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RESTITUTION OF HOLOCAUST ASSETS
WEDNESDAY, FEBRUARY 9, 2000
U.S. House of Representatives,
Committee on Banking and Financial Services,
The committee met, pursuant to call, at 10:05 a.m., in room 2128, Rayburn House Office Building, Hon. James A. Leach, [chairman of the committee], presiding.
Present: Chairman Leach; Representatives Lazio, Royce, Ose, LaFalce, Frank, Waters, C. Maloney of New York, Bentsen, J. Maloney of Connecticut, Sherman, Inslee, Schakowsky and Moore.
Chairman LEACH. The hearing will come to order.
Let me note first to the witnesses that the Congress is not in session today due to the funeral of the former Speaker Carl Albert, and many Members are in attendance, and for that reason not as many as would otherwise be the case will be attending this hearing.
This hearing and tomorrow's hearings are a continuation of the committee's review of efforts of the United States and countries abroad to establish greater accounting and accountability for economic aspects of history's most heinous crime, and belatedly provide a measure of comfort to its victims and their families.
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We began a little over three years ago with an historical look into the role of Swiss banks, including the Central Bank, in the Nazi war effort. Soon the investigation, propelled by self-generated moral imperatives, was expanded to include the role of other neutral countries, then allies, and not least the United States itself.
Historical inquiries such as these into the nature of the evil and how to behave in the face of evil are not normally the subject of congressional hearings. In this case, however, these questions were central to our own moral duties as legislators and public officials to learn from the past so such horrors will never again happen. As a Princeton theologian told this committee, ''The map, with the help of which we try to orient ourselves as human beings trying to live good and decent lives, is a map with Auschwitz on it.''
It has been the goal of this committee and the Executive Branch to conclude these proceedings by the end of the 20th Century. This deadline has not been precisely met, but hopefully the resolution of most of the economic issues is close at hand.
As I look back through the hearings of this committee on this subject and the more than one-hundred witnesses from more than a dozen countries who have appeared here over the past three years, I am struck by the magnitude of the undertaking. After an unconscionable, stumbling start, Switzerland, where this inquiry began, has reacted by submitting itself to the most profound and perhaps brutal act of national introspection in its history.
The Volcker and Bergier Commissions, which studied the country's behavior in World War II deserve praise for the rigor of their work.
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More than a dozen other countries, including the United States, have formed similar commissions, and two large international conferences in London and Washington have been devoted to wartime gold transfer and restitution of Holocaust-era assets respectively.
After a hiatus of fifty years, the mass theft aspects of the Holocaust, those aspects which partly precipitated the chambers of murder at camps like Auschwitz and Buchenwald, have assumed their rightful place at the forefront of our collective conscience.
Even more important, perhaps, several national foundations have been formed and funded, and money has at last begun to flow to Holocaust victims. And we are in the last stages of two large settlements with Switzerland and Germany which promise financial redress to still more victims.
The monetary compensation to Holocaust victims, however, should not obscure the fact that in the end the funds are but a symbol of moral restitution. In a stirring address at the opening of the Washington Conference, Elie Wiesel noted, ''Usually, anti-Semites say about us Jews that we speak about lofty things, but we mean money. Just the opposite. Here we speak about money, but we think of other things.''
And so today and tomorrow we will speak about bank accounts and insurance policies, forced labor and uncompensated work, as well as stolen art works, and how to restitute those things to those who lost them and to their families. We want to return what has been stolen to its rightful owners. We are here because we want to provide needy survivors with medical care and homes for their old age. But above all, we are here because we remember and we are convinced that crimes which occur without subsequent accountability are crimes which too easily may be replicated.
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It is more than a little ironic that as we strive to bring closure to this darkest chapter of the 20th Century, the specter of intolerance and racism is rising again over a country which has been at the forefront of science, economics and art. Austria, the land of Mozart, but also the birthplace of Hitler, appears in recent weeks to have chosen through the ballot box to turn xenophobically nationalistic. The European Union's strong reaction to Joerg Haider and his cohorts suggests that civilized Europeans are committed to seeing that history does not repeat itself. But it also indicates that without a continued commitment to conscience and memory, the threat of mindless extremism will not die.
This committee's goal in this series of hearings was to bring these issues to the public's attention and to demonstrate for all to see that we in the American people's House will not forget.
At this point I would like to turn to Mr. LaFalce.
Mr. LAFALCE. Thank you very much, Mr. Chairman.
Mr. Chairman, I want to thank you very much for the leadership that you have shown on this issue and for your continued dedication to ensuring that we do all that is humanly possible to obtain compensation for these egregious injustices of the past.
I think the issue before us is one of great public policy importance, great historical significance. As policymakers, we must take very seriously our responsibility to right the wrongs of the past and to provide restitution to the extent possible, to the maximum amount possible to Holocaust victims unjustly stripped of their hard-earned assets. It would be unconscionable if we were to ever lose sight of the horrors perpetrated by the Nazi regime.
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The recent events in Europe underscore our moral responsibility to preserve the memory of the Holocaust in our collective consciousness. Sentiments that should concern all democratic governments and all their citizenry are still being expressed today. The most recent example comes from Austria, not simply from a layperson, a citizen, but from the party leader of an extreme right-wing anti-immigrant party that has become part of a coalition government who has expressed sympathies with nazism. To ease the European Union's concerns, the United States' concern, and other countries' concerns about this development, the ruling coalition did issue a statement intended to reassure the world that the new government does not subscribe to Nazi beliefs. However, shortly after the statement's release, it was reported that the Freedom Party's leader invalidated the intent and spirit of that statement by indicating that it was an affront to Austria to have to issue such a statement.
The United States has appropriately called its Ambassador back for consultation, while citizens all over Europe, including Austria, have taken to the streets to express their outrage and distaste.
Mr. Chairman, I raise this troubling development only to emphasize how important these hearings are. We are honored to have Treasury Deputy Secretary Stuart Eizenstat with us today, who, along with his partner in Germany, Otto Count Lambsdorff, have played an important role in mediating a resolution to the enforced slave labor claims of Holocaust victims. I join in the Chairman's welcome of both of you to our committee and look forward to your testimony today.
Chairman LEACH. Thank you.
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Mrs. MALONEY. Thank you, Mr. Chairman. I want to thank you for scheduling these two days of hearings on the Holocaust issues, including the slave labor, Swiss bank accounts, insurance claims and stolen art objects. I am very pleased to see Deputy Secretary Stuart Eizenstat before the committee again, and I want to extend to him on behalf of my constituents our gratitude for his efforts and those of Paul Volcker on these issues. I have been closely monitoring the progress of Secretary Eizenstat's negotiations and the work of the Volcker Commission, and I look forward to reading the testimony of all of those who will be testifying today.
Mr. Chairman, I would like to bring to the attention of the committee my bill, H.R. 3105, the Holocaust Education Act, that I introduced in October along with Appropriations Committee Chairman Bill Young. The bill will provide grants through the Department of Education to Holocaust organizations for teacher training and to provide materials to schools and communities that increase Holocaust education.
Thank you again, Mr. Chairman, I look forward to the testimony.
Chairman LEACH. Thank you.
Mr. BENTSEN. I will ask unanimous consent that my statement be inserted in the record.
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Chairman LEACH. Without objection, so ordered.
Mr. BENTSEN. I believe this is the sixth hearing that the committee has held on this issue, and I am glad to see Secretary Eizenstat here, who has worked a great deal on this in his current position and at State prior to coming to Treasury. And I am eager to hear from Mr. Lambsdorff on behalf of the German government's and industry's involvement in this.
I would just say that I want to associate myself with the Chairman's remarks as well as Mr. LaFalce's remarks that I think this hearing today should send a very important message to Europe where the U.S. stands with respect to the situation in Austria, and I commend the Chairman for making that point very clear, and I yield back the balance of my time.
Chairman LEACH. Thank you.
Mr. INSLEE. Nothing, Mr. Chairman.
Chairman LEACH. Ms. Schakowsky.
Ms. SCHAKOWSKY. Thank you, Mr. Chairman. I would like to make a short statement.
Page 8 PREV PAGE TOP OF DOC Segment 1 Of 2 I first want to thank you and commend you for convening this hearing and on your continuing leadership on this important issue, Mr. Chairman. You understand the importance of commemorating the Holocaust and in seeking to provide, when possible, some small measure of restitution for those who have suffered this tragic period in our history. Members of Congress have a responsibility to address this issue fairly and completely for our constituents, for those who perished at the hands of the Nazi regime and those who were able to survive, and for humanity.
My district, which includes Skokie, Illinois, and many Holocaust survivors and families of victims of the Holocaust, are watching us today. We are profoundly aware of victims and survivors of the Holocaust who were robbed of much more than art, insurance policies, bank accounts, property and other material and financial assets. Millions lost their lives. Countless others were brutalized, were enslaved, raped, deprived of the opportunity to observe their religion. Additionally, those who lived to tell the gruesome tales of the Holocaust era from a firsthand perspective were robbed of their childhood and livelihood and had their family history and indeed their whole world stripped away.
We cannot attempt to repay them for the suffering and the loss, but what we can do is honor the Holocaust victims and survivors by never allowing our children to forget what happened and by denouncing in the strongest of terms rhetoric and behavior that is tainted with the reminiscence of the Nazi era. This necessity is unfortunately made all the more evident by recent developments in the government of Austria and elsewhere.
Finally, we must make every effort to provide as much financial and material restitution for those to whom it is entitled in as timely a manner as possible.
Page 9 PREV PAGE TOP OF DOC Segment 1 Of 2 I want to thank the distinguished individuals who are here to testify before us today and to commend them and the many organizations working for justice in the name of those who have suffered as a result of the Holocaust. We have witnessed some progress with the Holocaust restitution issues as well as some obstacles. I appreciate the opportunity to discuss the current details of negotiations and the status of efforts to return assets to the rightful recipients. I am honored to be here with all of you today and look forward to your testimony.
Thank you, Mr. Chairman.
Chairman LEACH. Thank you very much.
I will now turn to our panel, which is composed of the Honorable Stuart Eizenstat, who is Deputy Secretary of the Department of the Treasury and is the leading Administration spokesperson on this issue and certainly an individual to which this committee is deeply in debt.
Our second speaker will be Otto Count Lambsdorff, who is the Special Representative of the German Chancellor for the Foundation ''Remembrance, Responsibility, and the Future'', who has devoted most of his recent life to this particular endeavor.
We will begin with Secretary Eizenstat.
STATEMENT OF HON. STUART EIZENSTAT, DEPUTY SECRETARY, DEPARTMENT OF THE TREASURY
Page 10 PREV PAGE TOP OF DOC Segment 1 Of 2 Mr. EIZENSTAT. Mr. Chairman, I want to thank you and Members of this committee for holding this latest in a series of hearings. Your steady focus on Holocaust-related issues has helped elevate them in the moral conscience of the world, and the work of individual Members of this committee has given important support to our Government's actions in this area.
I have a very detailed statement which I would ask be put in the record and a separate statement on Austria and a communal property report.
Chairman LEACH. Without objection, so ordered.
Mr. EIZENSTAT. There are many issues here: art, insurance, communal property, Swiss bank settlements, Holocaust education. For purposes of my oral statement, permit me to focus on the German talks, Austria and the insurance issues.
I want to thank you for inviting my longtime friend and colleague, Count Lambsdorff, to join me on this panel. Count Lambsdorff is a dedicated friend of the United States, and of the U.S.-German relationship, and he has done much during his distinguished career to strengthen the relationship between our two great countries. In his current capacity as the Special Representative, he sits with me as co-Chairman of the German Foundation Initiative negotiations aimed at providing a measure of justice to forced and slave laborers and others who suffered at the hands of German companies during the Nazi era. It is evidence of the German government's seriousness of purpose and sense of moral obligation that Chancellor Schroeder has chosen a man of the Count's public stature and eminence to represent his country in these talks, and he has earned our full trust and the full backing of the German government and German industry.
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I turn to the current negotiations on slave and forced labor and related issues. They are focused on the establishment and funding of the new German entity to be called the ''Foundation for Remembrance, Responsibility and the Future.'' It will be the mechanism through which those who suffered as slave and forced laborers and those who suffered at the hands of German companies during the Nazi era can receive dignified payments.
Since your hearing last September, German industry and government agreed to raise their combined contribution to the foundation's capitalization to 10 billion German D mark, half from German industry and half from the German government. This was announced on December 17 in Berlin.
May I say that if one is looking for an international profile in courage, it would be Chancellor Schroeder, who, in the midst of cutting 30 billion deutsche marks out of his budget in an austerity program, has contributed 5 billion deutsche marks on the public side to this initiative to make it possible. All the parties to these negotiations, the government of Belarus, the Czech Republic, Poland, Russia, Ukraine and the State of Israel, the Conference on Jewish Material Claims Against Germany, and the lawyers for the victims have accepted the 10 billion deutsche mark offer as the capped amount for the German Foundation and the sum that will resolve the lawsuits in the U.S. courts.
We couldn't have reached the agreement without the personal involvement and leadership of President Clinton and the Chancellor as well as senior officials in the U.S. and German governments, and without the attention that you and the committee have focused on this issue, Mr. Chairman.
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A special thanks needs to go to the German President, President Rau. He has been a consistent voice stressing the moral aspects of this issue. He said on December 17, ''I know that for many it is not really money that matters. What they want is for their suffering to be recognized as suffering, and for the injustices done to them to be named injustices.'' He said, ''I pay tribute to all who were subjected to slave and forced labor under German rule and, in the name of the German people, beg forgiveness.''
This extraordinary statement provides assurance that the last word on this issue will not be money, but will be memory and moral accountability. Given the significance of his statement, I would appreciate being allowed to include the full statement in the record of today's hearing.
Despite the critical importance of what was agreed to in Berlin on December 17, final settlement requires subsequent agreement on a number of still difficult and contentious issues, including equitable allocation of the 10 billion DM among various groups and classes of claimants, and still difficult issues about the substance of the legislation that the Bundestag will pass to bring into operation the German Foundation.
Count Lambsdorff and I agree that it is very important that what we call the ''victim side'' be actively engaged in finding the compromises necessary to ensure that all elements of the Foundation are appropriately funded. There will be, Mr. Chairman and Members of the committee, the following windows or doors within 10 million deutsche mark figure: one for slave labor; one for forced labor; one for insurance; one for banking; one for other injustices like medical experimentation; Kinderheim, children who were forcibly taken with their parents into forced labor; and then, importantly, a Future Fund for projects of tolerance and for social benefits for heirs of deceased forced and slave laborers.
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I have proposed in this difficult allocation process a set of general principles: that slave and forced labor should have the highest priority in allocating Foundation payments, and that payments should include an inclusive category for personal injury and other cases, including, but not limited to, medical experimentation, Kinderheim cases and other personal injury cases involving German companies; that allocation be made for aryanized property claims against German companies; that there be an insurance section as well; that allocation shall be made for the Future Fund for the projects of tolerance, taking into account the heirs of forced labor; and that administrative expenses and legal fees should be paid from interest on the deposited funds from the German side.
The German Foundation will be established under German law. This is to be welcomed for two reasons: first, because it is the vehicle through which the German government will appropriate their half of the 10 billion deutsche marks, the other half coming from German companies; and second, because it will subject the Foundation to well-established oversight and accountability requirements that charitable organizations in Germany must meet, and these are every bit as stringent and transparent as those for charitable foundations in the United States have to meet.
I would tell the committee, frankly, that embodying the results of our nine-month negotiation in the draft legislation is sensitive, difficult and daunting. To add weight to the German government's commitment to deal fairly with all of the parties to the negotiation, at the last plenary we had just a few weeks ago in Washington, the German government delegation included representatives of five major Bundestag parties, all of whom traveled to Washington and took a helpful part in the discussion. I believe that the German government, and these members of the German parliament, fully recognize the importance of submitting draft legislation to the Bundestag that reflects the commitments and understandings reached during the negotiations and those necessary to bring legal peace which the German companies seek.
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We are working to ensure that the Foundation's coverage is so broad that the U.S. will be able to file statements of interest in U.S. courts in all cases brought against German companies arising out of the Nazi era. This statement of interest, indicating that the German Foundation should be the exclusive remedy for all future claims and that the dismissal of these cases is in the foreign policy interest of the United States, is a central element in achieving the legal peace the German companies seek and deserve.
There has been a good deal of expectation about who will benefit. Let me emphasize a few points. This does not cover every single person wronged during the Nazi era, but it will cover those who worked for companies, German private companies, SS companies, the German government, like railway and other parastatals. And importantly, it will include those who worked for companies that no longer exist.
This is not simply a negotiation. If it were, we could have finished it much earlier. For the sixteen companies who are subject to the jurisdiction of the U.S. court, paying their employees would mean dealing with only a few thousand workers. We are talking about paying upward of perhaps one million people, and what has been, I think, such an important moral step by the German industry and by the German government is that they are willing to pay hundreds of thousands, hundreds and hundreds of thousands of workers of companies that no longer exist, that are defunct, SS companies, or companies that may exist but aren't subject to the jurisdiction of a U.S. court.
Americans citizens will qualify as much as those in any other country, and their applications will be processed by organizations in the United States so that travel to Germany will not be required.
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In an important ruling that is part of our budget, we have allocated $73 million over ten years in the budget just submitted. The President has decided that American taxpayers who receive benefits under this German program, including property as well as other compensation, will not have to pay any tax, and this will call for a clear statutory exemption which we will ask Congress to pass for Holocaust-related payments.
No racial, ethnic or religious group will get favorable treatment. A slave or forced laborer is a victim, whether he or she is Czech, Pole, Jew, Romani or any other nationality or religion. But it has been agreed that those who were slave laborersthe intention of which was to exterminate them through laboras opposed to forced laborers, who were viewed as an asset of the German economy and indeed permitted such a huge standing army because they supplanted the Germans who fought on the front, that the slave laborers would be paid more, and rightly so, than forced laborers. But all should be paid dignified amounts.
Let me turn now to Austria. The entry of the far right Freedom Party into a coalition government with one of Austria's mainstream parties, the conservative People's Party, has caused great concern both here and in Europe. The fact that the statements of leaders of the Freedom Party have in the past failed to condemn intolerance and extremism and have attempted to explain away the Holocaust, understandably creates great concern here and in Europe. However, in the preamble to the coalition agreement signed by both parties, the new government has promised to uphold tolerance and human rights and to condemn discrimination.
We and our friends will be watching Austria closely to ensure that the government lives up to the preamble of the coalition agreement, and in so doing we will look at what the new government does as well as what it says. One important benchmark in this regard is how the new government will deal with unresolved Holocaust issues. In this regard I am pleased to report two positive developments.
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First, this very day Austrian Chancellor Schuessel said, in light of the interim report of the Austrian Historians Commission, he plans to seek prompt compensation for former forced laborers. In addition, he announced the appointment of the former head of the Austrian Central Bank, Maria Schaumeier, as the head of a new office which will address forced and slave labor compensation, and she will be an interlocutor with me and my colleagues.
Second, our first discussions with Austrian officials in the last few days on proposals to address Holocaust issues were very positive. Secretary Albright and our Ambassador in Vienna discussed our concerns with the new government, and I have had discussions with Austrian leaders and officials on this matter. In Washington on February 7, I met with Ambassador Moser, Austria's Ambassador. During our meeting, we had an extensive conference call with senior foreign ministry officials in Vienna. We discussed the new government's commitments to tolerance and to addressing the difficult and painful questions about Austria's Nazi past.
I am pleased to note that my discussions have been reassuring. Austrian officials have since transmitted to me a position paper that provides a road map for addressing Holocaust-related issues over the next several months, and I would like that position paper to be part of this hearing record.
Chairman LEACH. Without objection.
Mr. EIZENSTAT. In summary, the Austrian government says it will supportand this was the announcement todayopen access to archives and Federal agencies and advocate a similar policy among non-governmental entities; that Austria's Historians Commission will continue to submit interim reports on all aspects of Holocaust-related issues. In this regard the government has taken note of the interest of survivor organizations for the adoption of interim measures that will benefit aging victims, particularly those who live in difficult financial circumstances in Austria. The Austrian government will encourage Austrian insurance companies to participate in the work of the International Commission on Holocaust-Era Insurance Claims chaired by former Secretary of State Eagleburger. In this regard the Austrian government looks forward to the results of the research effort that Austrian insurance companies are conducting into complex historical and legal questions.
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The Austrian authorities will seek to improve the practical application of the 1998 art restitution law and encourage similar restitution steps among local and regional government bodies.
And finally, the position paper refers to the Chancellor's commitment regarding forced labor compensation and the appointment of a Special Representative to lead the Austrian team in talks and negotiations with other parties. The commitments outlined in the position paper constitute a good basis for the government to begin to address Holocaust-related issues and to confront its Nazi past. I plan to have follow-up discussions with Austrian officials shortly, and I will work closely with the Austrian government and survivor groups on this critical issue and look forward to keeping this committee in very close touch in terms of our progress.
