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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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    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.


    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?


    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.


    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.

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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.


    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.


    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


    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.

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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.

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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 students at the University of Chicago, a wonderful story by Albert Camus called ''The Fall,'' which is the story of a French lawyer who is unable to summon up the moral courage, or the professional discipline, during the period of Vichy to protest the law. And Vichy is explicitly mentioned in the story.

    As a law student at the Columbia Law School also, I noticed something anomalous about France, and that is that the law books from 1940 through 1944, the official legal gazettes existed in France for a four-year period, whereas in other defeated and occupied countries, there is a gap typically between 1939 and 1945.

    And as I perused those law books, I noticed that French law, by and large, continued through its predominant institutions, that its method of reasoning, that its approach to law judicially, and in terms of commentary, provided almost a seamless web during the War years despite the Occupation and despite the defeat. There was one new category in these law books and the category was called Juifs, J-U-I-F-S, Jews. This was a category hitherto unknown to French law which, after all, had enjoyed a legal system very similar in its ideals to our own in this country.

    The birthplace of egalitarianism in the late 18th Century, France, from which we benefited and inherited so much, had turned against a single segment of the population. There were other victims as well. This was what was new. This is what was different about those law books, and there were dozens and dozens, if not hundreds of cases, learned analyses, relating to the new issue of Jew: Who is a Jew, and what are the consequences that flow from that?
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    From literature and from law, I decided that I was going to try to find out what happened on a deeper level, and in 1982 I began a twelve-year process of working within the archives in France and elsewhere and of interviewing lawyers and functionaries who had served the Vichy government in one capacity or another, or who had resisted it, because there were examples of resistance, courageous examples of resistance as well.

    That twelve-year process culminated in the book that the Chairman was kind enough to mention, ''Vichy Law and the Holocaust in France,'' which was published in 1996 and in French translation in 1998. And although my full report to the committee elaborates quite a bit, what I have time to say this morning, I want to point out two conclusions from that book which are relevant to the French bank case in particular, and provide a little further detail to what Elan Steinberg said of the French control of their own fate when it came to the Jewish population.

    The third topic that I want to flag with the committee is the product of work that I did after the publication of my book, and am still doing, when I was invited by a team of lawyers representing Holocaust survivors to advise them on the issues that I am expert on because of my historical research.

    I am proud actually to be wearing, in a sense, two hats in that respect: one, in the much longer period before anyone was contemplating litigation of a legal historian and a historian of French culture, and the other—which I think is an equally important path to what the truth was, because it is still a sharply hidden truth in France—and the other part of the process of litigation under the American judicial system. I see no conflict between those two roles.
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    The work that I did as a historian leads to the first of the three rubrics that I want to talk to you very briefly about today. The first is autonomy. The second is privatization.

    First, autonomy. Remarkably enough, although I don't think there is any further contention about this, the French proceeded to create autonomously and without much German pressure, a system of anti-Semitic rules and regulations and ordinances. By the end of the War, there were almost 200 of these promulgated by the Vichy government, the first of these on October 3, 1940, shortly after the Armistice Convention and the establishment of the Vichy government in its own zone under the leadership of Marshal Petain. The first of these ordinances by all historical accounts—I was not an innovator in this respect—was promulgated with absolutely no German pressure from the occupied zone brought upon the French government. It defined a Jew and that, of course, is the first work that I suppose anyone has to do in such a bizarre enterprise where they are trying to figure out who to persecute. It defined a Jew more broadly than the already existing German ordinance in the occupied zone.

    The Germans defined a Jew as ''one who has three Jewish grandparents.'' Vichy defined a Jew both as an individual who has three Jewish grandparents, or as one with ''only two Jewish grandparents, but who is also married to a Jew.'' And this brought in already dozens, and eventually hundreds, of additional individuals, some of whom never thought of themselves as Jewish under the rubric of Jew, with the eventual and, in fact, severe consequences that followed.

    The next day, October 4, 1940, Vichy established special camps in the wrongly-labeled ''free zones,'' special camps in which foreign Jews, which Elan Steinberg alluded to, could be herded; that is, Jews without French citizenship on the sheer say-so of the local police department. Eventually 3,000 Jews died in these camps without, so to speak, having to be deported to the east. And 75,000 other additional Jews were, in fact, deported, only under 3 percent of whom were able to survive and return to French soil.
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    Key to the notion of autonomy is that the French pursued their definitional approach over four years with countless judicial decisions, professorial inquiries, administrative courts, learned individuals, and also private practitioners contributing to a four-year discourse, especially complicated. And you can find some of it in the law books and a lot of it in recent research and from the use of the archives that were open to us on the issue of who is a Jew.

    So fulsome, so thorough was their approach to this question, that the Germans in the middle of 1942, formally—in a memo that we have from Theodor Dannecker, a sturmfuhrer in the occupied zone—formally imported the French definition into the occupied zone, stating, ''The French definition being broader,'' meaning than the German definition, ''it shall now be used,'' as he put it, ''in difficult cases in the occupied zone.'' Autonomy existed, but admittedly to a lesser extent on the issues that your committee is so wisely looking into; namely, what has been called ''Aryanization,'' which is really the legalized, and perhaps not-so-legalized, looting of Jewish property. Here the Germans wanted to play more of a role. They saw the benefit to them of letting the French do it when it came to definition and administration of the process of Jewishness. They saved enormously in manpower and in treasure because of the autonomy of the French.

    When it came to Aryanization, however, there was more of an interweaving of French and German statutes, but I must say that the definitive statute on Aryanization was a Vichy statute of July 22nd, 1941, applicable to both zones, blocking bank accounts, permitting broad-scale Aryanization of Jewish businesses, setting down rules in great detail as to how these businesses were supposed to be administered, but permitting the liquidation and sale of these businesses without any further consent of the Jewish owners. The idea was, according to the Vichy statute explicitly, to eliminate all Jewish influence from the French economy.
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    And that leads me to my second point, I think directly relevant to the banks, that I elaborate on in my written testimony, and I call that ''privatization.'' And Mr. Lazio asked a question of an earlier panel, indicating an awareness that, although the public nature of French law is terribly important, much of the work as we get deeper and deeper into the archives, much of the work of discovery of the last few years has to do with the private implementation of Aryanization, of looting, and so forth. And the banks played a very important role in that, particularly through their comites d'organisation, their central banking committee, consisting of some of the most—probably the most—important banks in France.

    According to two recent French historians, these banks not only followed the law, they made the law. They were enormously influential, both on the German overlords and, of course, on the French government. They were influential on questions such as who should become an Aryan administrator and what fees should an individual be allowed in administering Jewish property. What should be the regulations as to the opening of safety deposit boxes?

    What these central bankers were asked also, should there be developments in the formal laws and regulations that they felt might be necessary? And an area that we have not touched on today: Which of their competitor banks should be permitted to stay in business?

    The central syndicate of French bankers, there are actually several of these, but the main one which was chaired by the president of Societe Generale, actually put in their agenda and made decisions about which Jewish competitors should find their banks liquidated and perhaps sold out from under them.

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    As in the private legal sector, as I discovered in my work on the law, the bar influenced the way that the laws were developed, the private practitioners of law and notaries, so also with the banks in the commercial sector generally, it is the private sector that must also be explored and examined as closely as possible. And as we get more and more private, in my experience at any rate, it becomes more and more difficult to find out what happened.

    I had greater success getting into the national archives—and it wasn't easy during the 1980's, and it wasn't that easy to get into the French national archives—than I had success getting into the Bar Association of the city of Paris to see what their records were about the behavior of lawyers during that period. So it is with the banks. Privatization means two things. It means that the private sector is contributing to the phenomenon that you are looking at, and it is clear that they did, but it also means that they have an especially covert system of protective devices.

    I am now turning very briefly to restitution, my final topic. In order to uncover, to publicize what is in fact private, we need all possible sources of information.

    And here I will close—and there are a lot of things in the Matteoli Report, and there are two members of the Matteoli Commission at least that I know personally and who have supported my work, but there is a lot in these reports that I cannot agree with—but I am going to close with a statement on page 166 of the French edition of the report, and it has to do with restitution. They say the following: ''The history of economic Aryanization and of restitution is at the same time a difficult and poignant issue. Difficult, because the shadowy zones are numerous, and because you will not be able to illuminate them without using multiple sources.''
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    Here I think Matteoli is standing for a proposition that we all can agree with; and that is that your committee, the work of others, the Executive Branch, also the work of litigation, the work of further historical research, the work of Matteoli to the extent that it also certainly contributes, multiple sources will be needed to find out the truth and to help the victims of this looting. Thank you, Mr. Chairman.

    Chairman LEACH. Thank you.

    In about four minutes the hearing will recess for several votes.


    Mr. FEDERGRUEN. Mr. Chairman, I too appreciate the opportunity to give testimony to your distinguished committee. I have submitted a complete written testimony. In the interest of time, I will only be able to cover certain points of the written testimony, and I would therefore kindly request that my entire written testimony be entered into the record.

    Chairman LEACH. Without objection all statements will be in the written record.

    Mr. FEDERGRUEN. And we will recess in four minutes?

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    Chairman LEACH. I just meant that you will be interrupted, but we will come back to you.

    Mr. FEDERGRUEN. Fine. I am the Charles Exley Professor of Business and the Senior Vice Dean of the Graduate School of Business at Columbia University. My areas of expertise are management science, including the area of statistical analysis and decision models, as well as operations management. I have been on the Columbia faculty for the last twenty years and I have been incumbent for the Charles E. Exley chair for the last seven. My qualifications are described in two bios that are appended to my written testimony.

    In April of this year, I was approached by counsel of Fernand Bodner, et al. and Anne Marie Benisti, et al., plaintiffs against a consortium of French banks in the Eastern District of New York of the United States District Court. At the request of counsel for the plaintiffs, I reviewed the second report of the Matteoli Commission dated December 31, 1998, which has been invoked in support of the position of the Republic of France as well as by the French banks. In fact, it represents their major form of support. I prepared an affidavit in which my comments and analysis are confined to the second part of the report, starting with the section entitled ''Bilan provisoire estime de la spoliation concernant les avoirs deposes.''

    The second report is mentioned as the principal current effort by the French government to ''address the eternal debt France owes to the Jewish victims of the Holocaust.'' The progress report is described as a ''massively thorough, detailed and fact-intensive summary of the results of the investigations.'' The existence of this report and the ongoing activities of the Matteoli Commission are invoked as one of the principal reasons to oppose the above mentioned litigations in this country. While it is unclear why these litigations would ''implicate the legitimate interests of France'' and why ''such actions would be contrary to the efforts of the French government to achieve a comprehensive, thorough and complete resolution of all unresolved issues caused by the occurrence of the Holocaust in France,'' the unstated implication is that the ''massive thoroughness'' of the Matteoli Commission's investigations will ensure that the extent and magnitude of the ''eternal debt France owes to the Jewish victims of the Holocaust'' will be assessed accurately and in toto. It would appear that any information uncovered in the process of the above mentioned litigations could only assist the work of the Matteoli Commission and the French government's sudden desire, fifty-five years after the Holocaust, to ''address the eternal debt France owes to the Jewish victims of the Holocaust.''
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    The argument loses further credibility as the defendants in the above mentioned litigations have in parallel stated that they cannot be held liable for robbing the Jewish community in France of their assets, at the most vulnerable point in their history, because as defendants claim, the banks were ''only following orders'' of the Vichy French authorities.

    This argument, Mr. Chairman, has unfortunately an all too familiar ring. Translated into German it is the ''Befehl ist Befehl'' or ''superior orders'' arguments which the Holocaust war criminals brought forward after the Second World War. Needless to say, this preposterous argument was rejected during the Nuremberg trials where it was consistently found that the circumstance that an individual or an organization is following instructions of a supervising office or authority provides no legal defense for violations of international law whatsoever.

    Would the Chair want to recess at this point?

    Chairman LEACH. I think that would be appropriate, Mr. Federgruen. The hearing will be in recess subject to several votes on the floor. I suspect that will be approximately fifteen minutes, if any of you want to do anything in that time period. The hearing is in recess.


    Chairman LEACH. The hearing will reconvene.

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    When we broke up, we were in the midst of the testimony of Mr. Federgruen. Please proceed.

