SPEAKERS CONTENTS INSERTS
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WORLD WAR II ASSETS OF HOLOCAUST VICTIMS
TUESDAY, SEPTEMBER 14, 1999
U.S. House of Representatives,
Committee on Banking and Financial Services,
Washington, DC.
The committee met, pursuant to call, at 9:57 a.m., in room 2128, Rayburn House Office Building, Hon. James A. Leach, [chairman of the committee], presiding.
Present: Chairman Leach; Representatives Roukema, Lazio, Lucas, Kelly, LaTourette, Ryan, Ose, Biggert, Terry, Green, LaFalce, Vento, Waters, C. Maloney of New York, Bentsen, J. Maloney of Connecticut, Sherman, Sandlin, Inslee, Goode, Schakowsky, Moore, S. Jones of Ohio, and Forbes.
Chairman LEACH. The hearing will come to order. The committee meets anew to examine the issues related to the Holocaust and the restitution of assets of victims to their rightful owners. A great deal of progress has been made since our first hearing three years ago. The study commissions have been formed in more than a dozen countries, including in the United States, and two major international conferences here and in London have been held. Foundations have been set up and payments to aging victims have begun.
The consensus has emerged that a framework for reaching a credible resolution of those aspects of the Holocaust that relate to mass theft should be completed as the century comes to an end so that the new millennium can begin with a slate that takes into account that the greatest crime in human history is neither forgotten nor financially rewarded. All precepts of Western justice require that victims, not victimizers, should be compensated for crimes against humanity.
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For the outstanding issues the committee will take up today, three are the most extraordinary: The behavior of European banks, including French institutions, during World War II and immediately afterwards; the practice of using slave labor by German companies; and unpaid claims on insurance policies purchased by Holocaust victims. On each of these fronts considerable progress has been made. Although class action suits are pending on the first two matters and disagreements persist about insurance claims, there can be no doubt of the moral imperative to compensate Holocaust victims, which override any procedural ambiguities that might stand in the way.
History has no statute of limitations. If negotiations are taking time, it is because compensation questions fifty years after the fact are exceedingly complex. The mundane problems of proper documentations, exchange rates, and present value are difficult enough by themselves, but parties in these talks must deal with profound moral judgments for which there are no precedents. What is a just compensation for prejudice, for genocide? Can justice ever be satisfied for crimes of such magnitude?
We have today five distinguished panels of witnesses. This morning we will start with Stuart Eizenstat, now the Deputy Secretary of the Treasury, who has done so much to advance the process of restitution. He will be followed by a group of Holocaust survivors and the third panel of Jewish leaders and academic experts. We will reconvene for an afternoon session at 2:00 o'clock to hear presentations by Lawrence Eagleburger, the former Secretary of State, who now chairs a mixed commission of Holocaust victims' representatives and insurance companies. We will conclude with presentations from Barclays Bank and officials of the French and Matteoli Commission, led by Adolphe Steg, a distinguished French surgeon, who is himself a Holocaust survivor and Resistance hero.
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Mr. LaFalce.
Mr. LAFALCE. Thank you very much, Mr. Chairman, for holding today's hearing, the fifth in a series that our committee has held in examining the proper claims of Holocaust victims. It is especially fitting that you call this hearing at the dawn of the Jewish New Year celebrated this past weekend. We are honored to have as our leadoff witness today Deputy Secretary of the Treasury Eizenstat. I look forward to his testimony. His work in this area has been exceptional and we are fortunate to see his continued involvement in this issue even as he begins yet another phase in his career of public service.
We have learned from prior hearings that the more we exhume the horrors of the Holocaust, the more we learn about the need to do more to redress the wrongs of the past, and the harder we work to provide restitution to aggrieved victims of that period, the more legitimacy we add to victims' claims and the further along we move in the path to preventing these horrible events from ever occurring again.
Today our committee will examine several important aspects that we have not covered previously: Current discussions with Germany regarding the settlement of insurance claims by Holocaust victims and their heirs; issues relating to profits derived from forced labor; and the role played by French and Austrian banks during the Holocaust. As we have learned from previous hearings, all of these areas hold difficult legal and logistical challenges. Existing documentation is often sketchy, misleading, incomplete, or anecdotal. We therefore may never be able to arrive at a full and completely accurate disclosure. Nonetheless, we must continue to build a meaningful process. The task undertaken thus far has taught us to confront difficult realities, particularly for countries and financial institutions that perpetrated, knowingly or unknowingly, Nazi-inspired injustices.
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As with our examination of Switzerland's role in this process, the role of French and Austrian banks calls for a painful reexamination of their contribution to the suffering of the Jewish people during and in the aftermath of the Holocaust. Our reexamination of these issues more than half a century later can only raise questions as to whether the Allies could have been more diligent in pursuing this issue both during and after the War, and, as called for in earlier hearings, we must continue to examine carefully whether international and domestic banking practices should be changed to ensure that displaced persons will not be unfairly deprived of their assets in the future, and that regimes that operate outside both law and morality will not profit from their activities.
Mr. Chairman, you surely have our full support in your efforts to continue to uncover these important truths, and I join you in welcoming all of today's witnesses and most especially for their diligent work on helping us shed light on these issues.
I thank the Chairman.
Chairman LEACH. Thank you, John.
Does anyone else have an opening statement they would like to make?
Yes, Mrs. Maloney.
Mrs. MALONEY. Thank you, Mr. Chairman. Hearings such as today's are important because they reinforce the message that the passage of time must not be an excuse to allow for unjust enrichment. In that regard the efforts of Deputy Secretary Eizenstat and private litigants have served two important purposes. As we know, they provide a means to restore the assets of Holocaust victims to their owners and owners' heirs. At the same time these continuing inquiries allow us an additional opportunity to see how completely the lives of the Nazis' victims were destroyed. Only now are we learning how thoroughly many were robbed as they suffered.
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I am pleased to see so many of my friends from New York who will be testifying before the committee. Many of you worked with me on the Nazi War Crimes Disclosure Bill that was signed into law last year. Collectively, members of the New York community have significantly contributed to the intellectual backdrop upon which much of the efforts to restitute Holocaust assets is built.
Finally, I want to extend my sincere gratitude on behalf of my constituents to Deputy Secretary Eizenstat for his tireless efforts in leading the Administration's work in this area, and a very special thank you to my fellow New Yorkers who will be participating in today's hearings.
This morning's New York Times reports that yesterday two Federal judges dismissed class actions brought against companies that supplied forced labor to the Nazis. One of these companies, Degussa A.G., refined gold the Nazis seized, and manufactured the gas used in concentration camps. In dismissing the cases, one of the judges argued that the issues in the case would more appropriately be handled by Executive Branch officials. While these cases will likely be appealed, I look forward to hearing from Deputy Secretary Eizenstat as to what he and the Administration intend to do to forward these claims internationally if they are not resolved in U.S. courts.
Again, I thank so many leaders in the New York community for participating in this hearing today.
Chairman LEACH. Thank you.
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Mrs. Kelly.
Mrs. KELLY. Mr. Chairman, I feel this is a very important hearing we are holding this morning and with unanimous consent, I would like to insert a statement in the record, because I would really like to hear from our witnesses this morning.
Chairman LEACH. Without objection.
Ms. Schakowsky.
Ms. SCHAKOWSKY. Thank you, Mr. Chairman. The Holocaust, as we all know, holds unspeakably painful and horrific memories for many. Historically, the Holocaust represents the darkest period in recent human history and certainly the greatest human tragedy. As a Member of Congress who represents the 9th Congressional District of Illinois, a district which includes Skokie, Illinois, which is home to a high concentration of Holocaust survivors and family members of victims, and as a Jew, I feel an especially strong responsibility to address this issue.
I want to thank you, Mr. Chairman, for your strong committment to addressing this issue. Your leadership has significantly focused needed attention to this issue. Today, as you know, while we examine the status of Holocaust reparations and continue our search for the truth, we are faced with the challenge of a timely resolution for survivors, victims and their families. As we all continue with congressional inquiries, international negotiations, and independent research, those on whose behalf we are working continue to age. I hope that with your leadership we can bring these individuals some sort of compensation that will occur while they still may gain some form of satisfaction.
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I want to thank the witnesses here today, Deputy Secretary Eizenstat, Secretary Eagleburger, Mr. Steinberg and all of those who have engaged in this issue for so long seeking some measure of justice for those who perished, their descendants, and for the survivors of this dreadful chapter in world history. I want to especially pay tribute to the survivors who are here with us today. What you have endured we will never fully know. The message that you bring is one that the world needs to hear, and of course we can never take back what happened to you and your loved ones. All we can do is address this issue with honesty and dedication and a pledge to never forget and never repeat the tragedy of the Holocaust.
As the Jewish community observes the High Holy Days, we reflect on the past year and years. We recount our blessings and try to atone for our regrets. Your words ensure us that those who perished will be remembered with every new year, and that as we reflect on the past we do so openly and honestly. Your words serve to remind us of the wrongs done in the past and what we must now do to repay some portion of what was taken.
My district, in addition to its many survivors, is also well known for my honorable predecessor, Congressman Sidney Yates. Among Congressman Yates' contributions while serving in Congress was his dedication to the commemoration of the Holocaust. Specifically Congressman Yates was a significant member of the effort to establish the United States Holocaust Memorial Museum here in Washington.
I just want to conclude by taking this opportunity to invite all of you to view my office as a place where this issue will always take high priority. Please let me know if I can ever be of assistance to any of you in your efforts on behalf of victims, their families, and survivors. I appreciate all of the witnesses being here today and I look forward to your testimony and to working with you in the future.
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Thank you, Mr. Chairman.
Chairman LEACH. Thank you, Ms. Schakowsky.
Mr. Ose.
Mr. Bentsen.
Mr. BENTSEN. First I want to commend you for holding these hearings, this fifth set of hearings, and keeping the pressure on. I would ask unanimous consent that all Members be allowed to insert a statement in the record.
Chairman LEACH. Without objection so ordered.
Mr. OSE. Mr. Chairman, for the record, that is your right, not your left.
Chairman LEACH. Thank you, Mr. Ose.
If there are no further opening statements, let me welcome Deputy Secretary Eizenstat. I think, as is unanimously in this panel, we are deeply respectful for your work. Secretary Eizenstat, in prior positions held in this Government as well as in this current one, has been tasked by the President of the United States to lead the Executive Branch efforts in these areas. He has done an extraordinarily distinguished job, not only in leading our Government, but leading the international community. Secretary Eizenstat, please proceed.