The Holocaust is a compilation of crimes, and we have approached the issue on many fronts. These include art recovery, a subject on which you, Mr. Chairman, have taken an especially active role; recovering on insurance policies; recovering communal property for emerging religious communities, Jewish and non-Jewish, in central Europe. And I have a detailed report which I will submit with my testimony today on the difficult Swiss bank settlement that now, a year-and-a-half after an agreement, not one nickel has yet been spent for victims, and Holocaust education.
All of these would be worthy of separate hearings, but permit me to close by dealing with the insurance issue. You will be hearing from former Secretary Eagleburger on the progress of the International Commission on Holocaust-Era Insurance Claims later, but let me say the following: The U.S. Government has strongly supported this effort. The International Commission is expected to announce the launch of its full-scale claims and outreach program this very month. The ICHEIC claims process will use relaxed standards of proof in dealing with outstanding claims, and will ensure the opening of companies' files, the cross-checking of names of Holocaust victims, and further research into European archives to find names of potential insurance claimants. They have already tested their claims process on a fast-track procedure for existing claims.
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Count Lambsdorff and I are working on the very difficult issue of how to mesh the process we are negotiating with the insurance efforts of ICHEIC under Secretary Eagleburger. Details of this important linkage are still being negotiated, but we expect that the German Foundation will recognize the International Commission as the exclusive mechanism for resolving insurance claims. The German Foundation on which Count Lambsdorff and I have worked will have a humanitarian insurance fund, which should be passed through to the International Commission for its humanitarian fund.
The U.S. Government has supported the International Insurance Commission since it began, and we believe it should be considered the exclusive remedy for resolving insurance claims from the World War II era. There is a MOU that was signed by five ICHEIC member companies, including one German company, Allianz. Those companies are cooperating with the Commission, and they deserve the ''safe haven'' from sanctions, subpoenas and hearings that the MOU guarantees them.
Proposed sanctions could undermine the work of ICHEIC. We strongly encourage all insurers that issued policies during the Holocaust era, that is all of those in Germany, all of those in Austria and in the Netherlands, including Aegon, to join the International Commission and to participate fully in its claims, outreach and humanitarian programs. ICHEIC is the best and most expeditious vehicle for resolving insurance claims from this period, and membership in the Commission provides the very real and, we think, only way of insuring that valid claims are paid and resolving international moral and humanitarian responsibilities. Payments made by anyone who joins ICHEIC or previous payments to international claimants would be credited so that double payments would not be required.
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Mr. Chairman, thank you again. I know that even my brief summary of this is lengthy, but this is an extremely involved issue, and I can't tell you again how much I appreciate your leadership, nor can I have adequate words in our language to express my trust, confidence and appreciation for Count Otto Lambsdorff's really heroic efforts.
Chairman LEACH. Thank you, Mr. Secretary.
STATEMENT OF DR. OTTO GRAF LAMBSDORFF, SPECIAL REPRESENTATIVE OF THE GERMAN CHANCELLOR FOR THE FOUNDATION ''REMBRANCE, RESPONSIBILITY, AND THE FUTURE''
Mr. LAMBSDORFF. Thank you, Mr. Chairman, Mr. LaFalce and other Members of this committee. I am honored to testify today before your distinguished committee on the Foundation ''Remembrance, Responsibility and the Future'' and related issues in the presence of a longtime friend of mine, Deputy Secretary Stuart Eizenstat. Mr. Eizenstat and I have worked together in mutual trust and confidence in the past, and now we are linked in such a way, Mr. Chairman, in his current capacity, that we are often taken for twins despite our obvious physical differences.
So to make sure there is no confusion from the start, allow me a few words to introduce myself. My name is Otto Graf Lambsdorff. I was born in 1926, so I am old enough to have witnessed the horrors of World War II and to have suffered physical damage from it. I lived through some of the events we are talking about today.
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I served as Federal Minister of Economics for seven years and was a member of the German Bundestag, our national parliament, for more than a quarter of a century, from 1972 to 1998. I consider it my good fortune that I have been able to make promoting German-U.S. relations one of my major lifetime endeavors.
Last August, Chancellor Schroeder asked me, a member of the Free Democratic opposition party, to become his Special Representative for the Foundation ''Remembrance, Responsibility and the Future.'' I readily accepted, but I admit that at that time I was not fully aware of the complexity and difficulty of the challenge that lay ahead. Now I have good reason to believe that we are nearing a conclusion. I am confident that the first payments will reach their recipients within the course of this year.
Mr. Chairman, in an exchange of letters dated December 13 and 14, 1999, President Clinton and Chancellor Schroeder expressed the understanding that a German foundation would be set up to ''allow a successful and just solution for former forced and slave laborers and others who suffered at the hands of German banks, insurance companies, and other German companies during the Nazi era.''
The letter from President Clinton concludes: ''it will allow our countries to enter the new millennium together, determined to protect the inviolability of human dignity.'' Chancellor Schroeder responded that ''the agreement concerning the Federal Foundation constitutes above all a significant sign of humanitarian belief and responsibility for the victims of Nazi persecution at the end of this century.''
Page 21 PREV PAGE TOP OF DOC Segment 1 Of 2 Some days later, on December 17, the agreement was verbally confirmed in the presence of U.S. Secretary of State Madeline Albright and German Foreign Minister Joschka Fischer by delegations from Israel, Belarus, the Czech Republic, Poland, Russia and Ukraine, as well as by the Claims Conference and groups of American plaintiff lawyers.
Immediately following that meeting, German President Johannes Rau took another significant step: He invited the participants of the seventh plenary meeting, including many survivors, to his Bellevue Castle residence. On behalf of the German people, President Rau solemnly asked for forgiveness. He declared that the victims' ''sorrow will be acknowledged as sorrow and the injustice that was done to them will be called injustice.''
The German people and German business and industry bear a special moral and historical obligation. I stress the word ''moral'' because I disagree with class action lawyers on the question of legal obligations. No amount of money could ever compensate for Nazi atrocities or for the cruel suffering of the principal victims of Nazi persecution. There can never be moral closure to the darkest chapter of German history.
But it is also fair to point out that the vast majority of recipients of payments from the Foundation ''Remembrance, Responsibility, and the Future'' have previously received public German compensation in some form or other, the only larger exception being victims of forced labor who did not return to their native countries after the War, but emigrated to third countries, in particular the United States.
Since its founding in 1949, the Federal Republic of Germany has tried to live up to its responsibility. As the first German Chancellor, Konrad Adenauer, said forty years ago: ''Unspeakable crimes have been committed, and they demand restitution, both moral and material.''
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Mr. Chairman, let me briefly outline Germany's restitution and compensation programs as unprecedented in history as were the German crimes. They built on and expanded programs initiated by the Allied powers in Germany after the War.
In 1952, the Luxembourg Agreement between the Federal Republic of Germany, the State of Israel and the Jewish Claims Conference brought 3 billion deutsche marks, an enormous amount of money at that time, to the State of Israel and 450 million marks to the Claims Conference.
The Federal compensation law of 1956 is the cornerstone of German compensation to victims of racial, political and religious persecution. Over four million claims have been submitted under this legislation, which provides for monthly pensions as well as extensive health benefits for injuries suffered as a result of persecution. Today, over 100,000 survivors continue to receive monthly pensions averaging $600 U.S. dollars. Most of the $600 million annually provided under this law goes to residents of Israel and the United States.
Under the 1957 Federal Restitution Law, property remaining in Germany that had belonged to victims of racial and political persecution was return to its former owners, and, in cases where owners had perished, to heirs or successor organizations, specifically the Jewish Claims Conference. For objects that no longer existed and thus could not be returned, compensation and indemnification were paid. In addition, global agreements with the Claims Conference were intended to cover Jewish property of unknown or uncertain origin.
In 1989, the fall of the Berlin Wall opened up the possibility of extending restitution and compensation rights to the residents of the former East Germany. I wish to remind you that the East German Communist state had lived with the myth of its own innocence and capitalist responsibility for Nazism. Let me stress that there is almost no victim's property in Germany which was not, or could not have been, reclaimed or compensated. And Germany is, as far as I know, the only country in the world which accepted the Jewish Claims Conference as the collective successor organization for heirless property.
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In the early 1990's, it was the fall of the Iron Curtain that made possible the establishment of ''Reconciliation Foundations'' in Belarus, Poland, the Russian Federation, Ukraine and a similar institution in the Czech Republic, endowed with German funds totaling 1.8 billion German marks. Within the last decade, these foundations have paid an average of $600 per capita to more than 1.5 million people. Most of the recipients were victims of forced labor.
The overwhelming majority of the German people support this German compensation policy which I have described.
Let me now turn back to my main subject, the Foundation ''Remembrance, Responsibility, and the Future,'' to be equally funded by the German government and private enterprises.
Now that, as stated in the understanding of Berlin on December 17, 1999, a capped capital amount of 10 billion marks has been established for the Foundation, we have proceeded to the implementation phase. I take it as a positive sign that not one of our partners in the discussion cast a shadow of doubt on this agreement during our last plenary meeting in Washington at the end of last week, and Secretary Eizenstat just confirmed it once again.
Now, details need to be worked out, compromises have to be found, comprehensive legislation needs to be finalized and passed by the German Bundestag, since half of the funds are being made available by the German government with taxpayers' money.
Page 24 PREV PAGE TOP OF DOC Segment 1 Of 2 Although the German Cabinet had already approved the Foundation bill in principle, it has postponed a final decision until March 1. This will enable the German government to take into consideration suggestions by German members of parliament and comments offered by our partners during the recent Washington plenary meeting as well as those it anticipates will come out of the forthcoming Berlin plenary meeting on February 17.
Some may ask why we cannot wait with the legislative process until all of the details, especially the question of allocation, have been wrapped up. The answer is that survivors and their organizations expect speedy payments and are understandably growing impatient with the process. This impatience is also shared by the German public. But let me assure you that members of all of the political parties have agreed to be open to amending the text of the legislation as we proceed with our discussion. That also applies to the question of fund allocation, once agreement has been reached.
Let me explain the principles of allocation within the Foundation. First, the largest part of the 10 billion mark endowment is intended for direct payments to victims, especially to former slave and forced laborers, most of whom live in Central and Eastern Europe. The German government feels that this amount earmarked for victims of slave and forced labor as well as for victims of certain other personal injuries, medical tests, the Kinderheim cases, and so forth, should be 7.7 billion marks. Former slave laborers who were interned in concentration camps shall receive up to 15,000 German marks; former forced laborers up to 5,000 German marks.
Here, I might add that what makes the Foundation fundamentally different from earlier individual efforts is that it also provides for payments to those who worked in enterprises that no longer existDeputy Secretary Eizenstat described that; those who were employed in the vast public sector of Hitler's Germany; and finally, those who worked for companies with no U.S. presence and would therefore be unable to pursue their claims in U.S. courts.
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Second, we must ensure that sufficient funds are set aside to compensate for property, mostly discussed under the aryanization aspect. It is understood that most of these funds will be used by the Claims Conference for social and humanitarian projects. We propose to set aside 1 billion marks for property claims, including insurance and bank issues.
On the property side, we have to establish a claims process to cover the few remaining cases not yet addressed under German restitution laws, principally German property belonging to Jewish victims living in Eastern Europe. On the insurance side, some more thought has to be devoted to the way in which the International Commission on Holocaust Insurance Claims, chaired by my friend Secretary Lawrence Eagleburger, and the Foundation will interlink. It was, however, agreed in the presidential letter that the Foundation shall also cover insurance claims.
The third component, which is very important to German enterprises, the German government and the German public is the Future Fund, for which we also propose to set aside 1 billion marks. This part of the Foundation was contested by those who believe that all the funds should go directly to survivors. We are, and will remain, focused on preserving the values that we share with the American people. By doing so, we will also foster transatlantic relations and lay the foundations for future European and American generations to come. When the survivors have passed away, their memory and their legacy can be kept alive with projects financed by the interest that has accrued on the Future Fund's capital. The government of Israel as well as the Claims Conference have expressed their strong interest in this Future Fund.
Finally, 300 million marks are earmarked for administration costs, including lawyers' fees.
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The allocation among the principal partners of our negotiations, who represent the vast majority of former slave and forced laborers, is a daunting task. This especially applies to the compensation intended for forced labor. The German government and political parties agree to follow suggestions made by legitimate representatives of the victims, provided that sufficient reserves are set aside for forced laborers and other victims not represented in the talks.
Under the welcome auspices of the Polish and Czech governments, discussions are underway to come to a solution. The initial tentative results were not acceptable, because the proposed amounts would have dwarfed the Future Fund and the Property Fund and been made available at the expense of certain victims' groups. Nevertheless, the ideas and suggestions of participating Eastern and Central European countries are worth considering and discussing. It is therefore vital that all parties participate in the process of finding a mutually satisfactory solution to the allocation question, and I underline all parties.
I have said on several occasions and will repeat it today that the best possible solution to be found for the distribution of the funds will be the one that is agreed to by all parties and leaves them all equally ''mildly dissatisfied.'' There can be no winners or losers. All the parties involved in the negotiations must develop a strong sense of fairness and a willingness to compromise. Otherwise, we will fail to reach the main objective of this endeavor, which is to heal wounds, to correct injustice left unremedied for too long, and to promote good relations with the partner governments.
Finally, Mr. Chairman, a word of legal closure. Let me again quote from President Clinton's letter of December 13: ''The unprecedented steps the United States Government is willing to take underscore the desire both countries share in obtaining all-embracing and enduring legal peace.''
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From the very beginning of our talks, legal peace was accepted as a legitimate interest of German enterprises. The reason for this is that they cannot be asked to pay twice for the same historic actsboth into the Foundation and before the U.S. courts. We have agreed on what comes closest to legal peace under the U.S. legal system, and that is, Statements of Interest filed by the U.S. Government in support of German enterprises based on an executive agreement between Germany and the United States. In its Statement of Interest, the U.S. Government is prepared to declare that the Foundation should be regarded as the exclusive remedy for all claims against German companies arising out of the Nazi era and that both countries desire all-embracing and enduring legal peace to advance their foreign policy interests.
The U.S. Government is prepared to file these statements in all cases, both consensual and non-consensual, provided the claimant at least theoretically has access to the Foundation. This is where there are still problems to be resolved. The German government understandably wants to exclude property claims that are not based on racial persecution. To reopen a European reparation debate fifty-five years after the War could only have disastrous results for all nations involved.
Secretary Eizenstat proposed some wording for the executive agreement to exclude this possibility, which we still have to analyze. We also want to exclude property claims where the objects in question have not been transferred to Germany. Finally, property which has been or could have been the subject of compensation claims under German law has to be excluded, because Germany does not want to reopen compensation procedures which have functioned for almost half a century now.
Page 28 PREV PAGE TOP OF DOC Segment 1 Of 2 Mr. Chairman, believe me, I wish I had greater funds available for distribution, but 10 billion marks is what we got and what was agreed upon by all of the participating parties after long and arduous negotiations. It is a final step in the successful history of German compensation worth many times that amount. Together with my respected colleague Stuart Eizenstat, I shall continue over the next few weeks to try to arrive at solutions regarding allocation. The proposed allocations I have explained to you are not meant to be binding.
The German government made an extraordinary political gesture with respect to the victims when it decided to look at the bill once more after our next round of discussions in Berlin and to incorporate their suggestions. The best way for the Foundation to function is on a basis to which all the victims' groups can agree, and it is exactly that formula for which Secretary Eizenstat and I are striving.
Mr. Chairman, we are really trying to do our best and come to a fair solution, which is not going to be easy, and the two of us know that very well. I have the full confidence that together with Secretary Eizenstat we will create an atmosphere of readiness to compromise and of readiness to accept solutions as fair as possible, and I would like to once again express my gratitude that your committee has taken an active interest in these endeavors. That is helpful. And once again, thank you very much for your attention.
Chairman LEACH. Thank you, Dr. Lambsdorff.
It is not the norm for officials of foreign governments to testify before committees. The fact that you have chosen to do is appreciated very much by the committee, and your government's cooperation in this regard is also very much appreciated.
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I would like to make two brief comments before beginning. One, because Secretary Eizenstat referenced the country of Austria, although the item I am going to mention is principally the subject of tomorrow's hearing, I think it is of importance to note that within this last week, a North Carolina museum voluntarily has agreed to return a painting to an Austrian family, and I raise this for two reasons. One, the painting is an extraordinary painting by Lucas Cranach, the Elder, entitled ''Madonna, Child and a Landscape.'' It is being returned without legal action of any nature being brought against the museum, but based upon documentation that has been presented to the museum.
Second, it underscores the United States' accountability in certain of these issues. And so as we as a country are somewhat presumptuously looking at other countries, we are also taking accountability of our own, and I think that is something that this committee ought to stress, as we also should stress our deep respect for the North Carolina Museum of Art which made this decision voluntarily.
Mr. EIZENSTAT. I mentioned that very issue in my prepared remarks, and I attribute a significant part of the reasons for that extraordinary action to the high principles that we agreed to at our Washington conference in December 1998, which you chaired that portion of and which you so mightily contributed to. So you ought to feel a personal sense of satisfaction.
Chairman LEACH. Thank you.
The second issue I wanted to raise just briefly, and again it is principally the issue of tomorrow's hearing, but because, Secretary Eizenstat, you raised it, the issue of insurance and what companies should or should not participate.
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I share your strong belief that all companies of the countries that you have indicated should participate. One of the companies, the one that you have mentioned, has a unique concern that I wonder if you want to comment on, and it is a concern based upon level of participation. You have indicated that prior compensation should certainly be considered, and that is common sense, but they argue that the Commission has indicated to them that they will be apportioned accountability based upon their share of the American market which was garnered after World War II, and that they believe their share should be based upon their share of the market in Europe in the occupied territories and relative to claims.
I just wonder if you would care to opine on that subject or whether you think that is a controlling issue that is left up to the Commission? I will only say that this particular company's concern is that the other insurance companies on the Commission will have a vested interest in a formula that disadvantages them, that is this company to the advantage of their companies, and they could be confronted with literally half the obligations even though their market share at a particular time was less than 5 percent.
Now, I do not know if that is a credible concern, and I am just wondering if you would care to opine on that.
Mr. EIZENSTAT. I have met with the Prime Minister of the Netherlands during the Stockholm conference and with the representatives of Aegon, and this is a concern that they expressed.
I want to make it very clear that the U.S. Government feels that Aegon should participate in the International Commission.
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Chairman LEACH. And the committee shares that concern.
Mr. EIZENSTAT. Number two, the concerns which they have expressed ought to be a matter for negotiation with Chairman Eagleburger and the key representatives of the Commission so that they can come in in ways that are mutually satisfactory and not disadvantageous.
Chairman LEACH. Fair enough.
Let me then turn to several of the subjects that are preeminent in this testimony today. One relates to the negotiations which have occurred between our Government and the German government, and then the translation of some of these negotiations into statute, and then the timing of which payments may become available.
Dr. Lambsdorff, can you give us assurances on a time period when you think these payments will be made available? And finally, have you reached decisions based upon the allocation of resources versus various categories of claimants?
Mr. LAMBSDORFF. Mr. Chairman, I am not in a situation to give assurances when the first payments can be made. I can only say that we work and we hope for and expect the first payments can be made in the course of this year. Why can't I give you a more certain answer? First, the German legislation has to be finished. Members of Parliament, as Deputy Secretary Eizenstat has mentioned, they have been here. They want to shorten the process as much as possible, and they hope that this bill will be passed before the summer recess. That means at the end of June at the latest.
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However, we have to look to the fact that in two cases, you will need some time. The first one is that you have to have a notification period because there are classes, as we know, and how long will that take. You know in the Swiss bank case, it has taken a long time. And because we do not know how many applicants will be there, it will be very difficult to pay out money and then finally find out we have paid out too early and too much.
The second thing is that we need some time to give to applicants to apply to the Foundation, and the Foundation has to be set up. The Foundation needs a board of trustees and management and things like that.
I do hope very much once again that all of us do what all of us do feel is necessary, and we come to payments, perhaps part of the overall amount in advance as soon as possible, because the average age of the survivors is close to 80, and as we were told in one of our plenary meetings, 10 percent of these survivors die annually. To avoid any misunderstanding, this would not mean that we could save money just by a demographic factor. That would be a very ugly development, because we have said from the start, from the beginning of this Foundation, February 1999, every survivor who dies, his heirs will be entitled to a compensation payment. So we have ruled out the possibility of saving money just by using time.
Mr. EIZENSTAT. I would add just one final point. I think all of the Members of this committee will appreciate the fact that Bundestag is, like Congress, an independent legislative body with its on prerogatives. The importance of having had on a regular basis five representatives of all of the major parties and factions is that this is an unusual piece of legislation because the legislation is, in fact, incorporating agreements that are necessary to also achieve legal closure in lawsuits.
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Count Lambsdorff has noted in our context that it would do precious little good to go through the whole legislative process and then find that the statute was deficient because it didn't have a broad enough scope to permit the U.S. Government to use its Statements of Interest in all cases, and this is one of the issues that is most difficult to negotiate and that is most critical from our standpoint to make sure that the Bundestag understands and includes in its legislation. So its scope has to be such, as the Count said in his opening remarks, that there is at least a theoretical possibility of every potential claimant having recovery, and that then gives us the chance, the opportunity, to file Statements of Interest in all potential cases.
