Imperfect Justice, or None at All: ‘Legal Peace’ on Holocaust Claims

By Stuart Eizenstat

Published December 05, 2003, issue of December 05, 2003.
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If there was ever an example of why I titled the book about my Holocaust restitution negotiations in the Clinton administration “Imperfect Justice,” it is the case of Simon Rozenkier. Every fiber of our beings screams out for justice for Rozenkier, a slave laborer and survivor of the infamous death march to Buchenwald who was sterilized by Dr. Mengele’s diabolical medical experiments. But how to best provide that justice some 60 years later?

Sadly, not the way Rozenkier’s lawyers have sought, by filing a new lawsuit against two German pharmaceutical companies, Bayer and Schering, which played a role in the revolting medical experiments he underwent during the Holocaust. His lawyers participated in the negotiations over restitution for German slave labor, and know that were it not for assurances to German companies of “legal peace,” Rozenkier and more than a million other surviving victims of slave and forced labor and other horrors inflicted by the Nazis might still be waiting for even imperfect justice to be served.

For six years I represented the Clinton administration in negotiating massive class action lawsuits brought against Swiss, German, Austrian and French companies, and in seeking restitution for everything from bank accounts and lost art to insurance policies. None of our negotiations was more wrenching than those against German companies, which resulted from lawsuits brought by class-action lawyers, including Rozenkier’s, for uncompensated brutal labor, unpaid insurance policies, bank profits from the forced Aryanization of Jewish property and the return of confiscated property.

During 18 months of roller-coaster, intensive, emotional negotiations with the German government, German corporations, class action lawyers and Jewish Holocaust survivor organizations, the American government sought to both satisfy the legitimate demands for justice from victims like Rozenkier and the diplomatic concerns of key allies such as Germany. We finally struck a deal in July 2000.

The German companies and their government agreed to pay a total of approximately $5 billion — on top of the some $60 billion the German government has paid to Holocaust survivors since the early 1950s — to satisfy all claims past, present and future against Germany arising out of World War II. A small percentage of the funds, about $350 million, went into a new “Future Fund,” a key demand of the German private sector, to support projects of tolerance and thereby provide an enduring quality to our work.

In return, the lawyers agreed to drop their lawsuits and not to bring ones in the future. The American government, for its part, agreed to file an official Statement of Interest arguing that it was in the national interest of the United States that any future suits against German companies arising out of World War II events be dismissed on any valid legal ground. Without this assurance of what the Germans called “legal peace,” this large settlement would have proven impossible.

As difficult as it was to arrive at a $5 billion settlement — the Germans originally suggested $1.5 billion and the class-action lawyers $30 billion — allocating the money among the different categories of injured victims proved to be even more emotional and divisive. It took three months of hard bargaining, as the allocation process exposed arguments over degrees of victimization between Jewish slave labors and non-Jewish forced laborers; among various Eastern European countries, each claiming a larger distribution for its citizens, and between insurance and property claims on the one hand and labor claims on the other.

During the allocation process it became painfully evident that we simply did not have enough money to achieve anything like full justice for all of the victims. Nor could anyone put an accurate figure on damages for the brutality exacted on victims. We knew that time was short; we had a narrow window of opportunity, for victims were passing away at the rate of 10% per year. We needed to develop a rapid process to pay survivors or it would be too late.

We originally developed the concept of “rough justice” in 1997 during the Swiss bank affair, under which all persons in a particular category would be paid the same amount — “per capita,” as it is called in legal language. Slave laborers, for instance, would each receive $7,500, regardless of the length of their labor or the damage which resulted from it.

It was really a question of “rough justice” — or no justice at all. With more than a million surviving slave and forced laborers, out of as many as 10 million “employed” during World War II, individualized hearings and justice tailored to each person were simply impossible. Furthermore, no one felt competent to measure degrees of suffering.

Near the end of the allocation process, one of the class action lawyers, Mel Weiss, insisted that a specific sum be set aside for victims of medical experiments and similar damages. Out of the $5 billion, we agreed to set aside about $25 million for these special claims.