    Mr. FEDERGRUEN. Moreover, what is at stake here in your committee's hearings, or in the aforementioned litigations, is not the prosecution of violations of international criminal law, whether committed entirely voluntarily or not, but the pursuit of truth and an organized attempt to restore as many of the illegally appropriated assets to their rightful owners or their heirs as possible.

    While the heinous crimes of the Nazi regime and their French collaborators can unfortunately not be reversed, it is of course eminently feasible to restore assets to their rightful owners, once identified as such.

    Juxtaposed with the claims that I mentioned before we went into recess, the argument that the work of the Matteoli Commission would preclude the necessity or even the mere utility of the litigations in this country loses any form of credibility in and of itself. However, since I am neither a lawyer nor a historian, and since my views and conclusions regarding the above historical and legal issues add little or no value to what has been or will be said by others who are far more qualified in these areas, I will confine my remarks to an assessment of the contents of the Matteoli Report.

    This assessment is preliminary in that it addresses only a subset of the problems associated with the report and, as mentioned, my comments are confined to the second part, starting with the section entitled ''Bilan provisoire estime de la spoliation concernant les avoirs deposes.'' It is this part which attempts to arrive at an estimate of the magnitude of the assets of Jewish citizens of France which were withdrawn, alienated, or blocked during the Second World War and the degree to which these assets were returned to the rightful owners or their heirs.
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    Here are some of my principal observations. The report distinguishes between three categories of assets belonging to Jewish citizens of France and despoiled by the German occupiers and by the Vichy regime. They are classified in the report as II: deposited assets, withdrawn or alienated; III, assets blocked which remained on deposit in banks; and IV, in safe deposit boxes.

    The reports claims that in terms of the assets in Category II, approximately the same amount were ''returned'' to the owners or their heirs as was ''withdrawn'' or ''alienated.'' Leaving the accuracy of the assessments regarding II aside momentarily, the committee is only in the preliminary stages of assessing the magnitude of the assets in Categories III and IV. While the assets in Category III were ''in principal'' ''released'' after the Liberation by a series of government acts, the Matteoli Report itself admits that restoration of these assets to their rightful owners occurred only if the following two conditions were satisfied and subject to the following caveats:

    Condition and caveat number one: ''By this measure, the owners were therefor given free access to the balance of their accounts and to their securities, if they had not been sold and if they were not under provisional administration. On the other hand, with the aim of protecting the value of currency in France, gold and foreign currency and securities remained blocked for all clients.'' You can find this directly on page 218 of the official English translation of the Matteoli Report.

    Caveat two: ''The person whose assets had been despoiled should have had the balance available of his deposited assets returned to him, on condition that he was present or represented.''
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    As to caveat number one, nowhere does the report address the extent to which assets were ''sold'' or under ''provisional administration.'' Nor does the report address the volume of holdings in gold or foreign currency which, by the Matteoli Commission's own admission, was not returned. It stands to reason that the latter category represents a large percentage of the holdings of the Jewish population, knowing all too well that in the face of war and persecution, it needed to maintain its savings in the most liquid and portable form possible; for example gold and foreign currency.

    The caveat number two is equally, if not more restrictive. The deported part of the Jewish population by the end of the War was either murdered by the German occupier and its French accomplices, or found itself in deportation camps in other countries and was therefore not in a position to be ''present'' or ''represented,'' so as to take possession of the despoiled assets.

    Most importantly, perhaps, the Matteoli Report admits itself, on page 218 of the official English translation, that for each restitution of securities placed under the Estate Department's provisional administration, a ''delivery report drawn up in the presence of both parties was required,'' but ''not a single copy of such reports has been found in all of the archives.''

    Similarly, the Matteoli Report admits that while, in principle, all blocked assets were ''released'' upon the country's Liberation, their release ''does not appear to have left any traces.''

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    The Matteoli Report continues to state that its future activities in 1999 will in part be devoted to assessing the extent to which restitution of blocked assets in fact took place, an effort which the committee characterizes as ''most difficult, since their release does not appear to have left any traces.''

    Noting in addition, that by the Matteoli Report's own estimates, the magnitude of the assets under III—blocked assets which remained on deposit—is close to 3 times that of II. The implication of the report is therefore that the restitution of the vast majority of the assets is in question, approximately 5 billion francs. I know that the press has quoted some other ridiculous figures such as 6.1 million francs, but in that simple Category III, which is approximately 5 million francs by the estimate of the Matteoli Committee itself.

    The Matteoli Report itself is therefore in sharp and unambiguous disagreement with the claim by the French banks and the French government, according to which these ''analyses reflect a payment during that period of approximately 95 percent of the funds and other assets that have been taken during the War.''

    The Matteoli Report is in conflict with the earlier stated percentage by the esteemed Deputy to the Secretary of the Treasury in his testimony to this committee.

    The second part of the Matteoli Report is written in a highly disorganized manner. Rather than specifying and justifying a clear methodology to estimate the magnitude of various asset pools or the number of potential claimants to these pools, it lists various partial calculations, often of quantities not used in the remainder of the report. The assumptions underlying various calculations are often flawed, as some of the examples in the written testimony will indicate. There is no clear correspondence between numbers stated in summary tables and those resulting from corresponding analyses or discussions.
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    For example, on page 217 of the official English translation of the Matteoli Report, it is stated that the magnitude of the assets in Category II is in the amount of 2.333 billion francs, and in the period 1944-54, 2.4 billion francs of that category was returned. On the other hand, on page 221, in Section IV-4, the report claims that for assets withdrawn by order of the Vichy government alone, by 1951, three years before 1954, 3 billion francs were returned in a total of 4,300 cases. Many of the numbers stated in the report are entirely unsubstantiated, either by an estimation procedure or by a direct reference to other reports or archival resources.

    For example, the summary statement on page 217 of the official English translation of the Matteoli Report pertaining to an estimated statement of spoliation of deposited assets, states that the number of deported Jews with blocked deposit assets is no more than 7,400, less than 10 percent of all deported Jews. This number fails to be substantiated and appears incredulous. The same applies to the stated figure of 53,000 Jews and non-Jews with deposited blocked assets.

    The committee appears to be satisfied with exceptionally wide estimate ranges in which the upper limit of the estimate is no less than 10 times the lower limit estimate. For example, the estimate for the aggregate volume of blocked bank deposits not subject to withdrawal or alienation ranges from 50 to 500 million francs. See the original French version of the Matteoli Report on page 95. The English translation conspicuously quotes the lower limit of 50 million francs as an exclusive estimate.

    It appears that the committee is content with their current estimate ranges in which the upper limit is no less than 10 times the lower limit, as their future work plans do not include any attempts to replace the current ranges by a meaningful and implementable point estimate and associated confidence interval. No serious professional statistical estimation methodology would conclude with such meaningless estimate ranges.
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    The committee does not begin to address how the nominal value of the unsubstantiated blocked and alienated funds in French francs of 1941 is to be converted into equivalent sums close to sixty years later. To maintain purchasing power parity alone, $1 owned in 1941 would need to be compensated by perhaps as much as $10 now if the Consumer Price Index is to be used as the deflator.

    For example, in the United States, the Consumer Price Index in 1996 was 8.62 times its value in 1946. In addition, it needs to be recognized that any savings in 1941 would have been invested, for instance in fixed income or equity markets, resulting in yields considerably larger than those required to offset inflation; for example, to maintain purchasing power parity alone. There is no unique, unambiguous way to find reasonable conversion factors over a sixty-year time interval. An additional complication arises from the fact that many of the Holocaust survivors or heirs to Holocaust victims have moved to different countries or originated from different countries, as we heard in earlier testimony. We heard that 70 percent of the Jews in France were in fact coming from different countries.

    Therefore, this requires an appropriate currency conversion resolution as well. Serious studies are underway in other contexts regarding Holocaust claims to establish conversion factors for assets held by Holocaust victims; for instance, by holders of insurance policies. The Matteoli Report is conspicuously silent about the entire issue, leaving the reader with the impression that the committee views outstanding balances in 1941 French francs as the appropriate measure to arriving at current obligations and restitutions.

    Much of the second part of the Matteoli Report is devoted to arriving at an estimate of the blocked bank deposits, the main component of the first item under Category III, estimated in total by the Matteoli Commission itself to amount to 500 million francs in 1941 currency.
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    Recall that component amounts to anywhere between 50 million and 500 million francs, according to the Matteoli Report estimates. Two approaches are pursued, but both are fundamentally flawed. One is an estimation procedure based on a sampling technique and the other is an estimation procedure based on disaggregation from known national aggregate figures. We critique both procedures in 10, 11 and 12 in the written testimony. And in the interest of time I will refer the committee to these points over there.

    In conclusion, ''The Republic of France and the banks invoke the Matteoli Report dated December 31, 1998 as its principal current effort to address the internal debt France owes to the Jewish victims of the Holocaust.'' That is a direct quote from their statement.

    The Republic of France characterizes this report as ''massively thorough.'' In fact, the second part of this report is written in a highly disorganized manner. Rather than specifying and justifying a clear methodology to estimate the magnitude of various asset pools or the number of potential claimants to these pools, it lists various partial calculations, often of quantities not used in the remainder of the report. The assumptions underlying various calculations are often flawed and fail to conform with state-of-the-art statistic standards. Important questions are entirely ignored, such as the conversion of nominal debts to Holocaust victims in French francs of 1941 to equivalent dollars in the year 1999.

    Finally, the Republic of France and the French banks misrepresent to a large extent the findings of the Matteoli Commission itself, whatever the latter's validity may be.

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    In closing, I believe that your committee's continuous efforts and intervention in this matter will be essential to provide just the beginning of a chance to begin the effort to restore Jewish assets to their rightful owners, and I would urge you to do whatever is in your power to make this possible.

    Chairman LEACH. Thank you very much, Professor Federgruen.

    I thought I might begin with several comments of Dr. Miller, and prior to him an individual, Mr. Michel, on the prior panel, and it relates to the lack of precision or devaluation of terms; for example, ''slave labor'' and the difficulty of applying that term in these instances. We use ''slave labor'' now sometimes in reference to people who are underpaid. If one thinks of slavery, as indicated there was an effort to keep slaves alive; there are also efforts in slavery periods to have offspring. In this case, there was an effort to end an ethnic grouping, and so I think the term of art is maybe ''genocidal'', or ''genocide-threatened labor'' is more precise, and it makes the circumstance much more unique and profound, which I believe it is.

    I would like to turn for a second to Professor Weisberg, your reference to the French civil law, which is obviously a very profoundly respectable code. But there are some distinctions, and one historical and one current which are troubling. One, as I understand it in the Vichy era, there were property rights tied to rights of French citizens, but if one was deported, one was no longer a French citizen. Therefore, the property rights were not the same, and that distinction is a Catch–22 of seminal significance.

    Second, today in very respected aspects of the civil law code in which there might be some social responsibility for—when you go to the issue of art—in the American and British common law tradition, rights of ownership don't pass with theft. In the civil law if there is an honest transaction, they do. So you have a problem with, for example, art that might have been bought at auction from a dealer if there was a belief that it was a good faith transaction, and yet there is a prior owner from which that art was stolen, that property stands.
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    And so it is clear that one can respect the civil law tradition and respect the ownership circumstance, but isn't there a social responsibility based upon that differentiation and code and the issue of justice?

    Do you believe that to be the case or not?

    Mr. WEISBERG. Mr. Chairman, on your first point about people deported, no longer citizens, hence no property rights, I think you are right on that analysis. And I would add about the civil law that the property rights deportation duality was aided during Vichy by consistent attempts to roll back naturalizations. There had been waves of immigration to France, which one of my colleagues talked about, from Hitler's Europe—with the threat of fascism to countries further to the east. And in the 1920's for economic reasons, and one of the goals particularly of Laval, who was one of the Vichy leaders who was working with the Germans on this, was to consistently denaturalize those who had gained citizenship so they could be subject to arrest and the stripping of property.

