American-based steering committee consisting of an accountant, an attorney, an economist and a representative of the commissioner, several commissioners.
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    The project would involve approximately 15 companies located in five countries, and the countries are Switzerland, France, Italy, Germany and Austria. In order to address the many issues that would develop, the team must have that varied expertise. In addition to firms of accounting and legal expertise, the team would have to include experts in insurance archeology, economists and accountants.

    Now, my department is preparing to go it alone if we need to on this issue, because we have approximately 6,500 directly registered Holocaust survivors, and we are already working with Governor Pete Wilson to find a funding source for just such a team as we approach the companies individually.

    Over the past several months, my department has invested significant energy and resources into determining the scope of this problem. We've heard from Holocaust victims who've produced copies of their original policies. We've heard from other victims who could produce nothing but memories of conversations with their parents. And we've heard from people such as Alan Stern, whose grandfather Moshe Stern bought a life insurance policy, knowing that his life was in danger as the Nazi war machine persecuted his people.

    We've heard from attorneys involved in the Federal class-action suit in New York on behalf of Holocaust victims against two dozen European insurance companies. We've also heard from Shimon Samuels, European director of the Simon Wiesenthal Center, who provided a historical perspective on the close working relationship between certain insurance and financial services companies and the German government to finance the war effort.

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    Those hearings have been vital to preparing insurance regulators for the challenge of acting on behalf of the Holocaust victims. The task ahead of us provides a great challenge. The commissioners and the Holocaust survivor community have already encouraged any of those who have any information to come forward. We'll continue to take that information and list it.

    But there are potentially thousands of individuals who may not even be aware that they have the right to come forward, and even if they did, many of them have, as we said, little documentation on what those policies might have been.

    The challenge for regulators now is to ensure that the records of insurance policies housed in archives throughout Europe in all of those countries are preserved, and most importantly, secured from tampering. Insuring the integrity of these records and combing through them to identify which claims have yet to be paid in identifying beneficiaries present an enormous challenge that we cannot fail to undertake.

    After having conducted several hearings on this issue in L.A. and San Francisco, I've become increasingly frustrated with the slow pace that some companies have chosen to adopt in responding to the NAIC's efforts to resolve the issue. Eight European insurers were invited to tell their story at the January 13, 1998 Los Angeles hearing, and the January 14 hearing in San Francisco.

    All but one of the insurers refused to attend; refused the regulators' request that they attend a hearing to discuss claims handling practices. That company, incidentally, as Deborah Senn had mentioned, is Allianz. They have stepped forward and courageously come to these hearings, which are rather emotional, very intense, and have stood up and said they are going to try to find a way to rectify this situation.
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    Last week, I issued subpoenas ordering the offices of Generali to appear at a public hearing I will hold February 19 in San Francisco to discuss their company's handling of unpaid claims of Holocaust victims. At that hearing, I'll make it very clear that the insurance commissioners are united in their support for Holocaust victims and that continued reluctance to act in good faith toward resolving these claims will have serious consequences for Generali and other European insurance companies, along with their American subsidiaries.

    I am prepared to revoke their certificate of authority, which allows a company to sell insurance in California for Generali and any of its American subsidiaries, if it fails to take the steps that I will outline in those hearings in San Francisco. This is not a threat; this is a promise. We will begin to hold those hearings on any company that isn't cooperating and progressing with us on bringing this issue to a conclusion.

    I would encourage other commissioners in the discussions I've had with them to take the same sort of actions, and they will be following the lead of Commissioner Senn and myself as we move in this direction.

    In conclusion, I would just say I have seen the policies. I have seen the canceled checks that have been written for these policies. I have seen the pictures. I have seen fragments of documentation. I have seen all the reminiscences of the victims of the Holocaust as to what has happened.

    We can have more hearings; we can discuss this even longer. But I think the time for talk is drawing to a close. In California, it certainly has. I am prepared to take action, and I know all of you are prepared to take action and bring this to a conclusion.
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    Thank you very much.

    Chairman LEACH. Thank you very much.

    Mr. Steinberg.

STATEMENT OF ELAN STEINBERG, EXECUTIVE DIRECTOR OF THE WORLD JEWISH CONGRESS

    Mr. STEINBERG. Thank you, Mr. Chairman. I appreciate the opportunity to once again appear here, and I wish to express our gratitude for the manner in which you are continuing to focus the moral attention of the world on this very troublesome and historic problem.

    May I also at the outset express my thanks to my fellow panel members here, Commissioner Senn and Commissioner Quackenbush for the determination they have shown in pursuing this cause. And a special word for Congressman Foley for his particular efforts.

    Mr. Chairman, I speak before you today on behalf of the World Jewish Restitution Organization and the Conference on Jewish Material Claims Against Germany, the bodies mandated to deal with restitution claims. The Claims Conference, comprising 23 national and international groups, deals with the claims against Germany and against Austria. The World Jewish Restitution Organization, comprising international Jewish bodies in partnership with the state of Israel, deals with the claims vis-a-vis countries outside Germany and Austria.
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    Mr. Chairman, it is now more than two years that the issue, which has become known as ''Nazi gold,'' has been before international public and people of concern throughout the world. The term ''Nazi gold'' has come to represent a shorthand reference to the whole array of Holocaust-era assets that were plundered by the Nazis in what was certainly the greatest robbery in the history of mankind.

    This committee has played a central role in addressing the moral and material imperatives which the issue has posed. It is worth recalling that in December 1996 the president of the World Jewish Congress testified here and proposed that Swiss authorities seek to being the process of restitution by initiating a good-faith financial gesture.

    Mr. Chairman, you have made a difference. I am pleased to report back to the committee that last week 5,000 elderly survivors of the Holocaust in Hungary received initial payments from the fund set up by Swiss banks which directly resulted from that proposal in December. Thank you, Mr. Chairman.

    Unfortunately, I must also report back to this committee, in keeping with our commitment to keeping it informed, that on the very specific subject of looted gold, which in many ways was the point of origin in this debate, there is a fundamental problem.

    This committee had been told, and indeed, the public at large had been told, that Switzerland would restitute whatever looted assets the Swiss independent commission of historians, the Bergier Commission, would uncover. The Bergier Commission in December confirmed that Switzerland had received in today's value, some $4.5 billion of Nazi gold, of which $1.5 billion was so-called nonmonetary gold, that is, gold from individuals, not from central banks.
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    This amount far exceeded the gold Switzerland had returned after the war, yet Swiss authorities have flatly stated they will not now make any further restitution of gold.

    Moving to the broader concept of Nazi gold, the other categories of Holocaust-era assets. This committee began by looking at the question of art this morning, and is focusing on the unresolved claims against insurance companies. It is very likely that, insofar as the lost benefits to individuals are concerned, the total value of this category of Holocaust era assets, insurance—this category exceeds that of the more thoroughly examined question of looted gold.

    I would like to say that in terms of the insurance problem, we are only at the beginning of a process which deals not only with monitoring claims and making certain they will be paid, but a matter of justice and morality. Our country has always stood for that throughout the world. The premium country throughout the world in standing for honesty and justice and morality, and we feel that is what is at stake here as well. And of course the claims are not only of our citizens here in the United States, but with people who live in countries where poverty is often so much more stark than it is here.

    We have met with representatives of the insurance companies, and we have had particularly extensive discussions with Allianz. Let me state that the talks with Allianz have been meaningful and worthwhile. Recently a delegation representing us met with their officials at the highest level in Germany to specifically examine concrete proposals and questions concerning available archives and resources. We sought to impress upon them not merely the seriousness of this issue, but the need to deal with it expeditiously while there are survivors still alive who have these policies, or while their heirs are still alive. But it must also be stressed that the larger part of these policies are, because of the tragic dimensions of the Holocaust, without heirs. The Jewish people are the heirs of the Jewish victims.
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    In keeping with the demands of justice, we have put forth specific proposals paralleling Senator D'Amato's proposals you heard earlier, which in their broadest form are: First, to appoint a joint commission of eminent persons, similar to the Volcker Commission for Swiss accounts, to independently, meticulously and professionally, search the records and files of the insurance companies' archives to identify and determine the volume and nature of policies which were issued in the war period. Second, to establish an acceptable procedure for publicizing and paying dormant policies to the beneficiaries or their heirs. Third, to establish a meaningful humanitarian fund. Officials with Allianz have assured us that a detailed response shall be shortly forthcoming.

