The federal judge overseeing a $1.25 billion Holocaust restitution settlement with Swiss banks is accusing an American survivor group of filing “frivolous” claims for more funds while survivors in the former Soviet Union live in abject poverty.
Brooklyn federal judge Edward Korman filed a sharply worded memorandum this week, vividly detailing the harsh living conditions of aging survivors in countries formerly under Soviet rule. The 51-page writ is meant to explain the judge’s decision in November to deny a request by the Holocaust Survivors Foundation-USA for a greater percentage of settlement funds to be devoted to humanitarian aid for needy survivors in this country.
But the judge’s stinging tone — he calls the foundation’s positions “baseless,” “absurd” and “outlandish” — and his emphasis on privation in Eastern Europe may offer clues to his views going forward to the case’s next phase. Jewish groups and others are gearing up for a public hearing in April and an eventual court decision on how to allocate as much as $600 million that may be left over after bank claims are resolved. At least 75 proposals have been submitted to the court for allocation of unclaimed funds.
The Holocuast Survivors Foundation’s lawyer, Florida attorney Sam Dubbin, said the group’s members “disagree very strongly with the court’s factual and legal conclusions.”
The order comes barely two weeks after Korman fired off another angry opinion, this time against the Swiss banks themselves, accusing them of distorting history and propagating a “big lie” in filings that attempt to deny a documented pattern of systematically preventing Holocaust victims from reclaiming their bank deposits. The opinion accused the banks of trying to “delay justice and prevent access to truth” by withholding information on war-era accounts.
That opinion came in response to a December 16 memorandum from the banks, objecting to parts of the process for resolving depositors’ claims. According to a source close to the court, the banks, mainly UBS and Credit Suisse, criticized the practice of granting the benefit of the doubt to claimants lacking full documentation, because of what the court views as the banks’ 50-year pattern of obstructionism. The banks have repeatedly denied being obstructionist. The judge, in an unusually tart conclusion, said the “banks’ last submission” was “one too many.”
Korman’s emotional, double-barreled salvos suggest mounting tension as the date approaches for the opening of the case’s next phase: the hearings on distribution of unclaimed depositor funds. Some $800 million of the $1.25 billion settlement was set aside for Holocaust-era bank-account owners who were unable to obtain their funds after the war. The rest went to compensate former slave laborers and other Nazi victims from whom Swiss banks were found to have profited during the war.
The survivors foundation has called on the court to immediately release $200 million from the unclaimed depositor funds, with one-fourth going to meet poor American survivors’ health-care needs. In his reply to the foundation this week, the judge indicated that he might delay the release of unclaimed funds, because of the obstacles the banks have placed in the way of claimants. To date, only about $150 million has been returned to account owners.
Korman has repeatedly written that the bank deposits are the only section of the complicated lawsuit that would have withstood legal scrutiny if the case had gone to trial. In repeated filings, he and the special master he assigned to oversee the funds’ distribution, New York attorney Judah Gribetz, have expressed frustration at the banks’ reluctance to publish account details. The banks have cited Swiss banking secrecy laws.
The judge’s February 19 opinion stopped short of ordering the banks to release the additional information. According to a Swiss newspaper account, negotiations are underway with the banks to obtain additional account details, with the threat of a new lawsuit being hinted at if they do not cooperate.
The foundation, a self-described network of grass-roots American survivor groups, has long pressed for American survivors to get a larger share of the humanitarian fund set up for needy survivors as part of the settlement, but the judge has repeatedly rejected the request. Currently, two-thirds of the $205 million humanitarian fund go to assist survivors in the former Soviet Union and just 4% to those in America.
Korman quotes relief agencies working in Eastern and Central European countries where medical care is described as on a par with developing nations. He quotes accounts of elderly patients sent home from the hospital to linger bedridden or die, while those with hip fractures are not properly treated and often never walk again. Groups such as the American Jewish Joint Distribution Committee and the International Organization for Migration give food packages, winter coats and basic supplies to survivors who would otherwise go hungry, he wrote.
The judge writes that, “given the distribution of need” illustrated by such examples and other considerations, the foundation’s objection to the court’s allocation of interest is “frivolous.”
Korman argues that while a recent study “paints a distressing picture of Nazi victims in New York, one must bear in mind that these survivors have available an exceptionally strong social safety net that will generally prevent the kind of destitution faced by almost all of the survivors in the [former Soviet Union].”
The judge also rails against Dubbin, the foundation’s lawyer, whose appeal of the initial Swiss distribution plan, according to Korman, contributed to “months of delay.” Korman denies Dubbin’s request for $3 million in legal fees, arguing that the attorney has accomplished nothing for his clients. He further accuses the lawyer and his associate of trying to “rip off” $2.9 million for legal work related to “objections to certain releases granted to Swiss insurance carriers.” He said that issue would be addressed at greater length in a future opinion.
Dubbin retorted that survivors living in America are no less deserving than those in Europe. David Schaecter, the president of the foundation and himself a survivor, wrote in an email: “The idea that Holocaust survivors do not have standing to speak out about the use of Swiss settlement funds is outrageous.”
“The money was paid by the Swiss because of the thefts of our families’ property,” Schaecter continued. “The case was won in the Court of public opinion because of what we, the victims suffered. Today we are constantly confronted with terrible needs among our fellows who cannot afford basic services that mean the difference between dignity and shame, between life and death. We have been trying desperately to obtain funds for them from the Swiss settlement for years, only to be told every time: wait a few months, wait a few more months. People are dying because of these delays. If we, the survivors whose mothers and fathers and brothers and sisters were murdered do not have the right to speak to this court about Holocaust settlement funds, then who does?”