Chairman LEACH. Thank you. I have more questions, but I think it is fairer to the panel to move to Mr. LaFalce.
Mr. LAFALCE. Thank you very much.
First of all, I want to join the Chairman in his remarks in giving special thanks to you, Count Lambsdorff, in coming before our committee to testify. It is very gracious of both you and your government.
Let me pick up where the Chairman left off, Mr. Eizenstat. The primary focus has been with respect to legislation that needs to be enacted by our counterpart, the German Bundestag. Then you were underscoring the necessity of their actions being broad enough so as to make meaningful the Executive Branch's filing of a Statement of Interest. But let's look at the flip side of that coin. To what extent is congressional action either necessary or desirable to bring legal closure, and to what extent is the simple filing of a Statement of Interest by the Executive Branch of Government adequate in and of itself to bring legal closure? To what extent would this be binding on a potential claimant in a United States court, assuming that the court would not rule that this was a political question as opposed to a justiciable legal question?
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Mr. EIZENSTAT. First of all, I would say, Mr. LaFalce, that we do not believe that congressional legislation is essential at this point. We think it would potentially further delay the process, and we are very anxious not to repeat the mistakes of the Swiss settlement, which was agreed to in August of 1998 and there is still no pay-out. We want this process to be done as an administrative process and for the cases to be dismissed and payments to commence.
With respect to the filing of the Statement of Interest, the best we can say is that the German companies and the German government are satisfied that they get sufficient security from our filing such a statement. Even though there may not be any guarantee that a court will dismiss a case, German companies and the German government are willing to agree to this solution. So this has been one of the most difficult issues. We have had law professors from Harvard and elsewhere working on this. It is the most unusual situation because the German companies decided, for their own reasons, that they did not want a traditional class action settlement, and, quite frankly, seeing how long a class action settlement in the Swiss case has taken, one can understand at least some part of the reason for that. So they feel sufficient security, and if they do, we do.
We have worked very hard on this, and we think that the courts will listen to the position of the U.S. Government in this case, particularly under extraordinary circumstance. I can't underscore this enough, the people covered are far broader, infinitely broader, than any lawsuit in the United States or any collection of lawsuits in the United States could possibly bring. And the reason is very simple. If there were 3,000 lawsuits filed in the United States, they could only subject to jurisdiction those German companies who, number one, employed slave and forced labor; and, number two, still exist; and, number three, do business in the United States sufficient to subject them to court jurisdiction.
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There are only sixteen of those companies who have been sued in all of these some fifty cases. If you took all of the former slave and forced laborers of those sixteen companies still surviving, it would number in the few thousands. This process, this Foundation will cover not only hundreds of thousands, but perhaps over a million people, and therefore we have felt that it is more than a good tradeoff to be willing to file these Statements of Interest because it covers so many more people than could ever have access to any potential recovery through many years of litigation.
Mr. LAFALCE. Mr. Eizenstat, I know that the Statement of Interest would include far, far many more people. I am just not sure myself what the legal validity of the filing of a Statement of Interest is. I really just don't know. I am not making an allegation one way or the other. I suppose if it is good enough for those who might have a suit brought against it, maybe we ought not raise the question.
Mr. EIZENSTAT. It is a perfectly valid question, and it is one which has been a prime issue on our agenda. Suffice it to say that the Statement of Interest, we think, is sufficiently strong that the German side believes that it will be adequate.
Mr. LAFALCE. See, I am dealing with some cases involving Indian property claims that I thought were settled 200 years ago, 150 years ago, 100 years ago, 50 years ago, and so forth. All of a sudden we find they are not settled. It comes up again, so let me go to a different train of thought, and that is the adequacy of the settlement.
I remember meeting with the German ambassador to the United States, late September or very early October, and with the Chairman of the Deutschbank, and so forth, and at that time they were both saying that the latest offer would be the final offer. It is my recollection that you were a little dissatisfied with what you perceived to be the final offer.
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Go back to September, and what was your position at that time, and what was the position that was articulated, and then what is the final position which has been agreed upon?
Mr. EIZENSTAT. The original numbers that were discussed with me a year ago privatelyand subsequently made publicwere around 1.5 billion deutsche marks. That then went to 4 and to 6 and then to 8 and then to the final figure, 10 billion deutsche marks.
Mr. LAFALCE. Going back to September/early October, what was the demand offer at that time, and what was the final resolution?
Mr. EIZENSTAT. The original offer by the plaintiffs' attorneys was $28 billion, which would be over 50 billion deutsche marks. That was the initial offer. That went down then to 25 billion deutsche marks, and then to a range of 10 to 15, and ultimately to acceptance of the 10 billion deutsche marks that the German side offered.
Mr. LAFALCE. Were we always using deutsche marks as the language as opposed to dollars?
Mr. EIZENSTAT. Yes, except the first plaintiffs' offer was expressed in dollars, but after that all of the other offers were in deutsche marks.
Mr. LAFALCE. I thank you.
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Chairman LEACH. Thank you.
Mr. LAZIO. Thank you, Mr. Chairman. Let me begin by thanking you for your continued focus on this issue. I think you have done as much as any Member in the public arena to help focus congressional attention on the issue of justice and fairness for those Holocaust victims who are still alive and their heirs.
And I also want to thank Secretary Eizenstat, who has been a phenomenal representative for our Government in helping to negotiate and helping to inspire us to take the moral high ground on this very important issue. He has been an exceptional help on the Holocaust Assets Commission, which I had the pleasure of sitting on.
I would like to ask a couple of brief questions. First of all, if I might, let me ask you, Secretary Eizenstat, what happens if the legal peace which you have negotiated frustrates those plaintiffs who are not qualifying under the Commission standards and the Foundation standards? What happens if some qualify and some do not; what happens to those plaintiffs?
Mr. EIZENSTAT. First of all, we hope that the scope of the foundation, Congressman, would be broad enough so that all those who were injured by German companies in the categories that we have talked about, slave and forced labor, insurance, property, medical experiments would have a theoretical opportunity to recover. Standards of proof will be relaxed, and so there ought to be a very, very significant percentage who will qualify. There may be some who will be turned down because they don't qualify at all. If they wish to bring suit they can bring suit. We would then file our Statement of Interest, and it would be up to a court to decide.
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Mr. LAZIO. Would that last class of individuals which you reference include the victims who died before February 16 of last year?
Mr. EIZENSTAT. Heirs are to be covered in a general way through the Future Fund. That is, there will be social programs like educational scholarships and the like for heirs, number one.
Number two, heirs will be able to recover on the property side. If there is a real insurance policy, and they are a beneficiary or potential beneficiary or if, there is a piece of real property, they will be able to recover. So it is the heirs of slave and forced laborers who would go through the Future Fund, but would not get direct compensation.
As Count Lambsdorff said, for all eligible claimants who die after February of 1999, their heirs would be able to fully recover for them because that is what the initiative announced.
Mr. LAZIO. Let me ask Count Lambsdorff, and I very much appreciate your testimony, my question has to do with the timing of the corporate contributions to those corporations which are participating with the Foundation, this initiative of 5 billion deutsche marks. It seems to me that the timing of it is quite important, because the earlier we have the money, the more interest that will accrue, and the more money, therefore, the Foundation will have to cover administrative costs and potentially legal costs. So is there a time line that has been agreed upon?
Page 39 PREV PAGE TOP OF DOC Segment 1 Of 2 Mr. LAMBSDORFF. Yes. The German Ministry has said that they will collect this 5 million deutsche marks latest the end of April.
Mr. EIZENSTAT. May I just say that we are very hopeful that will be reached and that could then be put in an interest-bearing account so that it earned interest, and that interest could be used to pay administrative expenses and negotiated legal fees.
Mr. LAZIO. Let me just ask about the unpaid insurance claims. Aegon, which now owns Transamerica, has been reluctant or has refused to join ICHEIC, and I am wondering if you can give us some feedback as to why they are refusing and what else beyond the boycott, which I guess has been announced, we should be thinking about to try to broaden the scope of those people who are participating?
It seems like from what I am hearing also that we are having some particular reluctance among Dutch companies to join, and I wonder if you can comment on that.
Mr. EIZENSTAT. Obviously they will have to speak for themselves, but as I understand the concerns, they are based upon a meeting that we had with the Dutch prime minister. Let me say the following: First, that the United States Government believes that it is very important that Aegon, all Austrian insurers, and all German insurers join ICHEIC. It is the best mechanism and vehicle for resolution of insurance claims.
Second, Aegon indicates that it has reached a settlement of its insurance claims with the Dutch Jewish community which it feels is inclusive. They also are concerned, as Chairman Leach indicated, that some of the terms of their entry into ICHEIC might in some way disadvantage them relative to the other five European insurers because of how market shares will be calculated. And our response to that is that should be a matter of negotiation, and indeed it is something that would be negotiated hopefully in a way that does not disadvantage them, but permits them to participate without in any way having to pay twice or providing other disadvantages. That is something that in the end Chairman Eagleburger will have to work out with them, but they ought to give him the opportunity, and see if a mechanism can't be arrived at where they can join to the mutual satisfaction of ICHEIC and Aegon.
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Mr. LAZIO. Is Aegon/Transamerica now refusing to negotiate?
Mr. EIZENSTAT. Well, they are refusing to participate in ICHEIC. I believe there have been some discussions with Secretary Eagleburger, but they have not yet reached a point where they feel comfortable joining. I would hope that those negotiations could be accelerated, and we could deal with senior officials at Aegon, and that they would be able to participate in ways that they found satisfactory.
Mr. LAZIO. Is it fair for me to assume that the Dutch government could be more engaged in having a dialogue with some of these reluctant companies that clearly have responsibility to participate?
Mr. EIZENSTAT. Well, first of all, in terms of reluctant companies, we don't have any German insurer with the exception of Allianz. It is very important that the other German insurers participate. We have no Austrian insurers. I read the statement that Austrian Chancellor Schuessel from Austria made today, which includes a statement that they will now urge Austrian insurance companies to participate in the Eagleburger commission, which we take to be very important and hope that they will do so.
Third, with respect to the Dutch government, I met and Mr. Singer and Mr. Taylor from the Claims Conference met with Prime Minister Kok, Prime Minister of the Netherlands. I think he is engaged, but at the same time he wants to see whether his company feels that they are going to be in any way disadvantaged. We think that they won't be disadvantaged, and we think that it is very important that they participate and we have communicated that to the Dutch government.
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Mr. LAZIO. I think the results will reflect the amount of effort.
Mr. EIZENSTAT. I hope that the results will be positive and that they will join.
Mr. LAMBSDORFF. I would like to add some remarks about the situation on the side of the German insurance industry.
As Secretary Eizenstat said, there is only one company which is a member of ICHEIC. That is Allianz. It is the biggest one. It is one of the founding members, one of the sixteen founding members of the Foundation, and they are in a situation that they do not know what do we have to pay into the humanitarian fund of ICHEIC, and what is left, what can we pay into the humanitarian fund of the Foundation or into the fund generally. This has to be clarified between Chairman Eagleburger on one side and the Foundation and our efforts on the other side.
The ICHEIC process is related to claims. These claims have to be paid. It is related to search for claims for unpaid policies. This can be extremely expensive, and it can be as expensive as Swiss banks looking for dormant accounts. It is much too expensive, but that is another issue. That has to be avoided. At least the company would like to know how much money has to be put aside for that, and how much money do we have to pay into the humanitarian fund of ICHEIC. And we and the Foundation, of course, need the German insurance industry to pay for the 5 billion which has to be put up on the German business side. So this is still not clear. It has to be cleared, and it must be clear, and I hope it can happen.
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I got a telephone call just this morning from the German insurance business. They said, ''We want to know what do you expect us to do? We want to be a member of the Foundation, but we don't want to pay twice for the same facts.'' That is the problem.
Mr. LAZIO. The measure is are the companies engaged in negotiating in good faith? Are they interested in coming to an agreement, or are they avoiding responsibility? I think that is what we must look at.
Mr. LAMBSDORFF. Yes, but all of the companies, all of the German companies, are interested in being a member of the Foundation. As long as they do not know what do they have to expect with ICHEIC, they are hesitant about joining ICHEIC.
Chairman LEACH. Thank you for those very important questions.
Mr. FRANK. Thank you, Mr. Chairman. I want to express my appreciation to the Deputy Secretary, who has done extraordinarily good work here, and to the German government for this kind of cooperation. I do want to note that I think this is also a useful time to talk about the roles of legislative bodies. My recollection is that when this committee and the Senate counterpart and others began to look into this, there was some skepticism that matters of this international delicacy were appropriate for a bunch of politicians to deal with. And I think, in fact, the initiatives that were taken vindicate the role of a legislative body in a democracy. Obviously when it comes to the specifics, to negotiating how this works out, it is not our role. But I do think that we are entitled as an institution to reflect on the favorable consequences of the intervention, and I should say that people should understand that.
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You mentioned Aegon and the Dutch government, and they should understand that as progress is made with many of the potential people who have to contribute, pressure is going to increase on those who are left. I was pleased to hear the Austrian government's statement. Maybe it shows that the EU's very prescient response to the recent elections in Austria had some impact and maybewho is it from the Netherlands that is skiing in Austria right now, is it the Queen or the Princess? Maybe she will talk to the Austrian government and come back to the Netherlands inspired by the Austrian example and urge her countrypeople to do the same thing. But people should understand that there will be increased attention on those.
Let me ask Mr. Eizenstat one question which stems in part from my Judiciary Committee role, and I notice you say with regard to the Swiss settlement that Judge Korman will be having a hearing on the 15th. I guess he was temporarily delayed because he had to straighten out the Republican Party's nomination process in New York. He is the judge who brought democracy to the Republican Party of New York, and now he can go back to bringing justice to some extent to the victims of the Holocaust.
If this goes on schedule, does that meanyou say conclude matters by June. Does that mean payments will start in June?
Mr. EIZENSTAT. Two points, Congressman. First, in my opening remarks I paid very strong tribute to the role of the Chairman and all of the Members of this committee for having focused attention on it, and I think it is a vindication.
Mr. FRANK. I appreciate that. I just want to make a note that it wouldn't be a congressional hearing without a lot of repetition.
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Mr. EIZENSTAT. Second, with respect to the Swiss settlement, the judge and the special master, Judah Gribetz, with whom I have been in touch, are concerned about the need for the Swiss government to provide a refugee database to help them make a match. They also need a frozen asset list of German companies so they can make an informed decision regarding how much of the settlement goes to slave laborers, and they need to be able to publish the names of newly discovered accounts so potential claimants know whether they should file a claim.
The special master is concerned about getting adequate cooperation from the Swiss authorities. Last night I called Swiss Ambassador Defago, and it is our very strong view that this information needs to be forthcoming as soon as possible.
It is the hope that there will be a fairness hearing and that a distribution can be made sometime by this summer.
Mr. FRANK. Thank you. I assumed that the Swiss government monitoring this proceeding will understand that request is strongly seconded by the Congress, and we would hope that there would be some response.
I also appreciate that because one of the things that we deal with in other contexts is the choice that we have to make between class action proceedings and setting up in some cases separate or parallel administrative proceedings. So it does sound like you are saying that the difficulty at this point is not something inherent to class action procedures, but rather a problem which would have existed whether it was class action in terms of Swiss government cooperation?
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Mr. EIZENSTAT. No, I would go further.
First, let me clarify that we hope that the Swiss authorities will act favorably on the Volcker recommendations pertaining to the publication of the names of 25,000 account holders that have a strong probability of being related to victims of Nazi persecution and the consolidation of databases, which are now in fifty-nine separate banks, to facilitate the process of matching names of account owners to those who died in the Holocaust.
With respect to the class action settlements, this has taken an inordinate amount of time in the Swiss case. The amount of time to try to notify a class, to try to have a fairness hearing has been, in my opinion, inordinate.
Mr. FRANK. So the class action procedure as opposed to the procedure that we are working with?
Mr. EIZENSTAT. The class action procedureand we said this to the German companies from the startwould give them the greatest assurance of legal closure. Once the class is certified and the judge agrees it is fair, that is the end of it. You don't have to worry about Statements of Interest, and we said that. For whatever reason, the German companies didn't wish to have that, so we worked on this mechanism. In the end this mechanism will be more expeditious.
Mr. FRANK. So starting later, it may end sooner.
Page 46 PREV PAGE TOP OF DOC Segment 1 Of 2 Mr. EIZENSTAT. I believe it will. Once these cases are dismissed, and they will be dismissed as soon as we can get agreement on the Bundestag legislation, then the claims period, which I think, Count, in the current German draft, will be eight months for people to file claims. Once that claim period is over, immediate claims can be paid, and indeed we are looking at some way of advance payment.
Mr. FRANK. I will close. That is one advantage that might come out of it. We have almost a case study here, not deliberately set up, but it worked out that way, where a similar problem involving large numbers of people was handled in a class action suit on the one hand and an administrative-type procedure on the other.
Mr. EIZENSTAT. And there is one other factor, frankly, and that is the Ortiz decision in the Supreme Court which complicated the ability to certify a class in these sort of mass damage cases.
Mr. FRANK. Was that the asbestos case?
Mr. EIZENSTAT. Yes.
Mr. FRANK. Thank you.
Chairman LEACH. Thank you, Mr. Frank.
Before turning to the gentleman from California, let me add an aspect of Mr. Frank's observations, and that is the role of democracy in this circumstance. We have with regard to the Swiss settlement a very awkward situation where the Volcker Commission has arrived at some 54,000 names of which some 25,000 appear to be likely Holocaust-related. But names lack meaning if they are not made public, and so it is a Catch22 of rather extraordinary dimensions. One aspect of legislative bodies and the precept of democracy is a strong vested interest in transparency. Truth, to be meaningful, must be public truth, and this committee would strongly urge the Swiss government to move.
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Mr. EIZENSTAT. I appreciate that support, Mr. Chairman, because we see no reason why after fifty years there should be any objection to the public release of refugee names and frozen assets. They are necessary for the court in the Volcker process to be perfected.
Chairman LEACH. The gentleman from California.
Mr. ROYCE. Thank you. I thank you, Mr. Chairman, for the focus of this hearing today and for the focus of the hearing three years ago that over time, with the assistance of Chairman Volcker, brought some measure of justice and resolution to a problem that had existed for many years, and now several hundred thousand family members of the victims of the Holocaust have received some measure of compensation for the money that ended up in bank accounts in Switzerland.
One of my hopes, Mr. Chairman, as we move forward we can also look at the funds that have disappeared from General Abacha in Nigeria, President Mobutu, President Sharif, and see if we can get closure on those monies transferred overseas.
But I particularly applaud you for this hearing today and for your efforts. I want to thank Secretary Eizenstat and Dr. Lambsdorff for their efforts now to try to bring some measure of justice in terms of slave labor and in terms of forced labor. And one of the questions that I would have is is there any reason to be optimistic that the German Foundation Initiative could be so all-inclusive as to resolve of the remaining Holocaust-era disputes in the form of a comprehensive settlement, including potential insurance claims? I would ask that of Secretary Eizenstat.
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Mr. EIZENSTAT. Yes, I think there is reason to be optimistic because I think the German Bundestag members, the German government, Count Lambsdorff, and the German companies recognize the importance of comprehensively covering all potential claims so that our Statement of Interest can be comprehensive.
Mr. ROYCE. What are the impediments to including insurance claims in the German Foundation Initiative?
Mr. EIZENSTAT. Insurance claims is one of the most difficult issues. We are looking at ways in which insurance claims can be dealt with in ways that are fair to the 10 billion deutsche mark settlement, but at the same time assure that each policy that exists will be paid. This is very, very complicated because there is some question about whether the claims are inside or outside of the Foundation amount. And we believe that the crucial thing is that everybody who has a real policy should be paid.
Now, with respect to German insurers, we should not be talking about a great deal of money because, as the Count said in his opening statement, Congressman Royce, the German government passed a law in the 1950's which required property restitution, and most, if not all, insurance policies have been paid. I am sure that there are some which have not. There is a complicated issue with respect to a subsidiary of Allianz called RAS, which was acquired by Allianz in the 1980's, which Allianz had no relationship with during the War, but which wrote a good number of policies in Central Europe, and the question of how to handle that set of policies is the most difficult and the most daunting.
Page 49 PREV PAGE TOP OF DOC Segment 1 Of 2 Mr. ROYCE. Would the United States involvement in the German Foundation Initiative bring a treaty-level status to the comprehensive agreement?
Mr. EIZENSTAT. No, sir. There will be an executive agreement which will state our understandings of when and under what circumstances we file our Statement of Interest, but it will not rise to a treaty.
Mr. ROYCE. I thank you, Secretary Eizenstat, again for all of your good work.
Mr. Chairman, again thank you for the focus of this hearing here today.
Chairman LEACH. Thank you, Mr. Royce.