    As of today, however, I cannot state that we have had that response. With your permission, Mr. Chairman, I would like to report back to the committee within 30 days as to whether a positive response is forthcoming.

    Mr. Chairman, many of the international companies have serious exposure in the United States. They have associate firms here in the United States and, therefore, we consider it proper that it becomes your concern as well. We would welcome the opportunity to maintain contact with you on a regular basis and to exchange information. You can help in this process, and I hope that we will be able together to urge them to act quickly, properly, set up the commission of which I spoke, and begin to respond to those, who I don't know how, but miraculously still are here with us, and have their policies and have not been justly compensated. Thank you.

    Chairman LEACH. Thank you very much, Mr. Steinberg, and let me say this will not be the last hearing on the subject, and your further reporting will be made part of a further record, and I think it's very important to understand that this is something that is going to take some time and the monitoring will be very careful. And thank you for your leadership, which, by the way, has been extraordinary.
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    Mr. STEINBERG. Thank you very much, sir.

    Chairman LEACH. Mr. Hunt.

STATEMENT OF TERRELL E. HUNT, PRESIDENT OF RISK, INTERNATIONAL

    Mr. HUNT. Thank you, Mr. Chairman. My name is Terrell Hunt, and I am the President of Risk International. I am accompanied here today by Del Jones who is the CEO of Millennial Insurance Services, which is our parent company. I mention him because, as many of you know, our work in this area has been pro bono, and it is Mr. Jones who is paying the bills. Doug Talley, who is our Vice President is also with me, and he's been leading up our research effort to date.

    We congratulate you, Congressman Foley, as well as Commissioner Senn, for the leadership you've shown in this area. I'm impressed with Commissioner Quackenbush and the courage and tenacity that he is showing. I've seen on his face the disappointment and the anger as insurance carriers have refused to participate in the hearings that he hosted in California, and we're impressed with the efforts he's making to bring insurance carriers to the table.

    Over the past ten years, Risk International has developed a highly specialized niche in the area of insurance archeology and claim recovery associated with environmental cleanups. As we know, environmental problems that we see in 1998 have their origin, frequently, in plant operation that occurred in the 1940's and 1950's, and, hence, we developed expertise in finding insurance policies written in the 1940's and 1950's. Last October, we accepted a challenge from Commissioner Senn and the NAIC to see whether this expertise of a historical insurance archeology might be applicable to finding Nazi-era insurance documents.
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    Over the last 120 days, we have found from independent archival sources, a number of important things. We have identified 21 different policyholders who hold 36 policies issued by 13 different Holocaust-era insurance policies. We found policies themselves issued by carriers in Germany, Poland and Switzerland. We have found what we believe is the smoking gun mechanism by which the proceeds of life insurance policies purchased by individual Jews were paid into the treasury of the Nazi government. And this document here, Congressman Foley used this morning at his press conference, is that smoking gun document. We have found evidence of complicity between high-level insurance company officials and the Nazi government.

    In our material, attachment 2, is the record of a meeting between Mr. Hilgard, who was an officer of Allianz and a leader of an association of German insurance companies, with Goering, Goebbels, Heydrich, and others, and the summary says that at this meeting it was decided that the insurance companies would make payments on their books but that such payments would be immediately confiscated.

    The message to insurers is this, the documentary evidence can be recovered from independent sources, from archives that exist around the world, although the preferred source of information is the insurance carriers' archives themselves.

    We would like to make two simple points. First of all, to talk about the impediments that we, as researchers, face in seeking to find Holocaust-era insurance documents and in seeking to match claimants who do not have insurance policies with policies that we discover that do not have claimants. And, second, comment briefly on what Congress and the States might do working together to make this archeology effort work.
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    First of all, the impediments. We need access to the internal files of the insurance carriers. There's really no substitute for doing archival work in their own files because in those files we will find insurance policies purchased by Holocaust-era Jews. We'll find documents of claims that have been made under these policies, and we can determine whether those claims were paid, whether they were not paid, whether they were reasonably denied. We can find information about the corporate structure and the officers of these corporations, and what role they may have played in establishing Holocaust-era Nazi government policy. We can find information about the financial performance of these carriers at the time they were supposedly taken over by post-Holocaust era governments and disadvantaged by their relationship with the Nazi government.

    This particular document came, originally, from the archives of an insurance company. We found it in a non-insurance company source, but it's key to the kind of things we would find if we were inside the archives of the insurers.

    Allianz spokesmen have recently indicated that tens of thousands of these documents exist in their files. Each of these documents has the key information that's necessary today to make a claim. They indicate the name of insured party, the policy number, and the insurance company that issued the policy.

    Carriers will say, and the panel that follows us will be interesting in this regard, that they are looking through their own files to find insurance policies. They have offered to make information they find available to potential policyholders. We're concerned that unless there's an independent voice, an independent eye, and some quality control of this effort, the world will never know whether an adequate search has been done.
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    So my advice is, do not be comforted by insurance carrier protestations of doing their own work and looking through their own policies. Ask them if they will allow independent researchers, independent archivists, to sit there with them as they do this work, and keep asking that question until they say, in an unqualified manner, yes.

    The second impediment is the risk of destruction of documents or the tampering of documents. It may seem incomprehensible to us sitting here today that an insurance carrier would destroy documents or tamper with documents. I remember looking on the wall of Senator D'Amato's office yesterday. He has a photograph of the Swiss bank guard who found documents being destroyed not long ago in Switzerland.

    Our third impediment: We will face, as we seek to review independent archives around the world, certain bureaucratic barriers to gaining access and cooperation. We intend to be in Bonn and Vienna and Moscow and Prague and other places, and we anticipate that in some instances, our access will be compromised.

    Fourth impediment: We need to have a mechanism to match claimants who seek insurance rights with insurance policies for whom we do not know a living, valid claimant. Extensive genealogical databases exist around the world, and we think the mechanism is probably there to perform this matching, but there needs to be some centralized mechanism, perhaps through the NAIC, to conduct this ongoing matching of claimants and policies.

    And, finally, the fundamental impediment to date has been one of funding. We are likely, as a people and as a group of people of conscience, to be facing one of the largest research and archeology documentary projects that has ever been undertaken, to identify the documents necessary to resolve these problems, and significant funding will be needed.
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    Now, in conclusion, what can Congress and what can the States do? First of all, provide funding. We're encouraged by the terms of the Holocaust Victims Redress Act, which provides $5 million of funding for archival research. There are many competing demands for these funds, to look at cultural heritage research and other research. $5 million is not enough, but it's an important and useful start.

    Second, we should mandate the retention and integrity of documents that exist today in carrier files, and take whatever action can be taken to ensure that no destruction of those documents proceeds.

    Third, make diplomatic channels available to foster access to commercial archives, independent archives, around the world. And use diplomatic channels to raise awareness in other countries about this effort and the efforts to find insurance documentation and recover claims on behalf of Holocaust victims. Most victims do not live in the United States, but are in Chile, Australia, Europe and many other parts of the world.

    And, finally, encourage Congress and the States to educate the American people. Educate the public and raise the moral banner worldwide that this issue must be addressed.