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STATEMENT OF HON. STUART E. EIZENSTAT, DEPUTY SECRETARY, U.S. DEPARTMENT OF THE TREASURY
Mr. EIZENSTAT. Thank you, Mr. Chairman. I really have now no words to adequately tell you how much I appreciate the leadership that you personally, and Members of your committee, have shown on this issue by continuing to hold hearings and focusing attention on this important set of issues. Much has been done, but much remains to be done, and we are frankly running out of time. Every year 10 percent of the survivors of the Holocaust pass away. We are in a race against a biological clock that makes it all the more important that we continue to make the kind of progress that we have made over the last several years, but accelerate that progress.
I would ask that my complete and detailed statement summarizing the progress we have made be a part of the record.
Chairman LEACH. Without objection it will be.
Mr. EIZENSTAT. I would also like to state that we have over the course of the last several years discovered little recognized facts about Nazi Germany's war effort and about the full depravity of how the Nazi regime systemically plundered the property of those it murdered in prison. We have pieced together new information about the way in which the Nazi war machine was sustained and we have underscored how little justice has been done for those who bore the brunt of the Holocaust and other Nazi brutality.
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We have learned how Nazi authorities financed the war effort by looting massive amounts of gold from the central banks of the countries they conquered and from the victims they killed, how they had it resmelted into disguised gold bars, and then converted into usable hard currency, primarily through the Swiss National Bank. We learned how neutral countries supplied crucial materials to Germany which sustained the war effort.
We have discovered as a result of the lawsuits that have been brought and other actions new details about how the Nazis forced some twelve million workers, mostly non-Jews, to work in German industry and agriculture, freeing German men to fight on the front, deported many to Germany, and relocated others to their own country. By their own admission, German industry became an integral part of the Nazi war effort.
We learned how the Nazis often forced insurance companies to pay them the cash surrender values of the policies of the people they were exterminating and how after the War the companies in many cases refused to pay any living beneficiaries. We learned about the looting of works of art on a scale unprecedented in world history, and we have learned how private and community-owned property from churches and synagogues to cemeteries, schools, and community centers were plundered on a vast scale, much of which has yet to be returned to its owners.
In the field of insurance, the Insurance Commission is now working under the chairmanship of former Secretary of State Larry Eagleburger to create a claims-based process to pay outstanding insurance claims in the lifetimes of Holocaust survivors. It has funding and support from some, but not all, of the major European insurance companies and we strongly support it as the most expeditious way of dealing with the insurance issue.
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As to dormant accounts in Swiss banks, the $1.25 billion settlement of the class action was agreed to in August of last year, signed formally in January of this year, and now is in the very slow process of being implemented. It appears that it will be the spring of next year before the first money goes out, and that delay is unfortunate.
As to the Nazi gold issue, the Persecutee Relief Fund has now received some $60 million in pledges from more than a dozen countries, including $25 million from the United States. We are now in the process of making our second distribution of funds, as are other countries, for relief of victims of Nazi prosecution and we will look forward to continue to work with Congress to develop our recommendations for recipient groups.
In the field of art, some fourty-four countries achieved a consensus in our Washington conference last December in finding a set of principles to find and publicize the existence of looted art and to expedite the resolution of claims that might be made. Countries from Austria to Holland and from France to Germany are reviewing, as is the United States and our major museums, their whole inventory to make sure that looted artworks are returned to their owners. That is in fact occurring. As to communally-owned property, like churches and synagogues, cemeteries and schools, there is slow but steady progress in the countries of Central and Eastern Europe, although much more needs to be done here as well.
We are very pleased by the fact that in Poland, we hope we are close to an agreement on establishing a foundation which will manage the restitution of several thousand pieces of communally-owned religious property. Only last week the Polish Council of Ministers agreed to submit legislation to their parliament dealing with private property. It appears, although we still need to examine the legislation in detail, that as we requested of the government of Poland, it will be non-discriminatory, meaning that it will be open to Polish-Americans of all faiths to file claims for the property confiscated by the Nazis or nationalized by the Communists.
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Finally, through the Washington conference we have established a task force dealing with Holocaust education and remembrance, which now has some eight countries. We will be holding the first of three educational conferences in Stockholm. Sweden was the initiator of this important effort. It is important as we go into the next century that the remembrance of the Holocaust not be about only money, but about the lessons of the Holocaust and honoring the individual worth and personal dignity of its victims.
I was asked specifically to report on the status of efforts to compensate survivors who were required to work under conditions of forced and slave labor for the Nazi regime and for German industry. Our efforts here are without regard to religion or national origin. In fact, the vast majority of those compelled to work for the Nazis who still survive are not Jews, but Eastern European Christians from countries overrun by Hitler's forces in the early years of World War II; in particular, those in Poland, the Czech Republic, the Ukraine, Russia, and Belarus and other countries as well.
To their credit, both German industry and government have stated their intent to do justice for a large group of individuals not covered by any past or current German compensation program. German Chancellor Schroeder in particular deserves enormous praise for his extraordinary leadership on this issue. He has been extremely helpful and his personal representative, a leading elder statesman and a very good friend of mine, Otto Count Lambsdorff, represents the Chancellor personally in our negotiations. I have known him from previous administrations and we have worked very well together.
Our current involvement in the slave and forced labor issue dates to the fall of 1998. It is almost now exactly one year since we engaged in this issue. I was asked by the German government to help find a resolution between class action claimants who had filed suits in U.S. courts for wages and damages arising from slave and forced labor during the Nazi era and sixteen defendant German companies. The German companies, recognizing their moral responsibility for the prior behavior during the Nazi era, proposed to establish a foundation which would provide compensation to those who were forced to work for private industry as well as those who were victims of other actions during the Nazi era.
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It is very important, Mr. Chairman, for you and the Members of the committee to realize that although there are only sixteen German companies, they have indicated in our negotiations a willingness to assume responsibility for all of those private companies that existed during the war even if they no longer exist, as well as public companies who have been privatized. That is an important breakthrough. It means that the number of victims covered will be far more than those who would be covered by the class actions which by definition can only represent those victims who were employed by the sixteen companies subject to the jurisdiction of the U.S. courts.
The German government, with the leadership of Chancellor Schroeder in support of its companies, has proposed to establish a separate government foundation which would compensate many others who were forced to work for the Nazi state who might not be covered by the private sector foundation. These German proposals are currently the subject of intense discussions and working groups and the plenary that myself and Count Lambsdorff have chaired. The participants included the Conference of the Jewish Material Claims Against Germany, five Central and Eastern European governments and the German Finance Reconciliation Foundations in these countries, the Israeli government, a number of plaintiffs attorneys representing former laborers and class action suits, representatives of German corporations currently supporting the foundation, and the German and United States governments.
By late August, discussions on the legal and administrative aspects were far enough advanced so that for the first time the issue of compensation could be discussed. This began August 24 to 26 in Bonn, and we will have our next set of negotiations October 6 and 7 in Washington. Meanwhile, Count Lambsdorff has publicly campaigned to increase German industry participation in the industry foundation, noting that there was, and I quote him, ''Hardly a German company that did not use slave and forced labor during World War II.''
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Consistent with his personal commitment to the process, Chancellor Schroeder convened a meeting on September 6, just a few days ago, of German industry leaders and told the press following the session that now thirty-five German companies were willing to join the industry foundation, more than double the original sixteen who were subject to the jurisdiction of the U.S. courts. The fundamental tradeoff for German industry is to grant a reasonable amount of compensation to former forced and slave laborers in return for what they have termed ''legal peace,'' an end to lawsuits on the subject. If agreement can be reached on compensation levels and the plaintiffs' attorneys and survivor groups concur, then the United States Government through the Justice Department is prepared to file an extraordinary statement of interest in future lawsuits brought in U.S. courts against German companies in cases where the foundation provides a remedy, stating our belief that the foundation set up by the German companies should be regarded as the exclusive remedy for future claimants who might be able to utilize it or, if asked by U.S. courts, we would indicate that dismissal of such suits is consistent with U.S. policy. Such statements by our Government in open court are extremely rare and I hope the German industry realizes this. I want to stress that we would only agree to do this if the participants in this process agree to establish a private foundation and the Bundestag establishes a federal foundation.
As regards the German government foundation, Count Lambsdorff has conveyed to me Chancellor's Schroeder's personal pledge to seek legislation establishing it when the Bundestag returns from its vacation in September. In order to obtain the support for Central and Eastern European governments participating in our process, which we believe is necessary for moral, political, and legal reasons, it is essential that the government's foundation offer as broad a coverage as possible, and that includes the private foundation as well, so as to include workers who were relocated from their homes and forced to work for the Nazi regime.
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There are two main reasons why the United States is interested in resolving these claims through a negotiated settlement rather than through a trial: First, the age of survivors, now averaging around 80 years, necessitates an expeditious solution; second, the number of victims who are covered by the two German foundations would be much greater than those covered by the lawsuits pending in U.S. court. Thus justice will be better served if agreement can be reached to establish the German foundations rather than putting Holocaust victims at risk in uncertain and lengthy litigation.
At this point the central unresolved issue is the amount of payments to be made to various classes of laborers. I know you can appreciate that I can't discuss details related to these issues. It is clear that the participants are very far apart on this issue and that both sides will have to give considerably to achieve an agreement. I hope the German industry realizes just how far the U.S. Government has gone in the interest of an equitable settlement. We have devoted the better part of a year and considerable staff resources to creating a framework for productive negotiation with the cooperation of plaintiffs' attorneys and all of the other participants that I have mentioned who have done what they and the German government have requested.
The German companies have time and again denied any legal liability in the U.S. courts, but have clearly indicated their moral responsibility to the gross abuses afflicted on millions of forced and slave laborers, perhaps as many as twelve million. It is now time that they make a proposal to settle the suit in a fashion consistent with their moral responsibility, not only for their own workers, but for all workers employed in German private industry during the Nazi era. Likewise, it is appropriate for the German government to establish a federal foundation to cover the forced laborers not covered by the industry foundation and we are encouraged by Chancellor Schroeder's willingness to do this.
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By the same token, I hope the plaintiffs' attorneys are aware that the initial monetary demands that they put forth in this negotiation are not considered realistic by German industry or the German government and can make it more difficult for the German government to muster public support to helping to fund a reasonable solution. These attorneys will need to show flexibility if these cases are to be settled within the lifetimes of the survivors they represent. Despite the wide disagreement over compensation, I feel that we have nevertheless come far in this process. If the remaining differences could be resolved, agreement could be achieved in principle on all forced labor issues before the end of this year. Two years ago, and on many occasions since, I have expressed the hope that our work on behalf of survivors could be completed before the end of this millennium. With that date less than four months away, that hope will be unfulfilled. But looking back at the progress that has been made, I believe that we have made enormous strides in bringing these issues before the conscience of the world and putting them on the global agenda. We have taken on all of the important issues, we have created institutions and set in motion an irreversible process that with creative thinking and goodwill and flexibility can bring about rapid resolutions. We have done the best that we can and we shall continue to do everything we can. We hope that the survivors can look at this record and we feel that we have their interests uppermost in our minds. We need their support and their prayers as we work against the clock to win for them what has been so long denied and what they so richly deserve.