Ms. WATERS. Mr. Chairman, I would like to thank you for your leadership in organizing this hearing and keeping this Congress in touch with this issue. This is very important.
I would also like to thank Dr. Otto Lambsdorff for his testimony. You were testifying when I came in today, and I have gone over your testimony here, and I would like to commend you for all of the work that has been done to bring us to this point.
And, of course, Stuart Eizenstat is one of my favorite people in the world. I think he is one of the smartest people I have ever met, and I have known him over the years, and I think that the work that you are doing with this is so commendable.
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Let me just ask, as I sit here, of course, and listen to the work that has been done and recognize how much time and effort has been put in and understand the work of the Independent Committee of Eminent Persons, I am wondering how to take this format and use it to deal with slave labor of my ancestors here in the United States. It is very strange to sit here and be forced to have to think about that without wondering what I could be doing that would lead us to a point to acknowledge slave labor in the United States and reparations.
Reparations in the African American community have been basically condemned as a radical idea, and many of those, including John Conyers, who has tried so hard to get this issue before the Congress, have literally been ridiculed.
Let me just ask in terms of possibility of support inside Treasury, is there a possibility ofis there a unit of some kind that deals with this issue of persons who dedicate some time to it?
Mr. EIZENSTAT. There is a unit in the State Department which is headed by Ambassador Bindenagel that deals with Holocaust-related issues. There is no unit in any agency that I am aware of that goes beyond that, but it was set up for this purpose, and it deals, Congresswoman, with everything from art, to communal property, to insurance, to banking, to slave labor, to Swiss cases, to the Austrian situation, anything that is World War II-related.
I would note that with the exception of property itself, the payments that would be made here to claimants are to surviving claimants, those who actually were alive, because of the recognition of the difficulty of going back and paying what could be tens of millions of heirs of people who died before. But in terms of a fixed office, there is one for Holocaust issues, and it is in the State Department, and I help direct that office with Ambassador Bindenagel.
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Ms. WATERS. How many people are dedicated to it? How many people are in the office?
Mr. EIZENSTAT. There are four full-time people.
Ms. WATERS. Four full-time people. Is this something that we didis this a separate appropriation, or is it in the office with the support for it allocated in the overall general budget?
Mr. EIZENSTAT. It was established when I was Under Secretary of State to work directly with me, and it was created out of existing State Department funds. There was no additional appropriation sought. It has a relationship to what we call EUR, which is the European bureau in which it is lodged, and it is these career Foreign Service people who work for the State Department. They weren't brought from outside for this purpose.
Ms. WATERS. I see.
Mr. EIZENSTAT. One of the reasons that it is in the State Department, and one of the reasons that it is in EUR, is because the issuesthe Austrian issue, the German issue and the Swiss issue, affect our relationships with those countries as well as have an impact on U.S. citizens.
Ms. WATERS. Is it possible that there could be a role inside Treasury on the domestic slave labor issue?
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Mr. EIZENSTAT. That is something I couldn't speculate on. It has not been brought to our attention at this point, and I am now at Treasury, of course, but I took this portfolio with me, and I continue to work with the office at State as if I were there, but I couldn't speculate on whether we could go beyond that to cover other problems.
Ms. WATERS. Mr. Chairman, do you think that perhaps this is an issue that we may develop in this committee to begin to get some kind of closure on, some hearings on?
Chairman LEACH. The gentlelady raises an extraordinarily profound subject, and the Chair will take it under advisement and seek the counsel of other Members on it. But the profoundness of the issue that you raise in an American historical setting as well as in the human rights setting is deep.
Ms. WATERS. Well, I think that the work that has been done on this issue is absolutely superb and wonderful, and I support it 1,000 percent, and I want us to do everything that we can to get justice for all of the victims of the Holocaust in every way possible for all of those assets that were stolen, taken, hidden, what have you. I want everything that can be done to be done to reclaim them. I want people to be compensated.
I think the slave labor issue is a little more complicated, but it certainly, for me, forces me to have to think about the slave labor of my ancestors and my people. And, of course, I am sure that the question will be raised by all of us in the Congressional Black Caucus of, and what are you doing on the issue of domestic slave labor? And so I raise it here so we may begin to collectively think about ways that we can at least bring some closure in some way with the support of Government in some way, and I thank you for your response and your consideration. Thank you very much.
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Chairman LEACH. Thank you, Ms. Waters.
Mr. OSE. Thank you, Mr. Chairman.
I want to add my compliments to the gentlemen here who have been so involved in the implementation, the negotiations and soon-to-be implementation of this agreement. I happen to think this is one of those things that Congress gets to exercise oversight on, and I think what you see here is a true interest in seeing this process brought to conclusion successfully.
This would not have happened without your leadership, Mr. Chairman, and so I want to add my compliments to those which have been previously offered.
I do have one question, and that is relative to the 10 billion marks that we are talking about being the principal of the Foundation, how does that compare to the overall level of claims?
Mr. EIZENSTAT. That is a good question. I think it is impossible to say, because other than the lawsuits, no individual has made a particular claim with respect to these companies.
Perhaps the best comparison I could make is that going back to the 1950's, and through the 1980's and into the 1990's, a number of the German companies who are participating in this effort established their own compensation funds for their surviving employees. As I mentioned, this is a small fraction of those who will be paid by this Foundation.
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While those payments have varied, many of the companies have paid around 10,000 deutsche marks per person for their employees on a one-time basis.
Mr. OSE. I am not quite sure that I understood whether or notare you saying that you do not have empirical data today that would lead you to offer a number in terms of what the absolute amount of claims might be relative to the amount in the Foundation?
Mr. EIZENSTAT. It is our hope, as Count Lambsdorff said in his opening remarks, and I would like him to supplement this since in the end the German government will be paying this, that the hope is that those who fall into what we have called the slave labor category will get something in the order of 15,000 deutsche marks per person; that is, $7,500 or so. And with respect to those who fall into the forced labor categoryand we estimate, Congressman Ose, that there are around 240,000 survivors in the slave labor category, roughly half Jewish and roughly half non-Jewishwith respect to the forced labor category, our numbers are less precise, 750,000 to a million or more. And here it depends exactly on how the foundations to which this money will be paid decide to allocate the money.
Count Lambsdorff mentioned perhaps 5,000 deutsche marks per person for this, but we won't know the amount per capita until two things are determined. First, this claims period ends and we know how many people file claims saying that they fit into this forced labor category. We have used experts, and we have had conferences in Florence. We think that there is somewhere between a half-million and a million people in this category, most of whom are in Central and Eastern Europe, most of whom are non-Jewish.
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The second and equally important factor is one of the most difficult issues we had to overcome, and which we have overcome, is that a number of countries like Poland insisted that their forced farm workers, agriculture workers, be paid. Understandably, German corporations said it is one thing for us to pick up the tab for defunct German industrial companies, but we are not going to pay agricultural workers. The German government was also reluctant to do it, and the way that we have compromised this issue is that allocations will be made from the German Foundation to five reconciliation foundations, one each with Belarus, the Czech Republic, Poland, Russia and the Ukraine. They will have discretion, if they wish, to pay beyond industrial workers to, for example, agricultural workers. The broader they spread that, the less per capita there is. So until they make those decisions, we won't know what it is per capita.
Mr. LAMBSDORFF. I would like to add, this is one of the most complicated issues of all of our negotiations, the question how do you define a forced laborer? How many forced laborers do you include into such a group? And, of course, the more people you bring together, the smaller the per capita amount will be.
Following a suggestion/proposal we have made based on Secretary Eizenstat's initiative, we will leave as much discretion as possible to the reconciliation foundations which do exist. I have reported in my statement on that in the various countries so that they can decide whether they would like to include very many people and try to give something to as many people as possible, or whether they would say, we would like to concentrate on those people who have suffered above a certain average during wartime, and therefore the per capita amount can be higher. It should be left to them and be their decision, because otherwise, if we decide in a centralized way we cannot doperhaps we cannot do justice due to different circumstances in different countries.
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Mr. OSE. Thank you.
Chairman LEACH. Thank you very much, Mr. Ose.
Mr. BENTSEN. Thank you, Mr. Chairman. I have a couple of questions. First of all, I appreciate all of you being here, and I appreciate your testimony.
Secretary Eizenstat, you said thatI think you said that you don't believe there is any need for congressional action with respect to creating a legal safe harbor or a legal peace, I guess the term was used, and I wasn't trained as an attorney, but it seems to me that a Statement of Interest on behalf of the United States Government would not be sufficient to deny standing to a claimant.
Furthermore, it seems to me that there might be a concern. You talk about the claims period, and I am reminded there is litigation right now with respect to the Simpson-Mazzoli Immigration Act where there was an amnesty period, and that period ran out, and some are filing claims saying that they were not properly notified. That case has not been settled yet, and it will probably run its course through the courts, but it concerns me that the interest of the United States is not sufficient if you really want to close the gap or shut off legal access in U.S. courts. And while you are correct it would only apply to a certain number, that number could grow over time as we see increasing globalization going on and more mergers between U.S. and German companies and more presence in the United States.
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I think that also might be compounded, and this leads to another question as you determine what the level of compensation is for forced labor versus slave labor, and so I would like you to address that.
The second thing I would like you both to address, in your testimony, Secretary Eizenstat, you talk about two issues where there is a disagreement between the United States and Germany and the Bundestag on the Foundation legislation. One has to do with scope, but either I missed it or you didn't get into great detail of what that difference is in scope, which could have a dramatic impact on the claimants and whether or not they felt that they were being fairly compensated.
The second is on any accumulation which you did get into. My question there is, in your opinion, what is the status of that? And Mr. Lambsdorff addressed this in his testimony a little bit, and he further went on to state that this is a problem from his perspective. I think he is coming from the opposite end, perhaps, and he states in his testimony that the German government understandably wants to exclude property claims that are not based on racial persecution. Can you give me a greater definition what that means, and does that play into your definition of scope as well, Mr. Secretary?
Mr. EIZENSTAT. First, with respect to legal closure, again, we spent an incredible amount of time with experts and outside experts, and we believe that we have come up with something. While it is not an ironclad guarantee because of the nature of our system, it will be sufficiently strong for the German companies to feel that they can obtain legal peace, because we will be saying that, not only should the Foundation be the exclusive remedy, but that dismissal of the cases, of future cases, is in our foreign policy interest. We know in the end that the court has to make that judgment. We think that is sufficiently strong.
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Mr. BENTSEN. Is there a particular reason why you wouldn't want Congress to adopt some safe harbor? The President's budget is asking Congress to adopt a change in the tax laws, which I agree with, with respect to any claims paid, making them, in effect, tax-exempt. Are you concerned with the precedent that it may set?
Mr. EIZENSTAT. First of all, I appreciate that you have mentioned this, and I think other Members have mentioned the possibility of a congressional safe harbor. I wouldn't foreclose it and don't want to appear to be foreclosing it. I am just concerned about the legislative process, it can take a long time, and we are anxious to get this process going. Now, whether after the process is going, whether an additional measure of assurance could be obtained through such legislation is something worth exploring. I wouldn't want it, in other words, to be a condition of going forward, but it might provide an additional measure of assurance to German companies, and this is certainly something we would like to look at.
Mr. BENTSEN. If you could address the other points.
Mr. EIZENSTAT. Yes. With respect to scope, the scope issue is really at one level quite simple to express, although not easy to implement.
In order for us to be able to file this Statement of Intent, as the Count said in his opening remarks, there has to be a theoretical possibility of all claimants being able to have some claim on to the Foundation. We have created a catch-all clause, which actually one of the attorneys, one of the American attorneys for the German companies, suggested, Mr. Robert Kimmitt, and that catch-all clause would essentially say we can't imagine all of the circumstances under which some suit will be brought. We have tried to lay out forced labor, slave labor, insurance, banking, and so forth, but there may be some cases of injury caused by German companies during the War which we can't imagine. And so this catch-all, which will have a capped amount, would provide that theoretical assurance. So underneath the 10 billion deutsche marks, we would have a subcapped amount for slave labor, subcapped amount for forced labor, subcapped amount for insurance, subcapped amount for banking and, quote/unquote, other cases and the Future Fund.
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Having that catch-all properly worded is crucial to the scope of the Foundation. It doesn't increase the liability of the German government or the German industry by one deutsche mark. That liability can't go above 10 billion deutsche marks, nor will it go above the subcapped amount. We have provided some language to the Count, and I will let him expound on this on.
One of the issues in that catch-all that concerns the German government is the confiscation of property for non-racial reasons is the possibility of reopening reparation issues. We have given them some strong language indicating that nothing in this Foundation Initiative would create any new rights with respect to this, and I think this would be an appropriate point for me to ask the Count to continue on this.
Mr. LAMBSDORFF. Yes, Congressman, indeed what the German government is not ready to do and ready to accept is the opening of a reparation debate. In our view, that issue has been settled, various international agreements. The last one was the Two-Plus-Four Treaty in 1990.
Secretary Eizenstat has given me language which excludes, or at least tries to exclude, any repercussion in the direction of opening the reparation debate if we deal with not racial, property claims. Racial property claims, that is not the problem. But let's go beyond that. I have transmitted this language to the German government because that is a high political issue which I cannot decide and do not want to decide. The German government has to react whether they can live with this language that Secretary Eizenstat has offered or whether we have to work with them to come to a solution. I can't give you a definite answer today.
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Mr. EIZENSTAT. May I just add one other point on this issue of legal closure, Congressman Bentsen, because it is obviously an issue that you have thought about a great deal, as have other Members of the committee.
I would note the following: First, all of the attorneys with whom we have dealt and who have been part of this process themselves control virtually all of the cases. We would have a consensual dismissal of all of those cases as part of the settlement. So that settles that.
Second, there are significant legal hurdles. Indeed, two of the suits have already been dismissed by Federal courts in New Jersey, the statute of limitations, and so forth. So our statement will be in addition to the motions to dismiss that will be filed by German companies citing these legal obstacles, and the combination of these two points give German companies enough assurance.
Mr. BENTSEN. Thank you.
Chairman LEACH. I would like to ask unanimous consent to place in the record the statement of Mrs. Waters.
Chairman LEACH. Mr. Sherman.
Mr. SHERMAN. Mr. Chairman, thank you for holding this hearing on a very important issue. I want to thank the witnesses before us, especially Secretary Eizenstat, who has done so much work on this issue, not only in coming before us today, but his work along with the other Members, including myself, on the U.S. Holocaust Asset Commission.
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I would like to focus on what I see as something analogous, and that is the view of slave labor compensation on the one hand versus property compensation, compensation for labor versus compensation for property. We are told that in order to be compensated for slave labor, one must survive roughly fifty-five years after the end of World War II or the claim is extinguished. But when it comes to property, if the owner is deceased, the heir or even the heir of the heir is entitled to that property. And it would certainly be difficult to find the heir of a slave worker or a forced worker, but it would also be difficult to find the heir of a property owner, whether that be a life insurance policy or whether that be jewelry or art or whatever, or a bank account.
So I can see some reasons why the claims of those who were forced workers who did not survive for fifty-five years, the claims of them and their family have been extinguished perhaps because that is the only way that a settlement could be reached. Perhaps it was because if a bank or life insurance policy is there, it is booked as a liability of the company, and so paying it is not a charge to earnings; whereas labor performed in the 1940's, if it had to be paid for to heirs of the worker today, would be a charge.
There are a variety of reasons, some perhaps as bizarre as earnings per share, which account for this very disparate treatment of the heirs of those who had their labor stolen and the heirs of those who had their property stolen, and it may be necessary that we endure this anomaly, but we should not hide behind the view that it is harder to find the heirs of workers than it is to find the heirs of property owners.
Mr. EIZENSTAT. May I try to respond in a couple of ways?
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Mr. SHERMAN. Yes, Mr. Secretary.
Mr. EIZENSTAT. First of all, we would have a notice and outreach effort so that potential claimants of property would be notified. I am not sure I would agree with you, people are easier to find. People know whether their parents or grandparents had property. It was often discussed. But there would be a notice provision so people would have an opportunity to file claims.
Second, many of the German property claims, in fact I would say the overwhelming majority of German property claims, have been paid in the lifetime of immediate heirs or even survivors, because under German law in the 1950's, there was a requirement for full property restitution or compensation. That program has been quite transparent, and thanks to the good work of the World Jewish Congress and the Claims Conference, when East Germany was united with West Germany after the fall of communism, a similar restitution program for property was carried out and is indeed being carried out for such property. So it is easier to identify.
Second with respect to insurance, insurance has by definition certain heirs who are entitled to recovery.
Mr. SHERMAN. I would say under the labor laws of every country I know of, if you die on the job, your last paycheck goes to the heirs, and so the legal rights are no less than the insurance, but I
Mr. EIZENSTAT. Here I thinkyou said it yourself. It is the practicality. We are talking about potentially tens of millions of heirs, and it is not practicable. However, we have tried to create an avenue for heirs to have some ability to be covered, more, if I may say so, than they are likely to get in court action, which would take years and be of uncertain success, and that is under the Future Fund. Many Future Fund education and social projects would be available to heirs. There would be a special effort to try to help heirs get scholarships and things like that.
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Mr. SHERMAN. I want to talk about insurance, and I want to commend Commissioner Barbara Senn in Washington, and Assemblyman Wally Knox in California respectively for their work in raising the bar and saying that European insurance companies should not through their subsidiaries be doing business in certain American States, and I would think any American State, unless they are willing to pay the policies issued to Holocaust victims. And I see that there is a practice that is nearly negotiated here.
What I would like to know is, Mr. Secretary, do you believe thatfirst, under this policy, will the companies list on the Internet the names of the insureds for whom they have not paid that relate to the Holocaust era, so that potential heirs can check that, or will potential heirs simply have to rely on the work of government employees?
Mr. EIZENSTAT. I am not trying to evade the question, I will give you the best answer I can, but that would be more properly directed to Secretary Eagleburger, who will be testifying later.
There will be very extensive notice and publication efforts. The companies who sign the MOU, and this is one of the reasons that we would like to have Aegon and the other German insurers participate, will agree to open their files, to publicize the list of those insured so that those kinds of claims can be made. Otherwise even though they may be willing to pay claims, the claimants won't know. If a German insurer said, we are willing to accept claims, if there is no publication process, then it will be a highly imperfect outcome.
Mr. SHERMAN. And do you support, or will the Administration support, an effort that those companies that do not enter into a reasonable process will not be allowed to sell through their subsidiaries policies in the United States? If anything, this is a consumer protection issue. If you won't pay your policies from the Holocaust, I don't want consumers in my district to be sending you money.
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Mr. EIZENSTAT. Insurance is regulated by States, and we have very little influence, but I feel that sanctions are not the best way to achieve the result. The best way is to try to achieve it consensually. We have been working in that respect. That is why it is important for these companies to participate in the ICHEIC process so that they get the benefit of the ''safe harbor'' which the insurance commissioners have agreed to as being signatories to the MOU.
Mr. LAMBSDORFF. I would like to make one additional remark. As far as I know, there is no European insurance company, certainly no German insurance company, that is not ready to pay claims and that is not ready to feel satisfied with some kind of loose evidence, because how can you do it differently?
However, if you have to go through your archives and have to look through one million files and come out with perhaps 1.3 percent of unpaid policies, then you come to the question how can we balance the expenses for this on one side and the result on the other side?
I do think, Congressman, you mentioned the Internet, that gives us a better chance and a better opportunity for notification. We have done it before in a very expensive way. The Internet could be very helpful in that.
Mr. EIZENSTAT. Secretary Eagleburger will testify to this, but he is trying to do what he calls a ''top-down'' process on the issue of claims and archives, as opposed to what we refer to as the ''bottom-up'' effort that Chairman Volcker did. Chairman Volcker deserves an incredible amount of credit. He took on an impossible task, and he has done it with incredible diligence, but it has cost several hundred-million dollars, and Michael Bradfield is here as well, who is his assistant. It cost several hundred-million dollars, that's dollars, which have gone into the hands of large accounting firms, not to victims, to go through these dormant accounts.
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I am not suggesting that this kind of searching process should not have been done, but I think we have all learned some lessons. Even though it may not be 100 percent accurate, we will end up with more money available for victims.
Chairman LEACH. Thank you, Mr. Sherman.
Mr. INSLEE. I would like to thank Dr. Lambsdorff for joining us today. We really appreciate it.
I would like to focus for a minute on how we can use this process in an attempt to prevent future disasters, because there is a compensation factor here, but there is also a preventive factor here that I think is very, very important.
It struck me listening to you that perhaps one of the most important ways that this can be effective is to act as a challenge to the Austrian government to accept the responsibility for becoming, and truly demonstrating their commitment to come into the family of nations.
And I would like to ask Dr. Lambsdorff and then Mr. Eizenstat what should be our bar, where should we set that bar for Austria in a sense, philosophically or economically, for them to demonstrate their commitment? And I think that is very important for this government to do this at this moment of international question on those issues, and I think this could be an opportunity for Austria or a great failure of Austria in this regard. So I just ask you, gentlemen, to help us understand what specifically should we be asking Austria, and do you share my view that we should be assertive and aggressive with the new Austrian government in this regard?
