Suing Hitler’s Willing Business Partners: American Justice and Holocaust Morality

, October 21, 2004

Jewish Political Studies Review 16:3-4 (Fall 2004)

 

The Holocaust restitution lawsuits, filed mostly as class actions in American courts in the latter half of the 1990s, yielded billions of dollars in settlements for Holocaust survivors and their heirs. The American lawsuits, and the concomitant political campaign by American Jewish leaders and American government officials, also unearthed valuable historical data about the financial crimes of the Nazis and their cohorts during WW II. This post-Holocaust restitution movement, while viewed as a success, nevertheless created troubling moral issues, and this article focuses on five of them. First, does the demand for financial restitution demean the memory of the Holocaust? Second, once the funds are collected, how are they to be fairly distributed? This raises the provocative issue of who should be deemed a “Holocaust survivor.” Third, should some of these restitution funds be allocated for Holocaust education and remembrance, or do they belong solely to survivors? Fourth, while payments to individual survivors from these settlements were in the thousands of dollars, the class-action attorneys earned fees in the millions. Are these attorneys entitled to such fees, even though the fees represent less than 2 percent of the total amounts collected through the litigation? Fifth, many of the lawsuits were defended by Jewish lawyers. Although European corporations accused of wrongful conduct both during and after WW II are free to hire Jewish lawyers to defend their interests, should lawyers who are Jewish have taken on the defense of such suits?

By confronting these gray zones of post-Holocaust restitution, this article aims to shed light on this latest and wholly unexpected legacy of the Holocaust.

 

The end of the 20th century added a completely unexpected chapter to the postwar consequences of the Holocaust. In 1995, a half-century after the end of WW II, a campaign was launched to obtain monetary compensation for the material losses suffered by Jews and other persecuted groups during the war. To everyone’s surprise, including the participants themselves, this campaign became a major political issue not only in Europe but also in the United States. One reflection of this was that more news articles were published about the Holocaust between 1995-2000 than during the preceding fifty years, most of these articles focusing on Holocaust restitution.

Another major surprise was that the locus of the campaign was not Europe, where the Holocaust occurred, but the United States. Consequently, the American justice system has been the prime mover behind the numerous agreements concluded between 1998-2001. These have resulted in compensation being paid to: (1) individuals whose families’ bank accounts had been looted either during or after the war; (2) former slaves of German companies seeking payment for their wartime labor; and (3) survivors whose claims to benefits of insurance policies issued to their family members who perished during the war had earlier been denied. A fourth area of Holocaust restitution, also pursued in the United States and often before American courts, involved competing claims to looted art. Art and cultural objects looted by the Germans and others from Jews during the Nazi era are only now being returned by museums, galleries, and private owners to the prewar owners or their families.1

The agreements brought about by the U.S. government and before U.S. judges since August 1998, when the first settlement took place, reached by 2001 a figure of somewhere between $8-$11 billion, depending on the method of calculation. Although these settlements came nowhere close to fully compensating still-living Holocaust victims or heirs for their, or their families’, wartime material losses, the sheer size of the settlements and their unexpected occurrence so long after the war, qualifies them as a major victory for surviving victims and others seeking to right as best as possible the financial wrongs committed during the war.

Not all the results, however, are positive. The campaign also produced some morally ambiguous outcomes that can be called the gray zones of Holocaust restitution.

This article will focus on those gray zones. The aim is not to provide answers to the difficult questions surrounding the Holocaust restitution movement,2 but to discuss them openly. Such an open and frank discussion is critical to understanding this latest – and still ongoing – legacy of the Holocaust.

 

The Gray Zones of Holocaust Restitution

This section will discuss five controversial issues related to the gray zones of the Holocaust restitution movement.

1. Does seeking restitution funds diminish the memory and distort the history of the Holocaust?

Almost from the beginning, the efforts to collect monetary compensation from the European corporate parties produced strong controversy, not at all surprising considering what one writer called the “minefield of passions that lies beneath this issue.”3 The question of whether victims of genocide should seek monetary compensation from the perpetrators and other wrongdoers raises important questions, such as: Does the taking of moneys by the survivors demean the memory of the deceased victims? Does it allow the perpetrators or their heirs to claim that their debt has been paid and their guilt extinguished?

The Jewish activists who pondered these questions in the late 1990s, as they considered whether to seek compensation from the Swiss banks, German industry, and other European corporate parties, failed to realize that they were reinventing the wheel. In fact, these same issues had been debated by an earlier generation of Jews.

After the war, the surviving victims had to decide whether they should accept restitution from a willing West Germany or whether, instead, this would bring dishonor to the six million killed by the Nazis. The postwar debate was raucous, with opponents labeling such payments “blood money.” It was most intense in Israel, where many of the destitute survivors came to start new lives. Street demonstrations, led by both opponents and proponents, manifested the deep rift in the Israeli populace. The controversy was also mirrored outside Israel, as American Jewry and surviving European Jews disagreed on how to respond to the West German offer.4

The eventual winner was pragmatism. Israel was in dire financial straits, needing an estimated $1.5 billion to resettle the refugees from Europe. It was agreed that West Germany would pay $1 billion of that amount. This led to the next stage, where certain limited classes of Holocaust survivors residing in the West began receiving lifetime monthly payments from West Germany, payments that still continue today.

To date, Germany has paid approximately $60 billion to Jews worldwide through its various reparations programs. Although this amount came nowhere close to compensating the material losses suffered by European Jewry during the war – let alone the loss of life – the debate over accepting financial restitution appeared to have been settled by the late 1950s. Yet it reemerged with the same force in the course of the Holocaust restitution litigation.

The first public misgivings over the litigation and claims for monetary damages appeared in December 1998. Abraham Foxman, national director of the U.S.-based Anti-Defamation League and himself a child Holocaust survivor who was hidden by a Polish Catholic family, published an opinion piece in the Wall Street Journal that labeled the litigation against the Swiss banks as undignified. In a commonly heard statement, he decried that this struggle for restitution from the private corporate defendants made money the “last sound bite” of the Holocaust. According to Foxman, this was a “desecration of the victims, a perversion of why the Nazis had a Final Solution, and too high a price to pay for justice we can never achieve.”5

In a later interview, he asserted that the litigation “trivialized the Holocaust, skewed it and made it to be that Jews didn’t die because they were Jews but because they had Monets, Swiss bank accounts, Stradivarius violins. The fact is that a tiny, tiny, tiny, tiny, tiny percentage had Swiss bank accounts. [For the perpetrators,] this was a perk of the genocide, not the cause of it. I am worried that the last sound bite of the century not be that the Jews were killed for their gold teeth.”

Foxman was soon joined by other critics. Journalist and author Leon Wieseltier published a piece in The New Republic disparaging lawyers and other restitution activists. He related telling his mother, a Holocaust survivor, to “spit at it” when she showed him the application she received for benefits from the Swiss.7

Despite these concerns, I contend that the restitution campaign was worthwhile. Not seeking financial restitution in the face of documented proof that world financial giants are holding billions of dollars of profits derived from World War II victims, which they have invested and reinvested many times during the last half-century, means ignoring an injustice. Allowing these corporate concerns to escape financial liability amounts to unjust enrichment.

