By NETTY C. GROSSExtract from Issue 16, November 24, 2008 of The Jerusalem Report. To subscribe to The Jerusalem Reportclick here. Ten years after the landmark Swiss banks
settlement, experts are divided about the
moral impact of the restitution agreement
As of September 30, over a billion dollars of Swiss bank money had been distributed or allocated to Holocaust survivors or their heirs under the 1998 Brooklyn U.S. Federal Court decision that settled a long-running dispute between Swiss banks and Jews who had been persecuted during World War II by the Nazis, and victimized by Switzerland. The process also unmasked the truth behind Switzerland's so-called neutrality and smashed its Heidi-like image.
However, a decade after the signing of the $1.25 billion Swiss banks settlement that followed the 1998 court ruling, experts are divided in their assessment of the benefits and shortcomings of the deal, as well as its larger moral impact.
Few would argue that the entire Holocaust restitution process, beginning with the original Luxembourg Agreements of 1952, which recognized post-war Germany's debt to the Jewish people for crimes committed by the Third Reich, had troublesome flaws. Some feel that even negotiating with the Germans and their collaborators over restitution was wrong, and even among those who favored the process, there is a perception that survivors have somehow been cheated.
Disputes about allocations have also marred the restitution process. Holocaust scholar Efraim Zuroff, who is the chief Nazi hunter at the Los Angeles-based Simon Wiesenthal Center and heads its Jerusalem office, tells The Jerusalem Report that while there is a "strong element of justice" to Holocaust restitution, endless talk of restitution payments "cheapened the memory of the Holocaust," and turned the "biggest mass murder in history into an economic issue."
Dr. Zuroff laments that the preoccupation with obtaining money to ease historic wounds - as exemplified by the Swiss banks deal - has caused "us to squander our moral capital" and feeds into anti-Semitic stereotypes about Jews and money. Hunting down and prosecuting Nazis, he admits, also often stirs anti-Semitic feelings, particularly in East European countries, but unlike restitution, trials of aging Nazis and their supporters, ultimately serve some social purpose, and lead to "true reconciliation" between Jews and other peoples, he asserts. The same cannot be said of Holocaust restitution, which has contributed to anti-Semitism, says Zuroff, who was not involved in Holocaust restitution negotiations.
Even proponents of restitution and the Swiss deal see its problems. Michael Marrus, a University of Toronto Holocaust historian who wrote a forthcoming book on restitution, asks whether Israeli banks behaved any better with their own Holocaust's victims assets than the Swiss did; perhaps, he suggests, the secretive behavior reflects a universal "banking culture." In any case, says Marrus, absolute historical justice for the survivors and heirs was not achieved by the settlement.
Marrus also questions whether the American legal system reached beyond its jurisdiction, as many Europeans believe. Finally, he notes, it is impossible to ignore the personal downfall of many associated with the Swiss deal, as with Holocaust restitution in general, including prominent lawyers and leaders of major Jewish organizations. "It was a high stakes game, with huge amounts of money involved. It attracted people with huge egos."
But despite its deficiencies, Marrus says the Swiss banks settlement was "the largest settlement on a human rights issue ever to be heard in a civil court. Historic wrongs were acknowledged. It was a major achievement." And a chorus of participants, historians and scholars agree.
Efforts to secure restitution so many years after the war, "to go from zero to billions... was nothing short of heroic. It was a glorious chapter in Jewish history," says Elan Steinberg, former executive director of the World Jewish Congress who was involved in the negotiations.
But he acknowledges that the the internal squabbling after the settlement was made "was a Jewish tragedy" and regrets that, in general, restitution programs do not always pay survivors directly but rather provide services via non-profit organizations, creating yet another layer of bureaucracy. Reports of multi-million dollar fees paid to lawyers while survivors of Nazi cruelty get paltry sums (by comparison) have also reflected badly on the global settlements.
However Michael Bazyler, a professor of law and human rights at the Chapman University School in Orange, California, and author of "Holocaust Justice," tells The Jerusalem Report that, even though the restitution process had its imperfections, the battles were well worth it. By his calculation, some $8 billion have been collected by survivors in Holocaust-related material claims since, and because of, the Swiss deal. These funds have been distributed in the form of cash grants and reparation payments.
