Who Benefits?
George Szamuely
New York Press


Not the least unappealing aspect of the current Holocaust shakedown is the prominent role being played by the United States. Americans have little to be self-righteous about when it comes to the Second World War. They entered the war more than two years after the British and French did. And they did little to help Jewish refugees: America’s restrictive immigration policy remained unchanged throughout the 1930s. Today, in the name of restitution for Holocaust victims, Americans are resorting to shameless extortion.

The method works like this: European companies are threatened with class-action lawsuits. The Clinton administration then steps in and promises them immunity from legal action provided they fork over billions of dollars. The companies create a "fund," which is then greedily divided up between lawyers and Jewish organizations–two leading contributors to the Democratic Party. Holocaust survivors never get to see a penny.

Last week the German government and Germany’s leading companies established a $5.14 billion fund. Its purported beneficiaries are to be the men and women who were forced to work for some of the companies during the war. However, this sum has nothing to do with compensation. No one knows how many such laborers are still alive. Estimates vary from 800,000 to 2.3 million. But it is quite possible that there are hardly any left alive. The $5 billion number was arrived at through blackmail and extortion. The lawyers had originally demanded $25 billion. However, in September federal courts in New Jersey dismissed two separate class-action lawsuits that sought compensation for wartime slave laborers. The courts argued that they could not overturn postwar treaties governing reparations claims. In light of these decisions, the lawyers decided not to take their chances and settled for a much smaller sum.

But dividing up the loot is going to be tricky. There are to be two categories of beneficiaries: former "forced laborers" (mostly non-Jews) and "slave laborers" (mostly Jews). Since "slave laborers" had it worse than "forced laborers" they will be entitled to more money. This does not exactly sit well with the former "forced laborers" (many of whom are believed to live in Russia and Eastern Europe). As they see it, the issue is not who suffered most but who has not yet had a payday. "The Nazi victims in the Czech Republic were not compensated until 1998," explains a Czech official who took part in the negotiations. "If there is a [forced labor] settlement, it should reflect this historical fact... The most unfortunate thing would be if it became a fight between Jewish and non-Jewish victims. But this approach–to set up a lump sum–really asks for it."

Archived Columns by George Szamuely

Who Benefits?

Laws of Return

Embassy Row

Selling Snake Oil

Chinese Puzzle

That Was No Lady, That Was the Times

The Red Tide Turning?

Pat & The Pod

United Fundamentalist States

Let Them All Have Nukes!

Liar, Liar

Gangster Nations

Puerto Rico Libre – and Good Riddance

Leave China Alone

A World Safe for Kleptocracy

Proud To Be

All articles reprinted with permission from the New York Press

The "lump sum" approach has been the defining characteristic of the Holocaust restitution racket. Last year the Union Bank of Switzerland (UBS AG) and Credit Suisse Group set up a $1.25 billion fund to settle the lawsuits pending against them and to ward off sanctions. It was the Swiss settlement that blazed the trail for all the subsequent class-action extortion suits. Lawyers roamed across Europe and Israel signing up clients. Representatives of the World Jewish Congress–the instigator of the suit against the Swiss banks–would visit European companies, threaten them with lawsuits and then suggest a nice round sum that would buy them peace. In the meantime, unscrupulous politicians that shamelessly pander to the Jewish vote would seek guidance from the World Jewish Congress as to what sanctions to impose against whom. New York City Comptroller Alan Hevesi decided that he would block Deutsche Bank’s takeover of Bankers Trust until it had settled its class-action lawsuit in a satisfactory manner. California passed a law enabling Holocaust survivors to file "slave labor" lawsuits against European companies in state courts.

