Court Actions Highlight Lack Of Special Rep On Restitution

By Nathaniel Popper

Published June 18, 2004, issue of June 18, 2004.
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The last month has seen the first major spate of legal action on Holocaust-era issues since 2001, when the Bush administration downgraded the American government’s representation on restitution and reparations matters.

To observers from almost every side of the debate, the recent wrangling in court has revealed the deep impact the absence of Stuart Eizenstat, President Clinton’s special representative on Holocaust-era issues, has had on the efforts of survivors to win back property lost during World War II.

“It used to be a two-track process — with legal and diplomatic efforts,” said Michael Bazyler, author of “Holocaust Justice: The Battle for Restitution in America’s Courts.” “In sensitive arguments like these, you need to have someone like Eizenstat to be the interlocutor when things become unglued, and that’s just not happening.”

Some of the problems have been evident in the recent hearings for the $1.25 billion Swiss bank settlement and the so-called Hungarian Gold Train case, which Eizenstat addresses in a separate opinion article (see left). But for many restitution insiders, the need for a mediator was underscored in a less-prominent case in New Jersey federal court, in which survivors are seeking unpaid interest payments from a $5.2 billion fund established by German companies in 1999.

In a June 8 decision dismissing the survivor’s suit, federal judge William Bassler wrote that “the court sees no reason why diplomacy again cannot resolve what could be the last link in what has historically been a political catena.”

In many recent cases, judges have declined to rule on issues they deemed better suited for diplomacy. But there has not been anyone in the government willing to take the lead on such questions, according to Burt Neuborne, a trustee of the German foundation charged with disbursing the $5.2 billion slave and forced laborer fund.

“There’s just nobody minding the store now — no one to pick these issues up,” said Neuborne, who was also lead council in the Swiss bank case.

The German agreement has actually been moving along with relative fluidity com-

pared to many of the other agreements negotiated in the late 1990s by Eizenstat, including ones responding to lapsed European insurance polices and the use of slave laborers by Austrian companies.

Continuing litigation and legal roadblocks have slowed the release of funds to survivors in all these cases, and a number of advocates for survivors, as well as Eizenstat himself, have said the only long-term solution is for the Bush administration to reappoint a special representative on Holocaust-era issues.

“To break impasses,” Eizenstat told the Forward, “requires a person at the senior political level who is backed by the president and the secretary of state who is willing and able to break some crockery.”

The United States has been a leader in a restitution campaign that first took the world’s attention in 1995, with the revelation of the dormant Holocaust-era accounts in Swiss banks. Eizenstat was a powerful mediating force on all fronts of the restitution campaign, but he was not able to close all the gaps by the time the Clinton administration left office.

At the time, Eizenstat pressed President Bush to name a Republican successor for his position, but his requests went unheeded. The administration did, however, maintain the office of Holocaust assets, with an ambassador-level special envoy overseeing a full-time staff of eight.

The Bush administration’s current special envoy for Holocaust issues, Edward O’Donnell, acknowledged that Eizenstat was able to bring a high level of political clout to his negotiations. In addition to his work on restitution, Eizenstat has served as deputy secretary or undersecretary of the State, Treasury and Commerce Departments. But O’Donnell, who was Eizenstat’s chief of staff, was one of the only restitution insiders to dispute the contention that there is a substantive difference in the way the American government now deals with restitution cases.

“There’s no lack of focus,” O’Donnell said. “This administration continues to be committed to unresolved issues from the Holocaust. It’s just that we are now in an implementation phase, and not a negotiation phase, and that is frequently a matter for the courts.”

Many Jewish communal leaders and restitution experts praised O’Donnell’s work, especially in picking up the issue of resurgent antisemitism in Europe. The executive vice president of the Conference on Jewish Material Claims against Germany, Gideon Taylor, said that O’Donnell has been “tremendously important” on many negotiation issues.

But there is general agreement in the restitution community that there have been significantly fewer efforts at mediation and diplomacy in restitution processes gone awry.

“The State Department used to be willing to bring pressure to bear on its resolutions,” said Ronald Zweig, chairman of the Jewish history department at Tel Aviv University. “That is clearly lacking now. The administration is no longer as engaged.”

One of Eizenstat’s sharpest critics, Thane Rosenbaum, has said that the agreements reached by Eizenstat during the late 1990s frequently failed to provide any moral justice for survivors in the form of genuine apologies or meaningful memorials. But now, Rosenbaum said, the problems are much more basic.

“To me, writing the check was never enough, but now we’re fighting just to get that,” said Rosenbaum, who is a law professor at Fordham University and the child of Holocaust survivors. “It’s not clear that this administration believes it is responsible in any way.”

The reasons for the scaled-back approach to restitution are manifold, according to Zweig. The new administration brought with it a new set of priorities in foreign affairs, and when the Clinton administration left office, many of the largest restitution issues appeared to have been resolved through the German, Swiss and Austrian agreements.

In recent years, however, Holocaust restitution issues with which Eizenstat had not dealt have come to the forefront. A group of survivors is currently attempting to win damages from France’s national railway company, which transported Jews to Auschwitz. In another case with potentially enormous impact, survivors are seeking pre-World War II Jewish property from the Polish government. Both cases are currently awaiting appeal.

It appears that these cases, which were dismissed by lower courts, will be allowed to go forward as a result of a June 7 Supreme Court decision in the case of Maria Altmann, who has unsuccessfully sought the return of six Gustav Klimt paintings from the Austrian government. While the court made no ruling about Altmann’s right to the paintings, six of the nine justices agreed that American citizens have the right to sue foreign governments for World War II wrongs, in spite of the sovereign immunity that governments enjoy.

Legal experts say this may point the way forward to an era in which individuals, rather than the American government, carry the weight of pursuing restitution. In Altmann’s case, rather than supporting her, the State Department and the solicitor general actually filed briefs against her.

Altmann’s lawyer, E. Randol Schoenberg, said he was happy that the case would be allowed to proceed, and there has been talk of other suits using his strategy. But Schoenberg said the situation is far from ideal.

“If the U.S. government were to apply pressure on restitution cases as they did during the Clinton administration, there would be many more resolutions,” Schoenberg said. “That involvement just hasn’t been there in the past three-and-a-half years.”

The broader issue of art restitution is one of the major fronts left unfinished from the Eizenstat era. Of the 600,000 works of art that experts estimate were stolen from Jews, only 2,000 to 3,000 have been returned.

Ori Soltes, director of the Holocaust Art Restitution Project, said the return of artwork continued at a decent clip during the last years of the Clinton administration, but “that apparatus began to fall apart once the administration changed.”

Whether the public support still exists for a strong American policy on restitution remains a big question. Zweig said that the Jewish community has begun to suffer a “restitution fatigue” of sorts, which has eroded the public opinion that was so strong in the 1990s. This can be traced, in part, to the ugly fights that have broken out over the proper way to distribute the funds won in the German, Swiss and Austrian agreements.

But advocates for survivors say that the continuing battles have occurred in part because there has been no high-level government representative assiduously working out the kinks in the process. Eizenstat not only cajoled European companies and governments, but also worked to resolve infighting among Jewish organizations. For many observers, those dealings outside of court helped bring these sensitive negotiations one step closer to a degree of justice.

“In law someone has to win and someone has to lose,” Neuborne said. “But there are settings that are not appropriate for that kind of win-lose resolution. There are settings where you have to come to agreements, and that’s what [Eizenstat] was very good at doing.”

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