U.S. Settles Suit With Holocaust Survivors

The U.S. government will pay $25.5 million to settle a suit by Holocaust survivors over goods that were stolen by the Nazis in 1944 and which disappeared after they were recovered by the U.S. Army.

Most of the money will go to social welfare programs for survivors in the United States, Israel and Hungary, according to documents filed in federal court in Miami.

In addition, the government will make an uncommon “statement of acknowledgment” about the U.S. role in the looting of what has been dubbed the Hungarian Gold Train.

The case was the only Holocaust-related litigation in which the U.S. government was a defendant.

“I hope the money will go to those people who need it most,” said Irving Rosner of Aventura, Fla., one of those who brought the suit.

Rosner, 82, was forced to work in a labor camp after the Nazis took him into custody in 1943 in Beregujfalu, Hungary. He came to the United States in 1949 after spending four years in a displaced persons camp.

“I’m happy they settled it,” he said.

The events in the case came in the closing days of World War II. As Allied armies advanced, the Nazis occupying Hungary loaded a train 24 cars long with goods seized from Jews who had been imprisoned in concentration camps.

The Nazi goal was to ship the looted property -- gold, jewelry, Oriental rugs, clothing and artwork, including paintings by Rembrandt and Durer -- to Germany.

According to U.S. government reports, the train never arrived at its destination. Instead, the Nazis abandoned it in a tunnel about 60 miles from Salzburg, Austria. U.S. soldiers took control of it there. Some of the booty immediately vanished. The rest was sent to U.S. military warehouses in Austria.

What happened to much of the property is a mystery, according to the President’s Advisory Commission on Holocaust Assets, which studied the case and published reports in October 1999 and December 2000.

The commission said Maj. Gen. Harry J. Collins, the chief U.S. military official in western Austria at the end of the war, had placed orders from the warehouse for enough china and silver for 45 people, as well as a dozen silver candlesticks, glassware, 30 sets of table linens, carpets and furs for his villa and a personal railroad car.

Collins died in 1963, and the fate of the goods he requisitioned was unknown, said Jonathan Cuneo, one of three lead lawyers for the survivors.

The case, filed in 2001, was one of a string of Holocaust-related claims to go to court in the last decade.

But among the suits against Swiss banks, European insurance companies and firms that had used forced laborers, the Gold Train case stood out because the defendant, the U.S. government, had saved the lives of thousands of European Jews by liberating the Nazi concentration camps.

The suit claimed the government, through the actions of military personnel, had violated international law and seized property without due process.

Lawyers close to the case said Justice Department officials, who had resisted the suit strenuously over the last four years, had been dismayed at the idea that the government was being lumped into the same category as those who had murdered and exploited the Jews.

In a letter filed with the court endorsing the settlement, Rabbi Israel Singer, president of the World Jewish Congress, took pains to emphasize the role the U.S. had played in winning the war.

“The United States was not only the liberator of Europe, it was also the rescuer of a devastated European Jewry after the Holocaust,” Singer wrote. “Thousands of Americans died in this heroic effort. I believe that this settlement will be an appropriate acknowledgment of this isolated episode.”

Gideon Taylor, executive vice president of the Jewish Conference on Material Claims Against Germany, the group that will administer the settlement fund, called the Gold Train controversy “one isolated chapter in a glorious history of an era when but for the U.S., many Holocaust survivors would have perished.”

“That sometimes gets lost,” Taylor said. “Wrongs deserve to be righted, and mistakes should be acknowledged, but good deeds must have their acknowledgment too.”

The settlement also was endorsed by the Confederation of Holocaust Survivors in Hungary and the Federation of Jewish Communities in Hungary.

Justice Department lawyers filed a one-page statement with the court Friday, saying the agreement was “the product of long and arduous negotiations.”

Those negotiations started after August 2002, when Federal District Judge Patricia A. Seitz ruled against some key government defenses and urged the two sides to settle. Washington lawyer Fred F. Fielding, a former White House counsel under President Reagan, became the mediator.

When President Bush nominated Alberto R. Gonzales to be attorney general, Sen. Hillary Rodham Clinton (D-N.Y.) and a bipartisan group of members of the House stepped up the pressure for a settlement.

The survivors and their heirs, who initially sought $200 million, agreed to settle for the smaller figure for several reasons, including the fact that there was “no certainty as to the value of the goods on the Gold Train when it came into the hands of the U.S. Army,” lawyers for the plaintiffs said.

The two sides also concluded that “attempting to provide compensation payments directly to class members would be impractical” in part because sorting out who had owned what might eat up much of the available money, the lawyers said.

“We’re proud to have been a voice for the survivors ... and to see their satisfaction at vindicating their rights in a country they love but they think did wrong,” said Cuneo’s co-counsel, Samuel J. Dubbin of Miami.

If Seitz approves the agreement, at least $21 million will be allocated to social welfare programs: 42.5% in Israel, 22.7% in Hungary, 20.1% in the United States, 6.1% in Canada, 2.5% in Australia and 6.1% in other parts of the world.

Another $500,000 will fund an archival project to collect documents and artifacts relating to the history of the train and the looting of the Hungarian Jewish community.

Lawyers for the plaintiffs are seeking $3 million in fees and $800,000 to cover the costs they expended litigating the suit.

The first hearing on approving the settlement is scheduled for Thursday.