Thank you, Mr. Chairman.
Chairman LEACH. Thank you, Mr. Eizenstat. Let me say that I am very impressed with your work to date. I would underscore the unprecedented aspect of the Executive Branch's commitment to intervene in domestic lawsuits. I would only say in this regard that as Chairman of a Congressional committee, and as only one of 435 Members, but I believe I can say with confidence that the Legislative Branch supports the Executive Branch in these endeavors. And I think that I can also say with some confidence that in terms of the sustainability of commitments of the Executive Branch, that certainly there would be a major effort of those of us from the Legislative Branch who are of a different political party than the Executive, that if the Executive changes in the next election that we would want to sustain public policy in a consistent way and that steps you are taking will be of a sustaining nature.
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Mr. Vento.
Mr. VENTO. Thank you, Mr. Chairman. Let me echo your comments with regards to the Administration's, and especially to Secretary Eizenstat's, role. Mr. Secretary, it seems that there are certain agreements that were entered into after the War that have status as treaties according to the courts. But, in essence, the rights of individuals that were either victims of the Holocaust in terms of their losing their lives, slave labor or forced labor, as we have differentiated in our comments here or our analysis here today—but before the facts were known, before we really knew what the consequence and the individuals—occurred. So these treaties have served as a bar in many instances. I guess that record is very inconsistent in terms of what property rights are, what types of civil damages are being sought in various jurisdictions. Would you care to comment on the status of those treaties? Obviously, you can go behind them or go around decisions of the U.S. courts, I guess, which present us a unique problem here in the sense that we are attempting to hold this up to the light.
Mr. Eizenstat.
Mr. EIZENSTAT. Thank you, Mr. Vento. The key treaties involved are the London Debt Agreement and the Transition Agreement in 1954. It remains an open question as to whether or not the liability of Germany has or has not been extinguished by the actions of the German government since that time. Germany, for example, has paid 100 billion Deutschemarks to survivors and has continued to do so. It has opened a new account for those survivors in Central Europe and requests that have yet to be paid are now being paid. They have paid through the Paris Settlement for those Americans—and we found scores of them—who were caught up as American citizens in concentration camps and they continue to make payments through the so-called BEG program. It still nevertheless remains an open question as to whether this extinguishes their liability.
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With respect to the judicial decisions on this point that you reference, the opinions, of course, were just released yesterday and the second of the two only last night. We are just beginning to review them to see what, if any, impact they will have on our current negotiations. It would be premature to comment at this point, but I would like to make the following statements.
First, the German companies during our year-long negotiation have always stated that their initiative reflected a moral and not a legal obligation. They have issued a statement since the opinion reaffirming their commitment to proceed with our negotiations and with the foundation initiative.
Next, it is important, as I indicated, that as we now get down to the last stages of the negotiations that their own offers and proposals should reflect the moral obligation they themselves have assumed. Next, these are all German companies, at least the sixteen which are doing business in the United States. We know that they value their good-will here and they will want to continue the kind of good corporate citizenship in the U.S. and Germany that they have always displayed.
So we are hopeful that, notwithstanding the decisions and the appeals, that will undoubtedly go on, that the negotiations that we launched will continue and we hope that they will be brought to a successful resolution. The fact that there will be appeals only adds to the need to resolve this as quickly as possible. These appeals can take months, if not years, with uncertain outcomes. And again, it adds a sense of urgency and it emphasizes the moral issues that the German companies themselves have always stressed.
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Mr. VENTO. I appreciate that that is the case with these treaties and agreements. We might also note that also with the relations with Japanese-Americans after World War II, in which a number of States had passed individual measures that provided some jurisdiction within their own States regarding Americans and others that had actually, in essence, been enslaved or in forced labor within the Japanese concentration camps. There is some suggestion of that agreement. But I think the question gets down to if we have a mechanism like a commission or others, for instance, the Swiss did not sign these treaties, so they are obviously in a different legal circumstance. But in any case, if we have such commissions that are formed, such as the one that has been formed and operating in Switzerland, with former Chairman Volcker doing some work on it, do we have accountability mechanisms to make certain that they are accomplishing what has been stated in their preface? The same, of course, is now true, because we have the French taking on the formation of a commission just this past month, the 10th of September. We are going to hear witnesses later about that. Would you care to comment about the accountability mechanism?
Mr. EIZENSTAT. Yes. That is a very important point. I would like to address it in two ways, first on the accountability issue itself and second in relationship to the Swiss contrast that you mentioned.
First, in the negotiations we have been doing with the German companies and all of the other participants that I have mentioned, we are now very close to establishing the parameters of the German private foundation in such a way as to ensure its accountability. That is, it would have a claims process that would be open, that would be transparent, that would rely on relaxed standards of evidence, that would have an appeals mechanism, and that would be subject to Germany's own law with respect to non-governmental organizations, which is enforced by the German states. And if there are problems with that, one can go to administrative courts.
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In addition, it has been agreed that the board of the foundation would be multinational, it would be widely representative, and it would have people from outside as well as from inside Germany. The German situation here is light years different from the Swiss situation. The Swiss government was never involved in our negotiations. They stood as far away as they possibly could. It was not until many months after we reached an agreement that the statement was put out by the Swiss government endorsing the settlement and not until Vice President Gore and I met with the Swiss president in February of this year that there was a formal acceptance of the settlement.
Here the German government has been a participant from the start. Of course, one can go back over forty years to note how much they have done to try to compensate in some small way what has happened to Holocaust survivors; but in this particular situation with respect to the slave and forced laborers, and also bank liability and insurance companies, German insurance companies, the German government has been very active and Chancellor Schroeder has shown remarkable initiative. Likewise the German companies have indicated, which was not the case with respect to the Swiss banks, their willingness to set up this kind of foundation. So I think that we have a very different situation, a much more encouraging situation, and one which will assure accountability.
Mr. VENTO. Thank you, Mr. Chairman. I appreciate the extra time.
Chairman LEACH. Mrs. Roukema.
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Mrs. ROUKEMA. Thank you. I am not quite sure that your extended response has answered the question that I had on my mind, because I wasn't sure, Mr. Eizenstat, that your response was specific to the consequences of the lawsuit being dismissed yesterday in New Jersey. So let me ask the question again, it may be repetitive, but with a little precision for my help in any case.
The case yesterday was dismissed in New Jersey and it was dismissed by the judge indicating that politics and international relations are not under U.S. law to be decided by the judiciary, but rather by the Executive and the Legislative. My question is, have you indicated that this has been taken into consideration and is covered completely in your negotiations with the German government, either with the private foundation or the government? That was my original question. Now, I have heard your sense of explanation, and it is a good one, but have you taken into consideration with precision the consequences of this court decision and whatever appeals might come about as a result?
Mr. EIZENSTAT. Thank you, Mrs. Roukema.
Let me first say there were two decisions yesterday, one in New Jersey by Judge Deberoise and then a second one by Judge Greenaway in the Ford case with a similar result.
Mrs. ROUKEMA. I thought the Ford case was still pending. It was expected shortly, but I did not know it had been made.
Mr. EIZENSTAT. It came out last night.
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Mrs. ROUKEMA. Thank you. I appreciate that.
Mr. EIZENSTAT. We have not had a chance to review either one of them in any detail and would like that opportunity before we try to commit to its impact. Quite obviously when a decision like this occurs, it can potentially have an impact on the psychology of those who are negotiating. What is important, however, is that the German companies have always indicated, as have we, as have the claims conference, the Jewish Material Claims Conference and the survivors and as have the Central European governments and the Israeli government, that this was always viewed as primarily a moral issue. Obviously the companies wanted legal closure. That can't be denied. But if anything, this emphasizes the moral aspect. So the negotiations will continue. They will not be broken off. The companies have assured us formally that they wish to continue participating, that they want to——
Mrs. ROUKEMA. Formally?
Mr. EIZENSTAT. They issued a press release yesterday saying they will pursue with determination their humanitarian effort and then they say it must be in the interests of all of the participants and especially the affected former forced workers, to conclude these discussions about the creation of the foundation as soon as possible. We also note that the German government is dedicated to set up its companion federal foundation through the Bundestag to cover many of the workers not covered by the private foundation. So all of that will continue.
Mrs. ROUKEMA. Can we get that formal statement following these two court cases from the German government and also include that press release from the private companies?
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Mr. EIZENSTAT. I have an informal translation from Wolfgang Gibowski, who is the spokesperson for the German Enterprise Foundation, which we can supply you with detail. The Germans, to my knowledge, have not made a statement, but we are very confident that they wish to continue in this process.
Mrs. ROUKEMA. Will you be following up in a specific way with the government?
Mr. EIZENSTAT. Yes. I spoke with Count Lambsdorff yesterday before the decisions came out, and we will be meeting with him very shortly in Washington.
Mrs. ROUKEMA. Could I request please that you forward your response to the committee so that we can include it in the record?
Mr. Chairman, I would request that the record of the press statement that Secretary Eizenstat sent may be included in the record.
Chairman LEACH. Without objection.
Mrs. ROUKEMA. Thank you. I appreciate your response.
Chairman LEACH. Mrs. Maloney.
Mrs. MALONEY. Thank you, Mr. Chairman.
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Deputy Secretary, could you elaborate and comment on the Matteoli Report?
Mr. EIZENSTAT. Yes. I have been in Paris on several occasions and have met with Mr. Matteoli, with Professor Steg who is here, and with his colleagues. The Matteoli Commission is working closely with French banks to identify and establish the value of all unclaimed bank accounts held by Jews at the time of the pro-Nazi Vichy regime. This information is scheduled to be included in the commission's December report. Almost all of the 106 French banks active during the Vichy regime have provided the commission with lists of names of wartime Jewish account-holders. Some 63,000 Jewish account-holders have been identified so far out of a total of 68,000, according to the Matteoli Commission. The commission reports that 90 percent of account-holders whose assets were confiscated received restitution at the end of the War. French banks have been asked to provide the commission by the middle of this month with a complete report on post-War restitution payments, as well as accounts without legal heirs or claimants, which in conformity with French law were mostly transferred to the French treasury after the War. Our embassy has been monitoring the situation closely and we will have more to report after September 15.