    I'm reminded of the words stated just a few months ago by the head of the Jewish documentary project in Riga, Latvia, on the occasion of a small, $400 reparation payment made by the Swiss to a Latvia citizen. He said, ''The world pretended not to see the mass graves, the crematories, the camps. They did not see our suffering or our death. But the world did see something. They saw our property and without any shame, they went to take it, to grab it.''
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    So, we congratulate you for this effort and encourage you to expose this wrong worldwide, to express this nation's outrage and its righteous indignation about what has happened, and to join the States and others who are working to seek redress and relief for those who have waited so long. Thank you.

    Chairman LEACH. Thank you, Mr. Hunt.

    Ms. Senn, in your prepared statement, you noted that the NAIC, which for those present, means the Association of Insurance Commissioners representing all 50 States, as I understand it.

    Ms. SENN. Yes, that's correct.

    Chairman LEACH. They had opened a dialogue with European insurers on the Holocaust issue. Could you explain the extent of these discussions and what's been accomplished or where they're leading?

    Ms. SENN. Yes, we have invited each of the insurers that are involved, there are about 15 companies, to each of our public hearings throughout the fall and the beginning of the year. In addition to that, the commissioners have an annual meeting in Washington, DC.

    Chairman LEACH. Have the companies come?

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    Ms. SENN. What we've had, written testimony provided by Allianz, we had an attorney for Winterthur, we had another Swiss life insurance company come forward in Seattle, but it's been pretty spotty in terms of the participation at the public hearing. So, in order to make sure that we could get a dialogue going, we also invited them to meet with the commissioners and the working group in Washington, DC., when we're having our annual retreat. And at that time, Generali attended through their legal counsel, and Mr. Hansmeyer who will be testifying here today, testified or met with us with regard to Allianz. We spent a couple of hours with them and we talked about some of the issues that have been raised.

    We heard from them, but most importantly, we asked them two very crucial questions. One is, will you, without objection, allow American insurance examiners to come to your company to examine your books and records? Second of all, will you release a list of names of policyholders so they can be cross-checked with the archives at Yad Vashem or the Holocaust Museum? And, we have not yet had an answer from Generali. We are expecting one fairly soon.

    In addition, we have sent out a list of about three pages of questions that have arisen out of all the hearings and discussions, and asked the insurers to answer those. Allianz told us that Arthur Andersen was in their company doing an audit report, but we pointed out that it was insurance examiners, it's a specialty that we are used to doing and we are equipped to do, and we would prefer to have our examiners look at the books and records. As I said, Mr. Hansmeyer approached us, approached me here today, and said that we are being contacted by the German regulators to make arrangements to examine their books and records. Now I don't know what the details of that are as of yet, and that's as far as we've gone.

    One French company has appeared, UAP, and said that they have been misidentified in terms of their claimant. We have not heard from Winterthur or any other companies that have been involved, so that's been the extent of our discussions.
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    Chairman LEACH. I thank you, and let me just say, at this point, I would like to request unanimous consent to put full statements in the record. Without objection, so ordered. Also unanimous consent to place a statement by Winterthur, as well as the Special Ambassador from Switzerland, Thomas Borer, in the record.

    Chairman LEACH. This committee is disappointed that Winterthur, having accepted an invitation to speak, chose at the end not to, which is, obviously, their right, but it's awkward. And I think, generally speaking, and I hear from Mr. Quackenbush, that lack of forthrightness is a difficulty in the American system, that is it can be counterproductive from time to time. In other societies it might be better, but I think in our society, directness is a better approach.

    In this regard, let me just ask another question of you, Commissioner Senn. You're developing a national database, can you tell us when it's going to be operational, who is going to manage it, who is going to have access to it?

    Ms. SENN. Right now, a number of the departments have received individual claims from people in their respective States and wherever we go and have a public hearing, we have people come forward. We've had claims sent to us from other States, I know the State of New York has had claims from Florida, and so forth, so we are trying to get together and sort them out. And in fact, in the State of Washington, we have begun to keep track of the claims and we're going to start talking to the working groups about putting them in a centralized database.

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    Most importantly, last Friday in Philadelphia, it was a public hearing, but I addressed this issue with the working group, and there was tantamount agreement, although we have to talk with the full working group, and that is that we believe it is important to submit the claims together. We have claims in the State of Washington, some very good claims, we have not submitted them yet because of concerns about the security of the record. And so we feel very strongly that if the States, together, put a package together and sent them to the insurers that would offer the best protection and the most comprehensive way to do it.

    The State of Washington has also put together something we're calling a kit, which is basically how to process this type of claim, what sort of information, what questions to ask the survivors, and that is actually ready probably this week or next week, and we're sending that out to the various States as well.

    Chairman LEACH. I would like to request a copy of that, and, again request unanimous consent it be put in the record as we develop it. I think that might be helpful.

    Ms. SENN. Yes, we'll supply you everything we have.

    Chairman LEACH. Thank you.

    In this regard, Mr. Quackenbush, you mentioned you've received 6,500 names, is that correct?

    Mr. QUACKENBUSH. Mr. Chairman, there are 6,500 registered Holocaust survivors in California, upward of 20,000. We've received hundreds, actually over 1,000, inquiries into our hotline discussing this particular issue. I would also emphasize that speed is of the essence here. Time is continuing to march by. These are elderly survivors, for the most part, and I think the longer we wait, the more chance that many of these survivors die and also, if there is anything going on with the recently discovered records, we could be losing valuable documentation, and we need to get into those companies as quickly as possible and preserve that record. That's why we are moving as aggressively as we are in California.
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    Chairman LEACH. Thank you. Let me ask Mr. Foley.

    Mr. FOLEY. I thank all four for participating, and for all of their hard work on this effort. Thank you.

    Chairman LEACH. Let me just conclude with one further question for Mr. Steinberg. What are the lessons and parallels that you see in your experience in dealing with the Swiss banks relative to dealing with this insurance issue? Are there one-to-one analogies, or are these very differing circumstances from your perspective?

    Mr. STEINBERG. I'm tempted to say that the lessons that should have been learned over the past years with the Swiss banks are what not to do. And I would hope very much that the painful and torturous path that was associated with the difficult negotiations with the Swiss authorities would not be repeated again. No, with every such comparison, there are analogies, and there aren't. The term ''Volcker Commission'' has come to be almost a generic phrase and yet while there are merits to that proposal, we have to realize there is a central difficulty here and that is, we're not dealing with institutions in one country. We're dealing with bodies of at least five countries. In the case of the Volcker Commission, for example, in Switzerland it was necessary that some enabling legislation be enacted in order to pierce the veil of Swiss banks' secrecy. Obviously, while this would be a voluntary enterprise, if we were to establish such a commission parallel to the Volcker Commission, for the insurance companies, enabling legislation would be much more difficult, or the kind of regulations that would be necessary would be much more difficult. So while we can draw certain lessons from that particular episode, if you will, there are substantial differences.
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    Chairman LEACH. Thank you, just in concluding, let me say that because this is an issue of international significance, there are aspects of the American system that are not widely understood abroad, and one relates to the Federal nature of America, particularly in the insurance arena, the decision of the United States Congress, in effect, either to devolve or not to assume responsibility for basic insurance regulation, which gives the States a significant role. And that means that as two symbolic State insurance commissioners, there's a great deal of authority that resides in your offices. And it's important that it be understood that this authority is very large, and is large because it is assumed it is being appropriately carried out. So I want to simply thank you for your leadership on this issue and not that it is not simply an advocate in nature, that is, there is an enormous authority that rests in a devolved way, in the American Federal system, with the States, and in particular in this area, with the State insurance commissioners. Thank you very much.

    Mr. BENTSEN. Mr. Chairman.

    Chairman LEACH. Excuse me, I beg your pardon. Mr. Bentsen has been here and I——

    Mr. BENTSEN. I left and returned, and I apologize. But I did have a couple of questions, if I might.

    Chairman LEACH. Please, absolutely.