    On your point about the civil law generally, I would say just this. The code, as you know, goes back to Napoleon, and what is very interesting about the period that we are talking about today is that very little was done to revise the code per se, and it is slow to change, which may affect what you are saying about bona fide third-party purchasers, and so forth. There have been some reforms in the code, obviously, and those continue. But by and large, the civil code during World War II was able to interweave with what was new, and that was the anti-Jewish legislation, relatively effortlessly; and that is a tough row to hoe, to go down the path of reform and what you call responsibility really to look into what happened.
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    Chairman LEACH. One of the analogies today is in, let's say, many areas of commerce. Take banking. One goes frequently, if one has choice of jurisdiction, to the least regulated jurisdiction or the least taxed jurisdiction to do transactions.

    In fields like art where there may be a question about provenance, one would certainly want to go to a civil law rather than common law country if one wants to be passed ownership and be protected. And it is kind of the analog of less regulation, although legal.

    Now, I think that gives a particular obligation at least for public institutions to take public accountability, such as a public museum, but it doesn't deal with the private property issue in private hands.

    Well, Ms. Schakowsky, do you have questions?

    Ms. SCHAKOWSKY. Thank you, Mr. Chairman. First let me apologize to most of the panel whose testimony I have missed, and I will read carefully and have read some of, but missed your oral presentations.

    I had a couple of specific questions and then just sort of a general comment I wanted to make.

    Mr. Steinberg, in your testimony you mentioned Skokie Illinois and that a survivor living in Skokie whose assets were plundered in some way in France will not be represented then in the Matteoli Commission's proceedings, is that correct, because that individual does not reside in France?
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    Mr. STEINBERG. No. What I meant to say was that a survivor in Skokie or outside of France has had no part of this process. This is an internal French governmental process. It relates, to a limited extent, to some leaders of the French Jewish community. There has been no input, no dialogue, and no interaction with representatives of Holocaust survivor groups worldwide or world Jewry.

    Ms. SCHAKOWSKY. So does that individual have any medium through which to file a complaint in the process? Is this person excluded from the discussion altogether?

    Mr. STEINBERG. It is not that he is excluded from the discussion, he is not part of the process as established within France. One could take part in a lawsuit here, one can come before the House committee and complain, but the formal structure that has been established by the French government in cooperation with the French banking system has excluded him from being part of the decisionmaking process.

    Mr. WEISBERG. Could I take a brief shot at that?

    Ms. SCHAKOWSKY. Certainly.

    Mr. WEISBERG. And I agree with my colleague. Among recently breaking developments, we heard about decisions in a couple of lawsuits this morning. The French have decided, I think as recently as yesterday to extend the—I would like to say the jurisdiction of Matteoli, although I think it will be through a new commission, called ''Drai,'' to the filing of individual claims. But I want to step back for a minute. We don't know how that will play out and we don't know what, so to speak, moved them to make that decision.
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    But, I think on the state of the present record, it is very important to point out that whether a person lives in Skokie or in Paris, Matteoli was not put into existence to take care of individual claims. The Commission itself is not a claim restitution organization. It is an historical organization. What they are going to do from now on, we don't know. Why they are going to do it, we don't know.

    And there are no class action suits, generally speaking, under French law. So your person in Skokie is not part of the process, but it is also fair, at least on the present record, to say that it has been difficult for the person lucky enough to survive the Holocaust, now living in France, aware enough and able to reconstruct records, even that person on the present record has not been able necessarily to move individually for restitution.

    Ms. SCHAKOWSKY. Then let me understand then what is the particular significance of the facts which you underline, Mr. Steinberg, in your testimony, the fact that 70 percent of the Jewish victims in France were non-French Jews. What is the significance of that in terms of restitution or reparations?

    Mr. STEINBERG. I think it goes right to the heart of the issue. We have repeatedly said that we don't come before this committee or indeed any other body to say ''this is how much is owed, this is how much should be paid.''

    We believe that a process, a fair process in which the victims themselves are involved, must determine ultimately how a resolution is brought about. And for us, this process has two goals and we repeatedly stated this: moral restitution, the truth, and returning to the victims the assets that were stolen.
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    The problem, if 70 percent of the victims are non-French Jews, we do not accept the position of the French Bankers Association that our relationship with certain leaders of the French Jewish community is sufficient to legitimize the structure that we currently have in place. Simply put, a majority of the victims are not represented. More importantly, even if a new commission is put in place whereby an individual anywhere can make a claim, and putting aside the propriety of the process put in place—you will forgive me for using this language—the dead cannot make claims.

    The large amount of unrestituted assets was not restituted simply because that person, that family, could not be there to make the claims, so it is not sufficient to put in place a claims-driven process that does not take into account that many claimants are no longer there.

    Ms. SCHAKOWSKY. If I could just express a certain frustration, someone who has a personal interest, an interest on behalf of constituents and in general for world Jewry, there are so many processes and commissions and mechanisms, not to mention private lawsuits and class action suits, that I can only imagine for Holocaust survivors and their families and heirs that navigating this system must be next to impossible.

    I am wondering if there is any map or guideline or single phone number or place where people can go who think that they may have a legitimate claim here in the United States?

    Mr. STEINBERG. If I may answer that, it is indeed a terrible problem and one that has at least partially been addressed by the Holocaust Claims Processing Office in New York. This was set up by New York State, but it serves the entire country, and any individual who has a Holocaust assets-related question or a question about reparations can call the toll-free number, which I don't have with me at the moment, but I will give to the committee, and they will direct them to the appropriate body dealing with Swiss restitution issues, for example. But there is at least in place a central office that can direct a person to where they can get the matter resolved.
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    Ms. SCHAKOWSKY. Finally, there are public policy questions, there are decisions whether or not the United States Government legitimizes certain commissions or processes, and in some cases by doing so precludes other options like lawsuits. And these are very difficult decisions and complicated decisions to be made, and I appreciate the input that you have had today. Thank you.

    Dr. MILLER. I would just like to add, Mr. Chairman, that the Claims Conference has just published a restitution guide which may be helpful, and we will send you a copy of the guide so you will be able to help your constituents.

    Chairman LEACH. Does anyone wish to make a closing comment?

    If not, let me thank you all for this very helpful testimony. The hearing will be in recess until 2:00 when we will start the afternoon hearing.

    [Whereupon, at 1:40 p.m., the hearing was recessed, to reconvene at 2:00 p.m., this same day.]

    Chairman LEACH. The hearing will reconvene. Our first witness this afternoon was to be Secretary Eagleburger who was Chairman of the International Commission on Holocaust-Era Insurance Claims. Unfortunately, Mr. Eagleburger has taken ill this afternoon with a minor ailment, and in his place is his Chief of Staff, Neal Sher. And we welcome you, Neal, and please proceed. Your full statement will be presented in the record.

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    Mr. SHER. Mr. Chairman, thank you very much. Secretary Eagleburger very much regrets not being able to be here. He tried, but unfortunately was not able to be present.

    I am pleased to appear before you today to provide an update of the work of the International Commission on Holocaust Era Insurance Claims which has been known as ICHEIC. The Commission is currently in the final stages of debating and resolving several complex and sensitive issues. Indeed, the Commission will meet next week in London, during which time we will address and hopefully resolve these issues. And either the Chairman or I would welcome the opportunity to appear before you again at a later time to provide further information on the progress which has been made.

    By way of background, the Memorandum of Understanding, known as the MOU, creating the Commission, was signed in August 1998. It grew out of discussions between European insurance companies, the United States insurance regulators through the National Association of Insurance Commissioners, and Jewish and survivor groups seeking an equitable solution to the many questions related to Holocaust era insurance claims.

    Former Secretary of State Lawrence Eagleburger was appointed Chairman of this Commission at the Commission's first meeting in October of last year. Since that time, much has been accomplished and we plan to launch our claims process very shortly.
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    The Commission consists of five European insurance companies, U.S. State insurance regulators, the State of Israel, Jewish and survivor organizations, and, as observers, the United States Government through the State Department and representatives of the governments of the Czech Republic, France, Germany, Italy, Belgium, and Poland.

    Section 1 of the Memorandum of Understanding sets forth quite clearly the purpose of the Commission: to establish a ''just process that will expeditiously address the issue of unpaid insurance policies issued to victims of the Holocaust.'' The overriding objective of the Commission and its work is to identify, locate, and pay, as expeditiously and as fairly as possible, legitimate Holocaust-related insurance claims. And it should be noted in this regard that the MOU is not limited to life insurance policies, legitimate claims on other insurance policies, such as dowry and education, as well as property insurance, would also be covered.

    The MOU provides for, and the Commission has undertaken steps to conduct, a reasonable review of files of the signatory insurance companies and their subsidiaries. This has been done through internationally recognized auditing firms operating under ICHEIC-created audit mandates, and it is understood, as specifically provided for in the MOU, that the Commission-retained audit firms will have complete and unfettered access to relevant company archives.

    In addition, pursuant to the terms of the MOU, the Commission will publish the names of Holocaust victims who may have held unpaid insurance policies.

    Moreover, it is mandated that the Commission establish and employ a system of valuing policies which are deemed to be legitimate. This valuation system will incorporate ''relaxed standards of proof'' to ensure that the special circumstances of the Holocaust that you heard about this morning from some of the survivors, and that this committee has heard about in the past, are appropriately taken into account as claims are evaluated.
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    The MOU, in addition, creates two special funds. The Section 881 fund will deal with those circumstances where claims cannot be attributed to a specific insurance company, as we expect to be the case in many instances, or where claims are against companies which are no longer in existence.

    The second fund, under Section 8A2, will deal with policies which were ''nationalized'' after the War by Communist regimes in Eastern and Central Europe, as well as policies that were paid: ''as required by local law, to a governmental authority that was not the main beneficiary of the policy.'' These, in essence, were policies that were subjected to, or paid pursuant to, Nazi regulations. The insurance companies have agreed to make equitable contributions to this fund.

    In addition, there is established in the MOU a General Humanitarian Fund, which is dedicated to benefit: ''needy victims of the Holocaust and for other Holocaust-related humanitarian purposes.'' Contributions by the MOU companies to this General Humanitarian Fund will: ''give due consideration to the category of 'heirless claims.' ''

    Mr. Steinberg this morning spoke generally about the problem relating to the fact that many people who had property taken from them, whether it was insurance or otherwise, never survived, nor did their heirs.

    Hence, many legitimate claims fit into the category of ''heirless.''

    At the first meeting of the Commission late last year, the five signatory companies, as a sign of goodwill—and it was truly goodwill—first: joined the Commission, and second, pledged $90 million to the various funds that I have just described. Significant contributions have already been made toward that commitment. We do not know exactly how those funds will be used at this point, but they have been put into accounts and are, in fact, drawing interest.
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    We, as a Commission, have met several times since the beginning of the year in an effort to clarify and resolve complex issues that are identified in the MOU and other issues which came up during the course of deliberations. These issues include the valuation of policies, the establishment of the audit mandate, which I mentioned before, and the establishment and creation of a claims process, as well as the identification of relevant archival sources.

    We have been endeavoring to resolve these issues on the basis of consensus whenever that has been possible. In fact, some issues have been resolved by that consensus method. In other instances, however, most notably regarding the issue of valuation—how policies are to be valued—consensus was not reached, even after good faith negotiations between the parties. Hence, Chairman Eagleburger last month resolved those issues, after careful consideration of the various positions presented by the members of the Commission.

    As mentioned before, we will be in London next week. This will be our first meeting since Chairman Eagleburger rendered his decisions, and we fully expect to move ahead full throttle to implement those decisions and to finalize the claims and audit processes.

    Mr. Chairman, we reiterate that we will be pleased to report to you at a later date as to what we believe will be continuing progress on these initiatives.

    Later this fall, the Commission plans to launch a worldwide effort to advertise our claims processes, to invite claimants to file claims, to publish lists of potential claimants, and to work with the Jewish and survivor organizations to make this process as clear and efficient a process as possible.
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    The Congresswoman earlier this morning mentioned the fact that there are many different processes and procedures in existence regarding Holocaust assets. We understand that and we are working very hard to be as ''user friendly'' as possible.

    While we have been debating and establishing our procedures, we have also implemented what is known as a ''fast track program,'' whereby insurance claims previously submitted to a number of State regulators, as well as the State of Israel, have been submitted by the Commission to the companies for expedited handling. We expect to receive insurance company responses in the very near future. We are also using this fast track approach to help to identify and correct potential problems in the claims process.