The Swiss banks settlement was, he says, "the mother of all Holocaust restitution settlements. If the litigation had failed, there would have been no momentum to proceed further with the other claims," for insurance, art and slave labor compensation, says Bazyler, who estimates that the Nazis stole between $230 to $320 billion from the Jewish population in Europe, and that the stealing was done on all levels, by petty Nazis who looted Jewish-owned jewelery and artifacts to institutions which raided bank accounts and businesses. The Holocaust "was both the greatest murder and greatest theft in history," he notes.
The Swiss banks litigation began in 1995, when Greta Beer, a gray-haired woman in her 70s, filed the first lawsuit of its kind in a federal courthouse in Brooklyn. Before World War II, Beer's father, Siegfried Deligdisch, a Jewish textile factory owner from Czernowitz, Romania, deposited money in a Zurich bank account. He died in 1940 of illness. After the war, when Beer and her mother, who moved to Switzerland, tried to locate the bank and remove the funds, various banks claimed that they could find no record of the account.
It was her lawsuit, and others like it, that ultimately compelled several Swiss banks, who in the post Cold War period went global and opened offices in New York City, to admit that they colluded with the Nazis, laundered gold looted from Jews, appropriated bank accounts of many Holocaust victims and, in the post-war era, destroyed bank records and conspired to remain silent.
Beer famously testified in 1996 about the churlish treatment she experienced at the hands of Swiss banking officials in hearings in Washington before the Senate Banking Committee, chaired by Republican New York senator Alfonse D'Amato. The hearings cast a spotlight on the enormity of the Nazi plunder of Jewish assets and Swiss complicity in it, as well as the way that Swiss authorities had turned persecuted Jews away at the border and mistreated others who found sanctuary.
In "Bystanders to the Holocaust: A Re-evaluation," Prof. David Cesarani and Prof. Paul A. Levine write that those Senate hearings had a transformative effect on Holocaust awareness regarding the plunder of Jews. "D'Amato provided an unprecedented platform for frail and elderly Jews whose murdered relatives had made deposits in these institutions [Swiss banks] prior to the war but whose heirs were prevented from retrieving the assets due to the duplicity of insensitivity of the banks when adjudicating claims," they write. Cesarani and Levine say that while historians long knew about Swiss complicity in plundered gold, the process leading to the settlement which started with the hearings gripped the public and became the subject of worldwide comment.
The January 1997 discovery by Union Bank of Switzerland security guard Christoph Meili of about-to-be-shredded war-era bank ledgers, which contained information about dormant Jewish accounts, didn't help Swiss claims of innocence. The 28-year-old Swiss guard, his wife, Giuseppina, and their two children, were awarded political asylum in the United States by Congress after Swiss authorities began investigating Meili for breaking Swiss bank secrecy laws. Meili also received death threats. He was represented by American lawyer Edward Fagan, who was also one of the class action lawyers in the Swiss settlement.
With growing pressure from an ad hoc coalition of Jewish organizations (such as the World Jewish Congress) and American and Israeli diplomats (such as Clinton's Special Envoy for restitution Stuart Eizenstat and Jewish Agency chair Avraham Burg) plus survivors, politicians and class-action lawyers, the banks caved in and settled on $1.25 billion in the Brooklyn federal courtroom of Judge Edward Korman on August 12, 1998. The deal was finalized in January 1999, and stipulated that in exchange for the settlement, the plaintiffs agreed to release Swiss banks, the Swiss government and other Swiss entities from all claims relating to the Holocaust and World War II.
Two lawyers hired to help Korman implement the judgment, Judah Gribetz and Shari Reig, told The Report that by last September 30, $1,026,839 had been distributed or allocated to 448,993 Holocaust survivors or their heirs worldwide. The settlement included payments to Jewish depositors as well as to all victims of Nazi persecution abetted by the Swiss, such as Jews who worked as slave or forced laborers for German and Swiss industry, and fleeing Jews who were turned away at the Swiss border. The agreement was not restricted to compensating Jews. It also allocated funds for members of other groups persecuted or targeted for persecution, including gypsies, Jehovah's witnesses, homosexuals and handicapped people.
Extract from Issue 16, November 24, 2008 of The Jerusalem Report. To subscribe to The Jerusalem Reportclick here.
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