[Senate Hearing 110-759]
[From the U.S. Government Publishing Office]
S. Hrg. 110-759
HOLOCAUST ERA INSURANCE
RESTITUTION AFTER ICHEIC
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON INTERNATIONAL OPERATIONS AND
ORGANIZATIONS, DEMOCRACY AND HUMAN RIGHTS
OF THE
COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
MAY 6, 2008
__________
Printed for the use of the Committee on Foreign Relations
Available via the World Wide Web:
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COMMITTEE ON FOREIGN RELATIONS
JOSEPH R. BIDEN, Jr., Delaware, Chairman
CHRISTOPHER J. DODD, Connecticut RICHARD G. LUGAR, Indiana
JOHN F. KERRY, Massachusetts CHUCK HAGEL, Nebraska
RUSSELL D. FEINGOLD, Wisconsin NORM COLEMAN, Minnesota
BARBARA BOXER, California BOB CORKER, Tennessee
BILL NELSON, Florida GEORGE V. VOINOVICH, Ohio
BARACK OBAMA, Illinois LISA MURKOWSKI, Alaska
ROBERT MENENDEZ, New Jersey JIM DeMINT, South Carolina
BENJAMIN L. CARDIN, Maryland JOHNNY ISAKSON, Georgia
ROBERT P. CASEY, Jr., Pennsylvania DAVID VITTER, Louisiana
JIM WEBB, Virginia JOHN BARRASSO, Wyoming
Antony J. Blinken, Staff Director
Kenneth A. Myers, Jr., Republican Staff Director
------------
SUBCOMMITTEE ON INTERNATIONAL OPERATIONS AND
ORGANIZATIONS, DEMOCRACY AND HUMAN RIGHTS
BILL NELSON, Florida, Chairman
RUSSELL D. FEINGOLD, Wisconsin DAVID VITTER, Louisiana
ROBERT MENENDEZ, New Jersey GEORGE V. VOINOVICH, Ohio
ROBERT P. CASEY, Jr., Pennsylvania JIM DeMINT, South Carolina
JIM WEBB, Virginia JOHN BARRASSO, Wyoming
(ii)
C O N T E N T S
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Page
Cardin, Hon. Benjamin, U.S. Senator From Maryland................ 6
Coleman, Hon. Norm, U.S. Senator From Minnesota.................. 5
Dubbin, Samuel J., Partner, Dubbin & Kravetz, LLP, Miami, FL..... 62
Prepared statement......................................... 63
Eagleburger, Hon. Lawrence, Former Secretary of State and Former
Chairman, International Commission on Holocaust Era Insurance
Claims (ICHEIC), Charlottesville, VA........................... 32
Prepared statement......................................... 34
Eizenstat, Hon. Stuart E., Partner, Covington & Burling LLP and
Former Special Representative of the President and Secretary Of
State on Holocaust Issues, Washington, DC...................... 43
Prepared statement......................................... 45
Kent, Roman, Holocaust Survivor and Chairman, American Gathering
of Holocaust Survivors and Their Descendants, New York, NY..... 7
Prepared statement......................................... 9
Menendez, Hon. Robert, U.S. Senator From New Jersey.............. 30
Nelson, Hon. Bill, U.S. Senator From Florida..................... 1
Rosenbaum, Thane, John Whelen Distinguished Lecturer in Law,
Fordham University School of Law, New York, NY................. 53
Prepared statement......................................... 56
Rubin, Anna B., Director, New York Holocaust Claims Processing
Office, New York State Banking Department, New York, NY........ 86
Prepared statement......................................... 87
Rubin, Jack, Holocaust Survivor and Member of the Advisory
Committee, Holocaust Survivors Of West Palm Beach, Boynton
Beach, FL...................................................... 14
Prepared statement......................................... 16
Appendixes
Appendix I.--Responses to Additional Questions Submitted for the Record
by Members of the Committee
Questions Submitted by Senator Bill Nelson
Responses From Jack Rubin.................................... 107
Responses From Samuel J. Dubbin.............................. 109
Response From Thane Rosenbaum................................ 117
Responses From Roman Kent.................................... 118
Responses From Hon. Lawrence Eagleburger..................... 123
Responses From Anna B. Rubin................................. 129
Questions Submitted by Senator David Vitter
Response From Hon. Lawrence Eagleburger...................... 132
(iii)
Appendix II.--Additional Material Submitted for the Record
Prepared Statement of Hon. David Vitter, U.S. Senator From
Louisiana...................................................... 135