    It is important to note certain fundamental principles that Chairman Eagleburger believes to be overriding in directing the work of the Commission. First and foremost is the fact that this is a claims-driven process. The highest possible priority will be given to attracting and paying legitimate claims of survivors and their heirs. In this context, the publication of lists of potential claimants is absolutely critical. The Chairman repeatedly has stressed this point, making it clear that it will be an integral part of our outreach program.

    The Commission must be able to demonstrate that it has gone the extra mile to identify and notify potential claimants. At the close of this process, we must be able to state unequivocally that we have made every reasonable effort to reach all potential claimants. This is especially so because ours is a claims-driven process.

    The experiences of other Holocaust-related programs have taught us that the publication of lists is perhaps the most effective way to reach potential beneficiaries. We are working with Yad Vashem, the Holocaust Museum and Research Center in Jerusalem, considered to be the most prominent of its kind in the world, as well as with other archives, to identify the whereabouts of, and analyze lists of names of people who might be potential claimants.
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    By way of example, this morning this committee was presented with a listing of 50,000 names of Jewish families who registered in Austria after the Anschluss in 1938. These families were required to identify, among other things, all of their assets, including insurance policies.

    As we meet here today, these Vienna archives are being examined by researchers retained by our Commission; they will identify those files which indicate that insurance policies were included among the holdings of the Jewish families. Eventually, we will publish those names.

    The approach that I just described regarding Vienna will be used in other appropriate archives. In fact, we have put together an archive steering group, comprised of prominent experts in archival research, to advise and assist us in this effort.

    I should also mention that the Italian insurance company which participates in our program, Generali, has to its credit, given us a computer disk of approximately 100,000 unpaid policies; compiled from a review of their files. This disk has been turned over to Yad Vashem for analysis to determine those which most likely belong to Holocaust victims. Those names will then be published by the Commission.

    Tomorrow, the 15th of September, the other companies are due to furnish the Commission with their lists of unpaid policies from the Holocaust era. This is a critical component to our program, and we very much look forward to receiving this data.

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    Our next priority will be a General Humanitarian Fund established to address, as mentioned before, the heirless claims, as identified in the Memorandum of Understanding—although I hasten to add that, at this point, it is premature to consider the amount that each company will be expected to contribute to this General Humanitarian Fund.

    As to the advantages and the benefits that we see to participating and supporting the Commission process, first, for the claimants, we believe that this process offers a streamlined and cost-free approach to settling their claims. As reflected in the MOU, companies which join and fully cooperate with the Commission can expect safe harbor from Holocaust claim-inspired State regulation and legislation. I think this was alluded to in the testimony this morning.

    Rabbi Miller also spoke about the importance of persuading additional companies to join the Commission. We take that point seriously, and we have, in fact, invited a number of companies to participate. We have received responses, but at this point none of the companies has agreed to come on board as a full participant.

    In this regard, it should be said that we have no expectation of carving out special categories of membership. All companies that did business, or had subsidiaries that did business, during the relevant time period should be full members of our Commission. Companies that join the Commission and fully participate should enjoy safe harbor. Companies that do not participate or that join but do not fully cooperate, should not enjoy that safe harbor.

    As previously mentioned, the Commission will convene next week in London. It is expected, and we have reason to believe, that Chairman Eagleburger's decisions will be followed by all participants. If that proves not to be the case, I am sure it will come to people's attention. We are optimistic, however, that we will be able to move ahead full steam and fulfill our mandate.
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    Thank you, Mr. Chairman.

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

    First, let me say, because I think it is terribly relevant, this committee has great confidence in Secretary Eagleburger, and I stress this, because it would be the expectation of the committee to be very sympathetic to his recommendations. Likewise, it would be the expectation of the committee that if there are things that go awry that they will be reported.

    Mr. SHER. No question about that, Mr. Chairman.

    Chairman LEACH. At which point Congress would reserve judgment on how to act. And I am sure the same goes for State insurance commissioners, which in this country have rather extraordinary powers in their jurisdiction.

    Now, in an earlier panel, there was a reference to the dilemma of companies that might not wish to be fully participating, but might wish to come under the rubric of protection of the Commission. One, indeed, was mentioned; I think a company called Munich Re. But you are suggesting to the committee that everyone would be expected to be treated equally. Is that what you are suggesting?

    Mr. SHER. That is correct. And the rules that apply to one should apply to all. Any company which joins should come in under those same conditions and enjoy the same benefits that any other participant would enjoy.
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    Chairman LEACH. Is it your mandate to assess how governments or given companies may have benefited by non-payment, or is that just an assumption?

    Mr. SHER. Mr. Chairman, that has come up, to some degree, within the various working groups of the Commission. I think everyone who participates in the Commission, the companies and the regulators, and the Jewish and survivor organizations, and the various nations, are focusing in the present and the future on how to benefit the victims and their heirs.

    I can tell you that, from day one, that has been foremost on Chairman Eagleburger's mind. He also realizes that our worst enemy is, of course, time.

    Chairman LEACH. How large a number of countries are covered? Are you talking principally Western Europe?

    Mr. SHER. The claimants can be Holocaust victims from anywhere in Europe. And, of course, there are Holocaust victims in virtually every country in Europe. The companies which comprise that segment of the Commission are based in France, Switzerland, Germany, and Italy.

    Chairman LEACH. Are there countries in the Far East that own insurance interests now in this area?

    Mr. SHER. There might be, but we have not, frankly, approached any, because none have come to our attention as being likely candidates. We have been relying on the National Association of Insurance Commissioners to identify those companies. Of course, these companies are very large and have extensive holdings. But I can assure you that, if companies come to our attention where there is reason to believe they should participate, we will get in touch with them.
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    Chairman LEACH. How do you parse out accountability if you have companies, of which there is one major example, that was a major private sector enterprise that then had a number of its branches nationalized behind the Iron Curtain? Are those governments accountable today or is the company accountable?

    Mr. SHER. In the rulings and decisions reached, there has been no acknowledgement of any legal requirement to pay claims in areas in Eastern or Central Europe where nationalization took place. But the companies have agreed, nevertheless, on an ex gratia basis, to pay claims that come in from those areas, and to pay them on the basis of the valuation formulas set by Chairman Eagleburger.

    The bottom line is that claims arising from areas where nationalizations took place will be paid under the Commission rules.

    Chairman LEACH. Is it an assumption when these funds are established that they will be exclusively private sector provided, or is there an expectation of public funds?

    Mr. SHER. At this point, it provides for the companies to make the equitable contributions. There has been talk and debate as to whether it would be appropriate for various governments to make contributions, but that is a bridge we have certainly not yet come to, let alone crossed.

    Chairman LEACH. Well, if the company is a non-participating insurance company, how can it be brought into the system? Does it totally volunteer or does a nation-state have to pass a law to precipitate it?
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    Mr. SHER. It is a voluntary process. Perhaps the best way to answer your question is to say that the companies that have in fact joined, and taken the bold step forward to participate in our program, are companies which either themselves, or through their holding companies or subsidiaries, do extensive business in the United States.

    Chairman LEACH. Well, I thank you, Neal. I will just conclude by noting that this committee will take very close note of any reports you engender on non-participation, and would reserve rights to proceed appropriately if there is a need so to do.

    Mr. SHER. Thank you, and we look forward to our continued cooperation.

    Chairman LEACH. We have two remaining panels. The first panel will be composed of Christopher S. Duncan, who is an International Private Banking Director for the Barclays Bank, and Mr. John-Pierre Landau, who is the Director General of the French Banking Association. If Mr. Duncan and Mr. Landau will come forward.

    By mutual agreement does one of you prefer to proceed? If not, Mr. Landau, representing the country that was our first ally, ought to go first.


    Mr. LANDAU. I appreciate that, Mr. Chairman. Thank you.
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    Mr. Chairman, it is my pleasure to appear here today on behalf of the French Banking Association and to inform you of the current status of the efforts of our association, and indeed the entire financial community in France, to address on a thorough, global, and transparent basis all issues remaining from the Holocaust in France and to ensure that all remaining funds taken from victims of that period are returned to them or their heirs.

    I want to thank you, Chairman Leach, for your leadership and dedication concerning this important subject matter, not just this year, but over the last several years. You have discharged your public duties in a most admirable and responsible manner.

    Working very closely with the French government and with the complete support of the Jewish communities in France, the French banking community is making every effort to address its role in this terrible chapter of our nation's past and to seek redress for any and all remaining victims of that period or their heirs. The French banks recognize, and have publicly acknowledged, that an enormous injustice was done during the Occupation of our country and are determined to address all remaining vestiges of that period.

    To that end, we have embarked upon an enormous logistical undertaking that requires the goodwill and good faith of interested individuals everywhere in order to complete its objective. My purpose today is to explain to you what we have done and are continuing to do and to ask your help in working with us to achieve the goals that I am sure we all share.

    Since time is short, I would like to emphasize four principal points that I believe are critical here.
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    First, it is important to understand that in France, unlike the situation in Switzerland and certain other countries, degradations against the Jewish community occurred under the color of the German-controlled French state and through the organs of the French government at the time. In June 1940, the Nazi's army invaded France and occupied its northern sector, which included the headquarters of virtually all the major banks of the period. The banks were, in fact, put under immediate and firm control of the occupying authorities.

    Through the acts of those authorities, and through the acts of the Vichy regime that followed their lead, increasingly severe anti-Semitic laws obligated the banks in France to isolate, to freeze, and ultimately to seize many of the accounts held by the Jewish account-holders. Indeed, the organs of the French government were often the means by which such funds were seized and then transferred to the German authorities.

    The second point I would like to emphasize is that today, as we look back at this tragic history, it is the French government that is at the forefront to redress this history and to find the most complete and effective means to compensate its victims. I am encouraged by President Chirac's unambiguous commitment to bring all remaining issues relating to the Holocaust to light. The French government has sponsored a number of different initiatives to pursue that goal. Among them, the most significant with respect to the French banking industry, was the appointment in January 1997 of the Matteoli Commission. And that was almost a year before the first American private litigation was brought against any French bank related to those issues.

    The Matteoli Commission is a blue ribbon panel, whose members have been appointed in close consultation with the French Jewish community, which was charged by the Prime Minister to identify any remaining funds, security, or property that has not been returned to their rightful owner and to propose a means of appropriate restitution. Again, acting with the full consultation of the French Jewish community, the Commission has hired a number of historians, auditors and other professionals to help them with that task.
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    In March 1998, and acting at the specific recommendation of the Matteoli Commission, the Prime Minister announced the formation of a special committee headed by Jean Saint-Geours, that has been given the specific task of coordinating activities in the French banking sector in their efforts with the Matteoli Commission. And I am pleased to state that last week, Prime Minister Jospin has formally created a new committee, headed by former Supreme Court Justice Pierre Drai, to provide an effective administrative remedy whereby all victims of the Holocaust in France, wherever they are located, will obtain complete restitution of any funds or assets taken from them.

    This brings me, Mr. Chairman, to my third point, which is to emphasize the commitments the French banks have made in this connection. We have specifically made four commitments:

    First, the commitment to cooperate fully and unconditionally with the Matteoli Commission in the research and fact-finding process.

    Second, the commitment to implement unconditionally the recommendations for individual compensation which will be formulated by that new Commission which has been created.

    Third, the commitment that any unclaimed assets will be transferred to a special Holocaust fund to be created, as announced by the French Prime Minister, under the aegis of the French Jewish community.

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    And, finally, fourth, the commitment to make a significant contribution to that fund no later than three months after the Matteoli Commission has released their final report.

    These four commitments form the basis and the core of our approach.

    The most pressing need has been to identify, locate and correlate the historical records. This has not been an easy task. Many of the events during the War that caused such tragic harm to its victims involved the operation of different organs of the French government. As a result of those complexities, and especially because of the unusual role played by governmental entities during the Occupation, the principal activity of the Matteoli Commission, and the other groups working with it, has been to focus on the location, coordination and, ultimately, the reconciliation of documents found in many different locations.

    The records of the banks alone do not reveal this history. In addition, any funds or securities that remained unclaimed at the end of the Occupation for thirty years automatically became the property of the French state and were generally transferred to the French treasury. Moreover, the recordkeeping obligation of the French banks ceased ten years after such transfer occurred, with the result that, generally speaking, many records that may have been held by the French banks at the end of the War were no longer in their position approximately forty years later, except by chance.