    Mr. BENTSEN. And I apologize for having to leave. I had to go over and introduce a bill and come back.
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    But, first of all, let me join my colleague, the Chairman, as well as my colleague from Florida, in commending the panel for the work you're doing. The commissioners, I'm a little dismayed to learn that my own State's commissioner is not yet engaged in this and I would hope that would change, although I'm pleased, and I think it's important that the panel know, that Mr. Hunt and Mr. Hunt's company are a Houston-based company, and so I appreciate the fact that you've filled that role where otherwise our own commission might be lacking.

    But I did have a few questions, if I might. And I have to say, I'm stunned. I've sat through the other hearings that this committee has had dealing with the bank situation and the insurance situation—and I missed the hearings on the artworks, which I apologize for not being here—but the insurance situation is quite stunning. Had this occurred in the United States, I imagine that either of you commissioners would be in court at this point in time, litigating this, and this would have been among the largest swindles of all time in the United States.

    Chairman LEACH. May I interrupt for a second?

    Mr. BENTSEN. Absolutely, I'd be glad to yield to the Chairman.

    Chairman LEACH. I think it would be more likely they would be in jail, considering the circumstances.

    Mr. BENTSEN. Lack of forthrightness, the Chairman was subtle in his comment on how that's viewed in the United States, but—and in this town we need to be kind of cautious about that—but in any event, I'd like to ask a few questions, if I might.
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    First of all, just to get an idea, and Mr. Steinberg may know this, do we have any idea of what value we're looking at, a dollar value of the claims at this time?

    Mr. STEINBERG. I certainly wouldn't presume to put a precise figure on that, but let me give you a notion of what we may be talking about. We are in the midst of a very extensive study which will attempt to assess the material damage done to the Jewish people during the Second World War. What was the total loss in terms of dollars? Without necessarily putting an exact figure on it, and excluding such factors as loss of wages, slave labor, if we talk about physical assets, we are approaching a figure, at this point, in 1945 dollars, of total assets, not just insurance policies, I must say, of something in the order of $12 billion, 1945. Multiply by 10 just because that's the rise in the consumer price index, we're talking of seized assets of something on the order of $120 billion today. I can't put a figure on what the size of the insurance component is, but there are indications that the single largest component would have been insurance policies.

    Mr. BENTSEN. If I might, do you know, and anyone may be able to answer this, and Mr. Hunt may know this, the panel before you testified, in part, as being in occupied territories, and at the time, the occupation took place, the assets were seized, and this document indicates that assets were seized and then transferred to the Reich. Do you know, subsequent to the war, whether or not claims were paid to non-Jewish Czechoslovakian citizens who otherwise had policies, or any other non-Jewish citizens who otherwise had policies by these same companies, or was there a blanket denial, across the board denial of claims as a result of the war? I mean, surely, with all the disruption, many people lost documents and all that, but was the Jewish population singled out or do you have the evidence that shows that?
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    Mr. HUNT. I think the short answer is that we don't really know the answer to that question. But it's interesting to use this document to make one point, that after the war claims were presented and very frequently denied for reasons presented by the insurance carriers that had to do with the strict interpretation of the language of the policy or other legalistic, formalistic, reasons, and we've heard today, a few people have mentioned the absence of a death certificate, for example, as a basis to deny a claim on a life insurance policy after the war, but would point out that the insurance companies were paying the Reich's treasury under these kinds of documents, proceeds of life insurance policies without a death certificate. If fact, they were paying to the Reich's treasury proceeds under life insurance policies the owner of which was not even dead, so there was clearly a double standard applied.

    Mr. BENTSEN. If I might, and with the Chairman's indulgence, the transfer of those assets was not a condition of the contract of the policy, I would imagine. No where in the policy did it state that if the country was invaded or an act of war, that certain individual's assets under a life insurance policy would be transferred to the occupying force?

    Mr. STEINBERG. Oh, you're absolutely right. There's no language like that.

    Mr. BENTSEN. There's no language like that otherwise, but——

    Mr. STEINBERG. Absolutely, if it's an insurance contract, it would remain in effect.
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    Mr. BENTSEN. And in your States, would that not, I mean, that probably was a violation of the contract, of the annuity contract, wouldn't that——

    Mr. QUACKENBUSH. It's not ''probably,'' Congressman, that's definitely a violation. No one has a right to declare null and void an insurance policy, and just say that the money comes to us now. They may be forced to provide money to that government, but the policyholder still needs to be economically whole for what was due them from that policy.

    Mr. BENTSEN. I can't speak for your States, and, quite frankly, I don't know the insurance code in Texas well enough, but wouldn't that affect a company's ability to do business in your State, if they have been found to have violated contracts?

    Mr. QUACKENBUSH. Absolutely, and that's the—all the commissioners have extensive powers to force insurers to comply. We have specific regulations that we promulgate on claims handling procedures, and to violate that is a rather serious event. They're liable for fines, they're liable for all types of restrictive policies put on them by the commissioner up to and including revocation of their certificate of authority. I've done that in California, and it's been done in many other States too.

    Ms. SENN. Yes, thank you. First of all, just to join Commissioner Quackenbush, we do look at that when a company enters our State to do business, and we do raise those questions, and there are good faith provisions in our statute to look at their conduct in other States and other places, and we've kept companies out for that very reason. He's revoked licenses and so have I, in the State of Washington, for that type of behavior.
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    Second, let me try to answer your question about whether Jewish insurance assets were targeted. We do have amongst our claims a Polish family for a policy, and they're not Jewish. So clearly, there are other victims of the Holocaust and the war in Europe that do have claims, but there is no question that there was a systematic campaign to target the Jewish community.

    I have a document here that we just looked at the other day, it's from the National Archives. It is a document that talks about the damages that were done during Kristallnacht, the night of the broken glass in Germany, and the fact that the damages amounted to 50-million Reich marks and the monies for the insurance policies were paid to the Reich to the tune of 1.4-million Reich marks. The Jews were not paid. And, finally, about 100,000 Reich marks were paid German non-Jews who suffered damages during Kristallnacht. So there is no question. And we've seen other documents Mr. Hunt has found which show committee meetings with the former CEO of Allianz who was Hitler's economic minister which talked about the disposition of Jewish life insurance assets and what kind of arrangement would be made. So there is no question that Jewish insurance assets were targeted.

    Finally, let me say that I have, indeed, spoken—I didn't see Mr. Ballmer recently, but I have spoken to one of his deputies, and the department is talking to us about participating in the working group.

    Mr. BENTSEN. If I might, just one last question, Mr. Chairman, because I know you have another panel. For policies underwritten by non-German companies, would the assets, the premiums, basically, would those have stayed in the country where the policy was underwritten or would they have been transferred to the holdings of the—if you had an Italian company or a Swiss company, would the assets have stayed in Poland or stayed in Germany or would they have been transferred to an account or a fund in Switzerland, for that matter? And the question being, if that's the case, were the funds that were then being transferred back to the Reich, were those funds being transferred back out of those countries, so it wasn't just a question of an occupying force plundering the assets in an occupied country?
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    Ms. SENN. That is indeed the case, we believe, and, in fact, you have hit the heart of one of the issues with regard to nationalization. The question being asked is, where were the assets kept and where are the policies claimable? And both those issues really relate to the issue of liability of the carriers.

    Interestingly, as an example, in Czechoslovakia, in 1923, the Czech government and the insurers concluded an agreement that would allow insurers to take assets out of the country for the business that they do and put it in other countries, and presumably, that arose out of fear, after World War I, of confiscation or whatever. So, you've really hit the heart of the question of where are assets located and where are these assets claimable.

    Mr. QUACKENBUSH. One thing, one point I'd like to make is that is an issue that is going to have to be resolved, but it shouldn't be the policyholder that has to resolve it. They should be paid what's due them, and then if there's a right of recovery against another company against another country, against several countries, that's something that the insurance carrier needs to do. The policyholder shouldn't be involved in that, they have a policy that's as good as gold and they should be paid.