Equally significant, forcing a wrongdoer to pay what is owed is a form of retributive justice. As Stuart Eizenstadt, President Clinton’s chief envoy on Holocaust restitution, has observed, “I think there is a certain symbolic quality that only money can convey to repair the injustices.”8 Moreover, outside of criminal punishment, the only other penalty that can be imposed on a wrongdoer, even one committing or enabling genocide, is to make the wrongdoer pay. As Eizenstadt, a diplomat and lawyer, points out:

In every developed nation on earth, the accepted method of compensating the victim when a civil wrong has been committed, a contract breached, or labor extracted under duress is the award of money. Victims of negligent and reckless acts of all types, including radiation exposure, oil spills, medical malpractice, and smoking-related illness routinely bring lawsuits asking for money damages for themselves and for others who have suffered the same injuries….Why should the victims [of the Holocaust] not have the same right to sue for justice as victims of other and lesser catastrophes?9

 

Columnist Richard Cohen, in a Washington Post op-ed called “The Money Matters,” also answers criticism that seeking compensation and making the wrongdoers pay demeans the memory of the Holocaust:

An immense calamity was committed in Europe, a moral calamity that left a black hole in the middle of the 20th century. Money is the least of it. But money is part of it. Holocaust victims paid once for being Jewish. Now, in a way, they or their heirs are being asked to pay again – a virtual Jewish tax, which obliges them not to act as others would in the same situation. But in avoiding one stereotype, they adopt a worse one – perpetual victim.10

Elie Wiesel goes even further, asserting that failure to deal with the monetary losses from the Holocaust amounts to a suppression of history. Quoted in a 1997 Time magazine article, he states: “[I]f all the money in all the Swiss banks were turned over, it would not bring back the life of one Jewish child. But the money is a symbol. It is part of the story. If you suppress any part of the story, it comes back later, with force and vengeance.”11

As for the danger that the restitution campaign would fuel anti- Semitism in Europe, in fact anti-Semites will seize any opportunity to promote their message. As journalist and author Hirsh Goodman put it in the Jerusalem Post, “The anti-Semites looking for reasons to hate the Jews call us Shylocks. Who cares?…If those living in countries now under scrutiny feel uncomfortable, that is the price of living with thieves. As one [survivor has] said: ‘I will not allow the anti-Semites to dictate our agenda.’ How right he was.”12

Eizenstadt comments on using the fear of anti-Semitism as a reason not to seek restitution:

Polish Catholics who worked in a Nazi munitions factory under terrible conditions . . . should be repaid for their forced labor, but the Jews who worked beside them should not. Why not? Because it is crass, unseemly – in short “bad for the Jews,” as the saying goes – to seek compensation for Holocaust injuries; because doing so exacerbates anti-Semitism by reinforcing the age-old stereotype that equates Jews with greed.13

Despite the early concerns, it is clear that the Holocaust restitution movement has neither diminished the memory of the Holocaust nor distorted its history.

2. Who is a “Holocaust survivor” and thereby entitled to distribution proceeds?

Another contentious issue of the Holocaust restitution movement has been how to allocate the funds received. The simple answer, of course, is that the moneys should go to the still-living Holocaust survivors. But this begs another important and even more sensitive question: which individuals can rightfully be called Holocaust survivors?

Those who survived concentration camps, ghettoes, and death camps claim that only they can be called Holocaust survivors.14 Individuals who lost their entire families, quite apart from all their assets, but personally managed to escape the Nazis by emigration or flight vehemently challenge this view. Then there are the so-called child survivors – people who, as infants and older, either were hidden by Gentiles or survived under false identities – who also justifiably claim the status of Holocaust survivor. For example, who would deny Anne Frank the status of survivor if she and her family had survived the war without being betrayed? As for the assertion by those captured by the Nazis that the hidden ones “had it better” during the war, the child survivors point, among other things, to the daily fear of being exposed and then shipped off to death.

The definitional dispute is reflected in demographic studies. One survey, conducted by Hebrew University demographer Sergio Della- Pergola, found 1,092,000 Holocaust survivors alive today. However, a study by American demographer Jacob Ukeles estimated the world’s survivor population to be only 687,900.15 Although this definitional debate may have remained in the sphere of theory before the Holocaust restitution settlements, it has now acquired practical importance. Since billions of dollars now needed to be distributed to Holocaust survivors, it became necessary to decide who was qualified to receive the funds.

The definitional dilemma became most prominent during the controversy about how to distribute the Swiss bank settlement funds. In 2000 Brooklyn federal judge Edward Korman, acting on the recommendation of the settlement’s Special Master Judah Gribetz, allocated $800 million of the $1.25 billion settlement for the deposited-assets claims. Gribetz, a respected Jewish community leader and a New York attorney, was chosen by Judge Korman to work out a plan for allocating the Holocaust funds from the Swiss banks. Pursuant to American class-action litigation rules, he received the title Special Master, with his colleague, attorney Shari Reig, later designated as Deputy Special Master.

The $800 million amount allocated for these dormant account claims has proved to be, at least for now, a drastic overestimate. By September 2004 the Swiss Claims Resolution Tribunal in Zurich, in charge of processing the claims of depositors or their heirs to dormant wartime accounts in Swiss banks, had distributed only $179 million.

According to Gribetz, in an October 2003 report issued to Judge Korman, the fault for the low payout lies in part with the Swiss banks, along with the complications posed by the passage of time. As Gribetz explained, “Lack of full access to existing documentation [by the banks] and the unavailability of other data has interfered with the claims process….It is particularly frustrating to contemplate the possibility that not all victim bank records are available, and not all victim accounts will be returned to their previous owners.”16

As it became clear that there could remain major leftover funds – as much as $600 million – there was a competition for the remaining funds.

The first to make a claim to these funds was an organization called Holocaust Survivors Foundation-USA (HSF-USA), professing to represent the “true survivors” of the Holocaust. Created in the late 1990s specifically to provide a voice for survivors regarding the distribution of the various Holocaust restitution settlements, HSF-USA sought to distinguish itself from the Conference on Jewish Material Claims Against Germany (Claims Conference), the organization established in 1951 to negotiate with West Germany (later unified Germany) about reparations payments to Jewish survivors and to distribute such payments to the survivors worldwide. According to the HSF-USA organizers and others, the Claims Conference for many years had not been representing the survivors’ interests but instead was handing out proceeds to its favorite charities and various Jewish communal organizations that made up the Claims Conference.17

The strongest objection of the HSF-USA founders was that the Claims Conference was distributing vast amounts to Jews in the former Soviet Union (FSU). Many of these still-living elderly Jews had managed to flee or were evacuated from Soviet territory before it was occupied by the Nazis; some even served in the Red Army during the war. According to HSF-USA, however, these FSU Jews were not actual Holocaust survivors because the Nazis had never directly persecuted them; hence they had no right to any of the restitution funds. Moreover, HSF-USA claimed, there was a measure of self-dealing in the distribution of funds to the FSU Jews, since those funds were being disbursed by the Joint Distribution Committee (JDC), itself a major participant in the Claims Conference.18

Relying on the terms of the Settlement Agreement with the Swiss banks, which designated Holocaust survivors whose assets were looted by the Nazis as being an eligible class of claimants under the settlement,19 Gribetz classified the FSU Jews as Holocaust survivors and eligible for benefits because their assets, like the assets of Jews in Western and Central Europe, were also looted by the Nazis. Moreover, he found these survivors to be the most in need of assistance since, after the fall of the Soviet Union, the social safety net had collapsed in the FSU and mega-inflation had robbed these aged pensioners of their savings. Hence, out of the initial $100 million allocated in 2000 from the Swiss banks settlement for humanitarian purposes, Gribetz recommended that 75 percent go to the survivors in the FSU. Survivors in Israel were allocated 13 percent of the humanitarian funds, with the remainder going to survivors in the rest of the world. Survivors in the United States were allocated 4 percent of the funds, a travesty according to HSF-USA and others. Two later humanitarian payouts, derived from the interest earned on the Swiss banks settlement funds, also were distributed along these lines. By 2004, $205 million had been distributed or allocated from the Swiss settlement funds to needy Holocaust survivors according to the Gribetz formula.

HSF-USA has a major support base in South Florida with its high concentration of Jewish retirees, and it retained Sam Dubbin, a Miami attorney who had worked in the Justice Department during the Clinton administration, to convince Judge Korman that Gribetz’s distribution formula was unfair. Instead of adopting Gribetz’s needs based formula, whereby the humanitarian funds would be divided among segments of survivors’ groups worldwide based on need, Dubbin urged that the judge adopt a population-based formula whereby any humanitarian distributions would be made according to the percentage of survivors in each country. Since approximately 25 percent of the worldwide population of Holocaust survivors lives in the United States, this percentage of $205 million, claimed Dubbin, should be allocated to U.S. survivors.

