Holocaust Survivors, Swiss Banks OK Settlement

Lawyers for Holocaust survivors and Swiss banks on Friday agreed to final details of a $1.25-billion settlement that will provide compensation for unreturned Holocaust-era assets. But attorneys and Jewish leaders said there are deep divisions over how to equitably distribute the funds.

The agreement creates the possibility that some Holocaust survivors, and the heirs of people who perished during the World War II genocide, will receive some money before the end of 1999.

Friday’s accord came more than five months after lawyers for the survivors and the Swiss banks announced a tentative settlement, and it was reached only after a lengthy late night meeting in the chambers of a Brooklyn federal judge who has been supervising the massive case.

“I am very pleased with the outcome,” said Elan Steinberg of the World Jewish Congress, an organization that has played a key role in pushing for the rights of Holocaust survivors. “We put flesh on the bones of the agreement announced on Aug. 12.”

“The main hang-up” in wrapping up the settlement was defining the class of persons eligible for compensation, said New York University law professor Burt Neuborne, a member of the plaintiffs’ lawyers steering committee.

Defining Those Persecuted

The attorneys finally agreed to the term “targets and victims of Nazi persecution.” As described in the settlement, that term includes Jews, homosexuals, physically and mentally disabled people, people commonly known as Gypsies, as well as individuals among those groups who sought refuge in Switzerland and were deported. In addition, individuals who were slave laborers for Swiss firms will be eligible for compensation under this settlement.

“We had to walk a line between everyone harmed by the Nazis--which is virtually all of Europe--or only the Jews,” Neuborne said. “Both extremes were unacceptable. The first would have so diluted the recovery it would have rendered the whole suit meaningless. The second would have made it unfairly parochial.”

“I’m very pleased that the Romani are included,” said Century City attorney Barry Fisher, attorney for the International Romani Union, the organization which represents Gypsies.

The settlement effectively ends all Holocaust-related claims against Credit Suisse and UBS (Union Bank of Switzerland), as well as claims against the Swiss National Bank, several other Swiss banks and the Swiss government. “You’ve never seen a release like this,” said Philadelphia attorney Robert Swift, a member of the steering committee.

A spokesman for the Swiss banks said: “We think this agreement is eminently fair for both sides and we are glad that the long discussions are coming to a dignified end.”

The Swiss government issued a formal statement expressing its hope that the agreement “will promptly benefit the victims of the Holocaust.” The litigation had created friction between the Swiss and U.S. governments.

Neuborne said that every time one of the lawyers wanted to change a word in the settlement document, it had to be examined very carefully because of the potential impact on other Holocaust-related litigation that is still pending, including cases alleging that large American and German corporations used slave labor in Germany and other countries during the war.

Wiesenthal Center Praises Accord

Rabbi Marvin Hier, dean of the Simon Wiesenthal Center in Los Angeles, called the latest development “a major victory for Holocaust survivors.” However, he said, it will not be easy to reach a formula for distributing the money.

He said there are serious splits among Jewish organizations on two major issues: who is a “survivor,” and whether all the money should go to individuals or whether some of the funds ought to be allocated to Jewish organizations.

There are estimated to be about 800,000 living Holocaust survivors, more than half of them in Israel. Hier and others said it is not known how many eligible heirs there are.

Two other attorneys serving on the steering committee--Mel Weiss of New York and Michael Hausfeld of Washington--said they were hopeful that some funds will be distributed by the end of the year.

The Swiss banks already have deposited $250 million into an escrow account. Before the funds can be distributed though, some important steps remain.

Tens of thousands of European Jews deposited their funds in Swiss banks for safekeeping as the threat from Adolf Hitler’s regime became ominous in the 1930s. However, after World War II ended, many Holocaust survivors and the relatives of those who were killed in the Nazi gas chambers were unable to regain the funds. In some instances, bank officials told survivors that they had to show nonexistent death certificates from the concentration camps to prove that they were entitled to the money. The suits accused the banks of illegally keeping the money.

Attorneys said they expect that U.S. District Judge Edward R. Korman of Brooklyn would give tentative approval to the pact that resolves four class-action suits that were consolidated before him.

After Korman issues a tentative approval, a notice will be sent to known class members and published in newspapers worldwide to alert other potential claimants. They will be asked to make a written claim or to call a toll-free number.

Steinberg said it would be important that the notice make clear to survivors that they do not need a lawyer to file a claim. “It is very difficult to explain to people in Israel-- where half the survivors reside--how a class-action in the U.S. works,” he said.

Attorney Weiss said that many of the people eligible for compensation are no longer alive and that he expected that many of the eligible heirs cannot be located.

“I believe that the bulk of the money should go to individuals. . . . But in order to satisfy the requirements of the federal class-action rules we will probably suggest, at least that some money go to Jewish educational institutions as a substitute for the people we can’t locate,” Weiss said.

The thorny questions over how to fairly disburse the funds are about to be thrown into the lap of veteran New York lawyer Judah Gribetz, whom Judge Korman plans to appoint as a special master, according to several attorneys.

Gribetz has a long record of public service, including serving as counsel to former New York Gov. Hugh Carey and more recently advising Sen. Daniel Patrick Moynihan (D-N.Y.) on federal judicial appointments. Gribetz also has done considerable work in the Jewish community, but is considered not to be aligned with any Jewish organization that might be a candidate to receive some of the funds.

Attorneys said they anticipated that individuals with clear claims to specific Swiss bank accounts would be paid first.