Israeli Requests for Shoah Funds Denied

By Nathaniel Popper

Published April 23, 2004, issue of April 23, 2004.
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A court-appointed special master overseeing distribution of money from Holocaust-era Swiss bank accounts has turned down two Israeli proposals for a dramatically increased share of unclaimed funds.

In a report released April 16, the special master, Judah Gribetz, rejected Israeli requests that the Brooklyn federal court allocate almost half of any remaining funds from the $1.25 billion Swiss bank settlement to Israeli Holocaust survivors and Holocaust education programs.

The submission by the World Jewish Restitution Organization, a body with close links to Israeli officialdom, was one of some 80 proposals considered by Gribetz, as part of a broad review of the court’s previous pattern of allocating funds from the Swiss case.

The review was prompted by protests from survivor advocates in America and Israel, who had argued that a disproportionate amount of funding was going to the former Soviet Union. Gribetz, a former New York deputy mayor, wrote that the proposals he received during the review “confirm that survivor needs unfortunately remain essentially the same as when they were [originally] assessed.”

U.S. District Judge Edward Korman, who has overseen the Swiss bank case, has scheduled public hearings on April 29 to let advocates present their views on distribution of the remaining funds, which could amount to $600 million. Korman has largely adhered to Gribetz’s recommendations in the past.

The Gribetz report also contains what appears to be the first comprehensive review of how German reparations and restitution payments have been divided since World War II. Since the first German reparations agreement in 1954, some $54 billion has been paid either as compensation to survivors or for restitution of stolen property. Of that amount, only 0.8% has gone to survivors in the former Soviet Union, where an estimated 12% to 21% of the worldwide survivor population lives, largely because survivors there were barred for decades by the former communist regime from applying for reparations. By contrast, 43% of all compensation has gone to Israel and 27.6% to the United States.

For the American and Israeli groups who had argued for a larger share of the funds from the Swiss bank settlement, the Gribetz report was a serious setback.

“I don’t think that anyone opposes help to needy victims in the former Soviet Union,” said Reuven “Bobby” Brown, a senior official at the Jewish Agency for Israel, who helped draft the Israeli proposals. “But it seems that the Holocaust survivors in the U.S. and Israel, as well as the whole concept of remembrance, have been completely deprioritized or forgotten.”

The 1998 class action settlement created a $1.25 billion fund to compensate Holocaust survivors and their heirs who claimed they had been victimized by Swiss banks. Of that total, $800 million was set aside for owners of war-era bank accounts who were denied access to their funds after the war. The rest went to Nazi slave laborers, refugees turned away by Switzerland and persons whose assets were looted by the Nazis and then deposited in Swiss banks. In all, $593 million has been distributed so far.

Money from the so-called looted assets class was used to create a humanitarian fund to assist needy survivors around the world. That has touched off unending disputes, with survivors in America and Israel demanding a larger share. The judge has repeatedly dismissed their challenges.

The current dispute revolves around money that was reserved for account owners but remains unclaimed. A total of $646 million has not been claimed thus far, but Korman has said he will not distribute the funds until the Swiss banks release more information on the identity of the former account holders.

While the exact sum the groups are vying for is not yet clear, Korman has indicated in the past that any remaining funds will enter the humanitarian fund. In the current report Gribetz laid out a framework for distributing this money, and said the first priority should go to “assistance that keeps survivors alive.”

“Food, winter relief and in many cases emergency grants,” Gribetz wrote, “should take priority over all other aid programs, even those that add to survivors comfort and relieve some of the burdens for those who have difficulty with personal care.” Overall, Gribetz calculated that 74% of the emergency assistance is needed in the former Soviet Union, 20.4% in Israel and 3.7% in the United States.

Until all emergency needs were met, Gribetz said, the court should reject funding for Holocaust education or research. The Israeli submissions proposed that up to 20% of remaining funds be used to “fulfill the transcendent moral obligation to future generations to educate, commemorate and document the Holocaust.”

The Israeli proposal included a demographic study commissioned from Hebrew University demographer Sergio DellaPergola. The study indicated that 47% of all Nazi victims live in Israel, in contrast to the 31% figure from a demographic study conducted early in the settlement process.

In his report this week, Gribetz raised methodological problems with Israeli and American studies alike, in part because of small sample sizes. But Gribetz also argued that “the estimates of the size of survivor population do not speak to the needs of these individuals, whether previously counted or not.”

According to Brown, Gribetz’s calculations led him to a very different conclusion about communal needs than what Jewish organizations have come up with in the past.

“The court had a moral obligation to hear what the American and Israeli survivors had to say, and to look at the decisions that have been made in the past,” Brown said. “To ignore all of those people and say, ‘we know better’ seems to be a tremendous error in judgment.”

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