Judge Korman stuck with Gribetz’s plan, and also agreed with Gribetz that Jews in the FSU who had fled from the Nazis, fought in the war, or survived the various sieges of Soviet cities during the war should also be considered Holocaust survivors. HSF-USA initially appealed the decision, but then dropped the appeal. The $205 million was allocated based on needs, not on survivor population count, and a definitional formula used by Gribetz counted FSU Jews who survived the war as “Holocaust survivors.”

In 2004, when it became likely that some portion of the $800 million allocated for the dormant-account claimants would remain unclaimed, and would now also be used for humanitarian purposes, Dubbin urged Judge Korman to allocate a greater proportion of these leftover funds to survivors in the United States, in effect to make up for the alleged shortfall to the U.S. survivors when the previous $205 million humanitarian distributions were made. As a first step, in September 2003 Dubbin filed a petition with Korman seeking an immediate distribution of $50 million to survivors in the United States. According to Dubbin’s papers, “There is over $670 million under the court’s control right now, sitting in the bank, helping no one other than the bankers. This money is legally and morally the survivors’ money.”20 The proposed funds were to be used for a seemingly worthy goal: providing home health care to aging U.S.-based survivors during the last years of their lives.

In March 2004, however, Judge Korman issued a ruling refusing the request to make this interim distribution. Korman specifically rejected Dubbin’s argument that the money “legally and morally” belongs to the survivors. As he explained, “The $800 million that was set aside for individuals with claims against the Swiss banks for deposited assets…belongs to those survivors or their heirs. It was not set aside for, nor does it belong to, the survivor community as a whole.”21 Finding also that it is “not yet knowable” whether any funds will be left over from the $800 million allocated by Gribetz for the dormant account claims, Korman held that “the time is not ripe” to distribute any additional funds for humanitarian purposes.22

In an April 2004 report to Judge Korman, Gribetz echoed the judge’s conclusion by likewise noting that a secondary distribution of humanitarian funds was premature.23 Nevertheless, in response to Judge Korman’s earlier order to provide recommendations on how to distribute excess settlement funds, should any remain, Gribetz, in his April 2004 report, adhered to the same distribution priorities he had recommended to Judge Korman. As with the initial $100 million humanitarian funds distribution and the two subsequent distributions, Gribetz recommended that the first priority of any leftover portion of the $800 million be allocated again to assist the neediest of the needy, with food, winter relief, and emergency assistance. The vast majority of these survivors requiring this assistance remain the elderly Jews in the FSU.

According to Gribetz, 85 percent of survivors who are in need of food aid are in the FSU.24 In contrast, the food needs of survivors in places like the United States and Israel were taken care of through their government’s social welfare programs, with their unmet needs limited to such matters as home health care or better access to medicines. Therefore, Gribetz reasoned, the limited funds should be channeled primarily to survivors in the FSU who could starve or freeze to death without outside financial assistance. He explained: “In sum, assistance that helps keep survivors alive – food, winter relief and in many cases emergency grants – should take priority over all other aid programs, even those that add to survivors’ comfort and relieve some of the burdens for those who have difficulty with personal care…or provide transportation or social activities.”25

During the original allocation decision, Israel had stayed on the sidelines. This time Israeli officials made their voices heard, urging that Israel, which has the largest population of Holocaust survivors, should receive 48 percent of the leftover funds both to aid Israeli survivors and for Holocaust education and remembrance projects in Israel. Specifically, Israeli officials claimed that 48 percent of all survivors live in Israel.26

Israel’s petition sparked a response from the Forward, the New York-based Jewish weekly. In a lead editorial “Israel and the Swiss Banks,” it accused Israeli officials of misrepresenting the number of Holocaust survivors by counting “as Nazi victims persons who lived during World War II in countries like Egypt and Iraq where the local populace sympathized with Hitler.” Returning again to the definitional question of “Who is a Holocaust survivor?” the editorial averred: “With all due respect, that’s not what is meant by Holocaust victims.” It went on to characterize Israel’s petition for the largest share of the Swiss leftover funds as “carry[ing] an unfortunate odor of opportunism,” and explained:

It is true, as Israel argues, that a significant number of the destitute survivors in the Soviet Union have relocated to Israel in recent years, increasing Israel’s burden. That’s why Gribetz increased Israel’s share of future humanitarian funds from 14% to 20% in his latest round of recommendations.

But many other Israeli arguments are specious. The crisis in social welfare is largely a result of government cuts driven by neoliberal, Thatcherite economics….It’s not clear that this is the sort of hardship for which the Swiss humanitarian funds were intended.

It looks as though Israel sees these looted Holocaust-era bank accounts as an available pool of money to close its budget gap, and it wants that money. That’s the last thing the world needs to hear right now.27

The anger and accusations continued. Judge Korman scheduled a hearing for 29 April 2004 in which interested parties could present their views to him.28 HSF-USA took this as a signal for action. Before the hearing, an advertisement began to appear in New York-area Jewish newspapers, including the Forward, urging Holocaust survivors to attend a rally in front of the Brooklyn courthouse where the hearing was to be held, to demand that Korman allocate a greater amount to the survivor population in the United States. The advertisement explained:

On April 29th, Judge Korman of the Swiss Banks’ settlement will hold an open hearing on how to allocate unclaimed funds likely to exceed $600 million. So far, Special Master Gribetz has recommended, and the Judge agreed, that 70-75 percent be given to the “HESED” program administrators, for residents in the Former Soviet Union-FSU.

The United States Holocaust Survivors have received, as of the latest reports, about 4 percent of the funds from the interest on the funds sitting in the bank, even though reliable population studies have reported that up to 25 percent of the Holocaust Survivors have incomes below the federal poverty level.

Many have to make painful choices between buying food or medication, between getting a few hours of home-care or paying rent & utilities. Judge Korman has stated that the needs of Holocaust Survivors living in the United States do not measure up to those living in the FSU, and therefore survivors here are entitled only to a minimal share.

Pitting seemingly actual Holocaust survivors in the United States against alleged impostors in the FSU, the ad then stated, “We say that all true Holocaust Survivors in need, wherever they live, ought to get assistance they need, and that survivors ought not be penalized because they live in the United States.” It concluded: “If you believe, as we do, that Survivors in need in the U.S.A have as much right to help from the Swiss settlement funds as Survivors anywhere else, please JOIN US IN OUR RALLY.”29

The debate did not just stay within the community of survivors or even within the Jewish community. The “dirty laundry” began to be aired in the mainstream media when the New York Times and other major outlets published prominent stories on the issue, and also covered the 29 April hearing and the protests outside.30

At the day-long hearing over fifty speakers, including Holocaust survivors, members of Jewish organizations, and other advocates, each gave Korman their suggestion on how the leftover funds should be distributed. According to one account, “there were passionate requests to release unclaimed funds only after more bank account holders and their heirs are found, and equally passionate requests to release more money now. Some people wanted funds for remembrance, some wanted help for other survivors and some, it seemed, just wanted to share their stories.”31 During the hearing, “questions bled easily into raw emotional appeals and painful discussions, including one about the definition of a survivor.”32 The State of Israel was represented by Natan Sharansky, the former Soviet dissident and now Israel’s minister for diaspora affairs, who in a video call during the hearing asked for a substantial increase in the funds to survivors residing in Israel.33

The Financial Times, in its coverage of the hearing, praised Judge Korman. Describing him as “the long suffering Brooklyn judge with the Solomonic task of overseeing the Swiss banks’ Dollars 1.25 bn settlement with Holocaust survivors,” its editorial noted that “dozens of claimants [at the hearing] made their case; a few opted to hurl abuse at him. Korman seemed to maintain his sense of humour…. And then there was that patience. He started his hearing at 10 am and did not call a recess for a bathroom break until just before 5:30 pm. That’s when the court loved everything about him.”34