Material Submitted by Organizations and Individuals in Support of
HR 1746
Members of the Florida Congressional Delegation.............. 136
Sidney Zabludoff............................................. 138
The Organization of Forced Laborers Under the Nazi
Occupation, Tel-Aviv, Israel............................... 141
Generations of the Shoah International (GSI)................. 142
On Behalf of The David Family, Milwaukee, WI................. 143
Material Submitted by Organizations and Individuals in Opposition
to HR 1746
The Anti-Defamation League, B'nai B'rith, and Others......... 145
Rabbi Andrew Baker of the American Jewish Committee,
Department of International Jewish Affairs................. 146
Rabbi Abba Cohen of Agudath Israel of America................ 147
Robert A. Swift, Attorney, Kohn, Swift & Graf, P.C........... 148
Waite, Schneider, Bayless & Chesley Co., L.P.A............... 150
Appendix III.--Material Submitted by Anna B. Rubin, Director, Holocaust
Claims Processing Office, New York State Banking Department
Section 1.--New York State Banking Department HPCO Annual Report. 151
Section 2.--Overview of the Interwar Economy and the European
Insurance Industry............................................. 179
Section 3.--Correspondence Between NAIC and New York............. 185
Section 4.--Additional Material Submitted by Ms. Rubin........... 187
HOLOCAUST ERA INSURANCE
RESTITUTION AFTER ICHEIC
----------
TUESDAY, MAY 6, 2008
U.S. Senate,
Subcommittee on International Operations
and
Organizations, Democracy and Human Rights,
Committee on Foreign Relations,
Washington, DC.
The committee met, pursuant to notice, at 2:27 p.m., in
room SD-419, Dirksen Senate Office Building, Hon. Bill Nelson,
presiding.
Present: Senators Bill Nelson, Menendez, Cardin, and
Coleman.
OPENING STATEMENT OF HON. BILL NELSON,
U.S. SENATOR FROM FLORIDA
Senator Bill Nelson. Good afternoon and welcome. The Senate
Foreign Relations Committee is meeting to consider a difficult
but extremely important issue, compensating Holocaust survivors
and their heirs for the value of Holocaust-era United States
insurance policies that they held before the war, but were lost
or had stolen from them by various entities, including the Nazi
regime.
This afternoon I have just been informed that we will have
two recorded votes called by the Senate at 2:30. It is my
intention to go ahead and start the meeting and get as far as
we can until I have to recess the committee to get over there
to vote. I will vote on both of those and come back immediately
and resume the hearing.
This is the first time a Senate committee has met
specifically to consider Holocaust-era compensation issues.
I've been involved with this issue for more than a decade. In
my former life as Florida's elected insurance commissioner in
the nineties, I was part of an international effort by
regulators in the 50 States, as well as Jewish groups, that
ultimately forced many European insurers to come to the table
and for the first time begin paying restitution to survivors.
Florida is a State with a large population of Holocaust
survivors, one of the largest concentration of Holocaust
survivors in the world. The three States that have the highest
degree of concentration of survivors are New York, Florida, and
California.
Most are in their eighties or nineties. The youngest are in
their seventies. They are extremely valuable citizens that we
honor and, while no amount of financial compensation or
property restitution can ever make up for the indescribable
wrong of the Holocaust, we all are committed to doing what we
can to assist the survivors to obtain meaningful compensation
due to them for the assets that they lost during the war and
around the period prior to the war, and to have that
compensation come to them without delay.
This hearing is timely for a number of reasons. It comes
only a few days after the national commemoration of Holocaust
Remembrance Day, on which people all around the world
acknowledge the historical atrocity of the Holocaust and say a
prayer for the 6 million Jews who were murdered by the Nazis
and their collaborators.