    Mr. HUNT. Let me just add that where the money ended up is not really relevant to the policyholder's right of recovery particularly where we're talking about insurance policies provided by the major European carriers, the names that we've been talking about today. Those policies typically contained in their language words to the effect that the claims would be recognizable or payable anywhere, and the reason that a Jew would have sought out Generali or Allianz in 1935 to purchase a policy is because they know that they're an established company that will be around when it's time to recover under this policy.
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    Mr. BENTSEN. I'm not arguing that it would mitigate the claim, I think it enhances the potential of fraud that occurred and it builds the case, and would build the case for the commissioners.

    I thank you all. I thank the Chairman for yielding.

    Chairman LEACH. Thank you very much, Mr. Bentsen. I'd like to thank the panel for your participation, Mr. Hunt, Mr. Steinberg, Mr. Quackenbush, Ms. Senn.

    Mr. FOLEY. Mr. Chairman.

    Chairman LEACH. Mr. Foley.

    Mr. FOLEY. I regret I have a conflict and I would like to ask unanimous consent if I can extend questions to the panel that follows in writing for their response. And I do want to thank both the companies for their appearance today to help shed light on this issue. I know we may be in somewhat conflict based on a bill I filed, but I do want to thank you for appearing here today and help, as you will, to shed light on this subject. And, again, I thank all those that have joined in the pursuit of the truth of this issue. Thank you.

    Chairman LEACH. Thank you, Mr. Foley.

    Our next panel will be composed of Mr. Herbert Hansmeyer, who is a member of the board of management of Allianz AG, and Mr. Guido Pastori, who is General Counsel of Assicurazioni Generali S.p.A.
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    Mr. VAYER. Actually, Mr. Chairman, it will be U.S. Counsel——

    Chairman LEACH. U.S. Counsel—oh, Mr. Scott Vayer. I apologize.

    Mr. VAYER. That's OK.

    Chairman LEACH. Mr. Hansmeyer, you're welcome to proceed as you see fit, and your full statement will be placed in the record.

STATEMENT OF HERBERT HANSMEYER, MEMBER, BOARD OF MANAGEMENT, ALLIANZ AG.

    Mr. HANSMEYER. Chairman Leach, distinguished Members of the Banking Committee, my name is Herbert Hansmeyer. I'm a member of the board of Allianz AG, headquartered in Munich, Germany. We are a company with subsidiaries in 58 countries including the United States, where we have 8,000 people employed with us. We and our subsidiaries are companies that care about the people we represent and places we work.

    To be perfectly frank, the last year has been a very difficult one for Allianz AG, especially for its European subsidiaries which over the past 50 years have successfully reemerged from the devastation of World War II. Four of our European subsidiaries are among 16 carriers that have been named as defendants in the proposed class action suit in New York. These companies are alleged to have avoided payment to policyholders, beneficiaries or their heirs, on life insurance policies issued in the 1920's, 1930's and 1940's, to people who became victims of the Nazi regime.
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    I, myself, and the entire Allianz AG senior management are active and openly confronting the company's history, and are fully committed to resolving the matter of unsettled insurance claims as expeditiously and fairly as possible.

    We have made every effort to reach out to the appropriate people in all areas, from major Jewish organizations to political and business leaders. I have spent, personally, a significant amount of time traveling throughout the United States meeting with some of the insurance commissioners, including California Commissioner Quackenbush, and New York Superintendent Levin. We commend them along with Commissioner Senn and the NAIC, for their efforts.

    Let me stress a fact that is crucial to an understanding of our company's position. There's a clear distinction between the insurance company situation and that of the Swiss banks. Given the chaotic conditions that existed in central Europe after the war, there probably are some life insurance policies for which beneficiaries never received payment. At the same time, it should be stressed that unlike the Swiss banks, Alliance AG subsidiaries are not holding onto dormant assets representing residual value of those unsettled policies. Already before 1938, many life insurance policies in Germany were canceled by policyholders themselves, who then received the proceeds of the policies. Later on, the assets of Jewish policyholders were systematically seized by the Nazi regime, including the cash value of life insurance policies. For this reason, the Federal Republic of Germany assumed the obligation of life insurance policies and provided payments under its postwar restitution program. This program, by the way, made payments in excess of 100 billion Deutschmarks.

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    What about the cash assets that were not seized by the Nazi government? Like the rest of the German insurance industry, life insurance companies, such as our German life insurance subsidiary Allianz Lebensversicherungs-AG were bankrupt or near bankrupt at the end of the war after having had to invest heavily in government bonds that became worthless when Germany was defeated. Allianz Leben also held properties that were lost or destroyed in war-ravaged Germany.

    To prevent the collapse of the insurance industry, the postwar government granted financial support in the form of state guarantees which could be drawn upon by insurance companies to pay individual claims when filed by policyholders or beneficiaries. This means the assets of our present-day subsidiaries in Germany are the result of new business acquired after World War II on premiums paid by policyholders in the postwar period.

    In the case of Eastern Europe, it is important for this committee to bear in mind that the insurance assets of all companies together with the policy records, were taken over by the respective Soviet-controlled Communist governments or when the insurance business was nationalized by state-controlled insurance institutions. Under these circumstances, there could not be any enrichment in Germany or elsewhere for unclaimed and unpaid policies.

    Allianz AG is mindful of the fact that some insurance policyholders during the Nazi period, or their beneficiaries, have questions as to whether or not a payment has been made. Therefore, Allianz established the Allianz help line for Holocaust inquiries with multilingual, 24-hour telephone centers in North America, Europe and in Israel. The help line enables people to make inquiries and file claims directly in an unbureaucratic manner.

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    So far, the hotline staff has taken calls from over 800 people with search requests for more than 1,900 possible policies. In over 1,700 of these requests, no connection could be established to any Allianz AG subsidiary. In many of these cases, however, Allianz AG was able to refer the claimant to another insurance company that, based on information provided by the caller, might have issued a policy. Of 230 or so remaining claims, 38 were found to have been previously paid out directly to the policyholder or beneficiaries. Over 70 inquiries involved policies that were settled by the government of the Federal Republic of Germany as part of its postwar restitution program. As I mentioned earlier, the restitution program commenced in Germany after World War II, and has been continued by the Federal Republic assuming legal responsibility for life insurance policies confiscated by Nazi Germany. In seven of these inquiries, documentation has been found suggesting that a policy probably existed and that a policyholder or beneficiary did not receive payment from the company itself nor had there been a settlement through the German government. In these cases, we have made offers of payment. Five of the claimants reside in Israel, two in the United States.

    Allianz AG and subsidiaries will continue to settle open policies as long as there is reasonable evidence that beneficiaries have not been paid or have not received indemnification from the German government under its postwar restitution program.

    Allianz AG and its subsidiaries have and will be guided by conscience and integrity. It is important for me to put the process of inquiries into context so that you and others can understand what a monumental task this is. To take an example, the records of our German life insurance company contain more than a million paper files from the period prior to 1945. Verifying claims involves sifting throughout this mountain of material. In most cases, as might well be expected after the passage of so many years, claimants cannot provide information that would help reconstruct the terms of whatever policy existed and what happened to it. We frequently do not know the terms of the policy, the amount involved, up to what point in time premiums were paid, or even if insurance benefits were ever paid.
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    One of our highest priorities is to reassure the public and the insurance regulators that the process of identifying claims and making payments is credible. To provide this kind of certification, Allianz Lebensversicherungs-AG engaged the services of the U.S.-based auditing firm Arthur Andersen to secure and evaluate the relevant policies. Arthur Andersen is not Allianz AG, nor our subsidiaries, regular auditor, and maintains strict independence.

    While the report is not yet finalized, preliminary results indicate that a large number of policies, they were canceled by Jews living in Germany in the 1930's, when they fled the terrible and increasing persecution by the Nazis and immigrated in large numbers to countries like the United States, Israel, and the United Kingdom, in search of a sanctuary. Confronted by the loss of their jobs and hard put to sustain themselves for the basic necessities of life, many chose to cash in their policies. A smaller but still significant number of policies were expropriated by the Nazis.

