Swiss OK Holocaust Settlement Approach

Swiss banks, American lawyers and the World Jewish Congress on Thursday made a “breakthrough” agreement that could pave the way for a global settlement for victims of the Holocaust, a U.S. official said.

The agreement, which sets up a simple framework for negotiations to solve a complex and emotionally charged problem, allows the Swiss to avoid sanctions--at least for now--threatened by state and local governments across the United States, including California.

All parties to the deal, announced after a closed-door hearing in Manhattan, are committed to a just settlement for Holocaust survivors “who have suffered so grievously and received so little in return,” Undersecretary of State Stuart E. Eizenstat said. “That includes the Swiss who have come a long way in facing their past and acting on the lessons they have learned in the process.”

U.S. lawyers representing Holocaust survivors have pressed a multibillion-dollar class-action lawsuit against Swiss banks, seeking reparations for looted assets, slave labor and Nazi gold hidden in Switzerland.

One of the attorneys, Melvyn Weiss, praised the deal struck Thursday but cautioned: “We are far from anything that could be characterized as a global settlement. We have not yet come to grips with the issue of dollars.”

Eizenstat echoed that sentiment: “No one should underestimate the sensitivities or the complexities of the issues, and the hard work that remains to be done,” he said.

Under the plan, the lawyers and the World Jewish Congress will form a committee that will hold talks with Swiss banking authorities. Any monetary settlement they reach will go into a “rough justice fund” used to satisfy all outstanding claims by Holocaust survivors.

“I felt it was very important not to put the cart before the horse, not to start throwing dollar amounts out before we agreed to a structure,” Eizenstat said after the meeting.

State and local governments had threatened a boycott of or sanctions against Swiss financial institutions that failed to make progress in fulfilling a promise to reimburse the Holocaust victims. That was a powerful lever in bringing the banks to the bargaining table, according to California Treasurer Matt Fong, who sent a deputy to Thursday’s hearing.

But Eizenstat told reporters that such sanctions would “harden positions and would gravely undermine the chance of achieving a settlement any time soon.”

Elan Steinberg, executive director of the World Jewish Congress, said this was the first time the banks had expressed complete willingness to negotiate.

Avraham Hirschson, chairman of the restitution committee of Israel’s parliament, also praised the banks but pointed out: “They didn’t do anything for 50 years.”

Times special correspondent Lisa Meyer contributed to this story.