The HSF-USA leaders took a different view. In a letter sent to the New York Law Journal shortly before the hearing, they accused Korman of “continu[ing] to rule against the American survivors, ignoring the desperate needs of thousands who are dying alone without adequate care or basic necessities.”35 Israeli officials likewise criticized Gribetz’s allocation formula, publicly announcing, as the Jewish Telegraphic Agency reported, that “The Gribetz report reflects a total ignorance of the needs of survivors in Israel and throughout the world except those in the FSU.”36 The Forward commented in a lead editorial that “something that began as a struggle for justice – forcing Switzerland and other European nations to give up billions of dollars looted from the victims of Nazism – has turned into an unseemly scramble by competing Jewish interests to grab a piece of the pie.”37 In another story, it noted that the “emotions on display in the courtroom suggested that the Swiss bank case has, for many survivor activists, become a stand-in for the frustrations and failures of the entire 50-year reparations process.”38

It was a no-win situation. Korman either had to stick with the original needs-based formula and allocate most of the leftover funds to the poverty-stricken Jews in the FSU, or shift more funds in this second distribution to the survivor populations in the United States and Israel, where genuinely needy survivors are also present. As of this writing, Korman appears to have chosen the former. In his March 2004 ruling, he noted that while many survivors in the United States and Israel indeed do not have adequate home health care and medicines, the FSU survivors have much more acute needs, since many of them lack such basic necessities as food and shelter.39

Moreover, he noted that survivors in the West have been receiving reparations payments from Germany for the past half-century, amounting to over $50 billion, whereas survivors in the FSU, living until recently behind the Iron Curtain, were left out of the German reparations distribution scheme. As Korman explained during the hearing, “Survivors in the United States have actually gotten the long end of the stick, while survivors in the old Soviet Union have ‘gotten next to nothing.'”40

In the midst of this drama, an important point should be kept in mind. As Gribetz explained in his Allocation Report, “members of the Looted Assets Class [meaning, as explained above, all Jewish and other wartime survivors], who already have received funds [from the $205 million humanitarian distribution] and may now be the beneficiaries of residual funds [from the $800 million] properly belonging to the Deposited Assets Class, probably would have received nothing at all had the case continued to trial.”41 Survivors, therefore, receiving humanitarian funds from the Swiss banks settlement should be satisfied with what they receive, since for these recipients this is all “found money.”

 

3. Should restitution funds be used for Holocaust remembrance and education?

The Holocaust restitution settlements brought out another emotionally charged issue: whether any of the settlement funds should be used for matters other than direct assistance to survivors. Soon after the Swiss banks settlement, various proposals were made that a portion of the funds should be spent on Holocaust remembrance and education. For example, Miles Lerman, former chair of the U.S. Holocaust Memorial Council and himself a survivor, stated: “Survivors are entitled to get what was stolen from them or their parents….But we believe Holocaust education is more important; we believe the last chapter of the Holocaust cannot be gold and it cannot be bank accounts.”42

In the German slave labor settlement, the German payors insisted that DM 700 million (approximately $325 million) of the fund of DM 10 billion go to Holocaust education and remembrance, especially since they named their foundation the Remembrance, Responsibility and the Future Foundation. According to Count Otto Lambsdorff, the lead German negotiator, “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.”43

Likewise, in the French banks settlement a portion was allocated, at the banks’ insistence and with the support of the French government, to perpetuate the memory of the Shoah and other historical atrocities. In contrast, in the Swiss banks settlement Judge Korman, following the recommendation of Gribetz, refused to allocate any funds from that settlement to educational and remembrance programs. According to Gribetz, the needs of survivors were so overwhelming that all funds should be used to benefit them directly.44

The allocations for educational and remembrance programs have been controversial. Many Holocaust survivors and their supporters argue that, as long as there is one needy survivor still alive anywhere in the world, all monies must be used strictly for the benefit of survivors. Many survivors also feel that the funds belong only to them, since they were sought on their behalf and in the name of the suffering and degradation they experienced, and hence only they should be deciding how the new, unanticipated billions should be distributed.

Yet leaders of many Jewish organizations, especially the World Jewish Congress (WJC) which played a critical role in obtaining the Holocaust restitution funds, challenge the position that none of the funds should be used for Holocaust education and remembrance. These leaders argue that the heirs of the six million are the entire body of world Jewry, or at least the descendants of those killed. Most forcefully propounding this view is Israel Singer, who was chosen as president of the Claims Conference after his successes as the WJC leader most responsible for the restitution settlements. In the June 2002 issue of the Jewish monthly Sh’ma, Singer explained:

Holocaust survivors are not the only persons charged with making decisions for the Jewish people about how to use monies that will not be needed after they die. While our first obligation is to take care of Holocaust survivors, the remainder of any monies should be spent to ensure the existence of the Jewish people – not necessarily the existence of Jewish organizations. These decisions, which are about the future rather than the past, affect the entire Jewish people.

 

 

Invoking his authority “as a child of survivors and having worked for them my entire life,” Singer then asserts: “The entire Jewish people are the heirs of survivors….Survivors have tremendous institutional memory – without which the Jewish people couldn’t understand their existence in this time. However, survivors should not decide all questions about funds restored to the Jewish people from the Holocaust.”45

 

Many Holocaust survivors are outraged when they hear Singer and others make the claim that the “entire Jewish people are the heirs of survivors” and, as such, the Holocaust restitution funds belong to world Jewry. HSF-USA president David Schaecter, a Holocaust survivor and long-time Jewish activist from Florida, responded to Singer in the same issue:

The organizations that negotiated in the name of survivors are pushing to be the organizations that decide how to distribute the “leftover” money….While voicing empty rhetoric about “taking care of survivors first,” they have given paltry support for the real social service needs of survivors today….How dare these institutions presume to spend “restituted” funds for their favored “philanthropic” projects into the next century, using money claimed from the most terrorized victims of the past century.46

 

Singer, for his part, would create “a new body that would include the [Claims Conference], the World Jewish Restitution Organization, and the government of Israel, along with Holocaust survivors, Jewish educators, and innovative thinkers” to make all distribution decisions. The mandate of the new organization, which Singer has called “Fund for the Jewish People” or a “Jewish People’s Fund,” should be “to address the future needs of the Jewish people; for example, education – creating an innovative voucher system for every Jewish child to attend Jewish schools – would be a welcome initiative. The purpose of this effort would be to create a new future for the Jewish people. This restitution should be used to rebuild the Jewish soul and spirit. This has never been done effectively in the Diaspora.”47

Given the panoply of groups claiming to represent the “Jewish people” and the diversity of their interests, it is doubtful whether Singer’s proposal would ever reach fruition – even if there was complete backing for it by Holocaust survivors.

Another distribution proposal, greatly appealing to genocide scholars and those working to help all genocide victims, is to use the monies collected to assist victims of more recent genocides. As columnist Jeff Jacoby wrote in the Boston Globe:

I propose an entirely different idea, one that emerged in a conversation with Dennis Prager, a Los Angeles broadcaster renowned for his writings on ethics and Judaism: Once the cheated depositors have been paid, let the Jewish people relinquish any claims to the balance of the money. Let it be used instead to help human beings whose lives have been shattered by genocide and ethnic slaughter. Rather than earmarking the money for Jewish causes, spend it to heal the still-suffering survivors of the Rwandan massacre. Or the deeply scarred victims of the Cambodian holocaust. Or the Bosnian women brutalized in Serbia’s rape camps. “We Jews wanted to awaken the world to what the Swiss did,” Prager says. “We don’t want to profit by it.”48

 

 

Although this proposal did not get much publicity, there seems to be strong opposition to it both inside and outside the survivor community. According to Leo Rechter, a child survivor and a leader of HSF-USA: “ASTOUNDING! Jacoby has empathy for the formerly wealthy survivors; he has empathy for the victims of other genocides, but to try and ameliorate the final days of needy Shoah survivors does not cross his mind….It is of course easy to be magnanimous with someone else’s money, even though it is plainly evident that it is often desperately needed by the latter.”49

 

William Elperin, son of survivors and president of the 1939 Club, a California-based organization of survivors and their children, comments: “I believe that position is a mere extension of the shtetl philosophy. ‘Let’s not rock the boat too much. Let’s show everyone that we’re good people because we’re giving them money and maybe they won’t criticize us (or kill us).’ Can you imagine any other group entitled to restitution saying ‘We don’t want all of it. Let’s give it to the Jews.’ We should live so long!”50

 

4. Should attorneys prosecuting the Holocaust restitution cases be entitled to attorneys’ fees?

Adding to the distress of the current recipients is the matter of the millions reaped by plaintiffs’ lawyers who filed the suits. These lawyers were necessary since, until the lawsuits were filed, the various European corporate concerns had ignored the half-century-old financial claims. The lawyers all took the cases on a contingency basis, an invention of American law that opens the courthouse to those who cannot afford a lawyer to prosecute their case. Under the contingency fee system, the lawyer gets paid only if the case is resolved successfully, with the lawyer taking a percentage of the award recovered. In class-action litigation, such fees must also be approved by the court.