Second, this hearing gives the Senate the opportunity to
examine what has been done to compensate victims of the
Holocaust for the unpaid value of the insurance policies that
they held before the war. Last spring the International
Commission on Holocaust Era Insurance Claims, ICHEIC, closed
its doors after paying out $306 million to more than 48,000
Holocaust victims and their heirs, principally for life
insurance policies. Other insurance claim processes in Austria
and The Netherlands are winding down, and there is a pending
class settlement involving one of the insurance companies that
had written a significant portion of life insurance policies
for Jewish customers before the war, and that's the company
Generali.
This disputed settlement involves some 45,000 pending
claims that await evaluation for payment. Now that ICHEIC has
closed its doors, the question remains: What is left to be
done? Are there companies that have participated in ICHEIC that
haven't done enough to compensate Holocaust survivors who held
insurance policies? There is disagreement on this point that
we'll hear more about today.
Supporters of a bill introduced in the House by
Representatives Ros-Lehtinen and Wexler include certain
organizations representing Holocaust survivors. They are
represented here today by Mr. Rubin, Professor Rosenbaum, and
Mr. Dubbin, and are calling for legislation that directs all
companies doing business in the United States that issued
insurance policies during the Holocaust era to disclose all the
names of policyholders to the National Archives for
publication. They also seek a new Federal cause of action that
will enable them to sue in Federal court for damages and
attorney's fees for the compensation for their Holocaust-era
insurance policies.
Others here today include Ambassador Eagleburger, Secretary
Eagleburger and Eizenstat, who led the effort to negotiate,
establish and run ICHEIC, and Mr. Kent, a Holocaust survivor
who was an ICHEIC commissioner. They, along with several major
national Jewish organizations, the governments, including
Germany, Austria, and the European Union, that participated in
the negotiated resolution for compensation, and some
plaintiffs' attorneys who have represented Holocaust survivors
in class action litigation to obtain compensation for
insurance, all of those groups oppose the legislation proposed
in the House and support efforts to ensure that insurance
companies that participated in ICHEIC continue to honor their
commitment to accept and evaluate under relaxed ICHEIC
standards insurance claims for survivors and their heirs.
They will also argue that the legislation will undo
commitments made by the United States to give countries and
companies that participated in ICHEIC legal peace for agreeing
to pay claims under a negotiated resolution and imperil ongoing
efforts to obtain additional compensation in a host of areas,
such as pensions or property restitution.
Now, one entity involved in assisting Holocaust survivors
and their heirs to process claims, the New York Holocaust
Claims Processing Office, is represented here today by Mrs.
Rubin, no relation to Mr. Rubin. The office possesses expertise
in the area of Holocaust compensation in many areas and
continues to assist survivors from anywhere in the world. They
have been examining ways to provide ongoing monitoring and
assistance to ensure that insurance companies make good on
their promise to accept claims now and forever under relaxed
standards. So we will hear from Mrs. Rubin as well.
Now, are there countries or companies that did not
participate in the ICHEIC that should be called upon to
compensate Holocaust survivors for the unpaid value of their
insurance policies? There's no dispute on that question.
Millions of Jews lived in Eastern Europe before the war and,
while many of them lived in rural areas or were too poor to
afford insurance, there were certainly Jews who purchased
insurance policies from subsidiaries of Western European
companies whose assets were taken by the Communist governments
that came into power or by Eastern European companies that were
nationalized.
In both cases, the Eastern European countries did not
participate in ICHEIC or contribute to any of the insurance
compensation efforts that have taken place. ICHEIC even paid
claims on those Eastern European policies from out of the
humanitarian funds that were contributed by the ICHEIC
companies and paid $31 million on more than 2,800 claims.
Unfortunately, some countries have not taken nearly enough
action to provide restitution for insurance or other property
taken from Jews and other victims of Nazi persecution. Poland,
for example, is the sole member of the Organization for
Security and Cooperation in Europe not to have enacted
restitution legislation, and this is unacceptable.
That's why I'm pleased to announce today that, working with
my colleagues Senator Gordon Smith and Ben Cardin, we've
drafted and plan to introduce a bipartisan resolution urging
all countries, especially those in the former Eastern Europe,
to enact fair and comprehensive private and communal property
restitution legislation and do so as quickly as possible. Our
resolution will call for the Secretary of State to engage in
dialogue to achieve the aims of the resolution as well as the
convening of an international, intergovernmental conference to
focus on the remaining steps necessary to secure restitution
and compensation. We hope the resolution will spur our own and
other European governments into action and call attention to
the important unfinished business.
