The “special master” appointed by a federal judge to oversee distribution of the $1.25 billion Swiss bank settlement is recommending that all funds not claimed by owners of Holocaust-era Swiss bank accounts should eventually go to assist indigent Holocaust survivors.
The October 2 recommendation by the special master, former New York deputy mayor Judah Gribetz, appears to be a blow to those who favor using unclaimed Holocaust-era funds for Jewish education. Some $668 million currently remains unclaimed, Gribetz says in his report.
The report also blames Swiss banks for the painfully slow claims process, and Gribetz concludes that many bank account holders may never receive compensation. He takes the banks to task for using privacy laws to restrict information on millions of Nazi-era accounts and for failing to publish the names of an extra 15,000 accounts identified as possibly belonging to Holocaust victims.
Gribetz also recommends that an extra $60 million, representing accumulated interest and tax exemptions from the 1998 Swiss settlement, be used to fund humanitarian assistance to poor survivors, mostly in the former Soviet Union.
The proposal throws a wrench in the efforts of some American survivor groups seeking a larger share of restitution funds for needy survivors in the United States.
The $1.25 billion settlement ended a class-action lawsuit brought against Swiss banks by Holocaust survivors who claimed the banks had effectively robbed them by preventing them from reclaiming their accounts after World War II. Gribetz was appointed to his role by the judge overseeing the case, U.S. District Judge Edward Korman of Brooklyn.
The new proposal appears to signal an important shift in distribution of funds toward the neediest Holocaust survivors and away from other groups who have claims in the Swiss settlement. Gribetz asked the court to direct the entire $60 million in interest to help destitute survivors, arguing that other “classes” of claimants in the lawsuit were largely accounted for.
In addition to bank account owners, the class-action settlement benefited Nazi-era slave laborers who had worked for firms that deposited their profits in Swiss banks, as well as wartime refugees who were turned away by Switzerland at the border.
An additional “class” of claimants in the case consisted of people whose property was looted by the Nazis and ended up in Swiss banks. Korman has ruled in the past that the “looted assets” class included virtually all victims of the Nazis and was too large a group to be identified and compensated individually.
Instead the judge, citing legal principles from the Vietnam-era Agent Orange case, ordered that those funds be distributed in so-called cy pres, or “next best” fashion, to aid victims most in need. Under a plan drafted by Gribetz and approved by Korman in 2000, the “looted assets” share of the settlement — $100 million of the $1.25 billion total — provides ongoing humanitarian assistance to the neediest Holocaust survivors around the world. The total was increased in 2002 to $145 million.
In Gribetz’s 2000 plan, 10% of the humanitarian aid was reserved for non-Jewish survivors, mainly Romany or “Gypsy” victims. Of the remainder, three-fourths were set aside for survivors in the former Soviet Union, whom Gribetz described as “double victims” of Nazism and Communism. He noted that survivors in the former Soviet Union had never been able to claim German reparations funds, available to survivors in the West since the 1950s. And, he noted, many now live in extreme poverty, lacking basic medical care, often nearing starvation. More than half the aid pays for food, the report says.
Gribetz’s distribution plan has been challenged in repeated court filings by a group of American grass-roots survivor organizations, the Holocaust Survivors’ Foundation-USA, which seeks funds from the Swiss settlement to pay for home health care for indigent survivors in the United States. The group has cited a report by the Association of Jewish Family and Children’s Agencies, indicating that the unmet health care needs of American survivors total more than $30 million per year.
In a brief submitted to Korman last month, Miami attorney Samuel Dubbin, representing the Survivors’ Foundation, asked for an immediate distribution of some $200 million out of the unclaimed $668 million, with one-fourth going to benefit American survivors. Dubbin argued that the funds are the property of Holocaust survivors and should be allocated to them on a proportional basis.
Dubbin’s group says American survivors represent 25% of the world survivor population. The Conference on Jewish Material Claims Against Germany, an international agency created in the 1950s to oversee the distribution of Holocaust reparations, puts the number at between 14% and 18%.
Gribetz, in an implied rebuke, cited the judge’s repeated rulings that the looted Swiss bank accounts represented the heart of the original lawsuit and were the only “class” of claims likely to stand up if the case had gone to trial. Accordingly, he wrote, the bulk of the $1.25 billion settlement had been set aside for bank deposit claims, including all of the unclaimed $668 million.
He argued that the two years that had passed since a list of 36,000 Holocaust-era accounts was published, permitting survivors and heirs to search for family accounts, is not enough time to establish whether there will be dollars left over.
He said he is unable to “estimate with confidence whether residual unclaimed funds will in fact exist at the close of the claims process.”
However, Gribetz wrote, a future residue of unclaimed funds was a “likely possibility,” and in an apparent nod to the American groups he recommended that the judge invite proposals from the public on how those funds eventually should be distributed.
American survivors said they still hoped the judge would revise the distribution and make more funds available at once, while elderly survivors are still alive.
“I think the judge has the authority and the obligation to survivors to take some of that money and distribute it presently,” said Joe Sachs, executive secretary of the South Florida Coalition of Holocaust Survivors and the chair of the Survivors’ Foundation executive board. “We’d love to see him give funds to survivors, whether in the United States or the rest of the world.”
Gribetz’s report seems to directly oppose Jewish communal leaders’ bid to use unclaimed restitution funds for Jewish education. A year ago the president of the Claims Conference, Rabbi Israel Singer, whipped up a storm when he wrote in the journal Sh’ma that some monies from Holocaust restitution settlements should be applied toward a new fund for the “future needs of the Jewish people,” including day school education.
Singer told the Forward that he was pleased with Gribetz’s proposal. “If there’s a needy Holocaust survivor and a very, very worthy educational program, I can’t in good conscience teach someone about the Holocaust,” Singer said. But, he added, “If there is money left over after needy survivors pass from the scene, that’s another subject.”