    Fourth, and finally, Mr. Chairman, I would like to end by commenting on the significance of these activities and to address some questions that I know may be on your mind. Let me emphasize to you the utter good faith with which these activities are being pursued by my organization and its constituent banks. As enunciated by our President and our Prime Minister, it is a matter of fundamental and imperative French policy to get to the bottom of all remaining issues from the Holocaust in France and to devise a universal, effective, and transparent program for restitution. The French Banking Association and its constituent banks completely support that policy without reservation and are committed to its success.
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    Next, I hope that you understand that the task upon which we have embarked is a daunting one. Many of the events during the War that caused such tragic harm to its victims involved the operation of different organs of the French government, as I said. The French banks to not have lists that they are hiding. It is not simply a question of pushing a button to identify victims of that period or the degree to which they have or have not been compensated to date. Those facts can only be determined through hard work, through cooperation with many different organizations and through time. Fortunately, much of that work is behind us now, and we are confident of ultimate success.

    Further, I would like to emphasize that the fruit of this progress will be global and transparent. It is the specific mandate of the Matteoli Commission that all victims of the Holocaust in France be given all extant information concerning their assets during the War, and appropriate restitution to the extent that they have not already received it. Thus, our efforts are not limited to victims or their descendants living in France, but will be made available to such individuals worldwide, wherever they now live.

    And finally, I would like to say that this has been and should remain an inclusive process. The Matteoli Commission was established in very close coordination with the Jewish community in France, and my organization has kept that community regularly informed of our progress. We believe we have the support of that community and are committed to working with them until justice is done. It is for that reason that we ask you to support us as we continue to try to make our efforts as comprehensive, as global, and as transparent as humanly possible.

    The focus of those activities necessarily must be in France. It is in France that the relevant documents are located, and it is the French government that uniquely has access to records necessary to learn our history and how best to address it. I am confident that the Matteoli Commission and the French government will share the results of this information with the worldwide community of individuals with interest in this issue. There may be individuals and organizations who, at that time, will not be satisfied by those results. But until those results are known, we strongly believe that the efforts that are under way in France deserve support and that the participants in this process have earned the right to your trust.
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    I hope we all agree on the common goal, which is to mark this generation as the last one in history in which doubts or uncertainties remain about the fate of victims of the Holocaust in Europe, or in which any victims of that period remain uncompensated. It would be a tragedy if bickering or indecisiveness about the most appropriate means of achieving that goal were to hamper the major strides we have made to reach them.

    I am very happy, Mr. Chairman, to answer any specific questions you may have about the activities of the French Banking Association or its constituent banks with respect to these immensely serious and important activities.

    Chairman LEACH. Thank you, Mr. Landau.

    Mr. Duncan.


    Mr. DUNCAN. Good afternoon, Chairman Leach, and Members of the committee. My name is Chris Duncan. I am International and Private Banking Director with Barclays Bank PLC, and the senior executive at Barclays responsible for investigating and responding to all issues concerning Barclays activities during World War II. On behalf of Barclays, I thank the committee for the opportunity to address it today.

    Ever since questions were first raised about the fairness of measures undertaken at the conclusion of World War II for compensating victims of Nazi persecution for assets seized or frozen during the War, Barclays made a commitment to devote whatever resources were necessary to investigate these matters. We wanted to ensure that if any such assets remained with our bank that they would be identified and returned. We made an immediate decision to put aside technical legal arguments. We undertook to conduct research far beyond our internal resources. We opened and engaged in serious dialogue that continues today with Jewish organizations, seeking their input and guidance. Put simply, we made a commitment to do what is fair, right, and just, and we believe we have done just that.
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    Permit me to speak first about current efforts in the United Kingdom. Two days after the German invasion of Poland, on September 1, 1939, the United Kingdom declared war against Germany. From that date on, my country and its people were at war for their survival. The United Kingdom government took immediate steps to prevent its enemies from benefiting from any assets located in the United Kingdom. This resulted in the passage of the Trading With the Enemy Act. That legislation was quite similar to legislation later in effect in the United States. It required all British banks, including Barclays, to yield control over all enemy accounts and other assets to a United Kingdom government officer. This was the Custodian of Enemy Property.

    Assets of belligerent enemies, countries at war with the United Kingdom, including Germany and Italy, were seized by the U.K. government and transferred directly to the custodian. Those assets were never returned to British financial institutions at the conclusion of the War. Assets of technical enemies, countries then occupied by Nazi Germany, such as Belgium and France, remained at financial institutions. However, they were frozen and remained under the custodian's supervision.

    After the War, the United Kingdom government and the post-War governments of its belligerent enemies agreed to an offset procedure whereby the British government would pay claims of its own citizens to assets seized by its enemies during the War. Conversely, the former enemy governments agreed to reimburse their citizens for assets seized by the United Kingdom. Assets of technical enemies were simply unfrozen at British financial institutions and were then immediately available and accessible to the original customer.

    Although the act did not discriminate against Jews or any other victims of the War, it had an unintended and sometimes tragic impact. We know now that assets of belligerent enemies were often not returned to their rightful owners by the foreign governments that were committed to doing so. U.K. assets of customers who lived in Nazi-occupied countries and who perished during the War were often left unclaimed or dormant.
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    The efforts of the British government and the banking community in the United Kingdom in recent years have been focused on identifying these assets. In March of this year, the United Kingdom government launched a compensation scheme to address the matter of assets affected by the Trading With the Enemy Act which were not returned to their rightful owners or their heirs. For more than two years, Barclays has engaged in exhaustive searches of its own internal and governmental records for any information that might be of assistance in tracing customer assets believed still to exist, and has undertaken a massive effort in the United Kingdom to identify dormant accounts. As a result, we have been able to provide significant assistance to people seeking unclaimed assets.

    Let me turn now to France. After the Nazi conquest of France, Nazi laws were imposed in the occupied zones and the collaborationist French government in Vichy was quick to impose copycat legislation throughout the country. The commencement of the War threw Barclays France into disarray. All of the bank's British staff departed for England shortly after the War had begun and, as a result of the Trading With the Enemy Act in the United Kingdom, Barclays France was completely cut off from its British parent until after the Liberation of France in August, 1944.

    At the conclusion of the War, British managers returned to France to learn that the bank had survived the War, but that as an enemy bank, its activities had been placed under the control of German controllers for the duration of the Nazi Occupation. Throughout that period, both the German regime and the French government in Vichy enacted and implemented anti-Semitic laws which required financial institutions to block all assets held by Jewish depositors in banks in the occupied zone. The Nazis also forced open safe deposit boxes of bank customers and, in some instances, seized their contents.
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    In response to the French government's commitment to addressing the atrocities of World War II, and to a litigation commenced in New York against a number of French banks and Barclays, Barclays undertook a massive investigation of its subsidiary's wartime activities in France. The scope of our investigation has far exceeded anything that the French government has asked that we provide and anything that the pending lawsuit would ever require.

    To conduct the investigation, we retained Floyd Abrams and Cahill Gordon & Reindel, instructing them to leave no stone unturned in their efforts. This was no easy undertaking. As you can no doubt appreciate, the documentation of events that took place over half a century ago is fragmentary at best, particularly in the light of French legislation providing for the destruction of most bank documents after thirty years, a figure reduced to ten years in 1978.

    Our response was to undertake an exhaustive investigation that spanned internal, external, and governmental archives in France, in Germany, in the United Kingdom, and here in the United States. Literally hundreds of thousands of documents were identified and reviewed, countless present and former bank employees were interviewed, vaults and safety deposit boxes were systematically catalogued. The total of research hours during the course of this investigation was equivalent to 1,400 days.

    The investigation identified 343 names of Jewish customers at Barclays France at the time of the Occupation. It further concluded that approximately 95 percent of those deposits were owned by depositors or their heirs who had survived the War or participated in the post-War restitution process. Although we have no specific information concerning the disposition of the remaining 5 percent, all accounts were unblocked after the Liberation of France and we uncovered no information inconsistent with the likelihood that these monies were either withdrawn during the War or accessed after the War by their rightful owners or their heirs. The investigation indicates that Barclays holds no funds of Holocaust victims in France today.
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    Notwithstanding that, we determined to and did agree on a settlement of the class action currently pending in the United States. The settlement establishes a fund in the amount of $3,612,500 for the payment in the first instance of valid claims on behalf of any Jewish customer of Barclays France, if any come forward, for the restitution of unclaimed wartime assets. The remainder of the fund will be donated to support Holocaust research.

    When the settlement was announced, the attorney for the plaintiffs praised Barclays for, and I quote, ''acting responsibly and in a forthright manner.'' We believe that we did.

    Thank you very much for your time and attention.

    Chairman LEACH. Well, let me begin by saying, as a representative of a congressional committee, that I believe that you did too, and that I think, in an era in which one points fingers of blame in many different directions for many different reasons, your bank stands out as an institution that has set a model for the rest of the country and, indeed, the world.

    From the United States' perspective, we had two active banks in Europe that stayed active in France during the War, J.P. Morgan and Chase Manhattan, and I think each would be well advised to follow the Barclays model.

    Let me turn just principally, I guess, to you, Mr. Landau. Do you visualize a big fund? How do you visualize sharing responsibility from a French banking perspective? And how do you coordinate with all French banks?
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    Mr. LANDAU. Mr. Chairman, if I understand your question, we are, as I said, acting in this matter very much under the guidance, first, of the Matteoli Commission, and now that it will be created as far as individual compensation is concerned, under the Drai Commission. So for research activities, fact-finding activities, we are acting under the guidance of the Matteoli Commission, and we are doing exactly what they tell us to do.

    For the compensation, we are committed to do exactly what the Drai Commission will tell us as far as individual compensation is concerned. We are not going to challenge any of their recommendations.

    Chairman LEACH. From an individual bank perspective, who supervises research? Will this be an individual bank responsibility?

    Mr. LANDAU. Individual banks have appointed archivists in charge of doing the research. One of the tasks of the Saint-Geours Committee is to make sure that those researches are made according to the standards which have been set by the Matteoli Commission, and the real work is supervised directly by the Matteoli Commission. We have no role as a professional organization in supervising this work. We are providing some logistical support, but that is all.

    The real work every individual bank is reporting directly to the Matteoli Commission as far as their research and fact-finding efforts are concerned.

    Chairman LEACH. Well, thank you both.
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    Ms. Schakowsky, did you have a question?

    Ms. SCHAKOWSKY. First let me say to Mr. Sher that I am sorry that I missed your testimony, and I hope that if we submit some questions to you—that we will be able to, outside the context of this hearing, and deal with you on that. And I want to thank you for all the work that you have done, Nazi hunting and all the wonderful activities you have been involved in. Thank you very much.

    I am looking at Mr. Steinberg's testimony and let me just quote to you, Mr. Landau. ''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 have 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 Volcker Commission, were allowed to unilaterally determine which were relevant accounts.''

    I would like you to respond as substantively as possible to that.

    Mr. LANDAU. Yes. The first point is how were those accounts identified. Maybe the Matteoli Commission will correct me if I am wrong, but it has not only been the work by the banks, there have been archives of the governments under which the least of the Jewish accounts which have been blocked in 1941 is kept.

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    So it is not only like the banks themselves have set up those lists. The banks have been asked to do research. But as far as I know, that research is sort of reconciled with the archives the government has itself about those Jewish accounts which were blocked in 1941. So there are at least two sources of information.

    And the Matteoli Commission, I am sure, is checking very hard that at least the information we provide is as comprehensive as the government records already show. So from that point, I have to take exception with what was said this morning about that specific fact. The information about those blocked accounts does not come exclusively from the French banks. It also comes from government archives. It has two sources of information which are reconciled.

    Ms. SCHAKOWSKY. In terms of the publication of the list, I think all of us are interested in processes around the world that are as transparent as possible, so that there is in some way some enforcing mechanisms when you publish a list. What about that information being made public?

    Mr. LANDAU. I will answer your question, if you will allow me, in a broader context. We are not hiding those lists. Those lists have been transmitted. We have set up a deadline by the 15th of May. We have transmitted those lists to the Matteoli Commission, at least more than 95 percent of those accounts which we have been asked to provide information.

