Firms Offer Fund for WWII Slave Labor

More than a dozen large German corporations, including DaimlerChrysler and BMW, announced Thursday in Berlin the creation of a $1.7-billion fund for hundreds of thousands of people forced into slave labor during World War II.

Attorneys representing Holocaust survivors and leaders of Jewish organizations in the United States immediately denounced the plan as financially inadequate and expressed outrage that the companies presented it publicly without engaging in negotiations, something that they had agreed to do at a meeting in Washington last month.

The corporations emphasized that the fund would be financed only if they receive long-term protection from lawsuits related to Nazi government actions.

A State Department spokesman said Undersecretary of State Stuart Eizenstat, who has been trying to broker a deal among the parties, told representatives of the German companies at a Washington meeting Thursday that their move had not been helpful to the process and that aspects of the proposal were unacceptable. However, the spokesman said Eizenstat remained optimistic that an accord eventually could be reached. Eizenstat has hoped for a resolution by Sept. 1--the 60th anniversary of the start of World War II.

At their news conference, the German-based companies acknowledged that they had “moral responsibility” because of their cooperation with Adolf Hitler’s Nazi regime. “We will make it clear to the world that there is a historic and moral obligation that we want to stand up for,” said Manfred Gentz, chief financial officer of DaimlerChrysler.

Gentz and two other German corporate executives said the plan was a “voluntary initiative,” rather than payments that they could be legally obliged to make as compensation to individuals--both Jewish and non-Jewish--who were forced to labor in service of the Third Reich.

Payments, they said, would go to individuals and heirs of individuals who:

* Were forced to labor for German companies, primarily people deported to concentration camps and made to work under conditions of imprisonment, confinement to a ghetto area or similar situations of involuntary confinement.

* Suffered substantial material loss because of racial discrimination if a German company directly contributed to their loss or sought to profit from their loss.

* Were otherwise personally harmed as a result of Nazi government oppression in situations in which German companies were involved.

The executives declined to specify the exact amount of the fund, which they have named “Remembrance, Responsibility and the Future,” but company sources and the German government have said it would be in the neighborhood of $1.7 billion.

The executives also declined to state what typical payments would be. However, they said the size of payments would be pegged to pension levels in the countries where a survivor lives--meaning that individuals in the United States and Canada would get considerably more than people in Eastern Europe and Russia. They also said that to qualify, an individual would have had to be a forced laborer at least six months.

Among the other companies in the consortium are Allianz, one of the world’s biggest insurance companies; BASF, the large petrochemical company; Bayer, the pharmaceutical giant; DeGussa Corp., which worked with the German government on production of Zyklon B gas used in World War II gas chambers; Deutsche Bank; Dresdner Bank; Siemens, the electronics manufacturer, and Thyssen-Krupp, a major arms manufacturer in World War II.

Many of the companies have been sued in a massive class action filed last year in New Jersey. The companies contend that the suits are barred by statutes of limitations, and hearings are scheduled for this summer on those contentions. In addition, a large German construction firm that is not part of the consortium has been sued in Los Angeles by several slave laborers who survived the Holocaust.

At a separate news conference Thursday afternoon in Washington, attorney Michael Hausfeld, who represents Holocaust survivors, said the German companies had “sabotaged” the negotiations taking place under State Department auspices.

“We were led to believe at the State Department in May that we were engaging in a process where there would be working groups and a confidential exchange of information and ideas, leading each side to assess the viability of a workable resolution,” Hausfeld said.

“Despite repeated attempts to get the Germans to accelerate the meetings, they have resisted and provided nothing to date to the process. Instead they unilaterally . . . announce a program that is totally unacceptable in tone and terms,” Hausfeld said.

New York University law professor Burt Neuborne, Hausfeld’s co-counsel, castigated the companies for saying simultaneously that they were engaged in a voluntary, “humanitarian” act and that no payments would be made until they got assurances that the lawsuits would be dismissed.

“Calling this charity” is absurd, Neuborne said. “The human heart simply isn’t big enough to provide enough money for what happened to these people.”

Attorney Mel Weiss said plaintiffs’ lawyers would continue to press the lawsuits and would participate in no further meetings until the German companies agreed to engage in what he called meaningful negotiations.

Leaders of Jewish organizations also expressed dismay about the German plan.

“Linking the payments to the size of pensions in a particular country is ridiculous,” said Rabbi Marvin Hier, dean of the Simon Wiesenthal Center in Los Angeles. “The question is how much did people suffer,” not whether they live in the United States or Russia.

Elan Steinberg of the World Jewish Congress and Gideon Taylor of the Conference on Jewish Material Claims Against Germany, an organization that specializes in Holocaust reparations issues, decried what they described as the “unilateral” announcement by the German companies.

Like the attorneys, Steinberg denounced the notion that these would be voluntary donations. “This is not a charitable contribution. It is an obligation. This is compensation for material wrongs inflicted.”

In addition, Steinberg said that the six-month minimum of compelled labor to qualify for aid was “clearly unacceptable. On the face of it, it is macabre . . . and inequitable.”

Nonetheless, Steinberg said that his organization would participate in a meeting on the issue in Bonn on June 22 and that he too remained optimistic that a resolution could be forged with the assistance of Eizenstat and Bodo Hombach, German Chancellor Gerhard Schroeder’s point man on the issue.

The plan announced Thursday marks the first comprehensive proposal raised on slave labor issues by German firms since lawsuits on these matters were first filed in March 1998. Four months later, Volkswagen, which is participating in the initiative announced Thursday, created a $12-million fund to compensate individuals who worked as forced laborers for the car maker during World War II. Thus far, the firm has paid about 220 workers an undisclosed sum.