Although the Swiss banks class-action cases settled first, Judge Korman declined to approve any attorneys’ fees until a significant portion of the claimants received payment from the Swiss settlement. Three of the principal lawyers in the Swiss banks litigation took the case pro bono, and did not seek any fees. The remainder collected fees of $22.5 million, which amounted to less than 2 percent of the $1.25 billion of the Swiss banks settlement. In comparison, in typical class-action settlements, fee awards generally range between 15-22 percent of the total settlement amount, which in this case would have amounted to at least $180 million.51

Many of the same attorneys who prosecuted the Swiss banks cases also represented the claimants in the German litigation. Here, all the lawyers made applications to be paid for their work.

Why did the lawyers also not take these cases pro bono? The lawyers’ most common answer was that they could not afford to continue prosecuting further Holocaust restitution suits without compensation. The litigation was becoming quite expensive; the German companies, like the Swiss banks, hired top-notch counsel to defend them. As in the Swiss banks litigation, the defense attorneys filed voluminous motions to have the cases dismissed. The prosecuting lawyers insisted that, to be able to devote their time and the time of their associates, paralegals, historians, and other experts to these suits, they needed to be paid.

In June 2001, the fee awards were issued to the lawyers involved in the German litigation. Fifty-one lawyers were awarded fees totaling $59.9 million. Although the amount may appear large, it is about 1.2 percent of the total $5 billion settlement. In a typical class-action settlement, the lawyers would have been awarded at least $750 million.

Soon after, Paul Spiegel, a leader of Germany’s Jewish community, issued a public appeal to the lawyers urging them to donate their fees to the German Fund, to help increase the payments to the survivors. “I am convinced,” Spiegel stated, “that the lawyers have a legal right to their money, but not a moral right. I am not saying that the lawyers are greedy. It is just immoral when the highest payments to survivors are about $7,000 and the lawyers are getting millions.”52

The lawyers were not interested. Michael Witti, a German lawyer working on some of the cases and awarded about $4 million for his work, publicly responded to Spiegel’s proposal, explaining that the fees would enable him to continue representing survivors for other wartime claims, such as helping to recover confiscated property in Eastern Europe. The fees were needed, Witti elaborated, “so I can hire experts, so I can travel and have office staff. And this money gives me the support for this.” He concluded: “If you are not [fiscally] responsible, you run away and take commercial cases. But I have an obligation to do human rights cases.”53

Diane Leigh Davison, a Baltimore-based class-action lawyer also working on the German cases, had a more straightforward explanation as to why she was charging her clients: “You don’t say to a surgeon, ‘Don’t take your fee.'”54

The lawyers also pointed out that without their intervention, the Germans would not have settled. One example: after the settlement, some survivors in Britain spoke of filing their own separate lawsuits in European courts.55 It was, however, a bluff, since no English lawyer was willing to take such a case; only the lawyers in America were bold enough to challenge the Germans.

 

5. Should Jewish lawyers have defended the Holocaust restitution suits?

A classic ethical issue is whether a lawyer should decline to represent a certain client because of the behavior of which the client is being accused, and it also presented itself in the Holocaust restitution litigation. Many companies being sued by Holocaust survivors hired Jewish lawyers from some of the most prominent American law firms to defend them, often retaining counsel with important connections to the organized Jewish community.

For instance, the Italian insurance carrier Assicurazioni Generali, when sued for failing to honor Holocaust-era policies issued to Holocaust victims, hired Kenneth Bialkin, a partner at the prominent New York firm of Skadden, Arps, Slate, Meagher & Flom. During his career Bialkin has also headed several major Jewish institutions, among them the Anti-Defamation League. Defending his decision to take the case, Bialkin stated, “I’m in it to see if we can bring it to closure, and everybody gets out of it in a dignified way.”56

William Shernoff, a lead plaintiffs’ counsel in the insurance litigation, countered: “I just think there’s something wrong here, that these pillars of the Jewish community-type of people, well-connected, well-respected, are taking money [in legal fees] from this insurance company to try to beat down and destroy the claims of these survivors. What the hell am I missing here?”57

The Jerusalem Post quoted an unnamed representative of the Holocaust claimants: “I feel [Bialkin] is using years of service to the Jewish community to now perform a great disservice to Holocaust survivors. A Jewish lawyer can be a Jewish lawyer for anyone, but someone who calls himself a Jewish leader…has no business trying to defend the position of those who did not pay Holocaust victims. Period.”58

Bialkin replied: “I’m doing what I think is right – I’m going to try to perform it honorably, I think in the end it will be viewed as a service to the Jewish people, but I recognize that it can blow up in my face….I’m a big boy, I did what I thought was appropriate…and I’m prepared to be judged by my peers.”59

Generali was not the only defendant in the Holocaust restitution suits to retain Jewish lawyers as defense counsel. Other corporate defendants also hired top-notch American law firms to defend them, with the Jewish lawyers in those firms likewise faced with the moral dilemma of whether they, or even their firms, should be involved in these cases.

The private misgivings first became public in a 1997 Washington Post story titled “N.Y. Law Firm to Advise Swiss Bank Accused of Laundering Nazi Loot.” The story described how, “over the heated objections of many of its lawyers, the high-priced New York law firm of Cravath, Swaine & Moore is representing a Swiss bank that wartime U.S. officials described as ‘the most frequent violator’ of rules against laundering looted Nazi gold.” Cravath’s representation of the bank, Credit Suisse, led to “an angry internal dispute that then-presiding partner Samuel C. Butler said has no precedent in the law firm’s history.”60 According to Butler, “There were a fair number of partners, some of them Jewish, who said, ‘Do we really want to do this?’ There was a lot of soul searching….After an hour and a half of discussion, the very strong consensus was we should take it on because, very frankly, [Credit Suisse] are trying to do the right thing.”61

The decision to go ahead with the representation was not accepted quietly. As further described by the Washington Post, “One Cravath employee, speaking on condition of anonymity, said yesterday that a number of associate lawyers at Cravath remain angry, but are afraid to speak out for fear of being denied promotions to partner. ‘If we are so generous-minded on this subject, why not represent Holocaust survivors?’ said the employee, self-described as ‘angry and I also happen to be Jewish.'”62

Cravath’s involvement in the Holocaust restitution litigation can be considered minor, however, compared to the work done on these cases by another top-flight law firm, Wilmer, Cutler & Pickering (which, through a mega-merger with another large firm in 2004, became Wilmer, Cutler, Pickering, Hale & Dorr). The firm’s founder, Lloyd Cutler, is one of the most prominent Jewish lawyers in the United States. Roger Witten and Marc Cohen, the two Wilmer lawyers originally leading the defense team, are both Jewish.

As with Cravath, Wilmer’s representation of the Swiss banks in suits filed by Holocaust survivors accusing the banks of profiting from the Holocaust, led to a great deal of soul-searching by some of the other Jewish lawyers in the firm. The Wilmer partners quickly called a meeting “to suppress any dissent before it manifested itself.”63 As explained by Jane Schapiro in her account of the Swiss banks litigation, the partners drew a distinction between defending cigarette companies and the Swiss banks. “Everyone should understand, the banks were not like the cigarette makers who were killing people with their cigarettes and had no intention of stopping. The Swiss bankers wanted to correct the situation, and they had a specific proposal to prove it.”64 The argument that the Swiss banks wanted to rectify the situation apparently convinced the dissenting lawyers.65 Wilmer, with Roger Witten at the helm, went on to represent the Swiss banks not only in this litigation but also throughout the much longer stage of implementing the settlement.

