Austrian Bank Agrees to Pay $40 Million in Settling Holocaust-Related Lawsuit

A large Austrian bank has agreed to pay $40 million and provide reams of documents to settle a major class action suit that charged that the bank aided the Nazi war machine and profited by selling Jewish assets during World War II.

Although the Monday settlement of the case, filed in New York last year, is not nearly as big as the $1.25-billion settlement that Holocaust survivors reached with Swiss banks, the agreement is considered significant, according to attorneys and Jewish leaders, because the documents will give them considerable ammunition in major cases pending against German banks.

Creditanstalt and its parent company Bank Austria were sued in the same cases as two leading German banks, Deutsche Bank and Dresdner Bank.

A unique aspect of the settlement is that it gives the plaintiffs the right to any claims that the Austrian bank might have against the German banks for assets that were forcibly transferred to the German banks after Germany annexed Austria in the March 1938 anschluss. Deutsche Bank formally took control of Creditanstalt after the annexation.

“The significance of the settlement is not in the amount being paid but in the documents being produced and the claims being assigned,” said attorney Robert A. Swift of Philadelphia, one of the lead lawyers for the plaintiffs. “This settlement will lead to far larger compensation for Holocaust survivors,” Swift said.

Rabbi Marvin Hier, dean of the Simon Wiesenthal Center in Los Angeles, said he had not seen the settlement yet. But he said that thus far the Austrian government had escaped the sort of responsibility that had been imposed on other countries for collaborating with the Nazi regime.

Charles G. Moerdler, a New York attorney who was the lead lawyer for the Austrian banks, declined to return calls seeking comment. The settlement specifically provides that the Austrian banks admit no liability by signing the settlement.

The 37-page settlement resolves three cases filed in the past year against Creditanstalt and its parent firm Bank Austria.

The suits alleged that the bank aggressively participated in a scheme to profit from the inhumane slave labor inflicted by the Nazi regime and its allies. The plaintiffs also asserted that the bank obtained, concealed and profited from assets looted or “Aryanized” by the Nazi regime.

A document in one of the suits filed last year in federal court in Brooklyn described how Creditanstalt officials, after the German annexation, set up a “Control Bank” to efficiently seize Jewish-owned property in Austria that was deemed economically significant.

The basic purpose of the Control Bank, according to the suit, was to acquire as trustee significant Jewish properties for later sale to appropriate “Aryan buyers.” The suit also noted that the buyers were required to pay a “dejewing fee” to the Control Bank to acquire the property.

Within months after the suits were filed, Austrian officials indicated that they wanted to expeditiously resolve the cases.

In mid-September, Creditanstalt officials issued a statement, saying, “Out of moral responsibility toward the Jewish people and out of homage to the indescribable suffering caused by the Holocaust,” the bank committed itself to “an overall resolution of all matters which exist in this connection.”

Soon thereafter, the Austrian government created its own historians’ commission to examine the broad range of looting and expropriation of Jewish bank accounts and other property after the Nazi annexation in 1938.

At the time, there were about 180,000 Jews in Vienna, Austria’s largest city. The new regime soon forced thousands into exile and acquired their shops, apartments and art collections for a fraction of their worth or in some instances by outright theft. About 65,000 Austrian Jews were killed during the Holocaust.

The settlement provides that the Austrian banks will provide $30 million for a humanitarian fund, some of which will go to survivors, and another $10 million for an administrative fund and interim claim fund. All of the latter $10 million and $15 million of the humanitarian fund are to be paid within 20 days after the formal execution of the deal, which requires approval by the bank’s board.

Under the agreement, which was reached with the assistance of former U.S. Sen. Alfonse M. D’Amato (R-N.Y.), the U.S. Holocaust Museum in Washington, D.C., will have the right to send a team of researchers to review the banks’ archives and documents. The material will be placed in a permanent archive at the museum.