The Israeli official in charge of finding and returning property to heirs of Jews who died in the Holocaust blasted the country's past treatment of the issue in an interview this week with The Jerusalem Post.
Zvi Kanor, the recently appointed head of the state-run Holocaust Victims Assets Restitution Company, insisted it was "impossible that the State of Israel didn't know about these assets at the time of the founding of the state."
He called it "a sin" that the Restitution Company "wasn't established immediately with the founding of the state."
The Restitution Company was established by legislation in 2006 after a five-year investigation by a Knesset committee that found the state had failed to seek out and return such properties to their rightful heirs. The company is tasked with identifying Holocaust victims' assets and tracking down heirs.
In the three years since its founding, the company has managed to find some NIS 700 million worth of assets, including hundreds of real estate properties. As with such processes in other countries, however, it has found only a small percentage of the heirs.
More than 65 years have passed since the death of the owners of the assets, and during this period Israeli agencies didn't do enough to find heirs, Kanor said.
"At the time, everyone was more comfortable letting things lie. That's how the state, the banks, corporations and [Zionist] organizations ended up holding on to these assets since that time."
According to Prof. Yossi Katz, the researcher who launched a public debate on the issue in 1996 when he discovered unclaimed Holocaust-era assets being held by Israeli institutions, Israeli leaders were deeply uncomfortable coming to terms with Jewish victims of the Nazi genocide.
"Ever since the founding of the state, you find here and there official documents indicating that the subject was known," Katz told the Post this week. But "until recently Israel saw the Holocaust as something that needed to be forgotten, distanced from public [discourse]. Israeli leaders wanted to distance themselves from identifying with the Holocaust experience, with those who went 'like lambs to the slaughter.'"
No one was denied their property if they came forward to claim it, he said.
"Of course, anyone with documentation got the property back. But the Nazis killed off whole families, so a lot of properties had no heirs, and a lot of heirs never knew their relatives had owned properties in Israel."
Yet Israel could have done more to bring assets and heirs together, Katz and Kanor insist. Israeli government agencies had good records of assets and victims.
"These assets are being found in archives of the state custodian-general and other agencies, and they know what they are holding. They're the ones telling us that these assets belonged to Holocaust victims," Kanor told the Post.
The Office of the Custodian-General is a branch of the Justice Ministry that serves as the legal holder of property in Israel that has no owners. It inherited the unclaimed assets of Holocaust victims in 1969 from the Finance Ministry's Custodian of Enemy Properties, an agency that itself inherited it from the British Mandate office of the same name.
Katz shares Kanor's criticism of the state's handling of the issue.
"You can say that in 1948 people didn't know where things stood. But why, after these facts were rediscovered in 1996, did we have to wait another 14 years before the state started to return the assets?" Katz asked.
In the search for heirs, the company has listed more than 60,000 unclaimed assets on its Web site (http://www.hashava.org.il/eng). Some 50 employees and investigators have spent the past three years looking through museum archives and constructing family trees in the search for heirs, while also examining archives of the custodian-general, Yad Vashem and other agencies looking for unclaimed properties and bank accounts.
So far, only a few thousand heirs have been located for tens of thousands of assets, said Kanor. "We assume that about 50 percent of heirs live in places like the United States, and we haven't even begun to look for them over there," he said.
According to the 2005 law that established the Restitution Company, anyone currently in possession of an Israel-based property that belonged to someone who died in the Holocaust is required to transfer the property to the company.
The company already holds roughly NIS 300m. in pre-war shares and investments in the Jewish Colonial Trust, according to Katz, who served as an arbiter between the Restitution Company and the JCT.
Last month, the company received a historic first payment of some NIS 25m. from the country's three largest banks, Leumi, Hapoalim and Discount. Negotiations are ongoing with Leumi over an additional 3,500 accounts thought to contain another NIS 250m. in assets, according to estimates by the Restitution Company.
Bank Mizrahi and Mercantile Discount have yet to start negotiations with the company over accounts believed to have belonged to Holocaust victims.
The difficulty in finding heirs has left the Restitution Company flush with hundreds of millions of shekels, some of which have started to be spent on the welfare needs of poor survivors living in Israel.
In 2008, the company transferred NIS 6,000 to the bank accounts of every survivor listed as welfare-eligible by the Finance Ministry, a total expenditure of some NIS 75m. Another NIS 25m. has been spent on organizations that visit lonely survivors and offer food packages to the needy.
A long list of additional health and welfare programs is being considered by the company's volunteer External Committee, a five-member panel of retired health experts established to oversee the company's spending policy.