    In addition, a small fraction of the policies held by Jews remained undetected throughout World War II, and were paid out at expiration. Thus, only a very small number of policies remained uncollected. These are the preliminary results. We hope to have this report published by the end of next month.

    With the aim of shedding light on a dark period of Allianz's past, early last year, the company commissioned an eminent historian from the University of California at Berkeley, Professor Gerald D. Feldman, to compile an independent account of the company's history under the Nazi regime and during the postwar restitution period. Professor Feldman and a team of historians under his direction have been researching historical archives in Berlin and Moscow, in Wausau, with additional research planned in the United States, France, Austria and the Czech Republic. Professor Feldman hopes to complete his research and publish his report in book form by 1999.
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    We have also been in discussions with several major Jewish organizations. Prominent among them is the World Jewish Congress, which sent internationally recognized representatives to Allianz AG in Munich last year to help expedite the process of seeking a just and timely settlement of potential life insurance claims. I'm pleased to report that one of the representatives is sitting just behind me, Mr. Sonbell from Israel.

    Two weeks ago, Dr. Henning Schulte-Noelle, Chairman of the Allianz AG Board of Management and I held further discussions with another senior representative of the World Jewish Congress. We are hopeful that we will shortly have an agreement on a statement of principles for establishing a mechanism to resolve the underlying issue of compensation for policyholders and their heirs, as well as for those who perished in the Holocaust and left no survivors. As I said, Allianz AG is very mindful of the advanced ages of those who survived the Holocaust and wants to do everything possible to expedite a resolution of this matter.

    We commend you, Chairman Leach, for holding this hearing and want to assure everyone in this room that our company like yourselves seeks and desires justice. Thank you, Mr. Chairman.

    Chairman LEACH. Thank you, Mr. Hansmeyer.

    Mr. Vayer.

STATEMENT OF M. SCOTT VAYER, OFFICE OF THE GENERAL COUNSEL, ASSICURAZIONI GENERALI S.p.A., TRIESTE, ITALY
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    Mr. VAYER. Thank you, Chairman Leach. I want to thank you and Ranking Member Gonzalez, who is not here, for allowing me to testify on behalf of Assicurazioni Generali of Trieste, Italy. My name, as you know, is Scott Vayer, and I am lead counsel for Generali in the United States.

    In view of some of the developments that we heard about today, I'd like to depart from my prepared remarks for a moment and just tell you some other things. Generali supports the concept of an independent, fair and objective panel examining all of the issues surrounding insurance claims and Holocaust survivors and the expropriations of insurance assets in former Communist countries. Generali supports Senator Alfonse D'Amato's initiative suggesting the establishment of such a commission and looks forward to working with the Senator on this issue.

    Generali has consistently championed the concept of establishing a fund in the name of Holocaust survivors and their families. In fact, Generali is the only European insurance company to have already set up a fund and has dispersed millions of dollars in memory of the Holocaust. Generali has embraced a moral commitment to those insured by the company and victimized in the Holocaust. Generali urges other insurance companies and the former Communist state insurance bodies of Eastern Europe to join us in a fund similar to the one the company has already established.

    Generali praises the Senate resolution proposed by Senator Arlen Specter and Senator Robert Torricelli, that calls for the former Communist bloc nations of Czechoslovakia, the Czech Republic today, Hungary and Poland to participate in such a fund.

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    Generali has had a long and close affiliation with the Jewish people, which is reflected in the company's history. Generali was established in 1831 by a group of Jewish merchants in Trieste, Italy, which, at the time, was part of the Hapsburg empire. In the 1930's, as part of its worldwide operations, Generali founded the Migdal Insurance Company in Jewish Palestine.

    The company's future is as closely linked with the Jewish people as its past. Just this past year, Generali increased its interest in Migdal by making the largest non-leveraged foreign investment ever in an Israeli financial institution in the amount of $320 million. Generali through Migdal is the leading insurer in the Jewish state.

    And let there be no doubt that the issue we are discussing today is very close to the heart of Generali's most senior management, as you can well understand because Generali's board Chairman, Antoine Berhnheim, is himself a survivor of Auschwitz, losing both of his parents in concentration camps during World War II. Neither he nor Generali takes any aspect of these matters lightly.

    Without doubt, the issue before you today is an important one. There is no question that some people have insurance policies that to this day have not been paid. The issue before this committee is why those policies have not been paid. Clearly, these are not solely issues of insurance law, nor, with respect to Generali, is it an issue concerning the treatment of Jews or the Holocaust.

    We've heard many disturbing accounts of the actions of the Nazis and even some insurance companies with regard to strong-arm tactics that were employed during the war. Certainly some were blameworthy. However, there are also many preconceptions and misconceptions that should be dispelled if a just resolution of the problems that have now been identified is to be achieved.
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    First, the Italians were not Nazis. They were wartime enemies of the United States and Fascism was despicable. But Italy resisted the Holocaust, Italy did not deport Jews to Germany like France or other countries did. Approximately 85 percent of Italy's Jews survived the Holocaust. Indeed, Italy shares with Denmark the distinction of saving the highest percentage of Jewish lives. Italy was, of course, a member of the Axis until 1943, but Italians were not Nazis. Italy fought against the Nazis for the last two years of the war. As a result, over 640,000 Italian troops were sent to German concentration camps.

    As a company founded and managed by Jews, right up to the war, Generali did what it could to resist Nazification. This is not a casual statement, instead, it is one based on extensive research of Generali's experience during the war years.

    Exhibit A—we do have exhibits that were passed out, I hope you have them—is a memorandum written in 1945 by Antonio Cosulich, then-president of Generali. This document was sent by the U.S. Embassy in Rome to the Allied Military Government and it was recently discovered in the National Archives in the United States.

    Simply put, this account by Cosulich regarding Michele Sulfina, a Jewish manager of Generali, describes the position during the war. Let me read from section 1, paragraph 4: ''Immediately upon the Anschluss and the Sudenten campaign, the Assicurazioni Generali came in conflict with the Germans and at the outbreak of the present war, all the organization of the company in central Europe had to submit to the harsh Nazi laws as it has been the case of companies who had in their capital English participations or interests. Here it is enough to recall that the Assicurazioni Generali were operating in central Europe since over a century. They did not start operations there in recent war years, but in that period had to suffer destructions, looting, and spoliations.''
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    The same memorandum, at exhibit B, on page 3, outlines Generali's policy of demobilization and withdrawal from Nazi central Europe, which included, ''surrender of the majority of the Fenix company and of all of the participations in the Olwag Company, the Bundeslander Company, the Allgis Company and the Heimat Company; surrender of one-quarter of the interest of the Assicurazioni Generali in the Deutscher Lloyd Leben and the Erste Allegmeine company; sale of one-half of the majority in the Polish affiliation; extreme resolution of the complete withdrawal from all the business in the fire and other similar classes of insurance in Germany, started as far back as 1849.''

    There is also significant evidence to demonstrate that Generali did what it could on numerous occasions to aid those Jewish employees of the company who were being forced out of positions due to racial laws of the time.

    Exhibit D is the case of Otto Zeller. Generali assisted in procuring permits and a new position within the company during Mr. Zeller's relocation in Brazil. I would direct you to Mr. Zeller's letter to the company which is in your exhibits.

    At the conclusion of the war, the Prefect of Trieste, the equivalent of a governor of that region of Italy, who was himself a survivor of Dachau and appointed by the Allied Military Government, wrote a letter commending Generali on its conduct during the war. That's in exhibit E, and I note that Antonio Cosulich, referred to in this letter, is the same individual who authored the memorandum from which I quoted earlier.

