Hungarian Jews can't bank on compensation

While many countries have been prodded to return the millions stashed by Holocaust victims, Hungarian situation is unique.

October 5, 2006 14:25


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Growing up in small-town Hungary, Endre Schvab dreamed of being a pharmacist. But born in 1924, he came of age in an era when Hungary restricted its Jews from enrolling in university. Learning a trade was more realistic. "So the whole family decided he would become an optometrist," recalls his daughter, Agnes Somlai. To that end, Endre's father, a wealthy wheat farmer and goose-feather merchant named Imre, socked away enough bank savings for his only child to one day build a large home and workshop, near the family homestead in Mindszent. Such idyllic plans were derailed in 1944, with the Nazi occupation of Hungary. Endre was deported to Dachau. It was two years before Endre - after recuperation from various ailments in a Swiss hospital - returned to Mindszent. There was nothing left, though: His parents, aunts, uncles and cousins had been deported and killed in Auschwitz. The one thing he found was the bank book, but Schvab learned the Hungarian government had confiscated it. It's this savings account that his daughter is today fighting to recover. Hers is one of 10 such cases that, six decades later, heirs or the account-holders themselves are now pushing through the Hungarian courts, with no success so far. "They probably won't pay, which is absolutely disgusting," Somlai, 57, says in a phone interview from Sydney, Australia, where she immigrated to in 1982 with her daughter, Barbara, now 27. "I'm not doing this for the money, but for the principle. It's about justice, nothing else." While countries from Switzerland to Israel have been prodded to return some of the millions stashed by Holocaust victims, the Hungarian situation is unique: The currency back then, the pengo, soon spiraled into a record-breaking hyperinflation, prompting Hungary to switch to a new currency - and rendering the pengo worthless. Further complicating the situation is that relevant legislation - through fascism, communism and now democracy - has changed several times since then. "It's a very difficult legal problem," says Peter Gal, the attorney whose firm represents each of the Jewish plaintiffs and has devoted 10 years to the issue. "You can't just use today's laws, but you need to know the acts in effect then - and how they were used - and harmonize the two." The Hungarian authorities, though, appear untroubled by the complexity. In court, lawyers for the Ministry of Finance and Hungarian National Bank reportedly avoid the moral question of compensating for seized assets, focusing instead on technicalities: how to compensate for something with no official value, and because it no longer exists, how to calculate its value anyway? In statements to JTA, spokesmen for both the ministry and bank declined to go into details or respond to critics, citing the fact the cases are still ongoing. The Ministry of Finance, meanwhile, suggests the claims are invalid. "These are clearly judiciary questions; we have to maintain our point of view in the Court of Justice, not in the press," said Mark Koszegi, of the ministry's press department. "Honoring the decision of the Court of Justice, our goal clearly must be to accomplish only valid claims." The issue is indeed complex. Shortly after the Nazis occupied Hungary on March 19, 1944, a decree required all Jews to not only sign over their bank accounts, but to hand-deliver all valuables, like jewelry and priceless heirlooms, to the state-owned national bank. The Nazis later shipped some of these prized possessions on the notorious "Hungarian Gold Train," which U.S. forces later seized. The decree affected all of the estimated 825,000 Hungarian Jews then on Hungarian territory - of whom some 560,000 would perish during the Holocaust. It's not known how many Jews had bank accounts. But all who did likely complied, under threat of torture. Their bank books were stamped zarolt - "blocked" - and the accounts were frozen. Jews were later ordered to turn in their bank books, which were reportedly destroyed. Gal pulls out a document from just one private Budapest bank, which he says had thousands of Jewish customers, who shifted some 1.5 billion pengo over to the national bank - an amount he estimates today at $70 million. "At the time, 400 pengo was a really good monthly salary," he says. By war's end, the Soviet Red Army liberated Hungary from the Nazis, but the country was economically devastated. The new government repealed the anti-Jewish decree and ordered compensation. But hyperinflation soared, setting the then-world record; even today, numismatists cite the 100,000,000,000,000,000,000 pengo note from 1946 as the largest denomination ever issued. It was worth just 20 cents at the time. As the Communist curtain enveloped Eastern Europe, talk of compensation dissipated. In the 17 years since the system collapsed, Hungary, under pressure, has enacted several compensation plans - for communal property, private property, personal persecution and the Gold Train. But not for confiscated bank accounts. And it seems Hungary's not about to. In 10 years, Gal concedes he has yet to win a court case, but continues to appeal. His goal, he says, is to get the bank and finance ministry to pronounce the 1944 decree and seizures "null and void" because they were coerced. Admitted coercion may pave the way for financial settlements. His continued court failures, while discouraging, haven't stopped him. "Not only is this legally difficult, but it's a moral challenge as well," Gal says, between drags of his cigarette. "Because on the other hand, I'm a Jew. I have a granddaughter, and when I see her, I'm thinking about when I was a little child: I didn't know my own grandfathers, because they were both killed." As for Somlai, her case reached the Hungarian Supreme Court last month - and was denied. She and Gal are now discussing whether to turn to the European Court of Justice. Admittedly hot-headed, she says she's ready to struggle on. "I'm just trying to make a point: My granddad didn't save the money for his family for nothing," Somlai says. "From this money, I would love to buy just a piece of chocolate to give to my daughter, to say to her, 'This is from your great-grandfather, to you, with love.' "

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