In addition, I am committed to helping survivors to obtain
compensation for insurance and other property that they lost
during the war or had stolen from them by the Nazis.
Now, before I turn to my colleague, the ranking member, I
want to ask unanimous consent to make the following documents a
part of the record: The written statements of all the
witnesses; the written statement supporting H.R. 1746 from
Sidney Zabludoff; a letter supporting H.R. 1746 from the
Organization of Forced Laborers Under the Nazi Occupation; a
petition supporting H.R. 1746 from the Generations of Shoah
International; a letter opposing H.R. 1746 jointly signed by
the Anti-Defamation League, B'Nai B'rith International, the
Conference on Jewish Material Claims Against Germany, the
Religious Action Center for Reformed Judaism, and the World
Jewish Congress; a letter opposing H.R. 1746 from the American
Jewish Congress; a letter opposing H.R. 1746 from Agudoth
Israel of America; a letter opposing H.R. 1746 from plaintiffs'
attorney Robert Swift; and a letter opposing H.R. 1746 from
plaintiffs' attorney Stanley Chesley.
[The material referred to is located in the Appendixes to
this hearing print.]
Senator Bill Nelson. I really appreciate our witnesses and
I turn to my colleague Senator Coleman----
Senator Coleman. Mr. Chairman, I know that we have a vote--
--
Senator Bill Nelson [continuing]. Without objection.
Senator Coleman. Thank you, Mr. Chairman.
I know we had a vote posted about 10 minutes ago, a 15-
minute vote.
Senator Bill Nelson. Yes.
Senator Coleman. So I would suggest that I go vote, and I'm
not sure if we want to put the hearing in recess, your call,
but then after the votes--there may be two votes--that we then
come back and I would give my--deliver my statement, and then
turn to the witnesses.
Senator Bill Nelson. Certainly. We have how many minutes
left?
Mr. Bowman. 7\1/2\.
Senator Bill Nelson. 7\1/2\. So I had announced before you
got here, and that's why I started 1 minute early, trying to
get it in, that maybe they would delay the vote past 2:30. But
they didn't. They started right on time. So we will recess the
hearing and we will come back.
Now, let me remind all of the witnesses, because of this
interruption, that's going to take a few minutes for us to vote
and then vote on the second recorded vote in the Senate, and
because of the length of the agenda, we're going to ask each of
the witnesses to keep your statement to 5 minutes. There is a
light box up there that will indicate when 5 minutes is over by
turning red. But I'm going to ask the Clerk of the committee,
who will stand at the end of the 5 minutes; he'll come right
over here, so everybody can make sure that they understand.
That's the only way we're going to be able to keep on time.
All of your written statements are entered into the record
without objection, and we will now recess and resume upon call
of the chair.
[Recess.]
Senator Bill Nelson. If everybody could take their seats.
In my opening remarks I inadvertently said that there would be
a letter entered in the record from the American Jewish
Congress. It's from the American Jewish Committee, as well as a
letter from the U.S. Department of State.
Senator Coleman.
STATEMENT OF HON. NORM COLEMAN,
U.S. SENATOR FROM MINNESOTA
Senator Coleman. Thank you. Thank you, Mr. Chairman. I'd
like to begin by thanking you for holding this critically
important hearing and for your longstanding leadership in
seeking Holocaust-era insurance restitution to victims and
their heirs. I'd also like to thank Senator Vitter for
graciously allowing me to serve as ranking member of this
hearing.
Mr. Chairman, just last Thursday I attended the Days of
Remembrance for Holocaust Victims event at the Capitol Rotunda,
where I had the high honor of joining Polish-born Holocaust
survivors Freida Weinberg in lighting a candle in remembrance
of those who perished in the Holocaust, including those of her
family.
Every time I think of the Holocaust and how it represents
the deaths of a population equivalent to everyone living in my
State of Minnesota and then some, I am stunned at the evil
human beings are capable of. So, Mr. Chairman, I come to this
hearing with a heavy heart and an abiding commitment to seeing
that victims have received the justice they deserve.