    Let us now turn to the issue that has brought you here today. The claims of Holocaust victims and their heirs. Generali, in fact, has paid numerous claims of Holocaust victims. Exhibit F in your exhibit package are copies of the actual payment ledgers used by Generali during 1946, 1947 and 1948. Listed are the names of policyholders and the amounts paid on their policies. In the last column, titled, ''osservazioni,'' or reason of death, you will find numerous entries which read, ''morte in campo concentramento'' or ''morte en campo concentramento, Mauthausen'' in the case of the Mauthausen death camp. This is clear evidence that Generali did pay on policies of concentration camp victims in western countries.
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    The question with respect to Generali, then, is more pointed. Why were policies that were issued in eastern and central Europe not paid? The short answer is that Generali's businesses as well as those of other insurers in those countries, were nationalized, expropriated or liquidated by the governments that came into power in those countries after the war. The assets and property which backed policyholders' insurance were confiscated.

    The communist regimes that swept across eastern and central Europe and seized control in Czechoslovakia, Hungary, Poland and other countries, became the successors to our insurance business. They became legally and morally obligated to the Holocaust victims and their families who were the beneficiaries of policies issued by Generali before the war when it had control of its business and assets. And if for whatever reason their claims may or may not have been made before, it is to the governments and successor entities in those countries that the families of the victims should be looking morally and legally for recompense.

    Let us turn to specifics. In Czechoslovakia, for instance, all insurance activities were nationalized by Presidential decree in October 1945. A Czech state company, Ceskoslovenska Pojistovna, was empowered by the state to assume Generali's business.

    Exhibit G in your package is a copy of the Czechoslovakian Presidential decree declaring, on the day this decree is published, ''contractual private insurance companies in the territory of the Czechoslovak Republic are nationalized by the state.''

    Exhibit H is a copy of an original letter from the Czech government to Generali. This letter clearly states that the new Czech company assumes, ''rights and obligations of Generali in that country.''
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    Exhibit I is a title document, in your package, for a property in Prague. The translation clearly shows that building at this location, block and lot, was purchased by Assicurazioni Generali of Trieste on May 5, 1894. On October 4, 1947, according to the ministry of finance, the ownership transferred to Prazska Pojistovna Narodni Podnik, the state.

    In total, throughout Europe, the Communist authority seized 184 offices and 14 companies that were controlled by Generali. Such nationalization or similar programs were repeated throughout eastern and central Europe throughout the postwar years. Exhibit J is a letter from the Hungarian authorities in Budapest which gives the order to begin the liquidation of Generali.

    In Western Europe, where Generali's assets had not been taken and it was allowed to continue doing business and was not expropriated, it paid all legitimate claims presented. But in places where Generali's assets were confiscated, the confiscating authorities are responsible for policy obligations which were backed by the assets taken.

    Exhibit K reflects the thinking of U.S. Government officials at the time, immediately following the war, and underscores the soundness of Generali's position today. This is a letter from the U.S. Embassy in Rome telling a U.S. Congressman that his constituent, ''should apply to the government of Poland for any payments due on policies.''

    In the spirit of helping the victims the Shoah and their families, in July of last year, Generali established a policy information center in the United States. Through this center, anyone who believes that he, she or a family member may have held a Generali insurance policy during the war era can request a search of Generali's archives—see exhibit L in your package. Our toll-free number has processed hundreds of inquiries and we are currently conducting those policy searches.
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    Generali is completing the process of computerizing the PIC to make these searches more efficient. The company has also invited representatives from Yad Vashem, the Holocaust Memorial and Museum in Jerusalem, to view our information center and coordinate the information exchange between the company and museum as we worked together to assist ongoing Holocaust research efforts. Generali has committed to furnish the names of Generali policyholders to Yad Vashem for inclusion in the Hall of Names, to commemorate the dead of the Holocaust.

    It should also be understood that unlike anyone else, Generali has established a fund in the sum of $12 million in memory of those who perished in the Holocaust. Fund monies will be given to organizations and public bodies dedicated to the eternalization of the memory of the Holocaust and to the assistance of Holocaust victims and their families. Fund monies may be applied toward discretionary payments to those who held Generali policies before World War II in Eastern and Central Europe, or to their loved ones who survive them.

    The fund has been established to support these objectives not only in Israel, but throughout the world. The public fund is being administered by a nonprofit trust and an independent board of trustees chaired by the Honorable Doug Levine, a retired justice of the supreme court of Israel. The trust will be publishing its procedures for application shortly, and will publicize these procedures worldwide. All of your constituents are welcome to contact the board of trustees to apply to this fund and, indeed, the people who testified here today are welcome.

    We look forward to continuing to work with you to achieve a sound and equitable resolution of the issues raised here today and I thank you for the opportunity to address the committee. Thank you, Mr. Chairman.
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    Chairman LEACH. Thank you, Mr. Vayer. By the way, are you an employee of the company or a law firm representing it?

    Mr. VAYER. No, I am an independent counsel.

    Chairman LEACH. And what is your firm, for the record?

    Mr. VAYER. Law Office of M. Scott Vayer.

    Chairman LEACH. Thank you.

    Mr. Hansmeyer, we understand Allianz contracted with Arthur Andersen to do a survey of certain aspects of your company. Some have expressed concerns that the audit is limited to Allianz Leben, and there is a question why Reoni Adriatica R.E.S. was not included. Could you indicate——

    Mr. HANSMEYER. Mr. Chairman, we decided very early-on when the issue about unsettled life insurance policies came to our attention, we decided to bring Arthur Andersen in to look at our largest operation, which is Allianz Lebensversicherungs-AG, and it's the company that carries our name, and has operated in Germany. We felt, perceived, the greatest need to secure our files there and to really understand, ourselves, how policies during this period had been settled. In the meantime, the research has been extended to subsidiary companies in Germany, which we acquired in the last 10 years or so, and we do the same research in the records and the same efforts to preserve the records in this company.
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    As far as Reoni Adriatica is concerned, the problem is quite different. Reoni Adriatica does not have files. Their files were in the countries where they operated which is Czechoslovakia, which is Poland, which are some of the countries mentioned by Mr. Vayer. They were also a very important insurance carrier in those countries. The records were kept in the countries, and when the company was nationalized in those countries, the records moved over to the successor institution, or to the government. So, in their situation, it would not make any sense to bring Arthur Andersen in since the only evidence that exists in Ross is some correspondence in some files that were established after World War II when people from Poland or from the United States started to take up contact with Ross and was questioning about life insurance policies, so there is some secondary information, but there are no policy files or no records, really, which we can preserve.

    Chairman LEACH. Thank you. There's some concern that third parties should have access to files. Have either of your companies discussed this? That goes beyond the research that you've contracted for.

    Mr. HANSMEYER. We are, generally speaking, wide open and invite people to look at our files. We have absolutely no agenda to hide anything. We want to put everything to the open, and we invited representatives of major Jewish institutions to visit our archives. We presented them preliminary work we had done, Arthur Andersen had done, and we presented with the way we handle our hot line, and we had two days, very extensive meetings where we went extensively in all the details, and we allowed the representatives of those organizations to pull files out of our shelves and to look at the status of our files. So it's not an issue of hiding anything.
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    We are somewhat concerned, because we are involved in the litigation in New York which might turn into a class action, which, of course, leaves some uneasiness, but our prevailing interest is to shed as much light as possible in the way policies have been handled in this period.

    Chairman LEACH. Mr. Vayer, is it the same with you?

    Mr. VAYER. Mr. Chairman, obviously there are—I'm a lawyer, and there are concerns whenever you're involved in litigation. There are also concerns whenever you're under compulsion of subpoena. Notwithstanding those concerns, the case with Generali is this, right from the outset, Generali has invited anyone who thought they had an interest in these policies to write to the policy information center and get copies of the documents, not a summary, but photocopies, and, indeed, that process will begin dispersing copies of those documents within, I believe, one week, at this point.