    Ms. SCHAKOWSKY. Excuse me. Would you clarify that? Ninety-five percent?

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    Mr. LANDAU. Yes. They had reasons to think that they had about 67,000 accounts, and we have been able to trace more than 95 percent of them. So that is what I am saying; information is coming from both sources, and we have provided those lists.

    Second—and this is again maybe a misunderstanding which may have arisen during the discussion—blocked accounts are not seized accounts. Many of those blocked accounts have not been confiscated. The users have just lost their ability to draw on those accounts, but there have been no confiscations of those accounts. Then you have confiscation and then you have restitution at the end of the War.

    So that is a very difficult process of reconciling all this that the Matteoli Commission is supervising now and we are contributing to. Blocked accounts by themselves is not very complete or significant information. What is significant and complete is the whole process of blocking, seizing, compensating, and restitution. And unless we have that full set of information—and that is what we are working to—the publication, I think, would be extremely misleading. That is my view on that.

    Ms. SCHAKOWSKY. Let me answer that. Publication of the lists would be misleading. I am confused on why that would have a negative impact.

    Mr. LANDAU. Because it may be that people would see the name of one of their family on those lists and, in fact, the account has been unblocked naturally in 1944. Because you know that one of the first decisions that the new French government took in 1944 was to order the unblocking of those accounts and nullify everything which had been done by the Vichy government on those accounts.
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    So by publishing the lists, if one of the people who would see that name on the list, or the name of the family on the list, might still think they have a claim on that account which, in fact, had been unblocked in 1944. So unless we are able to tell exactly what has happened to those accounts, publishing the list would be misleading.

    Now, if I may take this in a broader framework, because I think it is important. As was made clear this morning, we should make a distinction between announcing a settlement and getting the money to the victims. The approach which has been adopted by other parties, for instance by other banks like the Swiss banks, is to agree on an amount of money first and find the beneficiaries after, and we do it the other way around. We try to identify the beneficiary for compensation before, under a very strict deadline. We are committing to do that by the end of this year, and then compensate them for the money we have quoted.

    At this stage, to the best of my knowledge, the first approach, and I think Under Secretary Eizenstat made that very clear this morning, has not yielded significant payments for the victims. And he made clear that the urgency is to get significant payments to the victims. It may well be that our process bears on the rigorous assessment of facts, an identification of potential beneficiaries, and will prove speedier and more efficient from the point of view of the victims.

    Ms. SCHAKOWSKY. Let me just say that I have real concerns about the capacity to adequately identify all those when those lists are not made public or are not subject in some way to some kind of accountability mechanism. Thank you.

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    Mr. LANDAU. If I might just say, I think the outcome of this whole process will be made transparent and public. What I am saying now is that partial information will not be. The outcome of the whole process will certainly be transparent and public.

    Chairman LEACH. If I can ask a follow-on to Ms. Schakowsky's question, you are saying there will be transparency, which implies that you will make the list public. Do you have a timeframe for that? Are you simply verifying or are you going through a two-month process, a three-month process, a five-year process? What kind of timeframe do you visualize for these lists?

    Mr. LANDAU. I think the timeframe from the Matteoli Commission, and they will surely make that very precise, is to get a report by the end of the year.

    Chairman LEACH. And the list will be part of that report?

    Mr. LANDAU. That you may ask them.

    Chairman LEACH. Excuse me. That will be up to the Matteoli Commission?

    Mr. LANDAU. That will be their decision. They have the list now.

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    The fact-finding process will be ended by the end of the year, and the compensation process has started legally yesterday, when the Prime Minister took his decree. So things are going to go very fast now. We are operating under a very strict deadline.

    Chairman LEACH. We are dealing with obviously a rather extraordinary and unique issue in world politics and commerce and we are all learning lessons from each other. Clearly, one of the lessons of the Swiss circumstance is this is about the third significant go-around, although it is by all odds much more significant than earlier ones. And I think the Swiss were embarrassed and have had inadequately forthright earlier efforts at this issue. And so I think one of the things we have all learned is to try to be as comprehensive as possible.

    I have a great sense that the French government has taken very significant steps relative to where the country has ever been before—with the great question of whether those steps will prove to be completely comprehensive or not still open to review. But certainly the world community is impressed that initial steps have been undertaken.

    If there are no further questions, let me thank both of you. And again let me say to Mr. Duncan, I understand your bank in the 1930's was one of the hardest banks in the world to put a deposit into; that you had to have recommendations of several people before the bank would take a deposit. It proved to be one of the better banks to protect the depositors' money, if one was able to deposit with you.

    Mr. DUNCAN. I think I ought to have a rejoinder to that, Mr. Chairman.
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    Chairman LEACH. Yes, of course.

    Mr. DUNCAN. Our business in France was then, has always been, a very segmented, highly targeted business, starting out in support of the banking requirements of people who would travel from the United Kingdom and from the United States for periods of the wintertime on the Cote d'Azur and to have a break from the terrible English weather. It was never a mass market bank. It still is not now. We had twelve branches. We lost control of those branches.

    An additional point on publication and clarity of these issues. We do hope that it will be possible for the French authorities to publish these names and, indeed, for the appropriate mechanics to be set up for restitution to be given.

    Chairman LEACH. I appreciate that. Let me just ask one final question. Are the French banks dependent upon the French government's decision? Can you, on your own, make this decision to publish, whether or not the French government does?

    Mr. LANDAU. We are committed to follow any recommendation by the Drai Commission, and the Drai Commission is totally independent of everybody, Mr. Chairman. It will be chaired by a person who is a former Chief Justice of the Supreme Court of France. It will be totally independent of the government. It will be totally independent of the banks. It will make a recommendations for both the government and the banks and other financial organizations which owe compensation to Jewish victims of the Holocaust. And as far as we are concerned, we are totally committed to following immediately those recommendations.
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    Chairman LEACH. Well, I appreciate that very much, and I recognize very positive steps have been taken. But I would only stress that historically there is nothing more misleading than secrecy, and that openness is the least misleading aspect of almost any kind of affair.

    Mr. LANDAU. I understand that, Mr. Chairman.

    Chairman LEACH. Sure enough. Let me thank you very much for your agreeing to come and for your very frank and thoughtful testimony.

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

    Chairman LEACH. Thank you, Mr. Duncan.

    Mr. DUNCAN. Thank you.

    Chairman LEACH. Our final panel will be composed of two members of the Matteoli Commission. Adolphe Steg is Deputy Director of the French Study Commission into the Spoliation of Jews in France, otherwise known as the Matteoli Commission. Mr. Steg, a distinguished surgeon, wore as a teenager the gold star. He survived Nazi arrest and imprisonment and later fought with the French Resistance. In addition to his role in the Matteoli Commission, Mr. Steg is also President of Alliance Israelite Universelle.

    Finally, we have with us another member of the Matteoli Commission, and French historian, Professor Claire Andrieu, who is herself the daughter of two prominent figures in the French Resistance. Her mother survived deportation to Ravensbruck.
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    Welcome, Mr. Steg and Ms. Andrieu, and we appreciate very much your joining us.

    Mr. STEG. Thank you, Mr. Chairman.

    Chairman LEACH. We will begin with you, Mr. Steg. And let me say full statements, by unanimous consent, will be placed in the record, and you may proceed as you see fit.

    Mr. STEG. May I kindly ask you if you will allow me to have an interpreter at my side for better understanding questions?

    Chairman LEACH. Absolutely. Would the interpreter introduce himself for the record?

    Mr. KENT. My name is Michael Kent.

    Chairman LEACH. Fine.

    Mr. Steg, proceed.

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    Mr. STEG. I would like to begin with thanking you for your invitation to participate in this meeting, and please excuse President Matteoli. He is currently preparing the year's work of the Social and Economic Council and could, therefore, not be today here. He asked me to stand in for him in my capacity as Vice President of the Commission, and perhaps also because I am a survivor of the persecution and spent all of the War years in France.

    Given the importance of banking questions in the Committee on Banking and Financial Services which will be considered, Madame Claire Andrieu, member of the Commission, will give you an account of our work. Professor Claire Andrieu teaches Contemporary History at the Sorbonne, and is a specialist on the Vichy period. Some ten years ago, she published a significant work entitled ''Banking During the Occupation'', and she heads the Commission's research group on banks and insurance companies. May I add that Claire Andrieu comes from a family who played a major heroic role in the Resistance.

    My purpose is to introduce the Matteoli Commission to you. The Commission was created in 1997, following President Chirac's declaration of July 16, 1995, which changed what had been until that time the official French position, summed up in the hallowed phrase ''Vichy was not France.'' Which means that the Republic is not responsible for what was done by the Petain dictatorship. President Chirac's declaration was a historic one, because he emphasized his concern to see France pay its debt to memory and to history, and to accept its responsibility for the role played by the Vichy government in carrying out anti-Jewish measures adopted during the German Occupation.

    By this declaration, President Chirac led France to question the spoliation and reparation, and he wanted to make reparation not a community question, but a ''grande cause nationale,'' an important national cause.
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    In this context, and in response to the demands of leaders of the French Jewish community, Prime Minister Alain Juppe appointed Mr. Jean Matteoli, a member of the resistance and a deportee, to head the work of a special commission. From the outset of his term, Prime Minister Lionel Jospin unreservedly endorsed President Chirac's declaration. He himself remarked that ''It is normal that the victims of this unprecedented tragedy, the Shoa, should demand what are their rights. It is just and right that those who were despoiled should demand and obtain reparation.'' Finally Mr. Jospin has seen to it that the Matteoli Commission receive substantial resources for carrying out its work.

    The Matteoli Commission is a real task force and has several objectives: To study the conditions under which spoliations occurred; to evaluate the extent of the spoliations; to learn what happened to the despoiled assets; to make proposals to the French government concerning reparation measures.

    The work of the commission bears mainly on the following areas. One, spoliation in the internment camps and particularly Drancy, outside of Paris, where Jews were subjected to rigorous frisking and stripped of all of their belongings.

    Two, the spoliation known as Aryanization, which means removing the Jewish owners of their businesses and putting them under the control of an Aryan in order to sell or liquidate them. Between 50,000 or 55,000 businesses were Aryanized in this way.

    Three, spoliation of buildings, which is to say the pillage of apartments. The Germans pillaged 40,000 apartments and shipped approximately 20,000 train loads of furniture from France to Germany.
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    Four, appropriation of cultural assets. The German army carried off about 100,000 works of art and art objects. Of these, 60,000 only have been returned to France and 45,000 were returned very quickly to their rightful owners.

    Last, the spoliation resulting from blocking what were thought to be Jewish-owned accounts in banks and financial institutions, more generally the consequences on the banks and financial institutions and insurance companies of the anti-Jewish measures.

    In tandem with our work on spoliation, we have addressed the question of restitution. Indeed, it is to France's credit to have made an immense effort to restore despoiled goods. Indeed Paris had been barely liberated when on August 30, 1945, four days after the Liberation, banks were ordered to ensure that all blocked accounts were immediately unblocked, and in October an organization for the restitution of all sealed assets was created. In the months that followed, efforts were made to restore despoiled real estate, either by informal settlement or by reference to a court.

    Despite several years of effort, not all despoiled assets had been restored to the rightful owners, because not everything had been claimed, and this for different reasons, the most tragic being the owners had been deported and never returned. By our research we want to get as exactly as possible what was resumed or identified, what was neither returned nor indemnified.

    I would now like to insist on four specific features of our task force.

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    One, the government created this task force, but we are entirely autonomous and independent not only of all institutions and corporations, and we are not here as advocates of the banks, we are not here to negotiate in the name of the banks. We are absolutely independent and independent even to government itself. In fact, we are authorized to sanction the government when necessary. An example of this authority concerns art objects. When we showed that certain potentially stolen art objects were housed in official residences, agencies, ministries, and embassies, we demanded that they all be returned to the ''mobilier national'' in order to be publicly exhibited. To date, 140 of the 170 paintings and art works have been returned to the mobilier national. The 30 remaining items will be returned in the near future.

    Two, the commission's primary object is a historical one: to establish the truth concerning spoliations. In order to do so, we have organized teams with numerous high level researchers under the guidance of the commission members. Four among them are eminent highly specialized historians; in addition to Professor Claire Andrieu here; Professor Antoine Prost, specialist in comtemporary history; Annette Wiewiorka, specialist in the history of the Holocaust, and Serge Klarsfed, the famous specialist in history of the deportation.