In the Swiss case, the plaintiffs had demanded $20 billion. As it turned out, however, the $1.25 billion was more than generous. Jewish organizations had claimed that the Swiss had stolen Jewish money, that billions lay in dormant accounts. The Volcker panel recently reported that it had uncovered something like 54,000 accounts that may have belonged to Nazi victims. Their value today is in the range of $173.5 to $263.1 million. Clearly, this figure is much closer to the 1995 Swiss estimates of $30 million than to the wild assertions of World Jewish Congress President Edgar Bronfman Jr.

No sooner did the Swiss hand over the $1.25 billion than fighting broke out over the division of the booty. Who was a worthy beneficiary? Who could prove the existence of a bank account from 60 years ago? How much was such an account worth today? Who was the rightful heir? Rather than try to grapple with these issues the court decided that the safest course was simply to turn the money over to Jewish organizations. "It is important that [the plaintiffs’] interests and those represented...by the World Jewish Congress, the World Jewish Restitution Organization and the Jewish Agency be synthesized in a dignified and orderly way...so that we don’t have an unseemly disagreement in court about the distribution," Deputy Treasury Secretary Stuart Eizenstat declared fatuously.

Various Jewish charitable groups wanted to distribute the money to bolster their influence in the Jewish world. The World Jewish Restitution Organization, an affiliate of the World Jewish Congress, claimed that it has been empowered by the Israeli government to represent Jewish interests on Holocaust-related matters. It proposed handing over 80 percent of the funds to Holocaust survivors. Payment, however, would not necessarily be monetary but in the form of "charitable services." The remaining 20 percent would go toward Holocaust-related educational programs. There was little talk of turning money over to the heirs of victims who had Swiss bank accounts.

Gizella Weisshaus lost her family during the German occupation of Romania. She was the first to sue the Swiss banks to recover family assets. Today she complains that compensation payments are going to Jewish organizations and not to individual survivors and their heirs: "Survivors are sick, they’re losing hope, and these people are taking the money. It’s unbelievable... This is our money. They have no right to it."

Shaking down insurance companies proved to be the most lucrative activity of all. That is because they fall under the jurisdiction of 50 different state regulators. Therefore, 50 different sets of politicians can try to get their hands on the money. California recently passed a law requiring European insurance companies to provide a list of policies written between 1920 and 1945. Failure to do so would lead to revocation of their licenses to operate in California. The insurance companies also had to prove that they had paid out claims or had tried to locate the heirs of policyholders. If heirs could not be located the unpaid policies were to be turned over to a fund for Holocaust survivors. Florida has passed a similar law. Since locating millions of policies from so many years ago is an almost impossible undertaking, insurance companies realized that their best option was simply to cough up the money. They were soon "volunteering" to contribute to the appropriate Holocaust "funds."

Facing the prospect of harassment at the hands of state insurance regulators, six major European insurance companies committed $90 million to a "fund" for Holocaust survivors. Recently, the giant Italian insurance company, Assicurazioni Generali, agreed to shell out $100 million. The money would go to individual claimants and, of course, to a Holocaust "fund."

To make the looting of the insurance companies a little less haphazard, in 1998 an international commission to be chaired by Lawrence Eagleburger was set up. The commission comprises state insurance regulators, the insurance companies and Jewish organizations. The idea was to force the insurance companies to make a global settlement. In return for cooperating with the commission, the companies would be exempt from the penalties of state laws.

As usual, greed got in the way. The state regulators were not about to lose this cash cow. As the hapless Eizenstat was forced to admit, while the U.S. government could promise the insurers freedom from federal lawsuits, it could offer them no protection from state insurance regulators.

The Holocaust restitution racket is an unseemly brew of greed and self-righteousness. One wonders how Americans would respond if the Japanese were to try to extort money from U.S. companies that were in some way involved with Hiroshima? What would happen if the Germans decided to seek compensation from the United States for the pain inflicted on the 15 million Germans who were expelled–with the full knowledge and connivance of the U.S. government–from their ancient European homelands after 1945? There are few things in the world more repellent than lucrative moralizing.

Back to Antiwar.com Home Page | Contact Us