I would like to make two other statements, first with respect to art. The Matteoli Commission has done a very important service in helping to identify what may be as many as 2,000 or more pieces of looted art, many of which were hanging in the Louvre and the Jeu-de-Paume and other museums which were confiscated either by the Nazis or the Vichy regime. They have begun the process of identifying those. They posted them on the Internet. We know that actual paintings are now being returned to families. This has occurred to the Rothschild family and others. This is a very important process and their leadership here is much appreciated.
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Second, President Chirac deserves an enormous amount of credit for his political courage. After some fifty years he was the first French president to recognize the fact that France had responsibility for the actions of the Vichy regime, that they had to be explored in depth, and that the government of France had to assume responsibility for the actions of the Vichy French government during the War. This is an important initiative, and the fact that he helped create the Matteoli Commission is something to his credit.
Mrs. MALONEY. The report itself, I understand, lists approximately 5 billion francs that are blocked. What will the Administration be doing to see that these assets are recovered and returned to their rightful heirs or owners?
Mr. EIZENSTAT. First, we have again a good deal of confidence that the commission and the French government will act in an appropriate way. The French Jewish community is also very much involved in this, as has been the WJRO, although I know there are some differences of opinion between the French Jewish community and the World Jewish Restitution Organization. The U.S. Government will continue to emphasize the importance of doing justice here, of getting to the full facts, and to seeing to it that in every way possible justice is done for those account-holders who can be identified and that appropriate means are made for restitution where there are heirless accounts and no living heirs.
Mrs. MALONEY. Thank you again for your leadership. I am afraid we are going to miss a vote right now. Your testimony has been very insightful and informative.
Chairman LEACH. Thank you, Mrs. Maloney.
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The Chair would first note that we have a vote. It is the intent of the Chair to continue through the vote, but Members are advised that they might want to vote and then return.
Do you care to go first? Mrs. Kelly has been here, or Mr. Lazio, I know that you have had a conflicting situation.
Mrs. Kelly.
Mrs. KELLY. Thank you, Mr. Chairman. I just had one question. Well, it is actually three in one. Mr. Eizenstat, I would like to know who is going to be in charge of distributing money from the two German foundations; who is eligible; how do the victims apply; and what do they need to show in order to qualify?
Mr. EIZENSTAT. Thank you. The actual principles and rules and procedures for the German foundation are still a matter of negotiation. We have established again a number of principles, that there would be a claims process, that the German foundation could delegate the administration of that claims process to the five German-Central European foundations. There is one in Belarus, one in the Czech Republic, one in Poland, one in Russia, one in the Ukraine, and to the Jewish Materials Claims Conference. That is very important, Mrs. Kelly, because it means that claimants would not have to go to Germany to file their claims. They could do so in their own country. The precise rules have yet to be determined, but it has been agreed that they would be flexible rules, that evidence—because we know that oftentimes after fifty years the kind of evidence that one would require in court simply won't exist. There is an appeals process that is being designed internally. There is an accountability mechanism, because this foundation would be established under German law and German law is quite prescriptive about the need for transparency and due process in situations like this.
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The actual eligibility is the major remaining issue, substantive issue, other than money. There are in general three types of workers who would be eligible for the two foundations. First are those we call Category A, or slave laborers. These are workers who were forcibly required to work in German industry and lived while they were working in defined concentration camps or forced ghettos. Second are Category B workers. Here there is more dispute as to how broad the definition should be. But in general they were workers who were forcibly conscripted to work for German industry. They are non-Jewish. And by the way, the slave laborers I would say are somewhere between 55 percent Jewish, 45 percent non-Jewish, or 50/50. Most of the forced laborers are non-Jewish. They were forced to work, but lived in other facilities, like labor camps for example. There are other open questions about whether it should only be those who were deported to Germany, whether it should also cover those who relocated, whether it should cover children. So there are still open issues there.
The third group of workers which the Federal foundation would cover would be those not covered by the private foundation, because they did not work for private industry; for example, those who worked for public institution like the telegraph agency or the railroad. There is also an issue of the extent to which it should cover agricultural workers. This is a very sensitive issue in Germany and we are working at ways which that can be handled.
Mrs. KELLY. Thank you, Mr. Eizenstat. I have to go and vote, but I do have a follow-up question. That is a question of defined time line on applications.
Mr. EIZENSTAT. I can answer that quickly. There would be a time line. We haven't decided precisely what it should be, whether it should be six months or a year or eighteen months, but it would be something in that time of reference. There would be of course notice given, publication in newspapers and radio and so forth, so that people would have the opportunity to apply.
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Mrs. KELLY. Thank you very much. Thank you, Mr. Chairman.
Chairman LEACH. Mrs. Jones.
Mrs. JONES. I have to take this opportunity to step in front of all of my other colleagues since they ran out the door. I want to make a quick statement. I just returned from Israel with seventeen of my other colleagues on a week-long visit learning about the government operations. I had an opportunity to visit the museum. And unfortunately, because I don't have several clones, I am going to miss some of the testimony that is being presented today. But I would say to all of you seated here that it does not mean that this is not an important issue for me as a Representative. In fact, a considerable portion of my district—I am from Cleveland, Ohio—is a Jewish representation. I am going to do the best that I can to have an opportunity to speak up on your behalf.
Having served as judge for ten years before I came to Congress, I recognize that litigation and resolution is always a very difficult situation. Mr. Secretary, my question to you is how are you dealing with the different types of opportunities to or standing within different States to establish the right to obtain or receive compensation? Are you allowing each State's law to have priority and then apply it internationally? How is that being handled?
Mr. EIZENSTAT. Well, the State of California has passed its own law with respect to the jurisdiction of statute of limitations. We take no position on that one way or the other. We believe that it is frankly best to try to resolve this in the manner we are doing so, through the various commissions and negotiations that we have, so that we don't have undue delay. In the Swiss bank case, we all learned a lesson. We spent a year negotiating the dollar amount of the settlement, but not the allocation plan. Now, a year—more than a year—after the August agreement, not a nickel has been allocated. It will be probably the spring of next year, 2000, before that happens. In the meantime, more and more people are passing away, given their age. So we have taken extra months here in this slave and forced labor and banking and insurance negotiation to try to determine not only the dollar amounts involved, but how the money would be allocated, who would be eligible, what processes would be used, what accountability, so that if and when this is presented to the court for resolution we don't have to wait for another year-and-a-half for the court to go through the procedure. We will already have that decided.
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Mrs. JONES. Thank you, Mr. Chairman. Please excuse me, ladies and gentlemen.
Chairman LEACH. Mr. Secretary, thank you very much for your testimony, and the committee expresses great respect for the work you are doing. Thank you.
The hearing will be in recess for about five minutes before we call the next panel.
[Recess.]
Chairman LEACH. I would like to recognize Mr. Maloney for a unanimous consent request.
Mr. MALONEY. I would like to make a unanimous consent request that a statement I have for the record be included in that record; and that with that, there is a statement from a citizen of Connecticut who is a Holocaust survivor, and as a member of the Commission on American Holocaust Assets, he asked me to submit his testimony as part of this hearing. I would make that request. Thank you.
Chairman LEACH. Without objection, so ordered.
Mr. MALONEY. Thank you, Mr. Chairman.
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Chairman LEACH. On our second panel we are honored to have four Holocaust survivors and heirs here to share their personal experiences with looted assets and to discuss their efforts to reclaim those assets. Our panel is composed of Mr. Ernest Michel, a survivor of the Nazi slave labor camps and Executive Vice President Emeritus of UJA Federation of New York.
Our second witness is Mr. Martin Prochnik, who is the son of a doctor born in the Austrian-Hungarian province of Galicia, who fled with his family to Switzerland after being warned by a patient that he was on a list to be picked up in 24 hours.
Our third witness is Mr. Henry Mono, whose father owned a women's tailoring business in Paris before World War II, but who fled the German Occupation of France.
And last on the panel is Mathilde Freund.
Why don't we hesitate a minute as we await several of the witnesses in the back of the room.
Why don't we begin with Mr. Prochnik?
STATEMENT OF MARTIN PROCHNIK, HOLOCAUST SURVIVOR
Mr. PROCHNIK. Thank you very much, Mr. Chairman.
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Mr. Chairman and Members of the House committee, I am very pleased and honored to be provided the opportunity to appear before this committee today. I would like to read some highlights from my testimony and would ask the committee that my full testimony be made part of the hearing record.
Chairman LEACH. Without objection it will be, as well as the testimony of all witnesses.
Mr. PROCHNIK. Thank you very much.
I have done some thinking about the sorts of presentation that might be most useful for you today, and I think my personal impressions of the atmosphere in which the confiscation of my family's assets took place and the effect of this process on those members of Austria's Jewish community who, like my family, managed to escape deportation and reach safety, would be important.
While I was only eight years old at the time, I distinctly remember my parents' extensive and emotional discussions of their situation. Hitler's annexation of Austria was by no means a hostile takeover. Most Austrians welcomed the opportunity to join the German Reich in what was seen as a new and rapidly expanding and powerful empire. Hitler's views, including violent anti-Semitism, were eagerly adopted, and found fertile ground in already existing Austrian envy and hostility toward its Jewish community.
The Austrian economic and financial policymakers and administrators appear to have wasted no time in adapting their strategies to the new Nazi tenets. Confiscation of Jewish monetary assets, especially such as those of my parents who were well off, began quickly and very enthusiastically. At times, the process incorporated a malicious perverse sense of humor. For example, after my father's car was taken from him, he began to be charged storage and other fees associated with the confiscation, with dire threats for non-compliance. Not only was this action taken, but my father was ordered to declare and sign over to the Reichsbank all foreign assets, and I have a copy of this order with me.
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When we left Austria, we were forced to abandon our apartment, my father's business, and all of our family's bank accounts, including accounts with the Austria Postal Savings Bank and the Creditanstalt. I believe that my parents made unsuccessful attempts after World War II to gain access and recover the Austrian bank accounts. Throughout this deteriorating situation, my father continued to believe that what was happening was only a temporary aberration; that justice and fairness would ultimately prevail in his home country. He was strengthened in this belief by the fact that he had fought for Austria in the First World War and had received a citation for bravery for dragging wounded to safety under heavy enemy fire. He therefore made few, if any, preparations for flight, including no attempt to close his accounts, even if that had been possible by then.
All of this changed when he witnessed the brutal beating of an elder Jewish man by a mob. This came within a few days of my being forced to enter my first grade class through the toilet door, and being bullied with anti-Semitic taunts by an adult while playing in a nearby park.