To me the fundamental question of this hearing is whether
victims of the Holocaust have been treated right, has justice
been served? As I've looked at this issue, there can be no
denying that for many of these victims and their families the
effort at rendering justice was too long in the making. It was
only in 1998, and thanks in great part to the efforts of you,
Mr. Chairman, that action was finally taken to address unpaid
Holocaust insurance claims with the establishment of the
International Commission on Holocaust Era Insurance Claims,
ICHEIC.
But now, a little over a year since ICHEIC has closed its
doors, we have been confronted with important and troubling
questions as to whether victims who have gone through the
ICHEIC process have received the justice they deserve,
questions relating, for instance, to the fairness of ICHEIC's
claims valuations and claims processing. These are not some
technical bureaucratic issues, but rather issues at the very
heart of the matter: Did ICHEIC do right by the victims?
Beyond ICHEIC, it is important for us to note the full
extent of those victims out there who are waiting for justice
to be served, that there are others, in particular for those
victims from Eastern and Central Europe. What is currently
being done to help these victims with unpaid insurance claims?
In the name of justice, these questions deserve to be
answered. With many survivors in the twilight of their lives,
we have a solemn but urgent obligation to ensure the
appropriate rendering of justice. Ultimately, if injustice
indeed remains then we must act to ensure that survivors and
their families receive the compensation they deserve. They are
owed nothing less.
Mr. Chairman, when we talk to Holocaust survivors and the
relatives of victims the refrain is ``Never again.'' The
Holocaust happened in part because it was unthinkable. As we
think about it, we reduce its power to reoccur. What this
hearing is about is our efforts at ensuring justice for those
who suffered and to keep the Holocaust in front of our minds to
be sure we are always working toward ``Never again.''
I would note, Mr. Chairman, that as you outlined in your
opening statement there are clear differences in what should be
the right approach or what has been the approach, to whether
justice has been done for victims of the Holocaust regarding
insurance restitution. You read a number of letters both in
support and opposition. I think this hearing is what
congressional hearings should be. It's an opportunity to
provide a forum for us to listen and then respond.
Just on a personal note, my forebears, they came to this
country before the Holocaust, before the rise of Hitler. They
came in the early 1900s, some in the late 1880s. So for those
of us of the Jewish faith, the experience is either personal,
your own relatives, or personal if not your relatives, of
friends and neighbors. It's a very real connection. So on every
level I appreciate the opportunity that you've provided for
this forum and this hearing. I think it's important. I think
we've got to listen and then we have to figure out what's the
next step.
Thank you, Mr. Chairman.
Senator Bill Nelson. Thank you, Senator Coleman.
Senator Cardin, did you want to make a quick opening
statement?
STATEMENT OF HON. BENJAMIN CARDIN,
U.S. SENATOR FROM MARYLAND
Senator Cardin. Let me just be very brief because I do want
to hear from our witnesses and the other panel. Thank you for
holding this hearing, Mr. Chairman. I appreciate it very much.
Senator Coleman, thank you for your leadership in this area.
I do think it's important for us to have the right record
on the issues concerning the insurance restitution issues. It's
part of a broader problem of property restitution and community
property and personal property confiscated during the Nazi era
and continued during the Communist regimes in many countries.
I want to just acknowledge with thanks the tremendous work
that was done in an effort to bring to a proper conclusion the
insurance issues. It was a very complicated and difficult
issue. I think what we were looking for was an agreement that
would be fair, acknowledge the injustices that were done, and
provide relief to those who were entitled to relief in an
effective manner so that moneys could actually get out. And I
thank those who worked on this issue and I appreciate this
opportunity to get a better understanding of that.
I just want to make one quick comment. Property
confiscation issues are very emotional. I had a case of a
family that had their property taken in Romania. When they
tried to get the property back and got a court judgment, the
government wouldn't respect the court judgment. It went on and
on and on. It wasn't until we put a spotlight on that, through
our Ambassador and through Members of Congress, that we were
able to get the property returned to its rightful owner.
I just would like to point out that it's complicated when a
country has gone through a Nazi regime where properties were
confiscated and Communists who didn't want to do anything about
it. Just in the last dozen years there's been the opportunity
to correct the injustice. Some countries have responded well,
have enacted good laws. Others have not.
