Netanyahu Seen Angling To Control Shoah Funds

By Nathaniel Popper

Published July 16, 2004, issue of July 16, 2004.

As its annual board meeting approaches next week, the main international Jewish body charged with negotiating and distributing Holocaust reparations, known as the Claims Conference, has all the appearances of an organization under siege.

The conference, which oversees assets totaling some $800 million, is being accused of giving insufficient attention to the voices of the survivors and of the Jewish state. Much of the anger appears to be spilling over from a bitter dispute between survivor groups and the federal judge overseeing the 1998 Swiss bank settlement, on which the Claims Conference is being pushed to take a position.

The judge, Edward Korman, has indicated that any unclaimed funds from the $1.25 billion settlement will be used mainly to benefit survivors in the former Soviet Union. This has angered American and Israeli survivors, who are demanding a greater share.

Israel’s finance minister, Benjamin Netanyahu, wrote to Jewish communal leaders last week, urging a thorough review of conference operations in the wake of the Swiss bank dispute. Several insiders described the letter as the first formal salvo in an ongoing Israeli effort to move conference headquarters to Israel and bring more of its assets under Israeli government control.

As it appears now, though, the money that sparked the wrangling — unclaimed funds from Swiss bank accounts, which had been expected to total as much as $600 million — might not materialize at all. Sources close to the Swiss case say that newly released data from Swiss banks might allow most of the money to be returned to the original war-era account owners and their heirs.

In the midst of the criticism, Claims Conference officials note that they are coming off a string of recent successes in negotiations with Germany. In the last two months, the conference has negotiated new agreements worth $180 million in new survivor benefits.

Just this week, the German government agreed for the first time to provide pensions to former slave laborers in Bulgaria.

But the current disputes are about more than any single Claims Conference operation. The conference is at the eye of a stormy debate over who may claim the right to speak for — and inherit the property of — the Jewish victims of Nazism. The debate is sharpening as the last generation of survivors moves toward the horizon.

The debate refers back to the creation of the Claims Conference in 1952, following negotiations between the West German government and the World Jewish Congress. While 23 Jewish organizations were represented on the board, neither survivors nor the Israeli government had any formal voice in the conference’s negotiation or distribution of funds. The survivors were an unorganized, voiceless community, and the Israeli government steered clear out of fear of harming its bilateral relations with Germany.

That began to change in 1989, when two survivor associations, one Israeli and one American, were given seats on the conference’s board. This coincided with the conference’s unforeseen inheritance of prewar Jewish-owned property in the former East Germany. Eight more board members were added in 2001 to represent Israel and the survivor community, but many survivors say these additions have not been enough.

“It is the survivors who lost their health, and their families and everything that they had,” said Noach Flug, chairman of the Center of Survivor Organizations in Israel. “It must be the survivors who have a say over where the money goes.”

Flug and other survivors have been critical of the conference for not trying hard enough to return to survivors the property the conference inherited. All prewar Jewish property in Germany reverted to the Claims Conference, and it set deadlines for heirs to claim the property. Afterward, property was sold to subsidize welfare programs for needy survivors.

The Swiss bank settlement has put a spotlight on the unhappiness of the American and Israeli survivors. But some Claims Conference leaders argue that the group most excluded from decision-making was precisely the group privileged in the Swiss case — survivors in the former Soviet Union. The conference has no members speaking exclusively for Jews in the region, where most of the Nazi atrocities took place and where, it is estimated that more than 20% of the world’s survivors now live.

This has had a clear effect on allocations, a number of board members said. “With no voice [from the former Soviet Union] at the table, the conference has always put more energy in negotiating to increase benefits for the same category of people who were living in the Western countries,” said Rabbi Andrew Baker, a board member representing the American Jewish Committee. “It’s the nature of the history that this group, in general, has come last on the totem pole.”

Survivors in the former Soviet republics have received .8% of all reparations and restitution money since 1952, according to a study by an adviser to Judge Korman. Since unclaimed Swiss funds began flowing there in the last three years, the overall proportion has risen to 4.5%.

This underrepresentation may provide the most immediate opportunity for reform at the Claims Conference. Talks are already under way between conference officials and Jewish communal leaders in the former Soviet republics. Next week, some leaders will be in New York for a World Jewish Congress meeting, and several are planning to stay in the city to press their case at the Claims Conference meeting.

“It is absolutely a problem that the Eastern Europeans have no representative on the discussions at this world level,” said Evgeny Satanovsky, president of the Russian Jewish Congress, who will be in New York next week.

But the requests of the Eastern Europeans may be drowned out by Israeli government officials, who have ramped up their argument in the last year that the Jewish state should be the leading caretaker of the survivor legacy — particularly since it is home to at least 40% of the world’s survivors. Currently, the Israeli government is represented on the board only indirectly, through the quasi-governmental Jewish Agency for Israel.

At a meeting of the Claims Conference executive committee in Jerusalem last November, board members were feted and lobbied by several Israeli Cabinet members. Netanyahu is said to have addressed board members bluntly, saying: “The day when you were doing whatever you wanted to and basically were going to throw us a couple of crumbs — those days are over. We now want to be part of everything that goes on.”

Netanyahu’s letter last week was more measured. In it, he called for a “blue-ribbon panel to examine how to increase the efficiency, transparency, relevance and coordination in restitution efforts.”

Netanyahu sent his letter to Israel Singer and Edgar Bronfman Sr., the top officials at the World Jewish Congress, which has been a key ally of the Israeli government in calling for changes at the conference.

Some conference critics, including World Jewish Congress executive Elan Steinberg, said that the conference would be more efficient if it were folded into the World Jewish Restitution Organization, which was founded in 1992 to negotiate property restitution with nations other than Germany and Austria. The Jerusalem-based WJRO works more closely with the Israeli government than does the Claims Conference. In the Swiss bank process, the WJRO filed a recommendation to the court, jointly with the Israeli government, proposing that 48% of all unclaimed funds go to Israel.

But any calls for an increased Israeli role will meet stiff resistance from survivors.

“The moment we would officially take on a government, this would stop being a moral organization, and this would all become a political issue,” said conference board member Roman Kent, chairman of the American Gathering of Jewish Holocaust Survivors, echoing statements of Israeli survivor groups.

Survivor leaders and others say the Israeli government has a less than spotless reputation in making survivors’ needs a priority. That reputation has not been helped by recent disclosures that the Israeli government and banks have done little to restitute what is estimated to be billions of dollars in property left in Israel before the war by Nazi victims (Please see separate article, above).

For now, however, the passions of the Swiss bank debate have drawn the survivor organizations into an unlikely alliance with Jerusalem. In June, Kent wrote a letter to Korman, together with a top Israeli survivor leader, Moshe Sanbar, a former governor of the Bank of Israel. The letter stated their belief, as Claims Conference board members, that the current allocations plan for the Swiss bank settlement should be revised.

One faction within the Claims Conference, led by the World Jewish Congress, is lobbying for the conference to adjust the distribution of its own funds in order to compensate American and Israeli survivors for their reduced share of the Swiss funds.

There have been media reports that Korman, the judge in the Swiss bank settlement, faces a unified opposition from the American Jewish community, with the sole exception of the American Jewish Joint Distribution Committee, which provides services to survivors in the former Soviet Union.

However, a survey by the Forward of the seven American organizations on the Claims Conference board indicates that none of them has taken a position on the issue, other than the group representing American survivors.

This opens the door for heated debate at next week’s meeting, but it is unclear what the stakes are. Even in the event that funds are left over in the Swiss case, the judge will have final authority over where the money goes.



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