My father realized at that point he needed to swiftly make plans to flee the country, but it was already too late to make this an efficient and orderly process. Matters came to a head when one of his long-time patients who was now a member of the Nazi party warned him he was on a list to be picked up within 24 hours. We fled within hours to the apartment of a brave Christian family who sheltered us until we could take a train the following day to Switzerland. Assets had to be abandoned. Thanks to the absence of modern information technology, we were not on a detain list at the border, and could cross to safety. That would not be possible today.
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Our family waited approximately a year in Switzerland to receive a U.S. Visa, and using borrowed funds we booked passage to America. At the same time, there was constant increasing pressure from the Swiss authorities to move on or be sent back to Austria. My parents could not afford to keep my older brother and me with them during this time period, and placed us in a public orphanage, along with a large tin of Ovaltine to supplement the sparse diet we were fed there.
Our arrival in New York meant safety and shelter for us, but we were literally destitute. A number of private charitable organizations had been formed to help people in our situation, and these provided a small apartment and limited food supplies. My father, who had been a prosperous and respected physician with a large practice, knew essentially no English, and now found himself looking to charity to support himself and his family. Thanks to his innate ability and intelligence and hard work, he learned English, passed his medical exams and began to rebuild a medical practice. However, this was a decades-long struggle, and it took a long time for us even to approach the par that we had in Vienna.
I recently have found my father's name on a list of dormant accounts published by the Austrian Postal Savings Bank. I contacted the people there, but received no substantive reply. In view of my father's financial position before we fled and our total lack of funds afterwards, it is highly probable that other accounts existed.
In closing, I need to emphasize that both my parents and I were and always will be incredibly grateful to the United States for providing shelter when our very existence was threatened. Life is the most important gift of all, and we were given that. The continued interest and support given us by the Congress and the Administration to further justice in this matter of confiscated assets is further evidence of the ethical and moral principles that remain the very fabric of the United States, and I would be happy to answer any questions you might have. Thank you.
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Chairman LEACH. Thank you for that testimony.
Mr. Michel.
STATEMENT OF ERNEST W. MICHEL, EXECUTIVE VICE PRESIDENT EMERITUS, UNITED JEWISH APPEAL FEDERATION OF NEW YORK, HOLOCAUST SURVIVOR
Mr. MICHEL. Mr. Chairman, and Members of this committee, my name is Ernest Michel, and I am a Holocaust survivor. My Auschwitz number is 104995. I am 76 years old, and I live in New York City. In my professional capacity, I was Executive Vice President of the United Jewish Appeal Federation in New York until my retirement ten years ago. This is the second time I have the privilege of testifying before a subcommittee of the Congress.
The first time was on the whereabouts of Dr. Josef Mengele, with whom I had an encounter in Auschwitz in 1944. I was born in Mannheim, Germany, in 1923 to a Jewish family which had been living in Germany for over 300 years. My father's business was Aryanized, taken over by somebody else. I was arrested on September 3, 1939, three days after the outbreak of World War II. I spent the next five-and-one-half years in slave labor and concentration camps. I arrived in Auschwitz in March 1943 after five days and four nights in cattle cars, and I spent the next twenty-two months as a slave laborer for I.G. Farben, the parent of Bayer, BASF and Hoechst in Auschwitz-Buna, or Monovitz. Auschwitz was evacuated in January 1945 as the Russian Army advanced.
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I escaped from a final death march in April 1945. My parents, grandmother, uncles, aunts, cousins all were murdered by the Nazis, gassed in Auschwitz. I arrived in the United States in 1946 under the Harry S. Truman Displaced Persons Act. I have been active in the survivor community ever since I came to this country and served as Chairman of the World Gathering of Holocaust Survivors in Israel in 1981. So much for my personal background.
In the early 1950's, a friend of mine, Norbert Wollheim, who was with me in Auschwitz-Buna, filed a lawsuit against I.G. Farben for non-payment of wages. It was the first time that a lawsuit was filed by a survivor asking for compensation from the largest chemical company in all of Europe. Of all the thousands of concentration and forced labor camps which existed in Europe, Auschwitz-Buna was the only one organized, built by a major German company, namely I.G. Farben, in close consultation with the SS and the Deutsche Bank, which financed both Auschwitz and the construction of the factory where we were working. Degusa, one of I.G. Farben's subsidiaries, produced Zyklon B, which was used to gas 1 1/2 million Jews in Auschwitz. We lived under the most deplorable conditions imaginable. To this date, I do not understand how I was able to survive the horror of those years.
Each and every company sued over the past decades, I.G. Farben among them, fought long legal battles to avoid paying any amount to those of us who survived. Norbert Wollheim, who died last year at age 85, was able to obtain a small settlement for a limited number of slave laborers. This was in the 1950's.
By December 1941, Nazi Germany had achieved domination over territories with an aggregate population of 350 million. When the drain on German manpower became so acute and the need for armament so great that it became impossible to recruit an adequate number of workers for German industry on a voluntary basis, the Germans on a massive scale turned to compulsory deportation and enslavement of human beings from the conquered territories. The vast reservoir of forced and slave labor utilized by the Germans included members of the conquered civilian populations and prisoners of war, which I will refer to as forced laborers, and concentration camp inmates earmarked for extermination, which I will refer to as slave laborers. These, including women and children, I among them, were subjected to unrelenting cruelty.
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The International Military Tribunal at Nuremberg, which I covered as a reporter for the German news agency Dana from 1945 until its conclusion in 1946, found that the slave laborers ''lived and labored under the shadow of extermination, working under conditions which made labor and death almost synonymous.'' Approximately twelve million human beings were forcibly deported—you have heard that from Secretary Eizenstat earlier—from their homes in occupied territories to work in support of the German war machine. From the moment of our induction, we were subjected to all of the tortures, indignities and suffering that the human mind can encompass. The treatment of slave laborers was based on the principle that they should be fed, sheltered and treated in such a way as to exploit them to the greatest possible extent at the lowest possible expenditure. The amount to feed one person per day was 4 cents. That is what we lived on. We were less than slaves. Slavemasters traditionally cared for the human property and tried to preserve it. The plan and intention of the exploiters was that slave laborers would be used up and then literally burned. Life expectancy in Auschwitz was six months. By that time, you went up the chimney. The term ''slave'' is used here by me only because our English vocabulary does have no term to describe workers earmarked for destruction.
The companies which exploited forced and slave labor contributed substantially to the ability of the Third Reich to wage its invasions and wars of aggression. And the companies flourished, supplying military equipment to the German armed forces, which permitted the companies to earn enormous profits derived from maintaining maximum production at low or impossibly small labor costs.
Let me add a personal experience. My first job in Germany after my final escape was to be an interpreter for the displaced persons section for the United States Military Government in 1945. Our department in one section of Germany dealt with hundreds of thousands of forced laborers from all over Europe. The military government helped to repatriate over ten million foreign laborers. I have no idea how many enterprises, companies, large and small, farmers, cities, villages were involved in this vast human tragedy. There must have been thousands, many of whom are probably still in existence.
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As of now, some twenty major German firms and banks, all of whom used forced and slave labor, are part of the ongoing discussion. Obviously they want to pay as little as possible. Just look at the record.
Let me briefly comment on the banking situation. I understand that Deutsche Bank is today the world's largest bank. It recently took over the Bankers Trust Company of New York. As I mentioned previously, Deutsche Bank financed the construction of Auschwitz-Buna for I.G. Farben. It is one of the firms involved in the ongoing discussions. I had hoped, unsuccessfully it appears, that the approval of this takeover could have waited until it had faced up to its responsibility toward us.
You know the German firms have offered reportedly a total of $1.7 billion to settle all claims to all survivors. It is an abomination. It is a disgrace. We are not avaricious. We simply ask for compensation and more than that, we ask for justice pursuant to the basic principles of justice under United States law; indeed, under any principles of justice. We are not asking for duplication of monies. Any compensation in the past covered only those severely persecuted, and only if they sustained severe injuries. None of these funds have come from German companies. They only came from the German government. The companies have never paid one cent. It is totally inconceivable that these huge firms which have made tremendous profits over the decades can now keep the benefit of our slave labor. Although they benefited from our sweat and blood, they never made any offer whatsoever to make amends. To the contrary, they fought to avoid it, to discourage any of it. They should have, but they didn't.
They should be made to pay now. Mr. Chairman, Members of this committee, I am here as one of the youngest survivors, although I am 76 years old. Most of my friends and fellow survivors are in their eighties and even nineties. We go to funerals every day. I came here to testify as a survivor on behalf of those of us who lost their families, their youth, their freedom, their education and are still suffering today. I am also here to speak for those who did not survive. I appeal to you to help bring this matter to a speedy conclusion.
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And I want to conclude to make two specific points: Number one, there must be—there cannot be any delay arriving at an appropriate settlement. Any day lost means that needy survivors of one of the greatest tragedies in all of human history will live out their last days in misery, not being able to take care of their very basic needs.
Number two, a settlement must be adequate and sufficient to give survivors a sense that some justice has finally been achieved and that their persecutors finally acknowledge their wrongdoing.
As a proud citizen of the United States who was given an opportunity to build a new life in this country, I owe an eternal debt to the armed forces of the Allies, many of whom gave their lives to destroy Nazism and preserve freedom and liberty for all of us. As a survivor, I express a fervent hope that the deliberations of your committee will help finally to bring justice to one of the saddest chapters in all of human history.
Mr. Chairman and Members of the committee, I thank you.
Chairman LEACH. Well, I thank you for one of the profoundest testimonies ever given this committee or this Congress.
Mr. Mono.
STATEMENT OF HENRY MONO, HOLOCAUST SURVIVOR
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Mr. MONO. Mr. Chairman and Members of the committee, I wish to thank you for an opportunity to appear today and make this statement.
I am presently a resident of New York State. My father owned a woman's tailoring business in Paris before World War II, and the shop also functioned as our home. My father also had bonds deposited with the Credit Lyonnais Bank in Paris and a checking account with the same bank.
After the German invasion, we fled south and lived in Toulouse until May of 1942, when we were able to leave for the United States. Now, during this period my father tried to transfer his account and his bonds to the Toulouse branch of Credit Lyonnais, and we have a letter dated August 7, 1941 from the bank to confirm this fact. However, Credit Lyonnais set requirements for the transfer which would have endangered our safety had my father tried to comply with them. They asked specifically that he prove that he was of Aryan descent. Subsequently, the bank also sent us a letter on December 10, 1941 refusing my father's request to transfer the bonds to the Toulouse branch.