Although we're looking at insurance issues today, I hope
that we will look at this with a broader view, Mr. Chairman, to
make sure that countries that are involved where properties
were confiscated have effective laws to right the injustices
that were done.
Senator Bill Nelson. Now, as the ground rules are, because
of the delay and the length of the agenda, 5 minutes. You can
use the 5 minutes however you want. Everybody's written
testimony and supporting documents are entered into the record.
At the end of 5 minutes, the clerk will stand up and come right
up here so you can be sure to see your time.
We're going to go just in the order as the agenda is
printed. Mr. Roman Kent.
STATEMENT OF ROMAN KENT, HOLOCAUST SURVIVOR AND CHAIRMAN,
AMERICAN GATHERING OF HOLOCAUST SURVIVORS AND THEIR
DESCENDANTS, NEW YORK, NY
Mr. Kent. Good afternoon, Senator Nelson, members of the
Foreign Relations Committee.
At the outset I want to express my gratitude and that of
all Holocaust survivors to you for addressing issues of
Holocaust-era compensation and restitution, an effort for which
we have little time remaining.
I am a survivor of Lodz Ghetto, Gross-Rosen, Darnau,
Flosenburg, and Auschwitz concentration camps. I am chairman of
the American Gathering of Jewish Holocaust Survivors and an
officer of the Claims Conference. I participated in the
negotiations leading to the establishment of ICHEIC and
subsequently played an active role as a commissioner. For over
20 years, I have actively participated in Holocaust-related
compensation negotiations with the German Government which have
resulted in providing hundreds of millions of dollars annually
for the benefit of needy Holocaust survivors worldwide.
I am greatly concerned that this proposed legislation will
help only a few survivors, but most certainly will be
detrimental to survivors who are in need of immediate medical
and financial assistance.
To address the ineffectiveness of lawsuits, ICHEIC became
the first and indeed the only organization to offer Holocaust
victims and their heirs a way to pursue Holocaust-era insurance
claims at no cost, without regard for any statute of
limitations, even if the policies could not be produced.
However, only the five European companies which signed the
agreement to work with ICHEIC and German insurance companies
provided funding for ICHEIC.
Proponents of the bill have presented estimates ranging
from $3 to $17 billion and even higher up to the stratosphere
which they claim represent the value today of unpaid Jewish
insurance policies purchased in prewar Europe. However, the
Holocaust Claim Processing Office has just produced an analysis
of the insurance data in prewar Europe. Review of this data
readily leads to the conclusion that the approximately $600
million secured by ICHEIC from the companies which participated
in its process clearly represents the recovery of a significant
part of the portion of the unpaid Jewish Holocaust-era
policies.
In the end, was ICHEIC perfect? No. Even though nothing can
remedy the wrongs perpetrated during the Holocaust, each new
compensation or restitution program brings the inflated hope
for survivors that now, finally, we will get back some of the
material losses that were taken from us. ICHEIC suffered from
such exaggerated expectations. Yet, in spite of its
shortcomings, what ICHEIC accomplished was without precedent.
ICHEIC provided a forum for identifying and processing
Holocaust-era claims, even without documentation, even without
naming the policy-issuing company, where for 60 years,
practically speaking there had been nowhere to go.
Second, ICHEIC did not charge survivors, nor was it bound
by any statute of limitations.
Third, ICHEIC paid on policies issued by insurance
companies which no longer exist.
Fourth, ICHEIC published a list of over 500,000 most likely
Jewish insurance policyholders.
Fifth, ICHEIC recovered approximately $600 million from
participating insurance companies, which was used to pay claims
and for humanitarian purposes, including the critically needed
home care, particularly in Florida.
Finally, insurance companies which worked with ICHEIC will
continue to accept and process claims.
I believe that H.R. 1746 will fail to provide an effective
mechanism to compensate Holocaust victims and that my fellow
survivors and I will, most likely, not live to see any of its
results. I worry that the legislation will unjustifiably raise
survivors' expectations, only--in the end--to profoundly
disappoint them. The overwhelming majority of policies which
would be disclosed would not be Jewish-purchased.
I also want to emphasize that I am very concerned that the
legislation will greatly damage critical ongoing negotiations,
especially with Germany, involving hundreds of millions of
dollars in Holocaust-related compensation which, as you know,
is desperately needed now, not tomorrow, not next year, but
now.
