Senators Urge Bills on Holocaust Claims

Leaders of the Simon Wiesenthal Center and two state legislators called Friday for an escalated effort to pressure Swiss banks into settling claims with Holocaust survivors.

Sens. Tom Hayden (D-Los Angeles) and Quentin Kopp (I-San Francisco) announced legislation they are proposing to place a one-year moratorium on future investments of state pension funds or other assets in three Swiss banks.

The moratorium could be lifted if the banks, which hold $343 million in state pension funds, resolve the current impasse with Jewish organizations over the claims. Earlier this month, the two sides said talks had broken off after Jewish groups said that the banks’ $600-million settlement offer was “obscenely low” and the banks said the $1.5-billion demand of the Jewish groups was “exorbitant.”

“We no longer want to use our money to prop up the status quo in this matter,” Hayden said at a news conference at the Museum of Tolerance in West Los Angeles. “We have an opportunity today to achieve justice” for Holocaust victims and their relatives.

Rabbi Marvin Hier, founder and dean of the Wiesenthal Center, expressed strong support for the bill, which would go into effect in January. The move comes after a decision earlier this month by state Treasurer Matt Fong to temporarily ban short-term investment of state funds in Swiss banks. Fong endorsed the bill, noting that “having appropriate legislation ready that will trigger additional investment restrictions in January will send another signal to the banks that they must act now to reach a just settlement.”

The money at issue stems from deposits that tens of thousands of Jews placed in Swiss banks as the Nazis gained power in Europe. The banks stressed that the accounts would be kept secret from everyone, including German officials. But victims’ relatives and concentration camp survivors say that after World War II ended, bank officials stonewalled them, contending accounts could not be found or refusing to turn over funds unless heirs of those who died in the Holocaust could produce nonexistent death certificates.

Meanwhile, lobbyists for major European insurers have launched a campaign to weaken other legislation by Hayden that would suspend the licenses of insurance companies that have failed to pay valid claims from Holocaust survivors or their beneficiaries. The measure also would provide $4 million to the state Department of Insurance for research and investigation.

On Thursday, representatives of two of the largest insurance companies that are defendants in a major class action suit--Assicurazioni Generali of Italy and AXA of France, parent of Equitable Life Assurance Co. of the U.S.--came to Los Angeles to lobby Jewish leaders. The companies argue that insurers who have agreed to participate in an international commission on the insurance issue should be exempt from the bill’s penalty provisions.

State Insurance Commissioner Chuck Quackenbush, executives of four European insurance companies and leaders of the World Jewish Congress in April announced an agreement to establish such a commission. But the commission has not come into being.

Michael Hirschfeld, executive director of the Jewish Community Relations Council of the Jewish Federation of Los Angeles, who headed the meeting, said that he and others told insurance representatives that they saw no reason to agree to the proposed amendments to the bill, which passed the Senate without dissent and is pending in the Assembly.

David Lash, executive director of Bet Tzedek Legal Services, which represents hundreds of elderly Holocaust survivors, characterized the proposals “as a blatant attempt by the insurance industry to escape liability.”

Representatives of both insurance companies declined to comment. The Clinton administration contends such state and local efforts to impose sanctions on the Swiss are counterproductive. At a hearing of the Senate banking committee on Wednesday, Undersecretary of State Stuart Eizenstat, who is the administration’s point person on the issue, said it would be unfair to impose sanctions because of positive steps already taken by the Swiss government, including a $200-million contribution from the Swiss National Bank to a special fund for Holocaust survivors.

But Hier said the Swiss banks had only come to the bargaining table because of international pressure. “Why should victims of the Holocaust . . . take 10 cents on the dollar or 20 cents on the dollar from Swiss banks that have used the money for years?” he said.

Hier also lamented the fact that Thomas Borer, the point man for the Swiss government on Holocaust issues, had canceled a meeting scheduled for next Tuesday with Jewish leaders in Los Angeles. Hans Peter Egger, the Swiss Consul General in Los Angeles, said only that the meeting had been canceled “for unforeseeable circumstances.”

Also on Friday, a group of congressmen, including Dennis Kucinich (D-Ohio) and Vic Fazio (D-Calif.) took another step in an attempt to keep the pressure on the Swiss. They introduced an amendment to an appropriations bill that would prevent the Justice Department from using tax funds for any legal challenge against state and local Holocaust victims compensation laws, such as the Hayden measure.

Kucinich said the Swiss government already has given public notice that it plans to seek a ruling from the World Trade Organization that such laws are illegal under organization rules. Normally, when the organization decides that a U.S. domestic law is illegal, the federal government is obligated to take all necessary steps, including a lawsuit, to compel states and localities to comply with the organization.

On Monday, a federal judge in Brooklyn has summoned representatives of both sides in a major class action suit against the Swiss banks to a status conference.