Wilmer’s successful representation of the Swiss banks also led to the firm being asked to represent other European defendants sued for Holocaust-era wrongs. This time, however, the clients would not be Swiss banks, whose country was neutral during the war, but German companies that worked hand in hand with the Nazis. The companies were being sued by Holocaust survivors who had been their slaves during the war. For these suits, the Wilmer partners could not keep the internal controversy private; it emerged in another Washington Post article, which explained:

For the firms’ many Jewish lawyers, the real problem was the inescapable sense that they were on the wrong side. Wilmer, Cutler’s work for Krupp, for instance, put them at odds with people such as Rachel Grunebaum, a Romanian-born 75-year old who is a plaintiff in one of the [slave labor] class action lawsuits….Jewish groups contend that companies that used forced laborers weren’t reluctantly playing by the rules foisted on them by an immoral regime. Krupp and others, they say, badgered the Nazis for more bodies, eager to boost profits.66

 

Nevertheless, the firm’s partners also decided to take the defense of the German firms. For the next four years, Wilmer, Cutler & Pickering became the leading American law firm defending corporate Europe for its dealings during the war.

In the end, Wilmer, Cutler decided to represent Siemens AG, Krupp AG and other German companies accused of exploiting forced laborers during the Nazi era. But there is lingering anger among some of the firm’s rank and file, and sympathy for an associate who disclosed during the arguments that his Jewish grandfather had been a forced laborer at Siemens. “It came down to issues of conscience warring against issues of business,” said one Wilmer lawyer, who requested anonymity. “And business won.”67

 

In contrast, Stuart Eizenstadt, now in private practice, stated that if he had been asked by the European defendants to represent them, he would have declined.68

 

Conclusion

The Holocaust restitution campaign can be viewed on many levels as an important triumph. Elderly Holocaust survivors and other wartime victims received compensation for losses that appeared to be forgotten for over a half-century. For many victims, this was the first time that they received any damages for their wartime suffering. With compensation also came recognition of the survivors’ claims, as the payments became potent symbols to the victims that the defendants finally acknowledged their wartime misdeeds.

The campaign also unearthed valuable new information about the behavior of many nations and private corporate entities during WW II. The newly discovered documentation has yet to be fully analyzed by Holocaust historians. It may be found either to support or refute long-held beliefs about the financial and other crimes committed during the war.

Last, the Holocaust restitution campaign has become a model for other campaigns to right other historically acknowledged wrongs. Again, how transferable is the Holocaust restitution model to other historical claims is yet to be seen. The campaign, however, even strictly within the confines of Holocaust history and memory, also produced a number of detrimental or at least morally ambiguous consequences. Often this came about because, in the words of Elie Wiesel, a decision needed to be made that entailed “the impossible task of judging between right and right.”70 How well these decisions have been handled can only be fully evaluated once all the settlements are concluded. Nevertheless, even if history does judge these settlements as not fully satisfactory, they add another important chapter to the story of the gray zones of the Holocaust and its aftermath.