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Mr. LAMBSDORFF. Well, Congressman, on our sideand I agree with you that dealing with the future and doing everything to work on prevention so this is not repeated is very important. That is the essence of the idea of the Future Fund, and that is necessary, and it is in full agreement with what was discussed in the Holocaust Conference in Stockholm, Education for Future Generations. Nobody wants to compare the Holocaust with any other crime against humanity, but unfortunately we do see these crimes against humanity everywhere in the world. It is terrible. So I think the activities of the Future Fund must have a very broad scope. That is the idea.
Now, Austria. Mr. Chairman, I have heard a number of statements about Austria. I do not have to speak for the Austrian government and certainly not for the new Austrian government. I do not know how many Members of this committee and in this room know Mr. Haider. I know him quite well, and I have had personal experience with him. His party was a member of the Liberal International when I was President of the Liberal International, and we forced him to leave, and he did leave. So I don't want to tell you long stories, but, of course, I have to bebeing here as a representative of the German Chancellor, I cannot deal with Austrian problems.
However, I have found it very interesting. Sometimes observations can be helpful. One of the first statements of the new government was, ''we are going to deal with Austrian responsibility for the Holocaust.'' And you can't imagine why he did that. First, I see efforts in other countries. Second, while I do think we do not have a very high reputation at the start of our government activity, perhaps that can help us. If that is the result, I don't question the motivations. If that is the result, it could be OK.
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I have been contacted today to meet with an Austrian delegation after I get back because they want to talk about what are you doing in the negotiations here. They are interested, and obviously they are interested to act quickly. That is a good development. For whatever motivation, if the result is it ends up with the Austrian government and Austria as a country accepting its responsibility, I think it has to be welcomed.
Mr. EIZENSTAT. May I just add a few points. I want to, frankly, thank you and Congresswoman Schakowsky for your patience. You came early and stayed late, as we say.
I think the really crucial issue with respect to Austria is to really follow the German model. Germany has accepted its past. It has faced its past honestly. Up to and including fifty years later with the remarkable statement, by President Rau, they have recognized their accountability, and they have acted upon it. They have paid 100 billion deutsche marks in compensation, but nothing can compensate for the loss of six million people and millions of others, but they have faced their past.
It is important that Austria face its past with the kinds of action that Chancellor Schuessel has laid out today. We will be following that closely.
Second, you asked what the bar should be. I think the bar should be implementation of what they agreed to, the document that their own president made a condition of the formation of the government; agreeing to EU norms, tolerance, democracy, respect for diversity, and human rights. We should look at not only what they say, but what they do.
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Mr. INSLEE. This issue of our ability to extinguish claims to allow this process to move forward, the one thing I would say, Mr. Eizenstat, I would encourage the Administration to consider congressional action to help accomplish that. The reason I say that is even if there is agreement by the council representing known claimants, who knows what claimants will appear. And also, I think there is a legitimate issue about the executives extinguishing claims, and I think you would find wide acceptance in Congress for this. I think it would be a neater, tighter package if elected officials in Congress agree.
Mr. EIZENSTAT. Thank you. I appreciate that.
Chairman LEACH. Ms. Schakowsky.
Ms. SCHAKOWSKY. Count Lambsdorff, you talked about a satisfactory solution being when all are equally mildly dissatisfied. I represent a district where there are a number of survivors who are profoundly dissatisfied currently. You pointed out that 10 percent of the survivors are dying every year. Erna Gantz, from my district, one of the leaders in the restitution battle, recently has passed away. As far as Mr. Eizenstat saying coming early and staying late, I will stay until those checks get distributed. I didn't understand, and I wanted to clarify, and I am sure you can do it, are we talking about paying only when the eight-month claimant period is over? Is that when checks would be distributed, only after we establish what is the universe of claimants?
Mr. LAMBSDORFF. Yes, that is what I said before. That is one aspect that worries us. That is foreseen as eight months in German law. There are people who say that period is too short. You have people perhaps at the last corner of the globe, and before you reach them, eight months is too short. I would rather see it shortened because before we do not have a clear overview how many applications do we have, how much money can we distribute, we can hardly start to do the full payment. Whether we can try to give 50 percent, 70 percent and have a reserve has to be seen. I do notwe have notwe cannot decide about that just now. But then, of course, there are additional expenses, because if you pay twice, that means a lot more administrative expenses, and all of these administrative expenses have to be paid out of the 10 billion, and we have to look after this amount so that money is left for the real purpose, namely for the survivors.
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Ms. SCHAKOWSKY. What is the plan for notification, for publicity, for getting the word out to everyone who, as you say, could be in all parts of the globe?
Mr. LAMBSDORFF. I can only answer with an answer that was given to me by one of the class action lawyers. He said we need one year for notification. I said, that can't be true. This is a timeframe which
Ms. SCHAKOWSKY. That is why I am trying to figure out how within this calendar year we can get a check out if we have to get legislation through the Bundestag and have a notification period of some sort. We have an eight-month-only window for people to make claims, and then figure out the formula for distributing the money, how does that possibly add up to ten months?
Mr. EIZENSTAT. If I may just take that. We don't think that these have to be seriatim. Some could be done simultaneously. Once we have an agreement, for example, on the scope and the necessary legislation, there is no reason that a notification process can't begin, so that we don't wait until the end of the Bundestag process and then the end of the claims period, eight months later, to begin a notification process. And I think there is a real desire on the part of the German side to make payments as quickly as possible. So what I would hope, Congresswoman, is that we could get the notification process started before the end of the claims window.
Mr. LAMBSDORFF. Especially regarding the slave labor group, we know about 90 percent of the survivors. There we have much more reliable data than we have in forced labor. There, of course, we could do it, and I think we should do everything possible to make payments as early and as quickly as possible and not wait for the eight-month period.
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Mr. EIZENSTAT. Even with respect to the forced labor, while the Count is clearly right that we have a better notion of the number, names, identity, and location because of the excellent files and transparent process that the Jewish Material Claims Conference has had over the last forty-some-odd years, because there were preexisting reconciliation foundations created in the early 1990's between Germany and these five Central European governments, they have already been making distributions of the 1.5 billion deutsche marks or so that the Germans paid. They have a list of names. All of those won't necessarily be slave or forced labor, but many of them will. So there again, they have identities, and that ought to make the notification process much more rapid.
Ms. SCHAKOWSKY. Mr. Chairman, if I could ask the witnesses, I have a number of questions remaining. I am wondering if, Secretary Eizenstat, I could submit those in writing to you for answers?
Mr. EIZENSTAT. Of course.
Ms. SCHAKOWSKY. Thank you very much.
Chairman LEACH. Dr. Lambsdorff, I would like to raise one question that relates to policy in Poland and actually in the United States, too. There is a concern in the Polish community around the world that this claim settlement process may not adequately take their concerns into consideration. Would you care to comment on their concerns as you see them?
Page 71 PREV PAGE TOP OF DOC Segment 1 Of 2 Mr. LAMBSDORFF. Sorry, Mr. Chairman, I didn't hear you.
Chairman LEACH. The concern relates to the Polish community both in this country and around the world and whether their concerns will be taken adequately into consideration?
Mr. LAMBSDORFF. Yes, of course, we will try to do that. We have five East European governments, and four of them have a Reconciliation Foundation, Poland included. We have a similar institution with the Czech Republic, and we have a number of East European governments where you find forced labor as well who have not been included in these foundations which were set up after the War, and, of, course we have to take them in as well. There are a number of practical problems, but I have seen the Polish government and I know thatI have seen them in Warsaw. They have domestic and political problems in relation to this compensation issue.
We know very well that Poland has been a country which has been hard hit and has suffered extremely during the last period. We know that very well, and, of course, we take that into consideration. But, Mr. Chairman, what we try to do, Secretary Eizenstat and myself, is here is the amount of money which is available. And now, please, you try to come to an agreement between the representatives of the victim groups. I would certainly just like profoundly to sit there and dictate the allocation of money, but I think it is an impossible idea. We can only hope and moderate and facilitate to come to an agreement, please, because otherwise everybody will not be mildly dissatisfied, but seriously dissatisfied, and this should not be the result of our efforts.
Page 72 PREV PAGE TOP OF DOC Segment 1 Of 2 Mr. EIZENSTAT. The government of Poland has been involved in all of the plenary sessions in a very active way at very senior levels. We have had more meetings with the government of Poland than any of the other Central European governments involved. The foreign minister Mr. Geremek is here. I will be meeting with him this evening to carry on that conversation.
Second, with respect to Polish Americans, I have met on perhaps four occasions with the Polish American Congress, and the Polish American Congress has volunteered to be one of the partner organizations that would distribute funds from the German Foundation in the United States so that Polish Americans won't have to go to Warsaw or Berlin to receive their compensation.
And last, it was at Polish insistence that we worked out this compromise on agricultural workers. That was one of their key issues, and we believe that we have been able to satisfy their concerns in that respect.
Chairman LEACH. I appreciate that, Mr. Secretary.
Let me just end with one final comment. The Austrian issue is on all of our minds, and we have all read quotes of some of its new leaders in the past that are imperfect. We all recognize in a political nature that sometimes in public life people attempt to appeal to the higher spirits of the human nature and sometimes the lower, and we are very concerned that the second may be the case in Austria today.
By the same token we have been informed in the last few days and by your testimony, Mr. Secretary, that the Austrians have made some commitments that we should respect, most particularly to the insurance commission.
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Mr. EIZENSTAT. And with respect to slave and forced labor, they have indicated that they will create a fund there as well.
Chairman LEACH. But I would only like to stress that the world community will be looking to ensure that these commitments are kept, and the insurance one is of particular interest to me because I believe that the commission that is established should be considered an international commission and referred to in the terms that you did in your opening statement. And ironically it may be the Austrian model is something thatif they fulfill their commitmentsother countries in Europe may want to look at as well.
In any regard, let me thank both of you. This is a very difficult time for all of us in dealing with these questions, and I particularly want to thank Dr. Lambsdorff for his willingness to come from Germany and the continuing extraordinaryand I want to use a word, Mr. Secretaryscholarly approach that is unique to public service that you have brought to the issue. This committee is very appreciative. So I thank the two of you and look forward to the second panel.
Mr. EIZENSTAT. Thank you, Mr. Chairman.
Mr. LAMBSDORFF. Thank you.
Chairman LEACH. Our second panel is Paul Volcker, Chairman, Independent Commission of Eminent Persons. Paul, would you like to proceed.
Page 74 PREV PAGE TOP OF DOC Segment 1 Of 2 STATEMENT OF HON. PAUL A. VOLCKER, CHAIRMAN, INDEPENDENT COMMISSION OF EMINENT PERSONS
Mr. VOLCKER. Thank you, Mr. Chairman. I am conscious of the fact that time may be of some consideration here, but let me first, given this particular setting, congratulate you on quite a different matter of getting banking legislation through the Congress after a period of some twenty years, of which I was intimately involved for ten years and have interest for the following ten years, and it is finally done. It took a long time, and it wouldn't have been done without your efforts. I think that is a very clear, and I want to take this opportunity to say that publicly.
I have a statement here, and I appreciate the interest you and the committee have had in this matter, which has been amply demonstrated in the earlier testimony. My statement is fairly short, but I thought in view of the time, I would just read the last few pages that refer to matters that have yet to be done.
Chairman LEACH. Without objection, your full statement will be placed in the record.
Mr. VOLCKER. And I hope that you will place in the record these tables and charts which we have prepared. These are the tables and charts that reflect quite fully, I think, the work that the Independent Committee of Eminent Persons that I had the honor of chairing, it is the material that we used in presenting our report.
I will not ask you to put in the record the whole 217 pages of our final report, but copies are available, and I am sure have been made available to Members of the committee.
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I also want to mention that here with us today is Rabbi Israel Singer, who is the Secretary General of the World Jewish Congress, who is going to testify himself; and Zvi Barak, who is another member of the Committee of Eminent Persons, who has come over here from Israel, and he has obviously been one of the most active members of the committee and has taken a continuing and strong interest.
But if I may, let me just emphasize what remains to be done in connection with our own investigation and particularly in order to satisfy the claims to dormant accounts in Swiss banks.
We had earlier established in connection with the publication of names that was already madeabout 5,000established a Claims Resolution Tribunal supervised by a board of trustees composed of some of the members of the Independent Committee of Eminent Persons, including myself as Chairman. That tribunal has attracted seventeen distinguished arbitrators to examine claims of those previous 5,570 dormant accounts that Swiss banks themselves identified, and that work is now pretty much completed of that earlier publication.
Now we have the work of resolving claims of the 54,000 accounts identified in our investigation, and, in fact, investigating claims of victims of Nazi persecution to any account in Swiss banks, and certainly we hope that that can go forward promptly.
In our work we have proceeded under the assumption that the accounts identified in our investigation would be adjudicated by an independent impartial forum, and we unanimously proposed that the established Claims Resolution Tribunal provide that forum. We have made a series of recommendations in our report, and let me just establish what they are.
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It is important, too, that the Swiss Federal Banking Commission, which has extended us very considerable and helpful cooperation in the past, should promptly authorize consolidation of the existing, but scattered, audited work papers and databases relating to all of the 4.1 million accounts opened from the 1933 to 1935 period in Swiss banks, and to arrange to put all of those databases in a central archive so that they can be used conveniently in a claims resolution process.
Second, and this also takes action by the Swiss Federal Banking Commission, authorization of publication of the names of holders of approximately 25,000 of the accounts that we have identified. These would be the accounts that we judge have the highest probability of a relationship to victims of Nazi persecution. There isn't any doubt that some of the others accounts that we have identified, and indeed some accounts we have not identified, also have a relationship, but there are varying degrees of probability attached to our investigation. What we are recommending is that these 25,000 accounts with the highest degree of probability be publicized so that victims with a claim to those accounts can more readily recognize the possibility of making such a claim.
Third, we do recommend that any person with a claim to a dormant account of a victim, whether or not the name is published, should be provided facilities for resolving such claims through the CRT. And that would certainly include existing claims already compiled by the New York State Holocaust Claims Processing Office and other claims that have been made through other channels, and they should all be matched against a centralized database of accounts and resolved.
Page 77 PREV PAGE TOP OF DOC Segment 1 Of 2 And then finally, we recommend and as members of the Claims Resolution Tribunal so instruct the arbitrators to provide a fair return to victims or their heirs whose accounts were as a matter de facto liquified; that the individual account values should be adjusted on the basis of long-term Swiss rates of interest. And what that means if we do that from 1945 to the present, you would multiply the 1945 value by 10 times.
Now, these decisions on the centralized archives and publication of account names need to be taken promptly so that the claims resolution process can indeed begin. Those who have waited so long for accounts to be identified should not have to endure a long further wait for the commencement of claims adjudication, the point that was just made in the earlier testimony.
These decisions on archives centralization and account publication are, I would emphasize, now in the hands of the Swiss government, particularly the Swiss Banking Commission. We understand they have undertaken a consultation process, and they have scheduled a decision for next month. From my point of view, the earlier that decision comes, the better.
Now the precise role of the Claims Resolution Tribunal and the resolution process has been a matter necessarily of discussion with the U.S. district court that is overseeing the settlement of the class action suit against the Swiss banks brought in the United States. And it is my sense from these conversations that these recommendations should be implemented with the concordance of the court, and plans are being made by the CRT for the mechanics of the publication of account names, presumably on the Internet, preparation of claim forms and a development of systems for processing the claims.
Page 78 PREV PAGE TOP OF DOC Segment 1 Of 2 One further thing which does remain is a decision on the funding of the Claims Resolution Tribunal. That was not specified in the original memorandum establishing the ICEP investigation itself, but it is my belief that the thrust and spirit of the effort strongly suggests substantial Swiss bank participation in this funding. Clearly the bottom line cannot finally be drawn under this entire problem until the claims resolution process is successfully completed, and it seems to me that is a matter that is at least as important to Switzerland and the Swiss banking community in particular as to any other interested party.
Finally, I would like to note the close relationship between the work that needs to be done to adjudicate claims to individual accounts of victims of Nazi persecution in Swiss banks and the class action settlement of Holocaust victims claims now being administered by Judge Korman in the district court in New York.
The class action settlement sets the upper limit of $1.25 billion on the liability of Swiss banks to Holocaust victims. Under the settlement, claimants through deposit accounts have a priority among the various classes of eligible beneficiaries of the settlement. Awards made by the CRT to claimants for deposits in Swiss banks will be deducted from the payments made by the defendant Swiss banks toward fulfilling the entire $1.25 billion obligation. Now, in the judgment of ICEP, claims of victims or their heirs entitled to awards we believe can be satisfied within the settlement amount agreed in the court proceeding. However, it is also clear that the work of the CRT needs to be closely coordinated with the other elements of the administration of the settlement. To this end we are working closely with Judge Korman and with the special master, Mr. Judah Gribetz, appointed by Judge Korman to develop a plan of distribution of the settlement and also working with the parties to the settlement.
Page 79 PREV PAGE TOP OF DOC Segment 1 Of 2 Those are the main points that remain open, Mr. Chairman. I hope that they will not remain open for very long.
Chairman LEACH. Well, I thank you very much. I, frankly, believe the world owes you a great debt of gratitude for your work in this area.
One of the rather singular issues that seems self-apparent is: How does the math work? And that is if with relative precision you can identify 25,000 names that are highly probable to be related to Holocaust issues, and the sum of money that is presented is $1.25 billion, that on an average would be approximately $50,000 each, which would mean the average account at the end of 1945 was $5,000.
Do you have any sense what the average size of these 25,000 accounts was in 1945?
Mr. VOLCKER. We have analyzed all of the 54,000 that we have identified and others, and insofar as possible found account values. Now, many of them do not have account values that we could identify. We had a name for all of those accounts.
Chairman LEACH. Does that include safety deposit boxes?
Mr. VOLCKER. It includes safety deposit boxes, but safety deposit boxes were opened in an earlier stage, and there are so relatively few that were involved here, and they have a problem. Gold, jewelryyou would get the goldpresumably you had the physical property, and that doesn't involve a difficult analysis. The difficulty is how do you value financial assets.
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Most of them were bank deposits or deposited securities. We have a lot of information, but it is not complete, about account values. This is all reported in the full report of our work. And for various categories we have some information, just glancing at this table, at the low point 50 percent of the values are known, for certain types of accounts; up to 100 percent for some other accounts. And it varies depending upon whether it was a deposit account, demand deposit account, they tended to be fairly low. If it was a savings account, they tended to be very small. If they were so-called depot accounts where people put securities into it, they tended to be higher.
So we can break all of this down, and we debated this endlessly in the Commission. We decided we could not make a reliable estimate. There were too many uncertainties how much of this money would be claimed, how much we could determine a value for and then translate it into current dollars.
We felt reasonably confident that when all was said and done, and we took the 25,000 accounts plus some other claims in other accounts, not all of those 25,000 accounts will have a plausible claimant, and we had the experience of the Claims Resolution Tribunal for the earlier accounts that we felt safe that it is going to add up to less than a billion-and-a-quarter.
Now, maybe we can be proven wrong, but I don't think so. If you just took all of these accounts and made a kind of mechanical projection where we didn't know account values and estimated account values, you could get a bigger number. But I think that that is unreasonable as a fair expectation of what is going to happen because not all of these accounts are going to be claimed, they are not all going to be Holocaust victims, and we felt, as I say, comfortable that it would fall within the billion-and-a-quarter.
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Chairman LEACH. One of the aspects of all of this as we look at Switzerland, is that the country has made certain very forthcoming steps. On the other hand, there has been some public reaction that has been imperfect. What is your sense for the Swiss public attitudes at this point in time on these issues?
Mr. VOLCKER. Mixed. I think in general my sense is that there has been an acceptance of our report. There is irritation in some quarters, a feeling that they were unfairly put upon and that they were no more guilty, if that is the right word, than other countries. This is only part, of course, of a larger investigation, including, for instance, refugee treatment, which had a report by another commission in Switzerland.
We had generally what we have characterized as good cooperation by the banks, but we certainly had resistance by some individual banks who had to be rather persuaded and convinced to cooperate. In the end virtually all of them did to enough of a degree so we felt that we could make a report. But I think in the end I would like to believe that the results have been constructive, but there is still some irritation. There is no doubt about it.
Chairman LEACH. Well, as we look at this from afar, this is not the first Swiss government effort in this endeavor, nor Swiss banking community effort in this area. It does appear that your commission and the Bergier Commission have really gone a long ways toward reaching resolution, and that relative to other approaches, it has been very impressive.
Mr. VOLCKER. Let me be clear in responding to your question. So far as the Swiss government is concerned, we have had full cooperation. My feeling is that they welcomed the report. I talked to the President of Switzerland at the time that we issued the report, and she certainly welcomed that the investigation at least was over and that we had done a satisfactory job.
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We have had good cooperation by the Swiss Banking Commission all through this. They have in some instances been rather heroic. They have a couple of crucial decisions that have to be made now, and so far as the banks are concerned, I obviously think that it is in their interest that they cooperate in the financing of this final resolution process.