    Professor Claire Andrieu will describe our methodology and give you an account of our research.

    Three, we will make public our final report in the coming months. Like all previous reports, this one will be entirely transparent. All of our work will be published and we will clarify our procedures and methods and anyone wishing to do so will be able to verify them.

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    Four, in its final report, the commission is to provide the government with recommendations concerning restitution and reparations. We have already obtained certain concrete measures: The creation of a structure to examine individual demands for reparations from anyone who during the persecution was despoiled of possessions in France, or by their heirs, whatever the current residence of the persons concerned.

    Pierre Drai, former First President of the Court of Cassation, will preside over this institution, which will be comprised of judges. Its unchallenged authority will be such that it will be able to consider and propose appropriate measures of restitution or indemnification.

    A second concrete result is that Prime Minister Lionel Jospin has also agreed to the following principle we have established: ''No unclaimed despoiled funds will remain in any private or public institution, but rather shall go toward the cause of the victims.'' Indeed for that purpose Lionel Jospin has announced the creation of the French ''trust fund'' to the memory of the Shoa and solidarity with its victims which will receive these unclaimed funds.

    This foundation will also receive the significant contributions which certain financial establishments, banks, insurance companies, the Caisse des Depots and Consignation have already announced as a way of making the moral commitment to reparation. We should be clear that any reparation process cannot be simply a way of repaying a debt, dollar for dollar. Reparations must be made in the knowledge that what was committed is irreparable. The human drama of the plunderers' victims must be taken into account.

    At the conclusion of our work, we will assess the sum of the spoliations and will also indicate what has been neither restored nor indemnified. But however rigorous and objective our work may be, our conclusions are not limited to simple arithmetic. Our objectives are not those of an accountant. They are, above all, moral, as well as historical and pedagogical.
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    Moral exigency. We have an obligation to consider the human circumstances and consequences of despoliation. This means taking into consideration the sum of the anguish, humiliation, suffering, and death that resulted from being despoiled. Indeed spoliation was more than plundering. It went beyond simple material disposession and sought to morally break its victims. Even more serious, spoliations made it significantly more difficult for Jews to flee. Not only had they lost their possessions, but they were also made far more vulnerable, they were far easier to hunt down, arrest, and ultimately, deport.

    Spoliation was therefore often one phase of the final solution. And we would like to emphasize the fact that the hardest hit Jews were often the poorest, those least able to defend themselves.

    The exigency of truth. We consider that the exigency of truth is the sine qua non of justice and reparation. Nothing enduring can be established without public recognition of the facts. Our research has shed light on the crushing responsibility of the government of Marshal Petain and his collaborators. Instigated by the Germans, French spoliation, however, was organized and carried out by the Vichy administration, and yet this page of history has been played down or obscured for fifty years.

    Our efforts contribute to restoring the truth. France is now confronting this somber period with open eyes and drawing the appropriate lessons and consequences. Having referred to the significant participation by the French in the spoliation of Jews, I do not want to give the impression of having forgotten all of those non-Jewish French men and women who came to our aid. None of us would have survived had it not been for their refusal to accept the unacceptable. More precisely, in France there were 330,000 Jews at the beginning of the War. 75,000 were deported. This is our main spoliation. We have been despoiled of 75,000 treasures, but three-quarters of the Jewish community were saved. Any one of us—and myself, I am in this situation—remember the very moment when a charitable hand attracted him to life and didn't leave him go to death, risking his own life.
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    We may say that Vichy is a shame and a black mark on our history, but the French people cannot be assimilated to the collaborators.

    A pedagogical exigency. We want to transmit to the younger generations the memory of what happened during the Holocaust. Not what happened elsewhere, in some removed area to the east, but in France and even before our very eyes. Above all, we want to demonstrate that even fifty years after the fact, a theft remains a theft and a crime remains a crime, and that any compromise with a totalitarian regime, even the most apparently minor, can have murderous consequences.

    And finally ''After Auschwitz,'' it is said, ''it is not enough to teach about Auschwitz, we must teach against Auschwitz.''

    Mr. Chairman, if you would allow me, I should like now to say a few words not as a member of the Matteoli Commission, but as a Jew, a survivor, a member of the French community. I heard some words and I would like to complete what I heard this morning.

    Chairman LEACH. Before you do, I would like to add that it has been brought to the attention of the Chair you are also speaking as a genuine French hero of the Resistance, and he speaks with that moral parameter.

    Mr. STEG. Thank you.

    As I was told this morning, the Jewish population at France was about 50 percent foreign Jews, 50 percent French. The deportees were largely more foreign Jews. As it was said, about 70 percent of the deportees were foreigners. But the large majority of the deportees who came back and of the survivors of the great community—three-quarters of the community had been saved—these large majority remained in France and the large majority became French. The figures in 1980 were that 97 percent of these foreign people had become French citizens.
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    Moreover, we remind that 38,000 Jews coming from the east, from Poland and Russia and so on, arrived in France just after the War. For example, I was in charge of the World Union of Jewish Students at that time, supported by the World Jewish Congress, and we succeeded in asking Moscow, the ''anti-fascist committee'' dealing with Jewish problems, to send us hundreds of students back from Russia, which were Polish students who had fled to Russia, to come back to France, and I personally welcomed them at the station when they arrived.

    Even for the foreign Jews who had suffered in France and left France for other countries who would better represent them than these Jews in France who have lived exactly the same experience in France? Who knows better what it is to wear the yellow star? I did it. I am very proud now. What it means at that time, I was designated to be a victim. Who would know better what it means to walk in the street and to be anxious at every corner, because at the corner there may be a roundup of the Germans or the French police, and the same at the exit of the metro. It was terrible. To walk the stairs, looking if there is a German or not. Who would better understand than we can do it? Who would better understand what it means at that time to have a piece of bread, because we have no more tickets to get bread, and we had to pay the price on the black market?

    So for all these reasons, I think that we see that the French Jews, the French Jewish community which is composed of many thousands of survivors, are the best representative of these Jews. This does not mean that I don't understand the role of the international organizations and especially the World Jewish Restitution Organization. I have respect for the work which is done by them. I understand them. You see, I am the President of the first Jewish international institution, because it was organized in 1860. So I know what it means: a judicial international organization has to defend all of the other Jews. The Hebrew name of our organization: ''All the Jews Are Friends.'' Our doctrine considers that every Jew is responsible for the others. So I understand the responsibility of the international Jewish organization to save the other Jews or to help the survivors. One may be sure that after completion of our work the French Jews will not forget their responsibility to the survivors of other countries.
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    Thank you very much.

    Chairman LEACH. Thank you, Professor Steg.

    Professor Andrieu.


    Ms. ANDRIEU. Mr. Chairman, distinguished Members of the committee, it is a pleasure for me as an historian to speak to an elected assembly for, as you know, from antiquity to our days, freedom of speech and historical truth have kept alive close links. The Matteoli Commission is deeply convinced that truth is the first step toward justice. Our doctrine is ''facts first,'' checkable and truthful. In this respect I regret to be obliged to say that I deeply disagree with important parts of the statements made by my esteemed colleagues, Mr. Weisberg and Mr. Federgruen.

    Our action will lead to concrete findings in the form of a three column table completed at the end of this year. The first column will give what has been restituted and the second what has not been restituted. The third column is of a different type. It is that of the moral reparation of a consequence of the new Holocaust consciousness President Chirac has made official in 1995. This is where the fund for the memory of the Holocaust that the Prime Minister Lionel Jospin announced in November 1998 will appear, provisioned by the public and the private sectors. The amounts in the second and the third column will probably be very different, clearly more important in the last one. This difference illustrates the two missions of the Matteoli Commission: To establish the facts, columns 1 and 2, and after, to have the wrongs repaired through a solemn gesture.
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    Today I will speak of columns 1 and 2. My statement will review four points: The general historical background; the particular history of deposited assets; the organization of present research; and some provisional results.

    France was divided into three systems of sovereignty, Nazi Germany, Vichy government and Free France. Regarding spoliation, only the first two are concerned. In 1940–1944, the main sovereign of continental France is Nazi Germany. It occupies the northern zone which covers three-fifths of the territory. Anti-Semitism is its main agenda. It publishes its own orders against the Jews, and except for two cases it was at the origin of all important Vichy laws against Jews. Nazi occupants alone decided to round up the Jews and to deport them.

    Next to the occupant, Vichy holds a secondary sovereignty. This vassal dictatorship took by itself two decrees against Jews: ''The status of the Jews,'' dated October 3, 1940; and ''The Law on the Internment of Foreign Jews,'' dated the day after. But afterwards, all its main decisions were inspired by the Germans and ancillary to discussions with them. This subordination inside collaboration was illustrated by the creation of the General Commission for Jewish Matters in March 1941. This service was the symbol of the state anti-Semitism and worked in close collaboration with the Germans. The only serious point of disagreement with the occupant lay in the fact that Vichy wanted to keep the product of the spoliation of the Jews, whereas the Germans demanded it. Eventually the Nazis only got the assets of nationals of the Great Reich.

    Now, what about deposited assets? The year 1941 was the great year of spoliatary measures. In spring 1941, the occupant edicted two orders which directly affected deposited assets. One order stipulated that Jewish stocks and shares could be sold, and the second, dated May 28, 1941, decided to block Jewish accounts. In both texts, the Jews were only authorized ''essential grants,'' or grants for ''usual activities'' or ''maintenance costs'', to which was fixed a ceiling. The order to freeze the accounts was given directly by the Germans to the Bankers' Union which transmitted it on the spot to its members.
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    On July 22, 1941, the Vichy government passed in turn its great Spoliation Law, after a six-month period of discussion with the German authorities. Under the terms of this act, the stocks and shares of the Jews had to be placed under the provisional administration of the ''Domains,'' the state property management agency, and sold by it. The product of the sales had to be paid to the Deposit and Consignment Office, a state financial institution, on an account opened in the name of the Jew, and consigned. The balances of cash deposits also had to be paid to the Deposit Office in the same conditions.

    The total intermingling of the Nazi and the Vichy legislations were made patent in the Circular on the Jewish Capital, dated August 25, 1941. It was issued by the French General Commission for Jewish Matters, but it enforced the German orders.

    As far as the occupied zone was concerned, the bank obeyed the Nazi orders and Vichy laws without delay during the year 1941. They had been prepared to these measures by a six-month latency period. All the banks obeyed, even those which were freer than others, like the American ones. They too, although coming under a neutral and democratic power, declared their Jewish accounts, even the foreign accounts for one of them, which was not required yet. This means that responsibility must not be only analyzed in terms of nationality, but rather in terms of human obedience to authority. If Vichy was part of France, it was not all France. Free France tried to hamper the spoliation of the Jews.

    As soon as 1940, General de Gaulle wrote to the World Jewish Congress and to the American Jewish Congress to let them know that ''Decrees issued against the Jews can and will have no validity in Free France. When we achieve victory, the wrong done will be righted.''
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    On the BBC, the French broadcast denounced at least fifteen times the persecutions against Jews. The confiscations were aimed at more than four times, from 1941 to 1944. Described as an ''organized theft'', they were declared legally null as soon as April 1941, and the buyers duly warned.

    As General de Gaulle had announced it, the Liberation marked a total rupture with the period of the Occupation. From 1943 to 1945, thirteen governmental orders dismantled the Vichy legislation, organized restitutions and decided compensations for the deportees and their families. After general elections, from December 1945 to 1949, thirteen other laws were passed to achieve the restitution and compensation process. The restitution policy was resumed in 1960 when the BRUG law, a German law passed in 1957, came into force in France. The last file documented by the French administration in the frame of the BRUG law is dated 1980. Thus one can't say ''Why only fifty years after?'' The right question would be ''Why twenty years after is it necessary to verify what has been done and to correct it wherever necessary?''

    Now I would like to explain our methodology to ensure truth-making and transparency. Our process is meant to ensure the finding of facts and the establishment of concrete procedures to answer the claims. The creation of the Drai Commission derives from our interim report and allows claimants to address individual complaints. Our final report, due by the end of December, will add other measures.

