Pact Could Lead to Holocaust Victims Fund, Official Says

The United States, Britain and France have reached an agreement that could lead to the creation of a fund to compensate victims of the Nazi Holocaust, a senior Clinton administration official said Monday.

Under the agreement, the three powers are freezing plans to distribute four tons of gold--worth about $68 million--that is the remaining portion of a cache of more than 400 tons of gold that was confiscated by the Germans from European central banks during World War II and deposited in Switzerland.

Nearly all of that gold has been returned to European countries from which it was stolen, and the remaining $68 million was scheduled to be returned shortly, with France expected to get about $26 million of it.

The decision to suspend distribution of the final $68 million does not mean that all, or even part, of that gold will go to Holocaust victims and their descendants.

But it could represent an important breakthrough in the impasse over how to compensate Jews and others who claim that they have been unable to retrieve assets that were deposited in Swiss banks during World War II.

The issue of compensating Holocaust victims has engendered enormous controversy in Europe in recent months, especially in Switzerland, because of accusations by the World Jewish Congress and other Jewish groups that the Swiss banks have been unresponsive to claims by Holocaust survivors for the money and assets left in their vaults for decades.

“We’re consulting with the French and British to determine whether or not any of that [$68 million] should be distributed to victims,” said Stuart E. Eizenstat, undersecretary of commerce for international trade.

Until now, the gold--which has been stored in the Bank of England and the Federal Reserve Bank of New York--has been distributed under a 1946 agreement that created a commission to determine how to return the bullion to the appropriate European countries.

The commission kept some “residual gold” to pay its administrative expenses and handle contingencies such as unexpected claims. Following a small payment to Albania last year, the commission planned to distribute the residual gold as well.

But the World Jewish Congress got wind of those plans and threatened to sue to block the distribution on the grounds that some of the original cache may have included gold jewelry and other gold items stolen from Jews and melted down into bullion.

Also Monday, a previously secret State Department document from 1946 indicated that Swiss banks, with the consent of Swiss authorities, had the Nazis deliver $12 million worth of looted Italian government gold to them in 1944 to pay off a wartime loan.

The document is the first found in a more than yearlong search of the National Archives in which U.S. diplomats directly accused the Swiss of actively encouraging the Germans to take gold for them, World Jewish Congress investigators said in releasing the document.