Although my father resumed contact with the bank after the War, and Credit Lyonnais continued to send statements to our New York address, the bank's refusal to transfer the funds and bonds in 1941 declaring irreversible damage, because of devaluing of the franc after the War. Also the bonds were converted into a lesser amount at a lower rate of interest.
Our apartment in Paris was also taken over and occupied by others, and so it was impractical for us or impossible to return. Thank you.
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Chairman LEACH. Thank you, Mr. Mono.
Ms. Freund.
STATEMENT OF MATHILDE FREUND, HOLOCAUST SURVIVOR
Ms. FREUND. Mr. Chairman and Members of the committee. My name is Mathilde Freund and we lived in Vienna—my parents, my husband and my brother—and we were forced in 1938 to flee Austria. And after several attempts to go to Switzerland, finally we arrived in France, in Paris, and then Lyon. My parents were wealthy, they were in the metal business; and also my husband comes from a very rich family, and his mother at that time deposited some money in Credit Lyonnais, because as refugees we could not work in France. And then after a few months in 1939 all the men were put in camps by the French government, because war was declared. And finally they all volunteered in the military service under the French government—my father, my husband, my brother and uncle and a cousin. They all served under the French flag.
Afterwards when they came back in 1940-1941, France was occupied by the Nazis, and they came with a big truck to take us, the whole family, to deport us. But finally we were able to escape through the windows. But from that day on, we had to live in the woods without food, without anything. It was just horrible. And we had false IDs, but even though when my husband went back to Lyon to get some food, he was arrested in September 1943 and deported to Buchenwald where he died—killed actually—in January 1945. My mother and myself we were taken to Fort-Mont-Luc in Lyon under the order of Klaus Barbie, and we were tortured. Then finally we were liberated by the American troops.
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My brother—I had only one brother—he was 26 years old, with his child in his arms, he was arrested August 10th and taken to Fort-Mont-Luc and then they killed many, I think, hundred Jews there, took them to the airport and killed them all with the machine gun. There is a big monument now in Lyon at the airport with the name of my brother, Alfred Nadler. My father especially tried to get some money from the Credit Lyonnais. They told him it is impossible, because my husband should be present, and we told them it is impossible, because my husband got killed. And we made several attempts. My father had all the papers. Unfortunately, he died of a heart attack because of all of the misery.
Then in 1948 we left France. It is a very sad story. My mother never could recuperate from all of the troubles. I came to this country with my mother and she was very sick all the time. She suffered nightmares and Parkinson's disease. And I came here with a little girl that was my niece—the child of my brother—who was saved, and I am grateful to the United States that I was able to come here and make a living.
Chairman LEACH. Well, I thank you, Mrs. Freund.
Ms. FREUND. I don't know if I covered everything, because it is impossible, but I get very emotional when I talk about it.
Chairman LEACH. It would be hard not to. I think the most extraordinary phenomenon is how, particularly Mrs. Freund and Mr. Michel can have any sanity at all.
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Ms. FREUND. Yes, I wonder myself many times, but I do it because I want to be a witness and live to tell everybody about it. I could not speak about it for many years, maybe thirty years.
Chairman LEACH. Well, let me thank you all for your testimony. There is nothing more controversial or more troubling than history. And when you speak about a dark moment in the past of which you were a personal participant, I cannot think of anything more difficult.
Mr. Vento.
Mr. VENTO. Well, thank you, Mr. Chairman.
I am very impressed and grateful for the courage that these witnesses have shown throughout their lives. I think few of us would be able to measure up or even come close to this. It is truly sort of a living history, and I think it is very important to state this and to try and reconcile as best we can these interests within a national sense of Germany or France and with the private entities that have played a role here, to call them to accountability with regard to this.
It is a very difficult task, as you noted in Secretary Eizenstat's comments who, of course, has been a student on this and has worked on it extensively for the last several years. He pointed out the cooperation of the German government, I think, with Mr. Michel, who very poignantly pointed out that the companies themselves have not basically been called into accountability in this vein.
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I asked about the commission in France. There is a commission that is supposed to report in Switzerland. I asked about accountability. I note that the Secretary may not have fully answered my question about accountability about the commissions. He wanted to talk about the progress and the positive aspects that has occurred with regard to the German government and the cooperation. And some of the documents indicate that the German government, since the conclusion of World War II, has provided about $80 billion. In dollars and cents terms, I don't know that that begins to deal with the issue. And I pointed out these treaties and other legal nuances, and I am not an attorney, but I think we all recognize the shortcomings of that type of analysis in terms of whether or not there is enough legal shield provided by the treaties and agreements after World War II, whether it be the Japanese that also participated in some misdeeds to be certain. I don't know if they begin to compare with man's inhumanity that occurred under the Nazis in Germany and France.
But in any case, there is nothing I can ask these witnesses. I am just grateful for their courage and their willingness to speak up and ask for accountability in this case and I think we obviously want to lend our support to see that accomplished quickly, if possible, and certainly we want these commissions and other good intentions that are being employed today to in fact do their job.
Mr. Michel, did you care to comment on that?
Mr. MICHEL. Yes, I would like to make one comment regarding what you told me. I was born in Germany. I feel no hatred toward Germany. I recognize the fact that the German government—and I want to differentiate between the government and the companies—have made an honest effort to pay compensation to survivors. The $80 billion that you are referring to is divided into two parts. One is governmental responsibility such as social security which they would have had to pay anyway. Yet that notwithstanding, I must recognize that the German government has made honest efforts to try to make up, although they never will be able to totally, for what we lost, my family and all of us who were born during that period and lived during that period in Europe.
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Mr. VENTO. Well, thank you, Mr. Michel. And I thank all of you for your willingness to speak up on this issue. Thank you, Mr. Chairman.
Chairman LEACH. Thank you, Mr. Vento.
Mr. Lazio.
Mr. LAZIO. It is difficult to ask much in terms of questions after the testimony that we have heard except to make comment about the need for us to continue to press for justice. And I am not certain I know what that means in this case. I am fortunate enough to serve on the Holocaust Asset Commission. And the more I learn, the more ghastly the era was.
I think I agree with Secretary Eizenstat that perhaps our experience of indifference during the early years during the conflict when much of the horror began in Austria and Poland and Germany was the reason why we were so much more responsible in Kosovo this time around, and I think we do need to focus on the private sector German companies, particularly those who do business here in America. There is an enormous direct investment tier in America. It is an enormous market for German companies. And as the world integrates on the private sector standpoint and Deutsche Bank, and banker trust being just one example and many, many others as well, I can't help but wonder in our search for justice whether we need to consider the responsibility of German companies who participated in what has been characterized, I guess inartfully, as slave labor.
Let me ask this question, Mr. Michel: What does justice look like to you in terms of the German companies that exploited Jews and others in Germany?
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Mr. MICHEL. Let me try to answer that. There are two ways. One is an admission by these companies who have enriched themselves because of our labor, to say ''Yes, we would like to make up to some degree''; although they never can fully pay us back. I am not talking about money. I am talking about justice. Let them admit what they did.
Second, I know survivors who live on Social Security here in this country in their eighties and nineties who are ill, who do not have enough to live on. There are millions of forced laborers all over Europe who served the German industry. Let German industry, one of the richest in the world, come forth and say ''Yes, we want to help make up for what happened during World War II.'' Their parents and grandparents, they themselves are not responsible. President Weizsacker, the President of Germany, recently said ''Our country will live forever with the memory of what happened during the Holocaust and our guilt.''
So I answer you to the best I can. There are two ways: One is admission, and one is payment.
Mr. LAZIO. Thank you.
Thank you, Mr. Chairman.
Chairman LEACH. Mrs. Maloney.
Mrs. MALONEY. I am committed to working on your behalf. Thank you for sharing your stories with us. Your statements speak for themselves, and I have no further questions.
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Chairman LEACH. Mr. Bentsen.
Mr. BENTSEN. Thank you, Mr. Chairman, and let me apologize for missing part of your testimony. I had to go to the floor for a bill that is on the floor, but I wanted to thank you for testifying on this important subject. And Mr. Chairman, for the record and not being able to get back before Secretary Eizenstat left, with respect to the question of compensation of forced labor, Mr. Eizenstat raised the issue of our Justice Department issuing a notice to the courts that the United States Government would respect compensation through a foundation and settlement structure as opposed to a class action litigation, which I think is admirable.
My question, which I submit for the record, is whether or not such a directive from the Justice Department is sufficient or whether or not there might need to be some legislative action on our part in order that you do not reach a favorable settlement with the German corporations and then you also have a class action litigation which could slow the process down.
I think it would be worthwhile for the committee to explore that with both the Treasury Department and perhaps the Justice Department. I yield back the balance of my time.
Chairman LEACH. Thank you, Mr. Bentsen.
Ms. Schakowsky.
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Ms. SCHAKOWSKY. I am very, very moved by your testimony. I would like a response actually whether or not you agree with the assessment that it is a good idea to set up this structure, this negotiating structure, as opposed to lawsuits. I realize that two have been dismissed right now, but is that a more sensible approach in your view, Mr. Michel?
Mr. MICHEL. I would like to answer something that I am familiar with and not answer things that I have no knowledge of.
Ms. SCHAKOWSKY. OK.
Mr. MICHEL. The only thing that I maintain, having been involved and being knowledgeable about some of the negotiations going underway, that it was not until the lawsuits were filed that the German companies finally reacted in some way; although they are still haggling and talking about ''maybe in three or four years.'' By that time, hardly a survivor will still be alive. Therefore, the only thing I can answer you is that unless legal action is covered and supported by our Government, I do not believe the German companies, as opposed to the government, will come forward with the kind of funds and admission that is necessary.
Ms. SCHAKOWSKY. Let me just understand what you mean by that, ''unless legal actions are covered somehow.'' What do you mean by that?
Mr. MICHEL. Well, as I said earlier to the gentleman who asked me, fellow New Yorker, that it is divided into two parts. One is to say, ''We did this. Our forefathers did this and we play a role in that. Second, here is what we are willing to do.''
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They have not done so yet. Whatever form it will take, I am not involved in this, and I don't know whether with a foundation or what way, but you can play a major role in bringing it to a conclusion.
Mr. PROCHNIK. If I can add very quickly to that statement, I certainly get the impression that without the lawsuits the motivation to move at all might have been very much reduced and diminished. So whatever the legal impact of the lawsuit versus perhaps other steps taken by governments, I do get the impression that the catalyzing force in this happened to be the lawsuits.
