Austria Comes to Terms With Its Past

By Stuart Eizenstat

Published December 16, 2005, issue of December 16, 2005.
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Last week, after a federal judge in New York dismissed the last major Holocaust restitution case against the government of Austria and several private Austrian corporations, Chancellor Wolfgang Schüssel told President Bush that he was declaring “legal peace.” The Austrian leader then called me and said in emotional terms that it was a “moment of great joy.”

Austria, Schüssel said, would now be able to immediately pay $210 million into the General Settlement Fund, the last remaining part of a nearly $1 billion Austrian-American agreement that I negotiated with him in the final hours of the Clinton administration almost five years ago. The first payments, he told me, would be made “before Christmas.”

That Holocaust victims will finally receive this deserved money is indeed, as Schüssel said, cause for joy. But it is also significant in another regard. At a time of Muslim unrest and lingering antisemitism in segments of Europe, it represents a twin triumph: a nation moving from the shadows of long-denied Nazi complicity in World War II into the sunlight of acceptance of its historic responsibility, and a chancellor proving his critics wrong, playing a historic role for his people and striking a blow for the fight against antisemitism.

The $210 million payment into the General Settlement Fund will mean that 19,300 claimants from around the world finally will have the chance to prove their claim and divide the sum on a pro-rata basis, with a maximum recovery of up to $2 million each for liquidated businesses; property converted to private use; looted bank accounts, stocks, bonds, mortgages and movable property, and unpaid insurance policies. Even before the chancellor’s declaration of “legal peace” last week, the three-person claims committee we created in 2001 already had reached a decision on 2,700 cases. The rest of the 19,300 cases should be decided by the spring of 2007, and Austrian officials have assured me that the oldest claimants will be sent to the front of the line.

“Legal peace” also will activate a part of our agreement that allows victims of Nazi persecution to get back the actual real property confiscated by the Nazis, if it remains in the Austrian government’s hands. There are 80 claims pending, and a separate tribunal created under our 2001 agreement already has decided seven cases, three favorably.

In a delicious irony, one of the successful claims will return looted property that now houses the Vienna offices of the United States Information Agency. The American government will leave the building, which the Austrian government took over after the war and leased for decades to Washington, and it will be returned to its rightful prewar owners.

Last week’s decision by the Second Circuit Court of Appeals, which opened the door to “legal peace,” validates the unique alternative dispute resolution process the Clinton administration developed to settle the major Holocaust restitution cases involving Austria, Germany and France. In dismissing the claims against the Austrian government, the Court of Appeals deferred to the American foreign policy interests that led us to create an international forum to compensate victims outside the American system.

When we were negotiating the agreement, we recognized that with hundreds of thousands of surviving victims, the traditional trial system never would have worked in the victims’ lifetime. And indeed, until last week a few lawyers who objected to our agreement, assisted by a federal judge who sat on the case for five years, were able to delay justice to tens of thousands of needy Holocaust survivors and their families. Since we negotiated the agreement, the number of living Austrian Holocaust survivors fell to 13,000 from 21,000.

At least for the survivors still alive today, justice is no longer delayed. Shortly after the Court of Appeals decision the federal district court judge thankfully dismissed the case against the private Austrian corporations, and in the process helped strengthen the Austrian Jewish community. The case’s dismissal was based on a stipulation negotiated by Andreas Kohl, president of the Austrian parliament, under which the organized Austrian Jewish community will receive roughly $40 million to support its struggling institutions. The contributions, given equally by the Austrian federal government and the provincial governments, will relieve some of the personal financial burden that has been carried by Ariel Muzicant, head of the organized Austrian Jewish community.

The declaration of “legal peace” also represents a personal vindication for Schüssel, and enhances the moral authority of Austria less than a month before the country assumes the rotating presidency of the European Union.

Following inconclusive parliamentary elections in October 1999, Schüssel, leader of the People’s Party, became chancellor by making a controversial pact with Jörg Haider. Schüssel’s alliance with the Freedom Party leader — an aggressive, xenophobic nationalist who built a political career on the far right by speaking at gatherings of Austrian S.S. veterans and offering apologies for Nazis crimes — provoked a diplomatic firestorm. Unprecedented diplomatic sanctions were levied against Austria by its fellow E.U. member states, and the Clinton administration pursued a policy of “restricted contacts” with Vienna.

The chancellor told me, in our first meeting, that his political strategy was to isolate Haider within his own party and to strengthen the moderate elements within the Freedom Party. And it worked: Haider has lost control over his party, and is an increasingly marginal political force in Austria.

Schüssel was a tough but fair negotiating partner whose leadership was indispensable to our agreement. His declaration of legal peace last week places his final stamp on the historic 2001 agreement.

The declaration represents more than just a financial settlement. It amounts more broadly to Austria, 60 years after the end of World War II, coming to terms with its past and more fully recognizing its responsibilities to the victims of the Third Reich. For decades after the war, Austrians clung to the myth that they had been the “first victims” of Hitler’s aggression, rather than his willing accomplices — that, as the Viennese coffee house joke went, Austrians believed that the German-born Beethoven was in fact an Austrian and the Austrian-born Hitler was really a German.

It was not until the 1980s that Austria was forced to take a harder look at its wartime record, when the full record of former United Nations secretary general and Austrian president Kurt Waldheim’s service in the German army was uncovered by the World Jewish Congress. Gradually, Austria’s political leaders began to speak up, but many Austrians still clung to past myths, while justice to its victims was never fully achieved.

With the declaration of “legal peace,” Austria now has come full circle, and it will be a stronger nation for its actions. Austria has gone beyond our 2001 agreement, which only required the federal government to return Nazi looted property. Several provinces and cities, including Vienna, are voluntarily agreeing to return looted property they control, and the filing deadline for all cases has been extended until December 2006.

But perhaps no development is more telling than this: In today’s Austria, it is not innocent Jews who sit in prison, but the notorious British academic David Irving, jailed on charges of breaking Austria’s law against denying the Holocaust. For once in our troubled world, there is good news to report — good for Austria, good for Holocaust survivors, good for binding old wounds and good for the cause of fighting antisemitism in Europe.

Stuart Eizenstat was President Clinton’s special representative on Holocaust-era issues. He negotiated the Holocaust restitution agreement between Austria and the United States in 2001, while serving as deputy secretary of the Treasury.






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