    The documents did have to be computerized, that is to say, they were kept by policy number, not the—long ago, I think alphabetical indexes were kept, but those were lost, and the only way into these documents was through a policy number. We've had to take each document and tediously reproduce the index linking policy number with alphabetical name. Now we can get into those documents, and we are going to be releasing that information.

    In addition, we have invited Yad Vashem to come to Trieste, Italy, and we are exploring that possibility with others here, in the United States. Yad Vashem is going to be receiving data from the archives. The archives are a phenomenal repository of demographic information about the Jewish community as it existed before the war and before the Holocaust. We certainly want to see these documents survive, we want to see them preserved, and we want to see this data in the right hands.
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    So, I do look forward to working with Senator D'Amato's commission once it is formed, and I also have a request from Commissioner Senn and the NAIC working committee which I received today and will be presented to the company and I look forward to working out the procedures with them.

    Chairman LEACH. Thank you, Mr. Vayer.

    Mr. Bentsen.

    Mr. BENTSEN. Thank you, Mr. Chairman.

    Mr. Vayer, you mentioned, in exhibit K, a case involving a former Representative Robert F. Jones, on the behalf of a constituent regarding a policy for Adriatica, or a subsidiary, Adriatica subsidiary, and in which the embassy and, I guess, the company stated that they needed to approach the Polish government because the Polish government had come in and seized the company and its assets. I guess my question would be, on the form that was shown to us by our colleague Mr. Foley, regarding the policy issued by the same firm in which in 1940 the assets for the cash value was transferred to the German government at that time. I mean, wouldn't that be a violation of the policy as it related to the policyholder, and even though prior to the seizure of the assets by the Polish government, the issuer of the policy had in effect seized the assets of the policyholder, and so wouldn't the issuer then be liable to the policyholder?

    Mr. VAYER. Mr. Bentsen, first of all, in all fairness, I do want to tell you that the document that you're referring to, while I did cite it, is actually in that part referring to Ross, which is an Allianz company, it's not Generali. The reason it's relevant is because Generali and Ross found itself in much the same circumstance, so I would submit that the document and your question would relate to Generali policy similarly situated.
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    That being said, I think your question is very good. There were, no doubt, many seizures and confiscations. From what we've been able to determine, Generali did try to resist seizures by the Nazis. Indeed, Generali's management going into the war was Jewish and Mr. Sulfina, who was referred to in other document that I mentioned by Mr. Cosulich was indeed a Jewish manager who was running the company up until 1943 when he had to flee the Nazis. So, certainly, there are questioned to be asked and answered.

    With respect to confiscations by the Nazis, we certainly believe that the successors to the Nazi confiscations, and I believe in that case were reparations programs, and those still may be open, although they may have to be revisited. Those authorities would have to answer for the seizure and confiscation of those assets. In order to do this job properly, one will have to examine all of these issues and all of these very specific problems on a case-by-case basis, or if that should prove to be impractical and there is such a possibility because, frankly, we only have fragmentary documentary records. I don't know what exists in Poland, we've tried to get it and been turned away. I submit that in the end, I believe the concept of a fund and method of, in a just and equitable manner, determining who should receive compensation, is the right way to go.

    I also believe that as with our fund in Israel, funds from these efforts should not be limited only to persons who had actual policies with these companies. There are many victims of the Holocaust and, to the extent that those people are still alive, whether they had insurance or they didn't have insurance, I think we can find it in our hearts to find a way to make these funds applicable to them as well.

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    Mr. BENTSEN. If I might, I'd asked a question of the earlier panel, and let's go back to the Polish question again, do you know, were assets prior to the war, were assets, in the form of premiums paid—were assets paid in Poland all invested in Poland, or did Generali, or was it the practice of insurance companies at that time, to invest those assets in other countries?

    Mr. VAYER. I must confess that by my age, you can probably tell I'm not an expert on the insurance regulation of that era, honestly. We are looking into it.

    As far as I understand at this time, all insurance in Eastern Europe at that time, and in Central Europe, was a regulated industry. Each of the branches, although they were branches, functioned autonomously and they were under the guidance of local regulators. Balance information, balance sheet information, was prepared in Trieste, and administration of the business was exported. To some extent, probably, some administrative fees were paid back to Trieste. But the requirement to maintain reserves locally, in each of these countries, was quite strict.

    In addition, in Poland, for example, most of the assets were kept predominantly in government securities or in real estate. Real estate, today, though, is still traceable and in many cases the real estate still bears plaques that indicate the origin with Generali.

    Mr. BENTSEN. If I could, Mr. Chairman, one last question, and that would be between—there's a 50-year spread between 1947 and 1997, and I think what your company or the company you represent has done in the last year has been admirable, and I think comments today about opening up your records and agreeing to having an independent party—I think that's what you said——
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    Mr. VAYER. Yes, I did, Mr. Bentsen.

    Mr. BENTSEN. ——Agreeable to having an independent party come in, I guess, why did it take 50 years to get to this point? I mean, weren't there claims filed?

    Mr. VAYER. I could talk about my retainer, Mr. Bentsen, but I don't think that's—I don't really know. I think that perhaps in this era, once the Cold War has ended, everybody's sensitivities on these issues have risen. I know that in the case of Generali, this issue first presented itself in a very serious way as Generali was increasing its stake in the Migdal company in Israel, and so, although these issues were pending over here, I think at about that time it was the Swiss gold issue that was percolating in the United States, Generali was already facing its history and the history of these claims in Israel, which accounts for why we moved forward in Israel before we moved forward here.

    If I could take a moment, though, and just answer one of your other questions that you asked earlier, that I thought was extremely perceptive. The question had to do with whether other people, non-Jews, also lost their assets or lost their insurance policies, and I do want to state that I think it's important for everybody to understand that when Generali or any of the other insurers deal with these issues, they have to deal with these issues not just with respect to Jewish victims of the Holocaust, but with respect to all people who lost their opportunity to claim their insurance because, indeed, at the time of the expropriations, people who were not Jewish also lost their opportunities to collect their insurance and also were victimized by the Communist nationalizations.
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    Mr. BENTSEN. But not necessarily by the Nazi government?

    Mr. VAYER. They're not double victims, one hopes, although their countries certainly were occupied.

    Mr. BENTSEN. Thank you.

    Thank you, Mr. Chairman.

    Chairman LEACH. Thank you very much. This brings us to the end of our hearing, and we've come again to the end of a long day on the problem of restitution to Holocaust victim assets. This morning we examined issues involved in returning looted or extorted artworks to their rightful owners and, frankly, I was particularly gratified by the forthright and determined attitude of four of our country's and, indeed, the world's, leading museums, not to let the shadow of a single tainted work of art darken their walls. In this regard, the scholarship and advocacy of the Art Dealers Association of America, the B'nai B'rith National Jewish Museum, the World Jewish Congress, and Smithsonian Institution, is impressive and appreciated.

    This afternoon, we were all moved by the testimony of three Americans who were touched by the Holocaust. Their stories personalized one of the great remaining and still in-plumb restitution problems, the payments of life and casualty insurance policies taken out after the dawn of the Nazi era. In this context, the work of our State insurance commissioners, particularly Senn and Quackenbush, in pursuing justice is to be commended, as is the advocacy of the World Jewish Congress and Risk International.
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    I would also like to express appreciation that representatives of two insurance companies, Allianz and Generali, agreed to engage in discussion with this committee. The problem of outstanding insurance claims can best be resolved quickly and through good faith efforts on both sides and such efforts must begin with dialogue. I regret that other companies involved in these Holocaust claims have demonstrated a reluctance to forthrightly step forward.

    The committee will be monitoring the progress of private and State efforts, and, if required, we're ready to lend a hand. In this regard, I would strongly underscore the reasonableness of the idea of establishing an independent commission along the lines of the Volcker Commission to review insurance company accountability.

    Thank you all for coming. This hearing is adjourned.

    [Whereupon, at 5:10 p.m., the hearing was adjourned, subject to the call of the Chair.]