Ms. SCHAKOWSKY. One more question. Again, I think this was—perhaps we can't flesh this out any more. The question of evaluating slave labor, putting a dollar to it, you talked about payment and how we put a dollar to it. I am just wondering if thus far you feel that you are satisfied with dollar figures that have been mentioned, or the negotiations, that we can arrive at a dollar figure that is reasonable? And how one would do that?
Mr. MICHEL. The figure that I have mentioned and that I have read is $1.7 billion. That encompasses all companies and it would be a final settlement.
I would venture to guess, it is purely a guess, there must be somewhere around two or two-and-a-half million forced laborers and slave laborers that are still alive. You divide $1.7 billion, which has been on the table—it is not an official offer—divide it by two or two-and-a-half million, you figure what it comes to, it is an insult. This is why the lawsuits are a major force in bringing this to a conclusion and hopefully as quickly as possible; otherwise it doesn't mean anything.
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Ms. SCHAKOWSKY. Thank you.
Chairman LEACH. Well, thank you very much. In conclusion of this panel, let me just stress as carefully as I can, because if one is a listener looking from the outside in and wondering why we are reviewing this issue, it is very simply based upon the notion that the greatest mass murder in history occurred, but also the greatest mass theft. The second is less significant than the first, but particularly to the degree that it may be part of compelling the first, it is important to review.
Second, it is inconceivable that there could ever be adequate compensation, but it is very important that there be some compensation, and partly for some of the reasons that Mr. Michel has indicated. That is, that there should be recognition. And that is why I think it is very important that we proceed on this subject.
One of the tragedies of all of this is for those who might have been compensated, most are dead. And as indicated on this panel and by Secretary Eizenstat's statistics, that we are at a generational age circumstance that most first affected are becoming quite vulnerable to death, and so the need to go rapidly is obviously paramount.
Anyway, I want to thank all of you for bringing personal perspectives to a very sensitive circumstance. Thank you very much.
At this time we will call our third panel forward. On our third panel, we have distinguished witnesses representing Jewish organizations and academia: Dr. Israel Miller, President of the Jewish Material Claims Against Germany, commonly known as the Claims Conference, which serves as the official representative of all Jewish victims of the Nazi Holocaust before Germany. Dr. Miller also serves as President of the Committee for Jewish Claims on Austria.
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Our second panelist is Mr. Elan Steinberg, who is Executive Director of the World Jewish Organization.
Our third witness is Mr. Richard Weisberg who is the Floersheimer Professor of Constitutional Law at the Benjamin H. Cardozo School of Law at Yeshiva University and author of ''Vichy Law and the Holocaust in France.''
The fourth panelist is Professor Awi Federgruen, Senior Vice Dean of the Graduate School of Business at Columbia University, who is an expert on French efforts to restore Holocaust victims' assets.
We will begin with you, Dr. Miller. All of your testimony will be presented in full in the record. Please proceed
STATEMENT OF RABBI DR. ISRAEL MILLER, PRESIDENT, CONFERENCE OF JEWISH MATERIAL CLAIMS AGAINST GERMANY, INC.
Dr. MILLER. Thank you very much, Mr. Chairman.
The Conference on Jewish Material Claims Against Germany welcomes the opportunity to update the U.S. House of Representatives on the developments during the last few months relating to the negotiations with German industry and banks, with Austrian banks, and the discussions with insurers in the framework of the International Commission on Holocaust Era Claims.
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The Claims Conference is committed to provide every assistance and participate in all efforts to resolve outstanding indemnification and restitution issues. Nothing can ever compensate for the loss and destruction suffered by the Jewish people during the darkest period of human history. However, as we approach the dawning of a new century, our responsibility to future generations is to search for the truth and rectify the injustice of one of the greatest robberies in modern history.
As the Biblical Prophet Elijah asked King Ahab, ''Have you murdered and also inherited?'' I quote from the First Book of Kings, the 21st Chapter, the 19th Verse.
As you are aware, the Claims Conference has participated in negotiations with the German government on issues of restitution since the 1950's. For the past half-century, the Claims Conference, composed of twenty-three major national and international Jewish organizations, has represented the Jewish people and Holocaust survivors in regard to compensation and restitution.
During the period immediately prior to the reunification of the two Germanys, you will recall that East Germany accepted no responsibility for any kind of compensation. The Claims Conference entered a series of negotiations on compensation with the Federal Republic of Germany, with the support of the United States Government. And here before you, I would like to offer my sincerest thanks to all of the Administrations, Republican and Democratic, Secretaries of State, Assistant Secretaries of State, Ambassadors, all of whom recognized the morality of our claims.
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These talks focused on securing compensation for victims of Nazi persecution who had received little or no compensation prior to that date. As a result of the negotiations, the unification agreement between the two Germanys contained an explicit commitment by the German Federal Government to ''enter into agreements with the Claims Conference for additional fund arrangements in order to provide hardship payments to persecutees who thus far received no, or minimal compensation, according to the legislative provisions of the German Federal Republic.''
Subsequently, the Claims Conference concluded an agreement with the German government establishing what is now known as the Article 2 Fund. This fund provides a pension payment of 500 Deutschemark a month to Holocaust survivors who meet the eligibility criteria. The Claims Conference administers this program on behalf of the German government. You are correct, Mr. Chairman, in pointing out that the government has accepted that modicum of responsibility.
However, there are thousands of Holocaust survivors who are not eligible to receive a pension under the current criteria. The Claims Conference is conducting continuing negotiations with the German government for the liberalization of the eligibility criteria in order to avoid injustice. We have received applications for pensions under Article 2 from persons in desperate financial circumstances, but who are ineligible to receive Article 2 for ''technical reasons.'' That is, they were in a concentration camp not currently recognized as such by the German government or were subjected to persecution for periods less than currently stipulated by the German government guidelines.
The staff of the Claims Conference, although performing their work as dedicated professionals, continue nonetheless to be extremely moved when reading these tragic testimonies. The Claims Conference is determined to continue to press the German government for the liberalization of the Article 2 provisions.
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Now I come to the negotiations that are currently going on. The Claims Conference is currently participating in the negotiations chaired by Deputy Treasury Secretary Stuart Eizenstat, who is doing a remarkable job for our Government, and Count Otto Lambsdorff for the German industries and government in addressing the responsibility of German industry toward slave and forced laborers—and we differentiate between the slave and the forced laborers—and the involvement of German banks in the looting of assets and the Aryanization of Jewish property.
These negotiations have reached a critical junction. A significant number of Holocaust survivors, as you have heard, are passing away each year and this number only continues to increase. Our quest to do justice cannot wait years; the survivors do not have years. And we are not talking about heirs of survivors, we are not talking about that kind of compensation. A fair and just settlement has to be achieved now before the passage of time defeats the goal of the attainment of justice.
A fundamental element of any fair and equitable settlement must be an appropriate acknowledgment of the responsibility of German industry for the morally unjustifiable use of slave labor during the Second World War. German industry participated in the Nazi policy of ''Vernichtung durch Arbeit,'' ''destruction, elimination through labor.''
As my friend Ernie Michel said, most slaveowners wanted to keep their slaves alive, because they were working for them. This was not the case with the slave laborers during World War II. They were being worked to death, and most of them never survived.
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Every aspect of this policy must be unequivocably denounced as unacceptable by German industry. These are the same companies, and German industry must offer a profound apology for their participation in such a system. Not only do Holocaust survivors deserve such a declaration, but if we intend to approach a new century as a society recognizing the dignity of man, the international community must demand such a statement.
The Claims Conference maintains that a settlement with German industry should comprise three elements:
One, payments to former slave and forced laborers. This is not compensation for their work; this is a payment to enable them to live their lives with a certain dignity until the Almighty takes them.
Two, a fund that recognizes that the majority of persons who suffered under slave labor are not alive today. Our task is not only to compensate the living, but also to recognize the suffering of the departed and to establish a fund dedicated to their memory that undertakes purposes and projects with which they would have identified. We have such projects in the Claims Conference in which we are helping thousands of survivors who are in need of this help.
And three, lastly, a component that specifically addresses the wrongs committed by the banking industry. The banking industry must accept moral responsibility for its active and often proactive participation in the ''Aryanization'' of Jewish assets. We use that word Aryanization, taking over of Jewish assets. As the official 1946 report of the U.S. Military Government of Germany indicates, and there is a report that dates back to 1946 by the U.S. Military Government, the three largest German banks often bought Jewish property, businesses and securities at below market price for their own accounts, and otherwise profited from Aryanization through the provision of loans and receipt of commissions, brokerage fees, and so forth. They competed among themselves to profit from the policy of the Nazi regime to forcibly transfer assets from Jews to ''Aryans.''
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The basic moral principle of all restitution is that the parties that engaged in and/or profited from unconscionable acts are not entitled to retain such profits. Therefore, this moral principle dictates that the banks are required to divest the profits that resulted from their active participation in this program.
Further meetings with German industry are scheduled for early October. Every participant in the negotiations is morally obligated to survivors to make the utmost effort to reach a mutually acceptable solution within the next few months. A quick and just resolution to these claims will ensure that survivors are able to feel the hand of justice at the conclusion of our century. And we are grateful to the committee for having this hearing on the eve of that meeting, because whatever help you can give to the representatives who are working to assure that there will be a proper solution to this problem, this challenge which faces us, would of course be very much appreciated.
Second, negotiations with Austrian banks. The Claims Conference regrets to report on the state of the current discussions with Bank Austria/Creditanstalt. The House may be aware that certain plaintiffs' lawyers signed a settlement agreement with the bank that is subject to court approval. The Claims Conference believes that the settlement is unfair to Holocaust survivors in and from Austria, and distorts the involvement of Creditanstalt in the Aryanization of Jewish assets in Austria by hiding behind the skirts of the German banks. Our research has shown that prior to the ownership of Creditanstalt by Deutsche Bank, Creditanstalt actively and enthusiastically participated in the Aryanization of Jewish assets.
Our opposition to the settlement is not merely based on the amount of the settlement, but derives from our commitment to ensure that truth and justice prevail. We urge you to call upon Bank Austria to reconsider the release of the 1,400 Austrian companies that are listed in the settlement agreement from future claims for the use of slave labor during World War II as part of the agreement that the companies, many of whom profited from slave labor, would also be released from any future claim, and that they guarantee that the humanitarian fund remains a meaningful contribution in the memory of the heirless.
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Finally, a word about the insurance claims.
The Claims Conference has been an active participant in the International Commission on Holocaust Era Insurance Claims. The work of the Commission has not been simple and straightforward. The parties have been deadlocked on fundamental issues such as nationalization and valuation. However, due to the leadership of Chairman Eagleburger, from whom the committee will hear, much has been achieved by the international Commission. Although neither party is completely satisfied by all aspects of the claims process in its current form, a viable mechanism has nevertheless been established to finally pay unpaid insurance policies after the passage of some sixty years.