*     *     *

Notes

1. Three major studies have been published on the Holocaust restitution movement. In early 2003 Stuart Eizenstadt, President Clinton’s chief envoy on Holocaust restitution issues, wrote a memoir that gave his account of the movement. See Stuart E. Eizenstadt, Imperfect Justice: Looted Assets, Slave Labor, and the Unfinished Business of World War II (New York: Public Affairs, 2003). In mid-2003, this author published a study of the movement. See Michael J. Bazyler, Holocaust Justice: The Battle for Restitution in America’s Courts (New York and London: New York University Press, 2003). And a good collection of essays focusing on some of the major themes of Holocaust restitution is The Plunder of Jewish Property during the Holocaust, ed. Avi Beaker (New York and London: New York University Press, 2000).
In 2002, two journalists who covered the Holocaust restitution story for the Financial Times published a journalistic account of the movement. See John Authers and Richard Wolffe, The Victim’s Fortune: Inside the Epic Battle over the Debts of the Holocaust (New York: HarperCollins, 2002). Finally, journalist Jane Schapiro published an account of the Swiss banks litigation from the perspective of attorney Michael Hausfeld, one of the lead plaintiffs’ attorneys in the Swiss banks and subsequent Holocaust restitution litigation. See Jane Schapiro, Inside a Class Action: The Holocaust and the Swiss Banks (Madison: University of Wisconsin Press, 2003).
2. I call the Holocaust restitution campaign a “movement” rather than merely a “process” to emphasize its wide-ranging scope, both geographically and temporally. It has involved not only Jewish political leaders in the United States, Europe, and Israel but also Holocaust survivors worldwide, lawyers, political activists, and both U.S. federal and state government officials. For example, at one time during the Clinton administration there were at least two federal government officials with the word Holocaust in their titles. During the Bush presidency, the role of the U.S. federal government in the Holocaust restitution campaign has declined. Nevertheless, the campaign, now going into its tenth year as of this writing, continues. As a tribute to the success of the Holocaust restitution movement, it has now also become a model for other movements to right other historically acknowledged wrongs. For discussion of the extensive nature of the campaign and its consequences for campaigns to right other historical wrongs, see the sources cited in note 1.
3. “Controversy: Holocaust Reparations,” Commentary, January 2001, p. 17 (comment by Roland Stephen).
4. Elazar Barkan, The Guilt of Nations: Restitution and Negotiating Historical Injustices (New York: Norton, 2000), pp. 9, 23-27.
5. Abraham H. Foxman, “The Dangers of Holocaust Restitution,” Wall Street Journal, 4 December 1998, p. A18.
6. Naftali Bendavid, “Is the Meaning Lost in Court,” Chicago Tribune, 12 August 2001, p. 1.
7. Leon Wieseltier, “Assets” The New Republic, 8 November 1999, p. 98.
8. Richard Wolffe, “Putting a Price on the Holocaust,” Irish Times, 16 March 1999, p. 15.
9. “Controversy: Holocaust Reparations,” Commentary, January 2001, p. 10 (comment by Stuart Eizenstadt).
10. Richard Cohen, “The Money Matters,” Washington Post, 8 December 1998, p. A21.
11. Lance Morrow, “The Justice of the Calculator,” Time, 24 February 1997, p. 45 (quoting Elie Wiesel).
12. Hirsh Goodman, “Atrocities beyond Compensation,” Jerusalem Post, 22 October 1999, p. 8B.
13. Eizenstadt, Controversy, p. 10.
14. For support of the view that only those imprisoned under Nazi occupation are Holocaust survivors, see Thane Rosenbaum, “Whose Money Is It?” New York Jewish Week, 7 May 2004. The author, a novelist, law professor, and son of Holocaust survivors, approves of “a narrower definition of Holocaust survivors – the way such a designation is more conventionally understood, not as mere targets of Nazism, but rather those who were either in concentration camps, ghettoes or subject to slave labor.” For a discussion of the contrary view, see opinion of Judge Korman in In re Holocaust Victim Assets Litigation, 302 F. Supp. 2nd 89, 112-113 (E.D. N.Y. 2004). The American cases cited in this article can be located and read in full at www.westlaw.com.
15. Joe Berkofsky, “Israeli Officials Jump into Fray over Use of Swiss Bank Settlement,” JTA [Jewish Telegraphic Agency] News, 26 April 2004. 16. See Judah Gribetz and Shari C. Reig, “Special Master’s Interim Report on Distribution and Recommendation for Allocation of Excess and Possible Unclaimed Residual Funds” (2 October 2003), pp. 28-35. See also William Glaberson, “Overseer of Holocaust Fund Fears Some Victims Are Left Out,” New York Times, 8 October 2003, p. A10.
Soon after Gribetz’s report, Judge Korman issued what the New York Times labeled a “scorching opinion” castigating the Swiss banks for trying to perpetuate the “big lie” by continuing to deny wrongdoing in their handling of Holocaust-era victims’ dormant bank accounts. See In re Holocaust Victim Asset Litigation, 302 F.Supp.2d 59, 62 (E.D.N.Y. 2004) (the “Big Lie” for the Swiss banks is that during the Nazi era and its wake, the banks never engaged in substantial wrongdoing”); William Glaberson, “Judge Accuses Swiss Banks of Stonewalling,” New York Times, 21 February 2004, p. A-6.
Korman urged the banks to agree to a greater opening up of their wartime bank records to the public, so that additional prewar and wartime account holders and claimants to such accounts could be located. In response to the banks’ argument that it would be unfair to the banks to publish such a list, Korman retorted, “I suggest that the banks stop being so concerned about what would be fair to them and start thinking about what would be fair to their clients and their heirs” (ibid. , p. 83). He concluded: “The truth appears to be that the banks fear the embarrassment that will come from further access to accounts, deeper probing into their history, and further successful claims by Nazi victims and their heirs. This embarrassment cannot outweigh the good that could come from more open cooperation” (ibid. ).
In June 2004, the Swiss banks agreed, in a compromise agreement with New York University Law School professor Burt Neuborne, plaintiffs’ chief settlement counsel, to make public information about an additional several thousand prewar and wartime-era accounts that may be possibly linked to Jewish account holders and also to provide the Swiss Claims Resolution Tribunal in Zurich (and a new branch in New York to be administered by the Claims Conference) with greater access to their total data base of 4.1 million prewar and wartime dormant bank accounts. In return, Neuborne agreed that the Swiss banks need not produce any further information or access to these accounts. According to Neuborne, “All of us feel that the compromise is a good one, and it gets us moving on the claims process so that we can, within a reasonable time, feel comfortable that we’ve done a morally acceptable job of trying to find all the available accounts.” Michael Weissenstein, “Swiss Banks to Release Records,” Jerusalem Post, 18 June 2004, p. 7.
17. For articles discussing criticisms of the Claims Conference, see, e.g., Isabel Vincent, “Who Is a Holocaust Survivor? Jewish Groups Argue over Hundreds of Millions in Restitution Payments,” National Post, 24 January 2004, p. 1; Jay Bushinsky, “Holocaust Panel Vilified,” Washington Times, 22 October 2003, p. A18; “More Light, More Justice: Holocaust Restitution and the Claims Conference,” The Economist, 23 August 2003, p. 47. For a recent article praising the work of the Claims Conference, see Gary Rosenblatt, “The Claim of Responsibility,” New York Jewish Week, 6 August 2004, p. 4.
18. Joe Berkofsky, “UJC Seeks to Mediate between Claims Conference and Survivors,” JTA News, 2 July 2003. See also Dwight Owen Schweitzer, “I Accuse,” Jewish Star Times, 19 June 2002, p. 4. (The publisher of a local South Florida Jewish weekly accuses the Claims Conference, among other things, “of complicity in the continued suffering of the victims of the Holocaust who remain alive, and not keeping faith with the millions who have died and will continue to die.”)
19. The rationale for making European Jews and other victims whose assets had been looted by the Nazis an eligible class of beneficiaries in the Swiss banks settlement came from the presumption accepted in the settlement that the Nazis sold these looted assets and then deposited the proceeds of the sale for safekeeping in Swiss banks. For a discussion of this “Looted Assets Class” in the Swiss banks settlement, see In re Holocaust Victim Assets Litigation, 2000 WL 33241660 (opinion by Judge Korman and available at www.westlaw.com).
20. Motion for Immediate Interim Distribution of Swiss Settlement Proceeds, filed 11 September 2003.
21. In re Holocaust Victim Assets Litigation, 302 F.Supp.2d 89, 93 (E.D.N.Y. 2004).
22. In re Holocaust Victim Assets Litigation, 302 F.Supp.2d 89, 93-94 (E.D.N.Y. 2004).
23. Judah Gribetz and Shari C. Reig, “Special Master’s Recommendations for Allocation of Possible Unclaimed Residual Funds,” 16 April 2004, available at www.swissbankclaims.com (hereinafter “Gribetz 2004 Allocation Report”).
24. Gribetz 2004 Allocation Report, p. 8. Gribetz identified three categories of basic survival needs faced by Holocaust survivors: (1) assistance with the purchase of food; (2) winter relief, such as winter clothing and utility payments for delivery of heat; and (3) emergency financial assistance “for sudden and unexpected crises (such as the need for a medical procedure or a device for which no other source of payment exists).” Gribetz 2004 Allocation Report, p. 11.
25. Ibid., pp. 12-13. Judge Korman, in his March 2004 opinion, indicated that he continued to support Gribetz’s ranking of priorities for distribution of the humanitarian funds. In re Holocaust Victim Assets Litigation, 302 F.Supp.2d 89, 111-112 (E.D.N.Y. 2004). He affirmed this view in a 22 April 2004 opinion, issued on the heels of Gribetz’s 16 April 2004 report. In re Holocaust Victim Assets Litigation, 302 F.Supp.2d 169 (E.D.N.Y. 2004). However, because Korman has declined for now to distribute any funds from the $800 million deposited assets category for humanitarian purposes, he has not yet announced whether he will continue to follow Gribetz’s needs rankings formula for distribution of any residual funds from these unclaimed deposited assets.