And if there was failure in these areas, it would obviously leave something of a stain on the whole process, but I hope and believe that that will not be the case. We have had good cooperation from the Swiss government right through.
Chairman LEACH. That is my impression as well, and I think that there is a sense in Switzerland that the 20th Century issues of an economic nature should be resolved soon.
Mr. VOLCKER. As was mentioned, if I may interject on some of the earlier testimony, our investigation has been very expensive, and there has been a lot of restlessness in the banking community about that. We have always said it is justified because this is not simply a matter of money, it is a matter of establishing the facts and clearing the record, and I think that has been generally accepted by the Swiss government. But it would seem ironic if, after spending all of that money, the job isn't completed with an expeditious claims resolution process.
Chairman LEACH. I fully concur.
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Ms. SCHAKOWSKY. Thank you.
Chairman Volcker, it is an honor to meet you and to express my appreciation for your work. Despite all of that work, a year-and-a-half after settlement what I hear from people in my district, where is the money? There is still not a penny, not a nickel has been distributed, and in some ways I have to tell you that all of this discussion and seeming progress has added to the frustration rather than having alleviated it, because expectations keep rising, and yet there is still not any money. So if you could just tell me what are the major things that are holding up the distribution of the funds?
Mr. VOLCKER. Well, at this point, first of all, some money has been distributed from an early publication of names. It is a relatively small amount, and even that has not been brought up to current values because we have not completed that part of the process. And it has taken a long time, and I don't know if I can be as frustrated as many of the victims, but I am plenty frustrated.
Ms. SCHAKOWSKY. I know you are.
Mr. VOLCKER. What is holding it up now is we have to get a publication of the names, we have to get agreement on the procedures, and we have to get it financed. All of those are decisions that I hope and wish they were made last month. But it is terribly important that they be made this month or no later than March, which is the current schedule for the Swiss Banking Commission decision. Then we will publish names.
Page 84 PREV PAGE TOP OF DOC Segment 1 Of 2 Then we can begin handing out claim forms and getting actual claims. A lot of claims we already have. We are just ready to go when we get the material consolidated and can get the necessary releases. New York State has done a lot of work in getting some claims together. We have been able to process those claims because we don't have access to our own files until they get released, in effect, for this kind of work.
So as soon as that is done, we will go to work, and just as in other investigations, we are going to have to allow six months to put in claims. We will try to have and we plan to have as expedited reconciliation procedures as we can have. People can't come in and say, my grandmother's name is X, and I see the name, and they have no other indication of the legitimacy of the claim. But they are not going to have to come up with very much. We want to make this as easy as we can, but they have to have some plausible grounds for making a claim.
Ms. SCHAKOWSKY. What is your best guess?
Mr. VOLCKER. I will be extremely disappointed if money is not flowing during the course of this year, and I would hope that it could be completed by the end of next year, but we have lots of names, and we don't havejust 25,000 are published, we have a database of four million names, and there are a lot of potential claimants.
Ms. SCHAKOWSKY. You have a database of four million names, though. There is an estimated total you have here of 6.8 million accounts that existed at the time.
Mr. VOLCKER. Right.
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Ms. SCHAKOWSKY. The 4.1 is fully 40 percent lower than that. Are there names within those?
Mr. VOLCKER. There undoubtedly are. We had a big, expensive effort involving hundreds and hundreds of accountants, but all we could get to was the four million names out of the 6.8 which they estimate existed during that period, which means there are names that we will never know about. There will be claimants who will be unable to make a claim because we can't find the account. And we think the names that we have tend to be from the banks that were most likely to have foreign accounts and refugee accounts, but there are undoubtedly refugee accounts, persecuted person accounts that are among the 1.7 million that we don't have.
Ms. SCHAKOWSKY. Have the banks begun to pay in? Do we have any of the money? Have they paid in?
Mr. VOLCKER. Well, they have paid in for some of the names that have already been cleared from the earlier list, but there is no money paidhave they made a payment?
I am told that the court does have some in escrow in effect, $500 million already.
Ms. SCHAKOWSKY. Is that earning interest, and does that interest attribute to
Page 86 PREV PAGE TOP OF DOC Segment 1 Of 2 Mr. VOLCKER. I hope so.
Ms. SCHAKOWSKY. Is that for administrative costs?
Mr. VOLCKER. They have a complicated formula, and at some point it gets interest. That is under the supervision of the judge.
Ms. SCHAKOWSKY. I know it is different for the slave and forced labor. We heard some estimates today of how much a claimant mightI suppose depending on the different kinds of accounts, is there any way to estimate the kinds of money
Mr. VOLCKER. When we have information about the size of an account, that will determine the size of the payment. We have various formulas for adapting whatever account value we have to present value.
Ms. SCHAKOWSKY. Is that the 10 times?
Mr. VOLCKER. It is 10 times the value that it should have been in 1945, but sometimes we needed rather elaborate estimates to estimate the 1945 value because we may only know the value in 1972, let's say.
So we want to put back all of the fees that have been taken out of that account and subtract the interest that has been paid so that we get a 1945 figure, and then we will multiply that by 10 for an ordinary deposit account. And that is the compounded rate of interest on long-term Swiss government securities over that fifty-year period. Now, if we don't have an account value, obviously it is a more difficult thing, and if somebody can establish plausibly that the account belongs to them or their progenitors, we will make an estimate of an account value presumably based on an average of account values that we know.
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Ms. SCHAKOWSKY. Is there anything that we can do, the ''we'' being the United States Congress, individual Members who have a particular concern of their district to facilitate this process?
Mr. VOLCKER. I don't think so. I don't think that I am going to ask the United States Congress to finance the process. That would be helpful, but I think that is up to the Swiss. I think your interest is welcomed and important in keeping this process going as expeditiously as possible, and I wish it could go faster. I have a personal interest in having it go faster, so you don't have to impress me with the importance of that. It may not match the recipients' interests, but I haveour interests are aligned.
Ms. SCHAKOWSKY. Thank you.
Mr. VOLCKER. Thank you.
Chairman LEACH. One last question, Paul.
Ms. SCHAKOWSKY. Mr. Chairman, when you are done, I forgot a question.
Chairman LEACH. Why don't you go right ahead.
Ms. SCHAKOWSKY. I apologize.
Page 88 PREV PAGE TOP OF DOC Segment 1 Of 2 Chairman LEACH. I yield back to the gentlelady.
Ms. SCHAKOWSKY. Apparently some dormant accounts have been charged excessive fees by the Swiss banks.
Mr. VOLCKER. Yes.
Ms. SCHAKOWSKY. I am wondering what efforts are underway to repay those?
Mr. VOLCKER. A lot of these accounts have been closed. They are not any longer on the books of the banks, and a lot of them are indicated closed to fees. What the banks did in some cases, many cases, they charged fees, and those fees over a period of years became large relative to the size of the account. When the account got to a certain point, they charged a closing fee. That was the official excuse for closing the account.
We have attempted and will attempt under bestwe have a lot of information on this. When we go back and try to estimate the 1945 values, we will reverse all of those fees as best we can do it, and I think we have a basis for pretty good estimates because the auditors found a lot of information on fees. So the process necessarily relies on estimates, but I don't think that they are estimates picked out of the air. There is some basis for them, and the fees could have been sizable, yes.
Ms. SCHAKOWSKY. I apologize, and I thank the Chairman.
Page 89 PREV PAGE TOP OF DOC Segment 1 Of 2 Chairman LEACH. There has been anecdotal evidence of a fair number of accounts that might have been held by intermediaries. What kind of a process is under way to review that, and are you confident in that system?
Mr. VOLCKER. This is a question that you raised in both of the earlier hearings that we had, and it is the least satisfactory part of the investigation. To the extent that the intermediaries were Swiss, and probably most of them were Swiss, and the deposits were in their name, and this all happened fifty years ago, and the accounts have been closed, it is extremely hard to identify.
Now, what we did was get a list of all so-called official intermediaries, notary publics, and so forth, in Switzerland that existed in 1945, and wethere were thousands of them. We ran all of those against the list of names to see whether they had accounts or repetitive accounts, and we found several thousand accounts in that category.
The auditors were alerted to report any evidence that they found that looked like it might have been an intermediary; some name that held a lot of different accounts, for instance. But some of the intermediary accounts may have been combined into one account, and so that is not perfect either. But where they had some information, they reported that. These matches or suspicious names, so to speak, have been turned over to the Bergier Commission, which has investigative authority over Swiss and outside the banking system which we did not have.
So they are alerted to this problem and are certainly aware of it and interested in it, and I am told that they have not yet gotten those lists because they have to be released by the Swiss Federal Banking Commission, and so that is another decision that the banking commission has to make.
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But there will be a follow-up by the Bergier Commission, but I am sure this is one area where our combined efforts will leave holes because it has been an area of investigation that I don't feel satisfied we have been able to fully develop.
Chairman LEACH. Well, thank you very much, and we appreciate your testimony, but, more importantly, the work that you have dedicated so much time to.
Mr. VOLCKER. I am sure that I speak for all of the members of the group that we have appreciated your interest in this, and that interest has helped us do the job.
Chairman LEACH. Thank you, Paul.
Our third panel is composed of the Rabbi Israel Singer, who is the Secretary General of the World Jewish Congress; Mr. Gideon Taylor, Executive Vice President, Conference on Jewish Material Claims Against Germany; Avraham Hirchson, Chairman, Knesset Committee for the Return of Jewish Property; Mr. Roman Kent, Chairman of the American Gathering of Jewish Holocaust Survivors; and Miles Lerman, Chairman, U.S. Holocaust Memorial Council; and Rabbi Andrew Baker, who is Director of European Affairs for the American Jewish Committee. If I can ask you to come forward.
Let me in particular welcome for the second time Representative Hirchson and say that we are always appreciative of having fellow parliamentarians. I think in terms of parliamentary protocol, we will suggest that Mr. Hirchson go first.
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STATEMENT OF AVRAHAM HIRCHSON, CHAIRMAN, KNESSET COMMITTEE FOR THE RETURN OF JEWISH PROPERTY
Mr. HIRCHSON. Thank you, Mr. Chairman. I would like to remind you and the committee Members I was here in the hearing more than two years ago. We were on our first steps of the historical justice for all of our people. It was a very difficult time. Most of the people didn't believe in our way of historical justice. A few supported us. You and your Members of the committee supported us in those difficult days.
I remember I was fascinated by how you understood that our issue is not the money, it is the not bank accounts, it is not the insurance companies. Our major important thing was the understanding, who puts the money in the banks, who makes the insurance by the companies. Those people were sent to Auschwitz, Buchenwald, and they were murdered.
Of course, we are now in another situation. After the wonderful work of Paul Volcker's committee, and after the report and the most important work of the report of the Bergier Historical Committee, of course it is another situation, but until now we have some major problem, the problem with other countries, they don't want to go into the procedure. They are trying to build new laws. On the other hand, they are trying to come to us and to cut with us short deals, and I would like that it would be very clear here, we will not cut any short deals with anyone, with any country, because what is most important for us is the procedure. And we would like that each one of the countries will have the procedure like it was done in Switzerland in the last year.
Page 92 PREV PAGE TOP OF DOC Segment 1 Of 2 Mr. Chairman, we are in a very difficult situation about what is happening in Austria these days. Vienna has not learned the historical lesson, not only that we were shocked by the resolution of the Austrian election, but its effect that each one of four Austrian citizens didn't learn the historical lessons of Austria of Adolf Hitler. And after fifty years, it is amazing that this country didn't learn the lesson.
Haider is trying to show the world that he is not anti-Semetic, but he is anti-Semetic. I learned in the last weeks something about Haider. I learned that in one of the gatherings of the former SS people, he say to them, ''My dear friends, you yourself sacrificed the vote.'' Yes, he is not showing us that he is anti-Semetic, but if he is questioning and if he is asking, Auschwitz was a death camp or a punishment camp. How many were murdered there? Six million, I don't think so. It is enough. You don't have to say very clear thing about it.
So now I am in impossible situation because I am caught between two justices. One is the justice of the survivors of the Holocaust that are sitting near me, and I say that after fifty years they have to get back their money and their property. It belongs to them. But there is another injustice, and this is an injustice where the blood of my brothers, my sister that were in the chambers are shouting at me and saying, ''Don't go to any agreement with this government that Haider is a part of'', and I have my decision, and it is my moral decision. If Vienna wants to be a part of this world, of the Western World, if Vienna wants to come as a normal nation to the new millennium, they have to tell Haider go out from the government. They have to make the procedure that Switzerland has done.
Mr. Chairman, it is a difficult time, and I think that this is the time for the citizens of all the world to take upon themselves together responsibility to work together, and then I am sure that we will succeed in our very, very important mission for generations to come. Thank you very much.
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Chairman LEACH. Thank you, Mr. Hirchson.
STATEMENT OF RABBI ISRAEL SINGER, SECRETARY GENERAL, WORLD JEWISH CONGRESS
Rabbi SINGER. Thank you, Mr. Chairman. I will read a part of my statement and then digress from my written statement, which I will give to the committee.
It is a distinct honor once again to appear here to testify before this distinguished committee. It is an opportunity that I really thank you for, to be able to convey to you our deep sense of gratitude. And may I say to you that you may take pride in the extraordinary achievements that you have effected since the first hearings on this subject some three years ago.
You might recall at those initial hearings dealing with Swiss banks, which have been expanded today, not one survivor had yet received compensation, and no humanitarian needs had yet been addressed. The proposal for a humanitarian fund, which was made at that hearing, was realized. In fact, it was made by you. The proposal already, I can report to you, has succeeded in paying nearly a quarter-of-a-million Holocaust survivors as a direct result. Survivors in Argentina, Zimbabwe, Iowa and Israel have indeed a lasting tribute to you and to this committee which they owe. Thank you, Mr. Chairman.
Page 94 PREV PAGE TOP OF DOC Segment 1 Of 2 The larger Swiss bank settlement, which I was honored to be a volunteer on for over hundreds of hours together with my colleague Steve Horak, who sits right behind me, under the chairmanship of Mr. Volcker, has some unfinished business, and I would encourage this Committee on Banking and Financial Services to take them into consideration. Paul Volcker, our Chairman, passed over them among other points, but I would like to repeat some stark points which need immediate treatment because they have already been agreed to after 350 hours of negotiation between ourselves and the Swiss members on the committee.
We have agreed to, of the 54,000 names that were found, to publish 25,000 some-odd names. There is still some administrative foot-dragging with regard to the publication of those names. It would be a shame if that money in all cases would be paid to heirs rather than survivors. Indeed, one of the survivors who made a settlement who appeared before your committee passed on, Mrs. Sapier. It would indeed be a shame if the settlements were made with heirs or for the benefit of class counsel alone. It would be a bigger shame if this case dragged on and we would have do deal with the heirs of class counsel to pay their heirs rather than themselves. It would be something that wouldn't be the kind of justice that this committee was seeking, nor which we invested hundreds of hours of volunteer time in creating. Justice would be delayed yet more by administrative foot-dragging. That would be a shame.
I would also like to suggest that with regard to the Swiss settlement, the judge would be concerned that the Claims Resolution Trust, which I had a major role in establishing, which, again, I voluntarily serve on in every way, including expenses, I would like to suggest that Claims Resolution Trust expenses should be agreed immediately to be paid for, as was agreed to by the Swiss members, rather than looking at this again and dragging one's feet.
Page 95 PREV PAGE TOP OF DOC Segment 1 Of 2 It is the conclusion of justice and its implementation, not only the announcement of justice, that we come here to ask you to do. It is not just that justice should just be seen to be made, but it should be implemented as well. We thank you for helping us make justice and announce justice, settle for justice, but, most importantly, to make that measure of justice which is all that we are really dealing with here, because the settlement and the nature of a settlement is such that it is only a measure of justice.
Count Lambsdorff said that he understood, we made him understand, and I am pleased to be sitting here next to my colleague Gideon Taylor from our generation who is negotiating for persons of a more senior generation that sit at the other end of the table, and my partners in the negotiating committee, Roman Kent particularly, is the youngest of the Holocaust survivors. When Count Lambsdorff said that he doesn't want to pay heirs, he doesn't want to pay people who are of the next generation, I believe him. He, too, knows the urgency because he knows his age, and he has mentioned that several times. I wish him long years, but I hope that he will be able to do other things and be able to finish this quickly. It would be a shame, an absolute shame, if we haggled, and we are not haggling.
Our position in these negotiations, and I speak now not as the Chairman of the World Jewish Restitution Organization, which helped to resolve the issue of Swiss banks, but I speak as the chief negotiator for the Conference on Material Claims that helped negotiate with Count Lambsdorff and with Mr. Eizenstat, the settlement that he spoke on with regard to slave labor and aryanization, that we come to a specific final settlement quickly not just with regard to the 10 billion marks that seem to have been capped, but with regard to the adjudication and the administration of those funds, not through a court, but, as we originally said, through administrative processes, and pay that money out to victims, not to heirs as class counsel would like.
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We don't want that money paid to heirs, we want that money paid to victims now that it has been decided to pay those victims still alive. They have made a distinct settlement here, and that settlement is of the millions of persons who are slave laborers, only 140,000 are left among the Jewish slave laborers. It would be a shame if not 10 percent, but 15 percent would die every year, and by the time we began settling these payments, we would lose another 30 percent until they were paid.
With regard to aryanization, we are not interested in having persons who are relatives, distant relatives whom I would personally seek to exclude from my will if they were relatives of mine, to get paid, but to have victims paid. I think that some of these concerns with regard to widening the number of persons who might benefit from some of these properties with regard to the aryanization is an absolute scandal. We are not here to see to it that financial problems are resolved. We are dealing with a moral settlement that is symbolic at best. That is the nature of settlements, and that symbolic gesture should be made to the victims, not made to some distant relative of an heir. I think that that kind of legalism is possibly the only effort left that some people can make, but it is not the one that we are striving for and the one that you called this committee into session today, nor the last time when you began dealing with these questions of justice.
My colleague, the Chairman of the Knesset Committee on Restitution, dealt with Austria in a moral and, you could say, principled way, and I agree with him. It would be a terrible tragedy if that which we were negotiating for, my colleague Gideon and myself and some of our colleagues, speaking to the former Austrian Chancellor with regard to the minimal payments, with regard to the 70,000 apartments that were stolen, and with regard to the 45,000 businesses that were aryanized in Austria, and that these small payments that were made so far and those which are being considered right now would be the product of a political scandal or political embarrassment. They should be voluntary payments being made by those who owe that money, not between governments whom one does not view with great comfort in dealing with.
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The banks that have made settlements so far have done so haltingly, and have done so in a manner that is very, very scantily related to the exposure which they have. I would recommend that those which have not yet spoken in Austria should not speak under the pressure of the embarrassment of their new government, but should speak as industry and as those individuals who aryanized the property irrespective of who is in their government. We will not negotiate with them, but voluntarily they made certain statements with regard to what they would do when their government was different. I think that those members of the opposition should be announcing what it was that they were negotiating with us on and that those industries should make those statements independent of their government presently. We should not have to crawl to those to whom we do not choose to sit with.
Bank Austria was limited to that institution. When they made their settlement, they tried to include 1,200 other companies and total economic peace for Austria. We saw to it that would not be part of the settlement. We hope and pray that that settlement reached in Judge Korman's chambers will indeed be respected. And at this time I say to you, Mr. Chairman, if it will not be, we shall appeal it. Settlements are not made to be broken by either counsel or by judges, they are made to be kept, and we say that in this Banking Committee with regard to another bank that may be coming under your observation.
We ask you, sir, that you take very, very serious note of what was said by Secretary Eizenstat with regard to all insurance companies. You know that we are dealing with this as a top-down basis, not on a bottom-up. We will only be dealing with a small measure of justice with regard to all insurance companies.
Page 98 PREV PAGE TOP OF DOC Segment 1 Of 2 I don't accept that 98 percent of all policies are paid by any company or will be paid by any company. It is not possible. Even the most assiduous recordkeepers among the companies only have 50 percent of the records. They admit that. Even the bottom-up process that Paul Volcker participated in that we worked on only found four million of six million accounts, of which we only found 1 percent, and that accounting cost hundreds of millions of dollars. What top-down process with an insurance company will ever find more than a minute percentage?
We ask that those percentages be made, however, by standards that are the same for all companies, and that those standards be homogenized and universalized, not that each company chooses to volunteer to throw at victims what they choose, when they choose, if they choose.
We do not accept sweetheart deals with any community, even the Jewish community. And we look to the strength with which Secretary Eizenstat represented our Government that all insurance companies, all, including Aegon, join the International Commission.
Conversely, those insurance companies, particularly the Dutch insurersand it is not my interest in having a quarrel with Holland today, an outstanding people who were our supporters on moral and human rights questions on many, many issues throughout historyallow the memory of those who were victimized to be once more treated in a manner that is less than accepted by the large insurance companies of the rest of the world.
