Embezzlement of Holocaust Funds Told

From the Washington Post

West Germany's national Jewish council Tuesday accused its late chairman of embezzling millions of dollars from funds that had been granted by the Bonn government as reparations for Jewish survivors of the Nazi Holocaust.

An auditors' investigation showed that Werner Nachmann, who headed the Central Council of Jews in Germany for 22 years until his death in January, diverted the money to his own textiles company and to various sham firms, Nachmann's successor, Heinz Galinski said.

Galinski said a minimum of $5.9 million was missing.

The court-appointed trustee of Nachmann's estate, Eberhard Braun, said Nachmann had transferred $11.8 million from two Jewish funds to his textile company alone, apparently without authorization.

West German media reports said a total of $19 million had been embezzled.

Destination Unclear

The final destination of the money that allegedly was embezzled remained unclear. It also was unclear why Nachmann, who had been a highly respected figure in West Germany, may have diverted the funds.

The missing funds were from interest that had accumulated on $235 million paid by the West German government from 1980 to 1987 to compensate Jewish victims of Nazi persecution, Galinski said.

The Jewish Central Council, which represents 14 state and local Jewish groups in West Germany, was responsible for handling the funds.

Part of the money granted during the seven-year period was for a fund for Jews worldwide who had not applied previously to the West German government for restitution, Galinski said.

Final Payment for Survivors

The rest of the money was for final payments to Holocaust survivors, and relatives of those who died, who had applied previously for reparations, he said.

The Bonn government has paid more than $30 billion since 1953 to Nazi victims and their relatives, according to the Finance Ministry.

German corporations, which exploited approximately 500,000 people as slave laborers during the Third Reich, have paid more than $20 million to victims.

The council called in an auditor in February after discovering irregularities in the funds. At the same time, the executors of Nachmann's estate had found discrepancies in the accounts of his textiles firm in Karlsruhe, in southern Germany.

"We looked into the financial affairs of the firm, and we soon found large deposits that were not explainable. We looked for the sources, and during this investigation we met others, as in a tunnel, who also searched. This was the (Jewish) central council, which had independently initiated investigations," said an official who helped to execute Nachmann's estate.

Bankruptcy Proceedings

The irregularities became public Tuesday as Nachmann's estate filed court papers to enter bankruptcy proceedings. It did so in part because it could not repay money that the Jewish Central Council planned to demand.

The council expects to seek $17.6 million from the estate, Galinski said. He said the council would ensure that any Nazi victims who merited compensation would not suffer because of the alleged embezzlement. He did not say how this could be guaranteed.

Galinski said the council had informed "leading government and political figures" of the alleged embezzlement. A Finance Ministry spokesman said he did not have sufficient information to comment.

There are approximately 27,000 Jews in West Germany.

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