    In April 1998, the mission has set up its own investigation task force on deposited assets. Presided over by myself, a university professor, the group assembles archivists and historians working in a dozen credit institutions, private or public, working under my authority. The group works on an academic, scientific way, like a university task force. This method is the only way to understand the mass of dispersed and disparate archives available in different places in Paris and in the provinces. The main resources lie in the national archives. They are the archives of the General Commission for Jewish Matters. The existence of these papers is of crucial importance. Not only have they allowed us to learn about the spoliation, but they give us the means to check the present works of the credit institutions, since under the Occupation, the banks had to declare the Jewish accounts to the Commission for Jewish Matters, and since we also dispose of the archives of the Restitution Service which worked from 1945 to 1953 at the Ministry of Finance.
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    You must understand that those archives allow us to cross-check systematically all information delivered to us by the banks. Thanks to these methods, the mission was able to publish three research guides for deposited assets which have been delivered to the Banking and Financial Services Committee. Here they are.

    The complexity of the spoliation and refunding channel is such that 461 data need to be informed for each account if one wants the table to be complete. When one knows that about 67,000 accounts were blocked, that means 30 million operations are to be fulfilled. This enormous work is now underway. At the end of this month, the banks will hand in their report. This document will be compiled according to the recommendations of the mission. A thoroughly detailed table of contents, 28 synthetic tables of figures and the disk containing all clients and a maximum of 461 data for each client will be handed in.

    In addition to that, we conduct our own research computerizing all data available in every institution or administration. That is to say national archives, Minister of Finance, Deposit and Consignment Institution, Ministry of Justice, Ministry of Foreign Affairs.

    At the end of the year, we will deliver to the Drai Commission comprehensive data with all information needed to answer individual claims.

    To sum up, first, banks work under our direction and according to our specifications.

    Second, we are able to cross-check with the archives all information coming from banks and related to spoliation.
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    Third, we do by ourselves the global research which constitutes a second cross-checking on our researchers.

    Fourth, transparency is our doctrine. All archives are open to the public.

    Fifth, law is law. I believe that when I pronounce these words in this place, I am understood. That is why lists of victims of anti-Semitic legislation can't be published in France. It would infringe two laws: First, the Civil Code, Article 9, which protects privacy as a fundamental liberty; second, the law called Computerized Data and Liberty, dated January 6, 1978, which forbids any publication of computerized lists, whatever its object may be.

    On the other hand, every claimant can address his or her demand to the Drai Commission starting today.

    Considering our principles of fairness and accountability and transparency, I have the pleasure, Mr. Chairman, on behalf of the Matteoli Commission to invite you to visit us in Paris and to see for yourself.

    Thank you.

    Chairman LEACH. Well, thank you very much.

    Earlier, Professor Weisberg testified in detail about the French Vichy government's definition of a Jew and indicated that this definition was broader than that in Nazi Germany; and, therefore, more oppressive. Mr. Steinberg testified that your commission has been reluctant to acknowledge the circumstance. First, is Professor Weisberg correct that the definition was broader than in Nazi Germany and was this the responsibility of the Vichy French?
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    Ms. ANDRIEU. Yes. On this point, Mr. Weisberg is correct. This is one point. First, I had the pleasure to read his book and I found many mistakes and misunderstandings and misinterpretations. But on this point he is right.

    I would add two considerations, two fundamental elements which fragilize the French and German texts. Germany was a totalitarian regime, and the Vichy regime an authoritarian regime. We had no unique party. Even if Vichy had taken the same text as that of the Germans, the application would have been different. This is important. Who enacts, who enforces the law changes its consequences.

    The second point, Holocaust was not in the horizon of the Vichy regime. That is why since 1941, since autumn 1941, when Holocaust was in its beginning, the Germans were not so keen in edicting orders against the Jews. What would be the use of it since anyhow the victims were to be killed? So the comparison between Vichy laws and German orders has some fragility. That does not mean that one must not do it, but literal comparison between texts has some limits.

    Chairman LEACH. You made several observations about American banks. Are they cooperating with your investigation?

    Ms. ANDRIEU. Yes, they cooperate.

    Chairman LEACH. If they don't cooperate, I would like it if you would write and inform me to that effect.
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    Ms. ANDRIEU. Yes. You can rely upon me if a bank doesn't cooperate, I can say that the situation is much improved this year compared to the preceding year, so I am not anxious at the results coming from banks.

    Chairman LEACH. Your work has been challenged on the grounds that it is not, and has not, been perfectly transparent and your audit of French banks is not as rigorous as it might be because you have accepted their own claims. Is this legitimate criticism, or do you think that this is unfair?

    Ms. ANDRIEU. I am sorry, I didn't quite understand. Can you repeat?

    Chairman LEACH. Some have criticized your work on the grounds that you have accepted the banks' audit of themselves as valid rather than relying on or looking to outside reviews. For example, Barclays Bank brought in some outside people to look. Do you think this criticism is fair and do you think that your review is adequate?

    Ms. ANDRIEU. Well, I don't think the criticism is fair. Our method—well, let's begin at the beginning. Two years ago no one knew anything about the despoilation and restitution channels. We had to rediscover them. Eventually, we could tell the banks where the archives were and what they had to do. I don't think an external audit would do better. I presume it would be less well, because you can be an auditor and make many photocopies, but that does not give the meaning of the whole affair. Whereas our guides obliging the bank to go from the beginning to the end, according to the method and the synthetic tables which are there, allow them to give a conclusion. This conclusion is given by a bank and we can check it and we do the work by research, too. And I will add something. If the audit is done by an external authority, then the bank is not responsible for it. Then you produce a system of authority. This system existed under the Occupation, and after the Liberation banks could say ''we are not guilty, we had orders.'' Then if we reproduce the system now they would say ''we had nothing to do, we paid an audit,'' and so it is finished. Whereas I think that the fact that banks are working now raises a new consciousness, and I give you a concrete example.
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    In October 1997, President Matteoli wrote to seventeen banks exactly, which were part of the banks who lend money to the Jews when they were imposed a fine. Among those seventeen banks, only two set to work, and most of them sent a letter saying ''we have no archives, so we regret it, but we can't do anything.'' Since in 1998 we established the methods, they set to work and for instance this bank—and the file is here—which wrote to us saying it had nothing, has now written about 400 pages and we are waiting for the final report which will come at the end of the year. And the attitude of the bank has totally changed.

    Chairman LEACH. At the end of your testimony, and I didn't see it in the written testimony, I think you said, and I want you to correct me if I am wrong, but I thought you said that you were not sure about whether you should publish names, because it might violate a French privacy statute, is that correct? I am just thinking of literature and this reminds me of both a German and an American, a German named Kafka. Is that not Kafkaesque, and an American named Joseph Heller, who wrote and invented the term, as far as I know, called ''Catch–22.'' How can you have accountability if no one knows who you are accountable to? The model around the world is a very democratic one called transparency.

    Ms. ANDRIEU. Wait. Can we speak about cultural tradition?

    Chairman LEACH. Yes.

    Ms. ANDRIEU. We have decided that we needed a special study about the differences between France and Anglo-Saxon countries on the point whether publishing a name is a blow against privacy or, on the contrary, policy of transparency.
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    In France, our tradition is very strict toward privacy. The papers currently are often put to trial on that matter.

    Should we change? This is a question, but for the moment the Matteoli Commission cannot change the law.

    Chairman LEACH. I will tell you just sitting here and thinking about it, this is awfully reminiscent of the post-World War II practice of someone suggesting that they might have a valid claim, and the institution saying ''show me a death certificate,'' but none were issued in Auschwitz.

    Privacy about rights to resources that may be unknown to the party is a privacy doctrine that strikes me as extraordinary. Now, sometimes in publications embarrassing things are revealed. With the Swiss there are revelations that there are people who might have accounts and it ends up that some of the revelations were about Nazis that had secret accounts. But that is what happens when free information is put forth and that was, in my view, extraordinarily embarrassing in many ways, but truth is embarrassing. You are almost suggesting that your commission's work is designed to be thorough and profound, but it will have no effect, because you will not tell anyone.

    Ms. ANDRIEU. Yes. The law forbids the publication of lists.

    Chairman LEACH. I am hard-pressed to think that you mean what you are saying.
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    Ms. ANDRIEU. Through the commission, any person who thinks he or she is a victim will be able to claim for his or her property. And the list can be consulted. If you contact the commission you will be able to see the list. Publishing is a gesture which is against the law.

    Chairman LEACH. So you will put the list in the lobby of a building and allow anyone to come in and look at it; is that correct?

    Ms. ANDRIEU. Yes. It can be consulted, but not published. After Liberation, you must think that we were just out of an anti-Semitic regime which had published lists of Jews in the official paper, so the publishing of names in the papers had a bad reputation. In France it reminds also of the proscription lists under the Roman Empire. We think in another way than some other countries do. There is a sort of shock of cultures, you know? If the United States are multi-culturalist, France is assimilationist, and this is a real problem in our dialogue on this question. Also we have another difference, our relationship with money is not the same in the States as in France, and all these data put together make the dialogue difficult, but I think it is an occasion for each country to understand better.

    Chairman LEACH. Thank you.

    Mr. Steg, in The Washington Post this morning there is a report that indicated that there may be a rift between the French Jewish community and the international Jewish community and you certainly addressed part of that in your concluding statement. Is there anything that you would like to add about the situation? Do you consider that a rift exists?
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    Mr. STEG. Are we speaking of the States or of the Jewish community?

    Chairman LEACH. Of the communities.

    Mr. STEG. Really here I think there is a misunderstanding. As I say, I feel that a great part of the Jewish community in the United States believe that all the work done in France, particularly by the Matteoli Commission, was a secrecy to put the treasure only for the French people. That is not right. We want to restitute. Everything has to be restituted. If we don't find the heirs, the money has to be put in the fund and the fund will be used in the best interest: the memory of the survivors in France and even in other countries. This was a first problem.

    Chairman LEACH. But you have established a policy to increase tourism to France, because, if you are from Israel, one will have to go to this lobby in France to read if one is on the list, is that correct?

    Mr. STEG. That's right.

    Chairman LEACH. Well, let me say there are differences in culture between all countries and I sometimes blame the French for problems in this country, because of a man named Montesquieu, but I want to thank you both. I personally believe that enormous strides have occurred to date in our country, in certain countries in Europe, and especially in France and the work of the Matteoli Commission is to be, in my view, respected.
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    We may have some differences of judgment that reflect cultural differences, and historical differences, and certain legal differences, but I am absolutely convinced that the goals of everybody are exactly the same. Is there anyone that would like to comment or make any concluding remarks?

    Professor Andrieu.

    Ms. ANDRIEU. I am deeply convinced that our goals are the same, and as I said, our struggle is the same. The problem, I think, is for each country to understand each other. Each democratic system has its legitimacy.

    Chairman LEACH. Yes, of course.

    Mr. Steg, would you?

    Mr. STEG. I thank you very much, because I am sure, Mr. Chairman, you personally understand the originality of the creation of the Matteoli Commission. It is a specialized commission to consider a Jewish question, when in France there is no official distinction between Jews and non-Jews. This was one of the main difficulties of our work, because after August 25, 1944, there was no more the mention ''Jew'' on the files. When we were studying the restitution we were guided by the names. But it is not 100 percent correct. So really we have to thank President Chirac and the French government to have done it, because I believe it is a historic new way to approach this problem, and I thank him very much.

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    Chairman LEACH. Thank you.

    Let me just conclude by saying I would like to express my respect and admiration for the decision of President Chirac as well. I think he has done precisely the right thing.

    Second, under the historical basis, as we look at accountability and we realize some of the great errors of the deportations, it is also true that the French accepted more immigrants from Eastern Europe, far more people of Jewish origin than the United States did, and France is to be commended for this in a historical way. This is a period of great repression in France which received a large number of immigrants and in a very difficult period in the 1930's where many countries did not want to accept immigration. And so your country is to be commended for that in a very deep historical sense.

    Let me thank you both, and also express appreciation for your appearing here today. You represent a government commission. In the historical circumstances, normally governments do not testify before foreign parliaments, and I want to express my appreciation that you have chosen to do so, and thank you very much for your testimony.

    The hearing is adjourned.

    [Whereupon, at 4:15 p.m., the hearing was adjourned.]