In a few weeks’ time, Judge Edward Korman of the U.S. District Court in Brooklyn will formally close the debate over how to spend whatever money remains unclaimed from the $1.25 billion class-action settlement between Swiss banks and their Holocaust-era depositors. There’s a January 30 deadline for submitting spending proposals, which will be posted on the Internet. The public will have five weeks to comment. After the court-appointed special master reviews the proposals and submits his recommendations, the judge will hold a public hearing, scheduled for April 29. Shortly afterward, the judge will issue his decision. And that, we hope, will be that.
With a bit of good will on all sides — something sorely lacking so far — these steps should end what has been a shameful episode in recent Jewish history. Something that began as a struggle for justice — forcing Switzerland and other European nations to give up billions of dollars looted from the victims of Nazism — has turned into an unseemly scramble by competing Jewish interests to grab a piece of the pie.
Up to now the judge has acquitted himself honorably and distributed the funds, which do not go as far as one might think, with Solomonic wisdom and integrity. The agencies he appointed to handle the distributions, notably the Conference on Jewish Material Claims Against Germany and the American Jewish Joint Distribution Committee, have worked honestly and efficiently to get the cash to those entitled to it, despite formidable odds. Among the hurdles they’ve had to negotiate has been the inexplicable reluctance of the Swiss banks themselves to release the names on war-era bank accounts, so that victims and their heirs can determine where their money went. Despite this, more than $560 million has been paid out so far in payments and assistance reaching at least 300,000 Holocaust survivors around the world. This deserves only praise and thanks.
Not everyone agrees with our assessment. Groups of American and Israeli survivors, Holocaust educators and even Israeli government representatives have come forward to complain that they’ve been left out. Some have made their cases in ways that have done a disservice to their own cause and the larger cause of justice by sowing chaos and maligning the representative Jewish bodies whose duty it is to carry out Jewish relief work. Nonetheless, the complainants are entitled to have their day in court. By reopening the distribution process for another review, the judge is giving the various claimants a chance to make their case in an orderly fashion. We can only hope that once this round is finished, all sides will agree to respect the court’s decisions and let the distribution proceed in a dignified fashion.
The Swiss settlement began as a series of class-action lawsuits lodged by owners of Holocaust-era Swiss bank accounts who were prevented after the war from reclaiming their deposits. In an out-of-court settlement in 1998, the banks agreed to create a $1.25 billion fund to reimburse the looted depositors. The settlement also aimed to compensate other Holocaust victims who suffered losses traceable to Switzerland: persons used as slave-laborers by Nazi-era firms with Swiss accounts, would-be refugees refused entry to the Alpine nation and persons whose private assets were looted by the Nazis and then deposited in Swiss banks.
Under a formula adopted by the judge in 2000, two-thirds of the total, some $800 million, was set aside for bank depositors, the only group, Korman said, whose individual claims could be proven clearly in court. Smaller sums were set aside for one-time payments to former slave-laborers and refugees.
The most controversial aspect involved so-called “looted-assets” victims. Ruling that the category included virtually every victim of Nazism and that no full compensation could ever be made, the judge embraced a class-action rule known as “next-best” compensation: using the funds to improve the lives of victims on the basis of need. The judge ordered the creation of a $100 million humanitarian fund, later enlarged to $200 million, to help needy Holocaust survivors around the world. Following a needs-assessment, two-thirds of the money was earmarked for aging survivors in the former Soviet Union, where destitution and even hunger were found to be widespread. Another 10% was set aside to assist non-Jewish survivors, mainly European Roma or Gypsies. The rest was directed to programs assisting needy survivors in America, Israel and elsewhere.
The humanitarian fund has been under attack ever since, mainly — but not only — from groups of American survivors who insist they were shortchanged. The most vocal complaints have come from the Florida-based Holocaust Survivors Foundation-USA, which was formed to press for greater funding of home healthcare for aging survivors. The group originally filed a court appeal against the judge’s distribution plan, dismissing the argument that the hunger in Ukraine represented a more urgent need. Under pressure from the court, however, the group withdrew its appeal in 2001, with the assurance that its arguments could be raised at a later date when more funds were available.
That time is now approaching. While thousands of bank depositors may yet come forward, sources close to the court now admit that a major part of the $800 million in looted deposits may never be returned to its original owners. In the end, the unclaimed funds could total as high as a quarter-billion dollars or even twice that. That would effectively double or even quadruple the so-called humanitarian fund, changing the very nature of its mission. Even after meeting the essential needs of the abandoned Jewish survivors of Ukraine and Belarus, funds may well be available to ease the final years of needy survivors in the West as well.
Those needs, while not as dramatic as conditions in Europe, are considerable. A new study based on the National Jewish Population Survey 2000-01 indicates, as Nacha Cattan reports on Page 19, that some one-fourth of Holocaust survivors in the United States live below the federal poverty line, including more than half of all survivors who entered this country after 1965, most of them as penniless Soviet refugees. Most of them suffered many of the same disabilities as the survivors who remained behind. Like their fellow Soviet Jews, they were barred from receiving allowances under the German reparations fund that was created in 1954 and has since paid out some $50 billion to survivors everywhere but in the former Soviet Union.
In a series of articles that began earlier this month and will continue in the coming weeks, Cattan has documented the real human cost of poverty among American survivors. True, the poverty here is due in considerable measure to the deterioration of the American welfare state in recent decades, not to the particular vicissitudes of Jewish history. The same may be said of the growing poverty among aging survivors in Israel, where the social safety net has been shredded in recent years. But the same may be said, in different form, of the suffering in Ukraine, where horrible policies have caused terrible suffering.
In the end, all we have left are the needs of our brethren, wherever they are, and our willingness to meet them. We appeal to the court to consider them.