I had the pleasure last week with Secretary Eizenstat to meet with the Prime Minister of Holland, and we hope that he indeed will establish standards that have been accepted by those of other Western democracies. Globalization has created standards and creates standards with regard to sales, with regard to certain kinds of treatment of customers, and also with regard to victims. In refusing to join the International Commission, they choose not to participate in a global tradition which has been established partly as a result of the pressure of this committee. We expect that their continued expansion into the United States market would present an affront to American citizens while they refuse to deal honestly with their responsibility.
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Some of my colleagues view this matter as being one which requires stiff economic sanctions. I personally have always been opposed to economic sanctions, but I speak to you, Mr. Chairman, as the minority voice in my constituency. I am alone in opposing such economic pressure, and the reason for that is that what has happened to date has happened because this matter, whether it is Swiss banks, or whether it is the issue of slave labor, or whether it is the issue of aryanization, has occurred the way it has occurred, successfully bringing justice late, but not never, only because of public awareness, public understanding, public pressure, which indeed these sessions are a very important part of.
I ask you, Mr. Chairman, to allow me to conclude with a specific proposal, that this, the last of these hearings, will have an extraordinary impact, and I am sure that you agree, therefore, that the issue must continue to be pursued in many ways. I would therefore suggest that this committee consider issuing a continuing progress report, say at six-month intervals, so that the public-at-large remains informed and involved and knows that these companies, these banks, these financial institutions, and that all governments are held accountable. This, we believe, would not only produce practical results, but preserve as a lasting legacy this committee's work as establishing justice.
Mr. Chairman, let me express my thanks to you and to the committee, and with your permission to wish to be able to call on you in the future to help to shape a world in which decency and fairness prevail. Thank you, Mr. Chairman.
Chairman LEACH. Thank you very much, Rabbi Singer.
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STATEMENT OF GIDEON TAYLOR, EXECUTIVE VICE PRESIDENT, CONFERENCE ON JEWISH MATERIAL CLAIMS AGAINST GERMANY
Mr. TAYLOR. On behalf of the Conference on Jewish Material Claims Against Germany, I would like to thank you for the opportunity to update you and this committee on the developments during the last few months relating to the negotiations with German banks and industry within the framework of the German Foundation Initiative and the discussions with certain European insurers of the International Commission on Holocaust Era Insurance Claims. We greatly appreciate the role that this committee has played in drawing the attention of the public and of lawmakers to the issues which are so important for all of us.
The Claims Conference, which comprises twenty-three Jewish organizations including the American Gathering of Holocaust Survivors, represented today by one of the members of our negotiating team, Roman Kent, one of the major figures in the negotiations, as well as the Israeli survivor organization, has participated in negotiations with the German government on issues of restitution since the 1950's. After the announcement of the establishment of the German Foundation Initiative in February last year, the Claims Conference continued in its traditional role as the party negotiating on behalf of the Jewish side with the German government and German industry. In that regard, we work very closely with the State of Israel in these negotiations and on many issues, and we particularly appreciate the presence of Chairman Hirchson today, who has been a most significant figure in this effort and with whom we work closely on the negotiations regarding the slave labor issue.
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We are also most grateful to Deputy Secretary Eizenstat and Count Lambsdorff for the way that they have led the negotiations which have taken place to date. Undoubtedly the most significant and moving aspect of the announcement that took place in Berlin on the 17th of December was the statement issued by President Rau which was quoted earlier to this committee. However, the generalized announcement that took place in Berlin still leaves many significant issues unresolved.
In welcoming this announcement, the Jewish participants had already made difficult decisions and agreed to many compromises, and we have concerns about the form that the final agreement will take, and we hope very much that the agreement will be one which reflects the fundamental principles on which we negotiated. In particular, we feel strongly that slave laborers must receive a dignified payment from the Foundation Initiative, and just as significantly, the issue of the responsibility of the banks for their participation in the aryanization of Jewish property must be seriously and appropriately addressed by the Foundation.
During the last weeks there has been much discussion, as the committee has heard earlier, on the draft legislation, and we have been in constant contact with the governments of Germany and the United States and very much hope that the final version of the legislation will reflect those concerns.
We are particularly concerned to ensure that the major details as to how the Foundation will operate will be spelled out clearly in the legislation and not be left to be resolved in the future. We believe that such clarity is most important if the Foundation is to succeed. In this regard we strongly believe that the unique role of slave laborers, those who suffered unimaginable horrors in concentration camps and ghettos, must be appropriately recognized by the Foundation.
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The work program of the Nazis was truly horrific. Those who were subject to it were described as ''slave laborers,'' but in reality the goal of the Nazis was their destruction as much as it was the use of their labor. The structure and the details of the Foundation, we believe, must reflect this terrible history.
It should be noted that the overwhelming majority of the funds from the Foundation will go to non-Jewish persons who suffered at the hands of the Nazis either as slave laborers or as forced laborers, and we think that this should be noted, and this committee should be aware of this point.
On February 16, 1999, when Chancellor Schroeder announced the establishment of the Foundation, he specifically stated that the purpose of the Foundation was ''to meet the moral responsibility of German companies,'' including German banks, ''arising from the use of forced labor, aryanization and other grave injustices committed under the National Socialist dictatorship.''
Aryanization was, as you have heard earlier, the Nazi program of the confiscation of Jewish assets. The inclusion of an aryanization component in the Foundation was a direct consequence of earlier discussions that the Claims Conference had with various German banks regarding the banks' responsibility for their participation in aryanization.
The historical fact is clear that banks did participate in aryanization and profit from these racial programs, and indeed this fact and these issues have been examined by reports issued by the United States military government in 1946. We believe that the amount allocated for this section of the Foundation should reflect the magnitude of the moral and financial culpability of the banks. We also believe that this aryanization section should have one component that will enable individual claimants to make claims as well as a component which will benefit the neediest Nazi victims on a humanitarian basis. This latter humanitarian fund will benefit the very many persons who, because of the unique circumstances of the Holocaust, have no documentation of their claims or are unaware that they may have a claim.
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In addition, the humanitarian section will also acknowledge the fact that many of those who might have had claims relating to the banks in the aryanization of Jewish property perished in the Holocaust.
Regarding insurance, we welcome the launch of the claims process of the International Commission on Holocaust Era Insurance Claims scheduled for next week, and we participate actively in that Commission and pay tribute to the role of Lawrence Eagleburger in overseeing this process.
We are most concerned, as you have heard, about insurance companies, both German companies and others, which have not joined the International Commission, and we would urge this committee to take all steps possible to encourage them to do so. We appreciate the commitment of State insurance regulators who have pressed these companies to do so.
We believe also that the relationship between the German Foundation Initiative and the International Commission on Holocaust Era Insurance Claims needs to be resolved in a way which appropriately reflects the understandings so far reached and the proper financial responsibilities of each.
Although much has been achieved in the area of the German Foundation Initiative and the International Commission and during other restitution negotiations, we believe that the path before us is nevertheless long and time is not our friend. We not only want to see a measure of justice achieved, but we want those who suffered indescribable horrors to be alive to see that a new generation and a new century has not forgotten them.
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Chairman LEACH. Thank you, Mr. Taylor.
STATEMENT OF ROMAN KENT, CHAIRMAN, AMERICAN GATHERING OF JEWISH HOLOCAUST SURVIVORS
Mr. KENT. Thank you, Mr. Chairman. Thank you for the honor of inviting me to this hearing.
It is difficult for me to express myself right now, because I am a little dumbfounded. I heard the reports by Secretary Eizenstat and Graf Lambsdorff, and I have trouble with it. I have participated in the discussions, and what I hear and what I think are two different items.
I would like to excuse myself for not having a written statement to you, to this committee, but I just found out about this hearing yesterday, so I didn't have a chance to prepare a statement. But maybe it is just as well, because I willinstead of reading exactly the statement I will try to share my thoughts with you on this subject without going into the particular detail as my friends and colleagues did.
And I will represent this to you, my thoughts, not just as a survivor, but also as the one who has to speak. And we must speak not only for the survivors; we must speak for the six million of our brothers and sisters that are no longer with us.
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So let me also follow maybe what Graf Lambsdorff did and tell you something about myself, because when we talk about these numbers, we are talking about six million, we are getting lost. It is hard to comprehend a number of six million being killed. So let me take myself, which is the best thing to describe something, and my family, so that we can follow what happened and why we do what we do.
I was born in Poland. We were four children in the family. All four children went to private schools, and we lived a fairly comfortable lifeI would say quite a comfortable life. Then the War started.
We were thrown out from our home. Imagine, Mr. Chairman, if somebody comes to you one day to your home, puts a lock on it, and says, ''that is no more yours. Everything you have there, including your shirt and toothbrush, is no longer yours''; it belongs to a German, and you are thrown out from it.
And then we went to ghetto. And then from ghetto we went to Auschwitz, separated, of course, from the family. And then to other camps: Flossenburg, Dornau. I don't think I have to tell you any more because it speaks for itself.
In 1946 I came to the United States and it would be maybe of interest to youit should, because I came under the auspices of the United States Government. Orphaned as a child, my brother and myself came to the United States. And maybe from my accent I have, you could deduce that I was adopted in Atlanta, Georgia; I got my southern accent there. I attended the high school and then Emory University.
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When we, as a group, I and my fellow survivorsand maybe one of the best examples is the gentleman sitting to my left, Miles Lermanwe worked hard in the United States. I believe we were good citizens. We raised our families. And many of the things which I am talking about to you today we kept inside, because we were raising the family, we were working, we were building a new future, trying to forget the old one.
But still, at the same time, we kept the memory. And we survivors have committed ourselves to preserve the memory and the uniqueness of the Holocaust. We have achieved that through educational programs, museums, commemoration; and today, you know, we have the days of remembrance throughout the United States every year. Mr. Chairman, as the best example, Miles became the Chairman of the Holocaust Museum in the United States.
And if I will jump a little and tell you this is why it strikes me like funny, like an irony, when Germany is starting today and announcing with fanfare that ''we are going to establish a Future Fund for commemoration.'' Where were they forty years ago? Fifty years, thirty years, twenty years? It is an irony that they are showing it to you and they announce it with such pride.
But let's go slowly further. It is then when we were able to come to ourselves. We slowly started to fight for justicenot for money, for justice. Now, let me say that there were references before to the 1952 agreements. Let me point out to you, Mr. Chairman, that we survivors were never part of this agreement. We didn't care. We were still skeletons, skin and bones, we didn't care about the money. We didn't want to.
Page 107 PREV PAGE TOP OF DOC Segment 1 Of 2 But I also like to point out that as it was said here by Graf Lambsdorff and so on, this agreement in 1952, when we look at it today, what kind of agreement was it? It was an agreement made without any precedent. What is so holy about an agreement that was made in 1952 about issue like Holocaust, which never existed, based on something that nothing was known about it? What is so holy about it as to not amend it and to change it if there were injustices? It is nothing wrong with it.
I think the people in the Congress, just like the Bundestag in Germany, are sitting every year and are changing laws that were passed sometimes even a year ago, five years, ten years. So I don't consider the way the Germans consider the 1952 agreement like it is Bible, it cannot be changed. It should be changed. It must be changed, particularly when we are talking about the 1952 agreement, we have to realize, as I said before, that there were many people that did not want to have any part, anything to do with Germany. When they started the so-called law which they called Wiedergutmachung, which I resent the name because you cannot make good something that was killed, it does not exist. But that is what they call it, Wiedergutmachung.
Many of our friends did not want to apply for any compensation. They did not want to have anything to do with Germany, they didn't want to take the money that they referred to as ''blood money.'' Many were children. They didn't want to apply.
Such a law has to be changed, should be changed, and we are making some progress in changing some of it. But here isand again, I like to tell you what makes the survivors different from many other people. You know when somebody is sick, to give you an example, we can say that ''time is the best medicine. Take a month, two, time is the best medicine.'' Mr. Chairman, Lady Congressman, for our survivors, time is not the best medicine. It is contradictory to medical science.
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You see, when we were young, and we were busy with raising a family, we did not think about anything else. We were in a new country. We were building the family. Today, when we are old, we go back, our memory goes back. Our children are grown up and moved away. And when you look at me or Miles, thank God we are OK.
But how many of our survivors are lonesome, by themselves with no means to support themselves except Social Security or whatever it is? And they need more help now than they needed when they were young. And they think more about what happened in the camps. And let me tell you, as I told you, I am sharing my thoughts with you here, that even I many times think about it. How can I forget the first day when I came to Auschwitz? Impossible.
So we, as part of the Claims Conference, the American Gathering we have started in the last few years, we joined the Claims Conference. And I say it again that at the beginning we survivors were not part of the Claims Conference. It is just in the last few years that we joined it. And I will say that we did reopen certain issues. And we have slowly broken through this so-called ''BEG agreement, 1952,'' and we have set up what the Germans call ''hardship fund.'' Recently we have received additional pensions for the people in Eastern Europe. But may I say to you it is too late and too little.
You know, I brought with me the book. This is one word that is written on the book, ''Auschwitz.'' I think this book can say all what we can say about the Holocaust. It is a word which will be remembered for now and eternity as evil. I must tell you that when I spoke a couple of years ago with the German officialslike here was the president of the Bundestag and the executive secretary, they have told me at that time that conditions in Germany are very bad and that they cannot do anything for us.
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It was maybe a coincidence that I have received this book when I flew to Germany on this meeting, and I read it. And I have told these people of the Bundestag that what she is telling us today, that the conditions are very bad in Germany, is nothing that is new to me. I am not in a concentration camp. We read papers, we watch television and so on. And I have told her, ''Let me tell you now something which you did not tell me. What you did not tell me'', I said to herand I showed her the book, which I say, ''I just read it because it just came outif you look here.''
And I went to them and I showed them: ''You look here at plans of Auschwitz and others, these were done not just by Nazis, these were done by draftsmen and engineers, businessmen, workers; they were all German people. And let me tell you what you did not tell me, namely, these people in the last forty years have the highest earnings in Europe. And let me tell you what you did not tell me is that these people are today on the highest pensions in Europe. So if you are telling me that the times are so bad, let me tell you point-blank, my heart does not bleed for these people that have the highest pension in Europe. And even if you have to cut them by 2 percent, their pension, and give it to the people that suffered, that were in the camps and 90 percent of them died, these people deserve this. So don't tell me about it.''
You know, talking to you this way, I must say that what I heard today on all these meetings was ''money, money, legal closure, closure,'' and I have to tell you that I am really very greatly disturbed. I am disturbed by the aftermath of articles pertaining to the inquiries. And we heard today all day long about gold, not about other SS atrocities, and the slave and forced labor. These are important issues, but I am really tired of hearing it.
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I want to tell you, Mr. Chairman, I certainly want the facts regarding the role of Switzerland and its banks, the role of Germany and the industry, and of any other country involved which was profiting during the Holocaust; I want this to be exposed, so that the truth be known and a just and overdue compensation be given to all victims of the Holocaust. Yes, what is uncovered already is just as shocking as it is disgraceful.
No longer will Switzerland be thought of simply as cuckoo clocks, skiing and neutrality. I fear, however, that the recent tone of the Swiss government and many others tarnishes the memory of the six million who perished. Even this hearing emphasizes that. The bickering and the lawyers bringing class action troubles me. For the media, the glitter of gold that is the great expectation generated by the search and lawsuits seeking damages in the millions, if not billions, of dollars is somewhat blinding. The thing created by the press has diverted attention from the unprecedented evil that was the Holocaust.
Now we have an additional issue in the limelight which is the slave and forced labor. It is unfortunate that the Holocaust now relates to banks and other assets and not just for the extermination of the people and the murder of six million brothers and sisters. As a matter of simple justice, survivors should get back what was seized from them and their communities in Europe. They want the true disclosure as to what happened in Switzerland or, for that matter, any nation. But great care must be taken if fervor over the gold overshadows the moral responsibilities, and I hope that this committee will see to it that it does not.
It seems to me, going to the present issues, that about a year ago the German government established the so-called German Foundation Initiative, called ''Remembrance, Responsibility, and the Future.'' Questions that come to my mind: Initiative, sixty years after that, do we call this initiative?
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''Remembrance, Responsibility, and the Future.'' It has a good name. But in all our talks we talk about legal closures, about lower cost of legal closure. The last one in Bonn; that was the one meeting I did not attend, because we survivors in the United States decided to boycott it because it became a three-ring circus. I could see the glitter of gold in the eyes of the lawyers that were thinking how many millions of dollars they would like to make out of our skin and bones, out of the survivors.
I have seen the perverting of the meaning of the Holocaust. And that of the slave labor and equating the slave labor to forced labor. And when we talk about the slave laborand I heard before the questions, you know, English language is extremely rich in words. But there is really no word that can describe, although we use it now as ''slave'' labor, because a slave was somebody that was a property; you did not kill the property voluntarily.
But the slave labor, the way we use it here is somebody that was designed to be killed through work. It was the German expression to be killed through work. And they had a schedule, ninety days should be the lifetime that they could use a man to work, and then let him die and they will pick up somebody else.
And the third issue, which also was to be like a three-ring circus, is the pleading of poverty by the industry. Imagine the poor German industry, the Siemens, the Bayers, the Volkswagens, the Mercedes-Benz, these are the people that are buying our banks; they bought the third largest auto company, Chrysler; they bought insurance companies. They are pleading poverty. I was at one time ready, but I didn't have the guts to go and tell them ''we will make a donation for you.''
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As a matter of fact, a leader of their industry in one of the meetings saidand he meant it seriously, he said ''You know, we, the industry, are paying part of the bills that the government is giving, because we pay taxes.'' I remember Stu Eizenstat was there too, and he was also stunned.
And it was quiet in the room, and I answered him, ''Yes, Dr. Gantz, you are right, part of the money which the government pays is your taxes. But if we are going to do this, why don't we go back in the history? Let's go to the Marshall Plan. I paid the taxes, all my fellow survivors, all Americans paid taxes too, so should we deduct it, should we add to it?'' We heard no more about the taxation.
But I would like to say again and I would like to emphasize that we survivors never spoke about money. We spoke about morality, we spoke about ethics. And some justice, relative justice, not a complete justice, we are realistsit does not exist, absolute justice for all. Not just for us. But we also told them at this negotiation that from us survivors, they can get no closure, they can get no forgiveness, because the only people that can forgive them are the six million people that they killed. They are dead. They cannot forgive them.
And this is what brings me to the trouble, that part of the negotiation which we were talking here so much, and misleading statements or innuendos about the 10 billion deutsche marks. And that goes back to what I said about the image, that it is money being grabbed by the Jews. It is wrong. It is not for the Jews. The Jews are only getting a small portion of the money, and yet it is presented in such a way as if it would be Jews. And unfortunately, I must say that I had a meeting with Graf Lambsdorff, Benwho is my friend, and Mr. Singer was there, too, just the three of usand Graf Lambsdorff said ''that creates anti-Semitism.'' And I have told him, ''If it does, it is your fault, because you are creating the impression that the 10 billion deutsche marks are for the Jews.''
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We are not grabbing. We never spoke about money. Maybe 30 percent of the money will be to the Jews.
Now, when we are talking about the negotiation, I tell you that the way I see it, that the problem with the negotiation is that too many of the negotiators have never been exposed to life in the concentration camp. Too many never heard the cries of agony from the tortured. But they are eager to talk and write about the lives in the camps.
I can only tell you that I never wrote a book, but I did personally experience life in these concentration camps. I can also tell you that there are no words, no tales, no pictures which can possibly convey the brutality, terror and bestiality that occurred daily in the places of horror. Yet so many, so many want to represent us.
If you would be at the meeting of this negotiation team, you would see half of the people are lawyers. So many of them want to represent us. So many want to tell us what is good for us. Without even realizing that only those who survived the concentration camp can truly understand us survivors. Then even we cannot convey to others but a minute portion of the actual happening.
I am sorry, Mr. Chairman, I take more time than maybe I should, but I was not given exactly the time period, and I will try to finish.
Because so much was said about this so-called December 17th date, I don't know whether I should call it the famous or infamous December 17 date. I was there. I was asked by some of my people, ''Roman, you must be there.'' I went there. I heard the speeches made by President Rau, by our good friend Stuart, and Graf Lambsdorff.
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I would like to tell you that I have the highest regards for Stu Eizenstat. He has the patience of an angel and he guides these meetings in a way that I have never seen anybody do it. And even today I have talked to Stu that, ''Look, I mean, I don't know how you do it, how you keep calm.'' And he said, ''I still have to learn how to keep you calm.'' But it is not so bad.
I would like to point out that no survivor was asked to speak at the presidential palace. It was just the three of them. But being there, I felt that we survivors should say something. It was wrong for us to be there, only two or three of us were there, and just standing next to this President Rau, I did express some of my thoughts. And I said that from the very beginning, we survivors fought for and stressed the moral issues and tragedies of the Holocaust, not only for us as Jews, but for the world at large. Even today the unimaginable damage caused by the Holocaust cannot be fully comprehended.
