The Swiss Bank Claims Process Is Both Just and Thorough

I am the federal judge presiding over the Swiss Banks Holocaust Settlement. I set aside $800 million of the $1.25 billion settlement to pay claims to dormant bank accounts opened before the war and never claimed, and to accounts closed when the Swiss banks illegally honored coerced written requests from account owners to transfer funds to the Nazis.

I created the Claims Resolution Tribunal to process those claims. Since payments began in July 2001, nearly $1 billion already has been authorized for payment to more than 430,000 survivors and heirs around the world, not only for claims to Swiss bank accounts but also for former slave laborers, refugees, and victims of looting. A total of $1.25 billion was received from the Swiss banks in settlement of these claims, and it is my expectation that that sum will be distributed.

In an August 17 opinion article, three attorneys from the New York Legal Assistance Group, Yisroel Schulman, Phyllis Brochstein and Laura Davis, assess the CRT’s work and conclude that the process was “seriously flawed” (“Swiss Bank Claimants Deserve Better”). The article leaves the false impression that they are objective monitors of the CRT process.

On the contrary, NYLAG attorneys represent specific claimants. Schulman, Brochstein and Davis fail to disclose that the focal point of their attack on the CRT is the denial of a claim that they pursued on behalf of a client, a distant relative of a Polish owner of a Swiss account.

The bank account was closed in February 1939, seven months before the Nazi invasion on September 1, 1939. There is nothing in the historical record to suggest that prior to the invasion the Nazis were seizing Jewish-owned property in Poland, or that Swiss banks were turning over these accounts to Nazi Germany.

With insufficient basis to conclude that anyone other than the owner closed the account, the claim was denied. Early in the CRT process, however, we believed that Jewish account owners could not access their accounts after Switzerland imposed emigrant visa restrictions in January 1939.

If the account was closed after that date, we assumed that the accounts had remained with the Swiss banks. The CRT paid a few claims on that basis.

The CRT has since established from bank records and other research that for someone who was not living in a country under Nazi occupation or alliance, as was this claimant in February 1939, there were many ways to access an account from outside Switzerland even if the emigrant visa rules were otherwise applicable.

The NYLAG attorneys’ grievance — expressed in letters, memos and, ultimately, at a meeting in my chambers on August 8, 2006, all of which the opinion article fails to disclose — was that their client had not benefited from our earlier misunderstanding of the effect of the Swiss visa restrictions. Although reimbursement was not sought from the handful of people who had received the earlier awards, I was not going to perpetuate the mistake.

Schulman, Brochstein and Davis do not disclose in their opinion article that they never disputed the factual basis for the denial of their client’s claim. They simply insisted that his claim be paid because of those few earlier awards.

In addition to failing to disclose the August 8, 2006, meeting in my chambers, they also fail to disclose that I wrote and published a detailed opinion on November 29, 2006, explaining the reasoning underlying my decision. Nor do they disclose that in a letter on December 4, 2006, I asked Schulman to submit any additional evidence he believed had not been previously considered because he may have relied on our prior practice. My opinion and letter are both publicly docketed, and are available on the Internet.

Schulman and his colleagues did not respond to this letter, nor did they appeal. Instead, nine months after I issued the order, they chose to use the Forward’s opinion page to disparage the work of the CRT.

Notwithstanding their unwarranted criticism of the CRT, the NYLAG lawyers acknowledge that the CRT’s rules “appropriately established a very relaxed standard of proof.” These rules are intended to compensate for the Swiss banks’ systematic destruction of Holocaust-era account records. They reflect information gained from the CRT’s examination of the remaining bank files, European archives and claimant information. We have left no stone unturned in our effort to return Swiss bank accounts to their rightful owners.

It is true that sometimes we have amended the rules to reflect new knowledge gained from experience in administering the CRT process. What Schulman, Brochstein and Davis do not mention, however, is that in virtually every case — with the exception of the amendment about which they complain — the modifications have resulted in further relaxation of the standard of proof, paying more people and at higher amounts. For example:

In addition, the concern of Schulman, Brochstein and Davis that too small a portion of the $800 million set aside for bank account claims will benefit Swiss bank account owners or their heirs is misplaced. Before the CRT concludes its work next year, many more awards will be forthcoming.

Moreover, as I have already noted, Junz has recommended that an upward adjustment be made to the average, or presumptive, values used by the CRT to pay awards for accounts of unknown value.

We are well aware that the CRT process has not been “expeditious,” as Schulman, Brochstein and Davis complain. This effort to fill in the glaring gaps in the Swiss bank records is unfortunately difficult, and it takes time.

It would have been more expeditious to deny many claims, given the paucity of the bank documentation. But to assist those whose claims against Swiss banks have been ignored for too long, we chose another approach: conducting extensive research, and sorting through sometimes dozens of competing claims and complicated family relationships. The process has been — and will continue to be — thorough and just.

Edward Korman is a federal district court judge for the Eastern District of New York.

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Edward Korman

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The Swiss Bank Claims Process Is Both Just and Thorough

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