There are many issues before the Commission that have still to be resolved. However, we are hopeful that progress will be made on the outstanding issues and that the Commission will continue its efforts to finally assist Holocaust survivors in their quest for justice in this area.
There is one major area in which we urge the House through this committee to intervene. Despite the attempts by Chairman Eagleburger and the State insurance commissioners, a number of companies that held a significant share of the prewar insurance market have thus far declined all efforts to persuade them to participate in the International Commission. Alternatively, they have made an offer to participate in the Commission as less than full members, thus avoiding the obligations of full membership while obtaining the benefits of the provisions of the Memorandum of Understanding that provide them with a safe harbor.
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In particular, Munich Re, which holds a controlling interest in the Ergo Group, should be encouraged to join the Commission as a full member and commit itself to honor the unpaid policies issued by subsidiaries of the Ergo Group—including Victoria Zu Berlin.
Hundreds of persons with policies issued by subsidiaries of the Ergo Group have already contacted the various State insurance commissions at a time when no substantial outreach program has even commenced. Since companies such as Munich Re have not joined the Commission, the Commission is unable to assist those persons, and has the unfortunate task of telling these Holocaust survivors that in addition to the other injustices that they have suffered, their family purchased a policy from a company not participating in the Commission.
Will they understand or accept this? Of course not. And survivors are right not to accept this answer. After all, what type of justice is partial justice? Every effort must be made to ensure that all companies operating in pre-war Europe join the Commission. The task before us, to secure justice at the end of the century, is overwhelming. But we owe it to future generations to succeed. We say in the ''Ethics of the Fathers'': ''We may not be able to finish the task, but neither are we free to desist from it.''
Thank you, Mr. Chairman.
Chairman LEACH. Thank you, Dr. Miller.
Mr. Steinberg.
STATEMENT OF ELAN STEINBERG, EXECUTIVE DIRECTOR, WORLD JEWISH CONGRESS
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Mr. STEINBERG. Thank you, Mr. Chairman. Let me begin with an expression of appreciation. These hearings and your ongoing commitment to the ongoing cause of historic truth and the physical restitution of assets taken from Holocaust victims have had profound practical effects. As a result of testimony here in December 1996, in which it was proposed that Swiss authorities establish a humanitarian fund, some $185 million was pledged by Swiss banks and institutions. As of this year, more than 120,000 needy survivors around the world, including tens of thousands here in the United States, have directly benefited from this fund. On behalf of these beneficiaries, Jews and non-Jews, we express our gratitude to you and this committee which has made a historic difference.
Mr. Chairman, there is so much to cover and I will therefore try to telegraph my message. The Chairman of the Claims Conference, whose mandate is to deal with restitution issues in Germany and Austria, has spoken powerfully to those issues. I have been asked to move beyond the question of Swiss banks to deal among other issues with progress, or lack thereof, with respect to Austrian and French banks and the massive problems of unresolved insurance claims.
With respect to insurance claims, we wish to express our support for the Eagleburger Commission, of which I am honored to participate, and underscore that we support safe harbor protection for those companies that are in the Commission and comply with its decisions.
Mr. Chairman, when the controversy surrounding Swiss banks first developed and the putative offer to settle claims was made, the President of the World Jewish Congress replied that he did not wish to speak about money, he wanted to deal with process. This remains the heart of the issue even as we turn to the issue of Austrian and French banks. The question, of course, is not only how much is owed, but the core concern is whether a process exists that provides for transparency and accountability as we seek to achieve the twin goals of moral restitution: The search for the truth, as well as material restitution. Regrettably, we cannot yet say that such a process, much less resolution, has yet been achieved with respect to Austrian and French banks.
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First, by way of background, in March of 1938, crowds of cheering Austrians welcomed Hitler's arrival in Vienna and the incorporation of Austria into the Nazi Reich. The persecution of Jews followed, with the seizure of their assets, and we heard so eloquently and movingly about that from the survivors that we heard from before. Austrian Jews were compelled to register their assets with the authorities, and I have with me a complete register of 50,000 names of Vienna's Jews in this census with the file number of their recorded holdings. These holdings are intact and available in Austria.
We have studied Jewish assets seized in Austria. Broken down by category, the financial component, the most liquid assets, such as securities, cash, savings, make up nearly one-half the total. The leading Austrian bank, Bank Austria Creditanstalt, is the subject of claims today. Recently Bank Austria Creditanstalt came to an agreement with a number of lawyers to settle claims for $30 million, with an additional $10 million for lawyers' fees and administrative costs. The Austrian Jewish community, the Conference on Material Claims and the World Jewish Congress have rejected this unseemly offer.
Bank Austria claims it is not liable because Germany's Deutsche Bank took control of it in March, 1938. We have documents from the U.S. Military study of 1946 which prove that Deutsche Bank did not establish effective control until October 1938. It was during that six-month period that the bulk of economic crimes against the Jewish people by Bank Austria Creditanstalt took place. We have met with the representatives of the Bank Austria even in the most recent days, and while I hope that an appropriate settlement might still come about, I cannot yet report this to you, Mr. Chairman.
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The case of French banks is also less than satisfactory. Here too the issue is one of process, transparency and accountability. The circumstances here are unique. The defeat of France by Nazi Germany in 1940 led to the establishment of the collaborationist, but unoccupied Vichy Regime in the south while German forces proceeded to occupy the northern part of the country. At the time of the Occupation, half of the Jewish population in France of some 350,000 comprised non-French Jews, refugees from Poland, Austria, Germany, Belgium and other European countries. France was unique in that it was the only country in Western Europe that delivered up the Jews to Nazi death camps from territory not directly occupied by the Germans.
The most salient fact to understand here is that while the Holocaust in France took the lives of 75,000 Jews, 70 percent were non-French Jews. This point is so central, forgive me for repeating it. Seventy percent of the Jewish victims of the Holocaust in France were non-French Jews.
I emphasize this point because we have been repeatedly told by French banks and authorities that they will not negotiate or deal with international representatives of Jewish communities and Holocaust survivors, because it is a French Jewish issue. It is indeed a French Jewish issue, and the French Jewish community must be involved, but it is also undeniably a world Jewish issue.
Simply put, a Polish Jew who as a refugee was plundered in France and who currently lives in Skokie, Illinois, is not represented by French Jewry. That the French government has established the Commission known as the Matteoli Commission is a positive step, but it is not sufficient. It does not, as it currently functions, meet the standards of accountability and transparency.
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To cite an example: French banks have handed the Matteoli Commission a list of some 63,000 accounts held by Jews during World War II. Neither the Matteoli Commission nor the French banks has agreed to publish this list. More importantly, these accounts were generated through the internal audits of the French banks and without any process of independent verification handed over to the Matteoli Commission. This is not accountability. It were as if the Swiss banks, without the independent oversight of the Volker Commission, were allowed to unilaterally determine which were relevant accounts.
We are also disappointed that France has yet to follow through on its promise to contribute 20 million francs from looted Nazi gold to a fund for needy Holocaust victims. As we learned during previous meetings of this committee, the United States, Britain, and France established the Tripartite Commission after the War to return gold looted by the Nazis back to the countries from which the gold was stolen. Because none of the gold was returned to victims from which much of it had been plundered, the U.S. and Britain established a fund at the Federal Reserve Bank of New York for recipient countries to contribute their final allocations of gold for humanitarian purposes.
France alone among the donors refused to contribute its full allocation and pledged only 20 million francs of more than 100 million francs it was to receive. But even that pledge has not been fulfilled certainly as of the last meeting of July, as France, unlike 10 other countries, has failed to deposit the 20 million francs at the Federal Reserve Bank, while 10 other countries, including the United States and Britain, already have.
Mr. Chairman, we are here to uncover historical truth. When the Chairman of the Matteoli Commission says the distinction between Jew and non-Jew in wartime France was made by the Germans, this is an historical untruth. It is unacceptable.
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I am, however, pleased to report to the committee that developments in Britain are highly positive and encouraging. Last December, the British government announced it was establishing a $25 million fund to compensate survivors whose assets were seized by Britain during World War II. These were refugees who escaped the Nazis only to have their bank accounts seized under the Enemy Property Act because they came from countries Germany had invaded. The British government posted the names of these companies on the Internet, launched a worldwide publicity campaign, and just last month began paying the first claims.
Mr. Chairman, we hope that restitution in Austria and France may yet profit from examples such as Britain and the previous shining example of Norway. I have deliberately used the word ''profit'' because the moral profit gained from doing the right thing far outweighs short-term financial profit derived from deception and the failure to come to grips with the ethical demands of truth and memory.
Mr. Chairman, the U.S. Government in a bipartisan manner, and this committee in particular, has led the way in this struggle to honor the demands of justice and propriety. Let me again thank you for all you have done, and presume to thank you for all you will do.
Chairman LEACH. Well, thank you, Mr. Steinberg.
Professor Weisberg.
STATEMENT OF RICHARD H. WEISBERG, FLOERSHEIMER PROFESSOR OF CONSTITUTIONAL LAW, BENJAMIN N. CARDOZO SCHOOL OF LAW, YESHIVA UNIVERSITY
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Mr. WEISBERG. Good morning. I would also like to thank the Chairman for inviting me, and appreciate that my written remarks be made a part of the record.
Chairman LEACH. Without objection, the full statement will be placed in the record.
Mr. WEISBERG. I would also like to thank the staff of the Chairman who were very courteous to me in the week or so prior to the hearing. I won't presume to go into my own personal history, particularly after hearing the accounts of the survivors on the earlier panel. I am not a Holocaust survivor or the child of a Holocaust survivor, but I think my relationship to France brings a different perspective on it, and I want to point briefly where I am coming from in terms of my own historical study of the issues before the committee today.
Before becoming a law professor, I was a Professor of French Literature at the University of Chicago and had spent a good deal of time in France. I love France. I love its culture and its people. And despite the report that I am going to give you today, I continue to have these feelings about the French.
I noticed in the early 1980's, however, that in speaking about all aspects of French history with my friends and colleagues from France, there was always a hesitation and, in fact, an embarrassed silence before the dark years 1940 through 1944, years that we know as the Vichy years. No one that I spoke to, whatever age and whatever political perspective, whatever the history of their families, whatever their interest otherwise, usually deep into French history or culture, no French person that I spoke to ever wanted to even discuss the question of Vichy. And until about 1981, I myself, already very much steeped in the culture, had no knowledge of the period at all.
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My curiosity was piqued about this period because of a reading that I did with my