And I would like to emphasize, standing next to the president, I still felt that I have to tell him this, that 1.5 million Jewish children were killed. No, not killed, but brutally murdered. And I said that sixty years ago, I too was child; I was one of the few who survived. And just the moral issues, the historical justice are what we survivors fought for. I continued by saying that the remarks that have been made here today, and particularly the ones made by you, President Rau, justify the efforts we have made concerning morality and morality only. Forgive us, and I used the Hebrew word ''shehahatanu'', for we have sinned, it was this, what I and the world heard today. And I finished by saying, ''Let these words reverberate now and forever here and around the world so that another Holocaust can never happen to us or to any other people.''
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I like, Mr. Chairman, to emphasize that I did not utter one word in the presidential palace about compensation. Yet I want to stress that there should be no question, no question in anyone's mind that the living survivors should receivethey should receive enough compensation to spend the rest of their lives in relative comfort. This is the least to which they are entitled. I would like to stress that the lives of 1.5 million children and their families are priceless. No, we do not want to equate morality and ethics in terms of dollars and cents. That is the difference between us, the survivors of Auschwitz and the non-survivors.
I can only hope and pray that the victims of the Holocaust did not die in vain. If we can be a moral force and, by example, make the world a better place to live, that would be the greatest legacy that we survivors can leave for posterity.
I would like to thank you again, Mr. Chairman, for allowing me to share some of my thoughts with you and your committee. It would be thoughtless, however, if I would not say that the draft legislation proposed by Graf Lambsdorff, given to the Bundestag, was completely disappointing and unacceptable to us. I cannot agree with the beautiful report which was given by the Graf.
There are so many points there that it have no business to be there. It was an insult to us. It was to me a heartless, cold document absolving the German industry of all these things, of all their atrocities, of all their tragic work; and should the 10 billion deutsche marks obliterate the meaning of the slave labor?
Now, we cannot agree to that. We cannot agree to that, because as long as you have people like Haider, who refers to a concentration camp as Mr. Hirshson said, as ''punishment camp'', and as long as we have David Irving questioning the Holocaust, we must not allow historical documents, and for that matter, any document, to distort the real evil of the Holocaust.
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I just want to finish by making a couple of additional comments about some of the statements made which were so contradictory, with your permission.
Chairman LEACH. Sir, you have my permission.
Mr. KENT. Thank you.
I heard the statement how much the German nation already paid100 billion deutsche mark, or whatever it is, and it strikes me like a funny way of saying how much they paid, rather than how much they took, and how much they paid out of that. If they stole from the people in Europe 500 billion and if they gave slowly year after year and adding up to 100 billion, should I go ahead and thank them? You paid me? If you took my whole apartment and you are giving me a chair every year, so that after fifty years I maybe have a living room, should I go ahead and tell them thank you? It is the wrong way of putting it.
Again, like I said about the German draft, there were so many things and the words are so nice, but its meaning is so different. When we talk about that we want to pay as fast as possible. Why were a lot of things kept by the German government in their hiding pockets and not told to us? Why, when we asked, ''Are you talking about foundation? What is the membership of the foundation? If it is allocation why don't you do work on it before? Why do you wait until everything is finished? And what is maybe even worse, why do you want to push us survivors to negotiate with the Eastern European government how to divide it? We are not giving the money.''
Page 117 PREV PAGE TOP OF DOC Segment 1 Of 2 I have told Count Lambsdorff, it is not our business to have anywe have no quarrel with the Polish government, with the Russian and so on. We have no right to fight. It is so easy for him to say, ''We will agree to everything that you will agree.'' That is not my money to agree with somebody. Yes, I have a foundation, a charitable foundation. I can decide who I give. Germany gives the money. Graf Lambsdorff tells me, you agree with the others.
We never fought about money. It is wrong to do it, is it not? And then to throw it at us, ''You delay it.'' No, they delay it.
Because another thing which they threw in all of a sudden, almost at the end of our negotiations, they suddenly decided that Bundestag has to approve it. Why did they wait so long? If Bundestag was supposed to approve it, they should have done it before.
I think, Mr. Chairman, I've said enough. I never spoke so long. But somehow looking at you, smiling, patiently listening to me, you gave me the courage to say what I said. So please forgive me if I took too much of your time. And if I have burdened you with too many problems, but this committee has been very instrumental to the memory of the Holocaust and that is what we survivors want to achieve.
So thank you again.
Chairman LEACH. Well, thank you, Mr. Kent. And let me just make it very clear that the United States Congress cannot cut off in any way the testimony of a Holocaust survivor. You deserve your time.
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STATEMENT OF MILES LERMAN, CHAIRMAN, U.S. HOLOCAUST MEMORIAL COUNCIL
Mr. LERMAN. Thank you, Mr. Chairman.
I would like to touch on a subject matter that is somewhat different, but very, very definitely intertwined and tied in to the subject matter that we have the dialogue on. And this is the subject matter of Holocaust education.
Chairman LEACH. If I could interrupt you for just a second, if you could pull the microphone closer and a little lower, I think you will find it carries to the back of the room a little bit better.
Mr. LERMAN. Is this better?
Chairman LEACH. Yes, it is.
Mr. LERMAN. The subject matter of Holocaust education, and not for the purpose of the horrors that this represents, but for the purpose of using it as a moral compass for todayfor the Kosovos, for the Rwandas and for the rest of the world. I have recently returned from Sweden where I have co-chaired with Under Secretary Eizenstat the U.S. delegation to the Stockholm International Forum on the Holocaust. This, Mr. Chairman, was an absolutely unprecedented gathering of representatives from forty-eight countries and several non-governmental organizations who came together to explore ways and means to implement a global network of Holocaust education. The delegations contained twenty-one heads of state.
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All the representatives of governments at the Stockholm International Forum declared the importance of the lessons of the Holocaust for contemporary society. As I mentioned before, they pledged to promote Holocaust education and remembrance, including an annual day of Holocaust remembrance in their countries, as we are having in the United States, and to facilitate the opening of archives in order to ensure that all the documents related to Holocaust matters are available to researchers and historians.
Countries pledged to work cooperatively with the intergovernmental Task Force for International Cooperation on Holocaust Education, Remembrance, and Research with the U.S. Government participation; and it is led by the Department of State and the United States Holocaust Memorial Museum. I have included a copy of the formal declaration of the forum and a description of the task force with my written statement, which you have on file, Mr. Chairman.
There are many reasons why so many countries on such high levels participated in this unprecedented gathering. The reasons were: The concern over the growth of neo-Nazism; public opinion polls showing that young people in some countries have very little knowledge of this tragic chapter in history; the events in Bosnia and Kosovo and Rwanda and East Timor, and elsewhere; concern for human rights; the hopes for the new century and the new millennium and other factors, not the least of which is the early vision of the United States Government in establishing the United States Holocaust Memorial Museum.
Much of the pressure toward greater efforts worldwide in Holocaust education, remembrance and research has been the indirect result of the activities of the Committee on Banking and Financial Services of the U.S. House of Representatives, in particular, and of the United States Government generally concerning Holocaust-era assets for which I want to thank you formally and officially. I can't thank you enough for that.
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As a result of this committee's investigation into the question of bank accounts in Switzerland and the expansion of that inquiry in the Congress and under the guidance of the Deputy Secretary Stuart Eizenstat, to encompass insurance, real property, art, and forced and slave labor, as Mr. Kent has enunciated, attention has been focused as never before not only on the need for financial restitution to survivors, but also on the great need for the world to understand the tragic history of the Holocaust, to understand it. Perhaps even more important ultimately than this committee's outstanding work regarding the assets themselves has been the way in which governments and the general public have come to understand the need to know the truth concerning the Holocaust, however painful it may be.
It is essential that the future generations learn not only what happened, but they get to understand how it was possible for it to happen. And this is very important.
The efforts of this committee have also spawned an entire new era of research. Previously, in years back, scholarship on the Holocaust concerned itself primarily with the murders. There was relatively little work on the tremendous theft, the tremendous robbery that accompanied it. Because of the need during the past few years to examine bank, insurance and other corporate records, a younger generation of scholars has developed expertise on the economics part of the Holocaust. This is totally separate subject matter.
And inasmuch as this new research will be instrumental in the implementation of a process to help compensate the unlawful confiscation of material matters, it is essential that we keep in mind that the last word on the Holocaust cannot be bank accounts or insurance policies. It must be Holocaust education, first and foremost.
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The last word on the Holocaust, must not, however, be money. And ultimately the issues discussed by this committee are about memory and justice and planting the seeds of a better future. I urge the committee to pursue its inquiries until they are fully settled, but to continue your efforts with the understanding that I know you have, that what you are really examining is historical truth and humanity's aspirations for a better tomorrow.
Thank you, Mr. Chairman.
Chairman LEACH. Thank you very much, Mr. Lerman.
STATEMENT OF RABBI ANDREW BAKER, DIRECTOR OF EUROPEAN AFFAIRS, THE AMERICAN JEWISH COMMITTEE
Rabbi BAKER. Thank you.
The efforts in these past few years to identify and recover Holocaust era assets have been quite remarkable. Questions concerning looted Nazi gold, stolen art, dormant bank accounts, unpaid life insurance policies, and long-rejected claims for forced and slave labor have all been addressed and appear to be on the way to resolution. Surely, no observer or participant to these developments imagines that this could have been possible without the active interest and intervention of the United States Government.
Page 122 PREV PAGE TOP OF DOC Segment 1 Of 2 At the same time, significant problems still remain in each of these areas, and delays and new stumbling blocks have increased frustrations.
The court-certified settlement in the matter of Swiss banks has promised the possibility of additional help and benefits to Holocaust survivors beyond those with claims to actual accounts. But the process of uncovering these accounts has been a difficult one and disclosure of new lists will delay further final determinations of how much money can be allocated to survivors and possibly even the distribution itself. The inability of parties to the agreement to reach a common understanding on distribution at the beginning has already added months of delay.
The creation of an international commission to resolve Holocaust era insurance claims was thought to offer a collaborative means of joining companies, regulators and victims' representatives to find a swift and equitable solution. Former Secretary of State Lawrence Eagleburger deserves much credit for his work as Chairman, but he presides over a divisive and argumentative process where progress is now measured in small steps and the number of participating insurance companies is decreasing rather than growing.
A year ago this month a representative of the German Chancellor announced in Washington that within ninety days a fund would be established to make payments to former slave and forced laborers. After much difficulty, though still before the end of this past calendar year, an agreement was announced for this total payment of 10 billion marks, and Deputy Treasury Secretary Stuart Eizenstat should be recognized for shepherding this very difficult negotiation toward a final settlement. But there are several different claims which must be satisfied by this total sum, and the actual payments to individuals, as well as the number and categories of forced laborers to be covered, still remain to be decided.
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People who are involved in these various negotiations have worked tirelessly and no one would dispute that a whole host of details must be completed before such complicated final settlements are put in place. But the news of these various agreements has often been trumpeted long before claimants or survivors are able to see any tangible result. Naturally, it has produced frustration and increased suspicion on their part.
Now we are about to face a new set of questions and problems. How will we divide and how will we distribute these funds? And I am not speaking of those cases such as a bank account or an insurance policy or a work of art where there is an identifiable heir or claimant. Rather, it is where we will have humanitarian funds as compensation for heirless or unclaimed assets or where we will have a lump sum payment for large numbers of victims.
Even among the most severe victims of the Holocaust, it is not easy to determine an equitable system of distribution or even to know if such a system is possible. Do we consider the experience and suffering during the Holocaust as the major factor? Do we take into account the financial needs and conditions at the present time? Can we find ways to approach fairly the very different situations today in which Holocaust survivors live in Israel, in America, and in Eastern Europe and the states of the former Soviet Union?
Add to this the fact that at least in the current slave and forced labor negotiations, we have expanded the group of victims to be addressed. It will include people who surely suffered during the War, but in the main were not concentration camp inmates, nor, like Jewish victims, targets for extermination. Justice is served by addressing the claims of these victims, too. But we must now contend with an overall settlement that virtually pits victim groups against each other to fight for their share of a fixed amount.
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Even as these problems demand answers, we should keep in mind some larger, more long-term questions. Throughout these months, many people have spoken eloquently and repeatedly about the lasting legacy of these asset debates. We have been reminded that they must not be viewed as only matters of money, but rather of justice, of morality, of history, of education. Yet I fear that when we look at these things, at the still tangled, unfinished business of the Holocaust, we address each important issue in isolation from the next.
It is as though the recovery of stolen assets, the pursuit of Nazi War criminals, the advancement of Holocaust education and research, the revival of Jewish life in Central and Eastern Europe, and the dynamics of the current bilateral relations with the countries affected are all separate. In fact, the truth is quite the opposite. We need to see that they are connected and able to reenforce each other in positive ways.
For many years and continuing to the present day, the Claims Conference on Jewish Material Claims Against Germany has conducted direct negotiations with the German government on behalf of Jewish Holocaust survivors. However, recent developments have now grouped it together with the representatives of other non-Jewish Nazi victims. The experiences of these victims during the Holocaust era were very different. And they do not see each other as having shared grievances of or the solidarity of a common suffering. But the representatives of Jewish victims do recognize that there is merit in the others' claims, even as they resist efforts that set these claims against each other.
In the end, I believe it is important for both moral and practical reasons that the many non-Jewish victims of Nazi forced labor and their respective governments will come to recognize that Jewish representatives shared and helped advance their efforts for redress as well.
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Many of the most needy of Jewish Holocaust survivors live today among the remnant communities of Central and Eastern Europe and in the former Soviet Union. The way in which these negotiations play out can either serve to ameliorate the relationships between these Jewish survivors and their neighbors and governments or serve to increase tensions and heighten resentment.
Great emphasis has been placed on the importance of Holocaust education, and as we heard, last month's Stockholm Forum was an unprecedented step to encourage government involvement in dozens of countries. Quite obviously, an understanding of the Holocaust in all its dimensions should contribute to a better understanding and appreciation for the efforts to recover looted assets, even as they make evident that money was only a small part of the story. But it should be pursued in such a way that the study of the Holocaust, particularly in the former Communist bloc countries, will foster introspection and self-examination that was impossible before 1989. With prodding from the West, several of these countries have created national historical commissions to investigate the events of the Holocaust on their own territories. Now we need to find the financial means to help them undertake the research and archival work, which may, in many cases, take them here to the U.S. Holocaust Memorial Museum or to Jerusalem to Yad Vashem. But in doing this, let us also find ways to help educate a new generation of scholars by creating opportunities for young researchers and interns from Poland, from Latvia, from Lithuania, from elsewhere in Eastern Europe, so that they can be involved in these efforts. At the end, there should be not only completed historical reports, but new teachers as well.
As for Holocaust education, efforts should not focus exclusively on the twelve years of the Holocaust itself. During the past eighteen months, the American Jewish Committee has conducted a review and analysis of secondary school textbooks in seven Central and Eastern European countries. Even where the subject of the Holocaust is addressed, all too often the centuries-long history of Jewish life in these countries is virtually absent. Thus, it is as though Jews appear on the landscape only to be deported and exterminated by the Nazis.
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Correcting this omission is important for several reasons. It will inform new post-Communist generations of students that their own national histories are intertwined with Jewish history. And it will strengthen the efforts of remnant communities as they seek to revive Jewish life and recapture their own histories. And the revival of Jewish life in this part of the world truly is one of the miracles we have witnessed.
Despite very limited resources, small numbers, resurgent anti-Semitism, and the internal disputes that seem to accompany all Jewish communities, they are actively engaged in the process of rebuilding. They need help in caring for their aged and indigent, the majority of whom, by the way, are Holocaust survivors; and these negotiated settlements should bring welcome relief. But they also need help in educating their children, even as they educate themselves, to make up for the decades when such Jewish learning was illegal or not possible.
Help for this, too, should come from these agreements. As I remarked the last time I was invited before this committee, the Jewish communities in Central and Eastern Europe themselves are also survivors.
Mr. Chairman, in these last half-dozen years I have had the opportunity to travel frequently to the countries of Central and Eastern Europe. In every place there are those who would minimize the Holocaust, who view Jews, past and present, with distrust and suspicion, whose own sense of being a victim of the Soviet horrors cannot permit an acknowledgment that their own countrymen might have collaborated in Nazi crimes. Encounters with these people can be a chilling and depressing experience.
Page 127 PREV PAGE TOP OF DOC Segment 1 Of 2 But, it is equally true that in all of these places there are also people, mostly young and idealistic, who hold different views. They tend to the care of abandoned Jewish cemeteries. They dig through long-forgotten local archives to retrieve pictures and documents of pre-War Jewish life. They organize seminars on teaching the Holocaust. They monitor newspapers and television broadcasts for anti-Semitic and racist expressions. They want to know their country's past and, in particular, its Jewish past. They want to link their country's future with the civic and pluralist values of the West.
Quite frankly, I think this second group is much smaller than the first. But I believe and I have hope in their future. Who will be the ones to preserve the legacy of the Holocaust in Central and Eastern Europe if not they? The local Jewish communities are too few, and we are too far away. These are the people whose eyes have been opened to the possibilities and to the responsibilities of building a new society on the values that we also cherish.
You know them. They are the people who came here on government study visits since 1989, who staff the Open Society Foundations, who have created Atlantic Councils, who have advocated for NATO membership and human rights; some of them even sit around some of the negotiating tables. In our efforts to recover Holocaust assets and to preserve Holocaust memory, they are not our adversaries. They should not be our competitors. They need to be our partners.
Chairman LEACH. Well, thank you very much, Rabbi Baker.
Thinking of the last two witnesses on the education issue and about the hearing we are going to have tomorrow, I am wondering if it might not be an interesting undertakingor perhaps you have already undertaken it at the museum, Mr. Lermanto have an exhibition, possibly a permanent one, on degenerate art. That is, Hitler defined certain art as ''degenerate''; in that defining, he really defined himself as degenerate.
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What makes me think of this, I was recently in a small town in Switzerland where they hold an annual conference, and there is a museum to an emigre from the Nazi era named Kirschner, who I don't believe was Jewish; but he committed suicide, it is believed, in large measure because most of his art was destroyed by the Nazis. I think that is a very big symbol to a civilization. And it might be an interesting thing for your museum to contemplate.
But I don't know. Maybe you have undertaken this sort of thing.
Mr. LERMAN. You would be interested to know, Mr. Chairman, that while I was with my senior colleague staff members, the director, Ms. Bloomfield, Wesley Fisher, who is with me here todaywhile we were in Sweden there was a tingling, there was an excitement, because it is the first time where forty-eight nationsand some of them were former collaborators of Nazi Germanycame together, knowing fully that they were coming for one purpose, to find a way of taking a good look at themselves, to take a good look at their past.
And at the conclusion, I stood up as Chairman of the United States Holocaust Memorial Council and committed the United States Holocaust Memorial Council, my colleagues, the expertsthey are the teachers; they are the ones who are working today with 30,000 teachers in the United StatesI have committed that any country that is embarking on a program of Holocaust education, and they need assistance, they need help, that I encourage them whether in methods, whether in evaluation of lessons or material, we stand ready, we are the expert. Unfortunately, we are the expert.
We have learned it throughout the years while we are building the museum and throughout the period of the six-and-one-half years of fabulously successful operation. We have found ways to convey the positive among the ugly, and we will do that. This will be an ongoing process.
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Robert Singer will proceed with his task that he is doing so ably, and everybody is applauding it. We will continue with our task, and we hopefully will create a generation that will be a little better than it was a year ago.
Chairman LEACH. Well, thank you.
Let me turn to Mr. Hirchson. The settlements that are being talked about that Mr. Kent indicates are inadequate, others indicate at least are symbolic. Will they make a measured impact on Israeli life and Israeli economy? Will they be any help to your country?
Mr. HIRCHSON. Of course the changing life, there are some of the survivors who are in very bad condition, and each dollar or each schedule that is paid now is changing, you know, on a daily basis their life. But I am asked every day by hundreds of survivors, and they want to know when it will be finished and when they can get the money. And the thing that I am dealing with is every day hundreds of letters of the survivors that want to know when the day will come that they can see justice.
Chairman LEACH. Well, I appreciate that, and certainly your country has the largest number on a proportional basis, but I think Rabbi Singer is right when he affirms that we are really dealing with symbolism much more than justice; that is, it is inconceivable, apparently, to reach justice, but it is not inconceivable to reach an element of symbolism that at least addresses philosophically the issue. And I think that is all we can do. But in terms of justice, I think that is beyond the realm of conceivability.
Page 130 PREV PAGE TOP OF DOC Segment 1 Of 2 Ms. Schakowsky.
Ms. SCHAKOWSKY. Thank you, Mr. Chairman, for this hearing today. And I really want to thank our witnesses, particularly Chairman Hirchson, for coming this long way and contributing so much to this discussion. And to all of you not only for being here today, but for your years and years of commitment, your ongoing commitment that I know won't end even when the checks go out, and I hope that they do. This is, as you have all said so eloquently, so much bigger than money and property and things.
I look forward to working with all of you to achieve our goals of the whole world never forgetting.
Chairman LEACH. Well, I think that is an appropriate statement to end the hearing on, and I want to thank you all very much for your testimony, we are very appreciative. The hearing is adjourned.
[Whereupon, at 3:00 p.m., the hearing was adjourned.]
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