26. Because tens of thousands of FSU Jews emigrated to Israel over the past twenty years, many of whom are elderly Jews who lived through World War II, it was in the interest of the Israeli officials in their papers presented to Judge Korman to label these individuals as “Holocaust survivors.”
27. Editorial, “Israel and the Swiss Banks,” Forward, 30 April 2004, p. 6.
28. Earlier, Korman issued an opinion denying Dubbin’s request for attorneys’ fees to be paid out of the Swiss banks settlement funds. In the opinion, Korman ruled that Dubbin was not entitled to any fees because he made no worthwhile contribution to the settlement of the litigation against the Swiss banks. In re Holocaust Victim Assets Litigation, 2004 WL 717243, p. 3, available at www.westlaw.com.
29. Ad (quarter-page), “All Holocaust Survivors Rally,” Forward, 16 April 2004, p. 3.
30. See, e.g., William Glaberson, “Judge Is Assailed over Holocaust Fund,” New York Times, 30 April 2004, p. B1; John Authers, “Holocaust Survivors Ask Why Justice Has Taken So Long,” Financial Times, 29 April 2004, p. 3; David Mermelstein, “Holocaust Survivors Speak Out against Injustice,” Miami Herald, 12 April 2004, p. 24; “Holocaust Victims Survivors [sic] Plead for Swiss Accounts,” Newsday, 10 April 2004, p. A22; Amy Dockser Marcus, “Group Says Survivors Come First,” Wall Street Journal Europe, 15 January 2003, p. 1.
31. David Hafetz, “Holocaust Survivor Stories Aired in Brooklyn Court,” New York Sun, 30 April 2004, p. 1.
32. Nathaniel Popper, “Passions Flare at Swiss Banks Hearing,” Forward, 7 May 2004, p. 3.
33. Itamar Levin, “Israel Intervenes in U.S. Swiss Bank Deposit Payout Hearing,” Israel Business Arena, 2 May 2004, p. 1.
34. “Sitting Judge Observer,” Financial Times, 3 May 2004, p. 12. Others have also compared Judge Korman’s task to that of the dilemma faced by King Solomon. See, e.g., Netty C. Gross, “Playing Solomon,” Jerusalem Report, 12 January 2004, p. 31.
35. “Holocaust Survivors Upset with Restitution,” New York Law Journal, 27 April 2004, p. 2.
36. Berkovsky, “Israeli Officials” (quoting Sallai Meridor, cochairman of the World Jewish Restitution Organization and chairman of the Jewish Agency for Israel).
37. Editorial, “Justice, at Last,” Forward, 16 January 2004, p. 10.
38. Popper, “Passions Flare.”
39. As Korman explained in a subsequent opinion issued on 22 April 2004, “As I have said again and again, when attempting to satisfy countless needs with a limited sum of money, we must look for the most pressing needs. Survivors in the United States who are ‘just managing’ are nevertheless managing. Survivors in the FSU – individuals who often lack the bare necessities of life, including food, fuel, and the most basic medicines – can only manage through distribution of the Looted Assets Class of the [Swiss banks settlement].” In re Holocaust Victim Assets Litigation, 302 F.Supp.2d 169,172 (E.D.N.Y. 2004). Meridor disagreed with this assessment: “You could not say that giving food is more important than giving mental health assistance or assistance to the disabled survivor who cannot get out of bed, or giving a home to a survivor who made aliyah [emigrated to Israel] but has no place to live.” Berkovsky, “Israeli Officials.”
40. Hafetz, “Holocaust Survivor Stories” (quoting Judge Korman). Following the 29 April 2004 hearing, HSF-USA filed an appeal before the Second Circuit Court of Appeals asking the appellate court to reverse Judge Korman’s allocation formula and seeking a larger share of looted assets funds to survivors in the United States. See Dubbin v. Union Bank of Switzerland, No. 04-1898(L), U.S.C.A. (2nd Cir.)(Amended Notice of Appeal filed 22 April 2004). The State of Israel has not filed a similar appeal on behalf of survivors in Israel. As of this writing, the appeal is still awaiting a decision from the Second Circuit.
41. Gribetz 2004 Allocation Report, p. 13. Gribetz’s observation that the claimants receiving humanitarian funds from the Swiss banks settlement would have received nothing if the case had gone to trial comes from opinions of both Judge Korman and the Second Circuit, which in 2001 affirmed Korman’s decision to allocate $800 million of the $1.25 billion settlement for the deposited assets claims. Both courts noted that the only legally valid claims in the lawsuits against the Swiss banks were the claims seeking return of the prewar and wartime deposits. See In re Holocaust Victim Assets Litigation, 302 F.Supp.2d 89, 93 (E.D.N.Y. 2004) (“This large sum [$800 million] was set aside in part because, of all the claims asserted against the Swiss Banks, only the claims of the Deposited Assets Class have any legal merit. The other claims could not have withstood a motion to dismiss”); In re Holocaust Victim Assets Litigation, 14 Feb.Appx. 132, 134 (2d Cir.2001) (“[The deposited assets class] claims are based on well-established legal principles, have the ability of being proved with concrete documentation, and are readily valuated in terms of time and inflation. By contrast, the claims of the other four classes are based on novel and untested legal theories of liability, would have been very difficult to prove at trial, and will be very difficult to accurately valuate”).
42. James D. Besser, “Seeking Moral Restitution,” Jewish Journal, 4 December 1998, p. 22.
43. Hearing of the Committee on Banking and Financial Services of the U.S. House of Representatives, 106th Cong., 6 (9 February 2000) (testimony of Dr. Otto Graf Lambsdorff).
44. Allocation Plan, ibid., pp. 11-13, 34-75.
45. Israel Singer, “Transparency, Truth, and Restitution,” Sh’ma, June 2002.
46. David Schaecter, “Use Restituted Funds for Urgent Survivors’ Needs,” Sh’ma, June 2002.
47. Singer, “Transparency.”
48. Jeff Jacoby, “Jews Can Set A Moral ExampleWith Holocaust Funds,” Boston Globe, Dec. 7, 1998, p. A15.
49. Email from Leo Rechter to author, 10 July 2002.
50. Email from William Elperin to author, 4 July 2002.
51. For an excellent article discussing the excessive fees received by plaintiffs’ lawyers in some cases, especially the recent tobacco litigation settlements, see Alex Beam, “Greed on Trial,” Atlantic Monthly, June 2004, p. 96 (discussing a tobacco litigation settlement where plaintiffs’ attorneys, in addition to receiving fees amounting to $7,700 an hour, went to court seeking for the State of Massachusetts to honor an agreement under which the lawyers would be entitled to an additional $1.3 billion in fees).
52. Toby Axelrod, “Lawyers for Nazi-Era Slave Laborers Urged to Use Fees to Help Survivors,” JTA Newswire, 26 June 2001.
53. Ibid.
54. Jonathan Weisman, “Redress Sought in Nazi-Era Labor,” Baltimore Sun, 23 August 1999, p. 1A.
55. Marilyn Henry, “Slave Labor Pact Reached with Germany,” Jerusalem Post, 24 March 2000, p. 7A (“British survivors said yesterday that they would pursue their claims in European courts”).
56. Alan Abrahamson, “Searching for Justice,” Los Angeles Times Magazine, 20 June 1999, p. 35.
57. Ibid.
58. Elli Wohlgelernter, “Lawyers and the Holocaust,” Jerusalem Post, 2 July 2002, p. 4B.
59. Ibid.
60. Blaine Harden and Saundra Torry, “N.Y. Law Firm to Advise Swiss Bank Accused of Laundering Nazi Loot,” Washington Post, 28 February 1997, p. A3.
61. Ibid.
62. Ibid.
63. Schapiro, Inside a Class Action, p. 19.
64. Ibid.
65. Whether the Swiss banks really wanted to, and actually did, “make it right” remains doubtful. In February 2004, JudgeKorman issued an opinion castigating both the Swiss banks and the Wilmer lawyers for deliberately issuing misinformation in the case during the settlement process. In re Holocaust Victim Asset Litigation, 302 F. Supp.2d 59 (E.D.N.Y. 2004), Korman explained: “What compelled me to write is that over the past year-and-a-half, the bank defendants have filed a series of frivolous and offensive objections to the distribution [of the settlement] process….These objections bring to mind the theory that ‘if you tell a lie big enough and keep repeating it, people will eventually come to believe it.’ The ‘Big Lie’ for the Swiss banks is that during the Nazi era and its wake, the banks never engaged in substantial wrongdoing….[Their] statements continually distort and obscure the truth, and….I am forced to address them.”
66. David Segal, “Past v. Future: Nazi-Related Suits Put Law Firms on Defensive,” Washington Post, 9 March 1999, p. E1.
67. Ibid.
68. Conversation with Stuart Eizenstadt by author, Washington, D.C., 7 February 2003. Eizenstadt did agree, however, to represent heirs to the Hapsburg dynasty against Austria for the return of forests, homes, and a palace seized by Nazis from the Haspsburgs after the Anschluss in 1938. Eizenstadt’s representation angered some in Vienna’s Jewish community who maintained that the Austrian compensation laws were promulgated to help Jews rather than wealthy non-Jewish Austrian families. The critics also argued that if Eizenstadt succeeded, funds allocated by the Austrian government to elderly, and sometimes destitute, Jewish survivors would then be diverted to the wealthy Hapsburgs. Peter S. Green, “Habsburgs Ask Austria to Return Estates Seized by Nazis,” New York Times, 10 May 2003, p. A7.
69. David Hafetz, “Miami Lawyer Draws Fire from Judge in Holocaust Case,” New York Sun, 29 April 2004, p. 1 (quoting letter from Elie Wiesel to Judge Korman).

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PROF. MICHAEL J. BAZYLER is professor of law at Whittier Law School, California; a research fellow at the Holocaust Education Trust in London; and in 2003 the holder of a fellowship at the Center for Advanced Holocaust Studies, United States Holocaust Memorial Museum, Washington, DC. He is the author of over fifty articles dealing with the international law of human rights and of the recent book Holocaust Justice: The Battle for Restitution in America’s Courts (New York University Press, 2003). His article is based on a chapter in the upcoming collection Gray Zones: Ambiguity and Compromise during and after the Holocaust, ed. Jonathan Petropoulos and John K. Roth (New York: Berghahn Books, forthcoming 2005).

About Prof. Michael J. Bazyler

Prof. Michael J. Bazyler is professor of law at Whittier Law School, California, and currently Distinguished Visiting Professor at Pepperdine University School of Law, California.