Because of the egregious nature of these cases, and at the insistence of all of those on the victims’ side as well as those of us in the Clinton administration, I obtained a “side letter” of July 12, 2000, from Count Otto Lambsdorff, my trusted German counterpart and the personal representative of Chancellor Gerhard Schröder. He reassured me that these special injury claims, unlike the slave and forced labor claims, would be treated on a more personalized, individualized basis, “pro rata” rather than “per capita,” but still within the $25 million cap we established for this category of claimant — of which Rozenkier is one.

Despite the best efforts of Lambsdorff and the Clinton administration, the German Parliament — which generally, although not completely, incorporated our negotiated agreement into German law — did not reflect what we believed had been agreed upon in our talks, and provided only for per capita payments for medical experiments, meaning the exact same treatment for everyone in that category. Although we urged that it be rectified, along with several other departures from our talks — some of which were to the disadvantage of German companies — the German Parliament refused.

This, however, is not the basic reason for Rozenkier’s problems. They are inherent in the nature of the “rough justice” settlement we reached.

The German Foundation charged with administering the $5 billion fund has received many thousands more claims for medical experiments and personal injuries than any of the parties forecasted during the negotiations. Regardless of whether the claims, such as Rozenkier’s, are treated on a pro rata or a per capita basis, the small amount of money we set aside for this category assured disappointment, or “imperfect justice.”

All of the parties in the negotiation — those on the victims’ side, such as the class-action lawyers and the Jewish survivor groups; the American government, and the German side — fully appreciated that there was no way of providing full justice for the injustices committed during the Holocaust. The $7,500 is hardly a king’s sum for brutal slave labor that was another form of extermination for the Nazis.

But this “rough justice” concept was far better than the alternative, such as the one Rozenkier’s lawyers now seek.

To begin with, lawsuits such as the one brought against Bayer and Schering rest on legal quicksand. The precedent was set in 1999 with the dismissal of two major slave labor cases by respected federal judges in New Jersey, on grounds of statute of limitations and post-war agreements with Germany.

Furthermore, individualizing justice for more than a million people through the court system would be to consign the beneficiaries to infinite delays past their lifetimes. The slow payment process in the court settlement of the Swiss bank cases underscores this point. And the German Foundation we created has made payments far more efficiently, using the “rough justice” concept of equality for classes of claimants.

Lastly, only by being reassured that cases such as Rozenkier’s would be dismissed when they were filed did the German companies and the German government agree three years ago to pay $5 billion for cases of shaky legal merit.

In short, we had to figure out how to benefit the most people in the fastest, most just way, even though it meant that Rozenkier’s $8,000 payout would seem so small relative to the lifelong pain he has endured. To permit his case to go forward could jeopardize the fabric of the agreement we reached for so many victims.

That is not to say that there is nothing more that can be done for Rozenkier and others like him. In addition to being eligible for compensation for medical experiments, he is also eligible for payments from the slave labor fund.

There will be excess, unclaimed funds from the Swiss bank settlement, the Holocaust insurance account and the liquidation of unclaimed East German properties that could be used. And it is possible that the German Foundation may have some unclaimed funds if fewer claimants appear than we anticipated. In addition, I have helped create a new, charitable Humanitarian Aid Foundation, to encourage American parent corporations of German slave and forced labor affiliates to make voluntary payments for just such humanitarian cases. Already Ford Motor Company has made a leadership pledge and soon we will be sending out letters to other American companies.

More broadly, we can remember the 6 million who perished and those who survived by telling future generations of the brutal facts of the Holocaust, including the stories of those like Rozenkier who underwent such bestial medical experiments; by applying the lessons of the Holocaust to contemporary events; by caring for survivors in their declining years, an area in which the American Jewish community has not done all it should; by protecting the State of Israel and Jews, wherever they are threatened, and by assuring the continuity of Jewish life in America threatened by assimilation.

In all of this, we should be inspired by the courage of survivors such as Simon Rozenkier who have lived a respectable life after their brutal wartime experiences.






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