Thus, instead of the proposed legislation, I respectfully
suggest that congressional action addressing the following
issues would provide critical assistance to survivors and their
heirs:
First, in order to ensure that insurance companies which
participated in ICHEIC continue to process claims submitted
after the close of ICHEIC, which they have promised----
Senator Bill Nelson. Mr. Kent----
Mr. Kent [continuing]. It would be valuable for Congress to
help develop a mechanism to monitor the processing of such new
claims.
Senator Bill Nelson. Mr. Kent, would you just wrap up now?
Mr. Kent. Yes; I will wrap it up.
Second, since most of the remaining unpaid Jewish
Holocaust-era policies were issued by companies which did not
participate in ICHEIC, it would be helpful for Congress to
focus its efforts on developing measures to have such companies
address the issue of Holocaust-era insurance.
Finally, reimbursement is also sought from Eastern European
governments for claims paid by ICHEIC on policies issued by
insurance companies that were nationalized or had their assets
nationalized. We would request congressional assistance in the
effort to recover such funds, as well as in the broader problem
of having Eastern European countries, for example Poland,
address and resolve in a meaningful way the restitution of
property confiscated during World War Two.
We want to deeply appreciate your assistance and in the
best, and we hope that you will continue to provide such
support in the future.
Thank you. Thank you very much.
[The prepared statement of Mr. Kent follows:]
Prepared Statement of Roman Kent, Holocaust Survivor and Chairman,
American Gathering of Holocaust Survivors and Their Descendants, New
York, NY
I am a survivor of Auschwitz, the chairman of the American
Gathering of Jewish Holocaust Survivors and Their Descendants, and an
officer of the Conference on Jewish Material Claims Against Germany,
known as the Claims Conference. I served as a member of the
Presidential Advisory Commission on Holocaust Assets in the United
States and participated in the negotiations leading to the
establishment--and was a commissioner--of the International Commission
on Holocaust Era Insurance Claims (``ICHEIC'').
I have been a vigorous advocate for what, in my experience and
judgment, is best for survivors and I have struggled to find ways for
survivors, both in the U.S. and abroad, to obtain some measure of
justice for us. To that end, I have been deeply involved in activities
which preserve the memory of the Holocaust and help, as much as
possible, the tens of thousands of survivors desperately in need of
home care, medical assistance, and other services in the twilight of
their lives.
For over 20 years, I have actively participated in Holocaust-
related compensation negotiations with the German Government which have
resulted in providing hundreds of millions of dollars annually for the
benefit of Holocaust survivors worldwide. In too many instances, this
has been the survivors' only available source of assistance of any
sort.
For these reasons, I believe that I have a unique perspective from
which to comment on the issues which are the subject of today's
hearing. However, before proceeding, I would like to express my
gratitude to Chairman Nelson, as well as to the other members of this
subcommittee, for addressing issues of Holocaust-era compensation and
restitution. The U.S. Congress has played a historic role in this just
and moral effort--an effort for which we have little time remaining.
At the outset, I want to highlight several key points:
First, the insurance companies which participated in ICHEIC
have committed to continue to accept and process Holocaust-era
insurance claims received after the close of ICHEIC--applying
the ICHEIC standards in their decisions--at no cost to
claimants. In addition, the Holocaust Claims Processing Office
(``HCPO'') of New York State, will assist survivors nationwide
filing such claims with insurance companies, at no charge.
Second, the proposed insurance legislation will raise the
expectations of survivors only, in the end, to disappoint them.
The costs, time, and effort required to engage in the
litigation the proposed legislation authorizes, will be
excessive, if not prohibitive. In addition, the mandatory
publication by the insurance companies which participated in
the ICHEIC process of all policyholder names will, at this
point, yield little new information regarding policyholders who
were victims of Nazi persecution. Even assuming that stringent
European data privacy hurdles could be overcome, the
overwhelming majority of the policies disclosed will not be
Jewish-purchased, while most of those that are will have been
previously published and/or compensated. Thus, the huge
expectations that the legislation will generate on the part of
survivors will simply not be met--leading to upset,
disappointment, and frustration.
Third, I am concerned that the proposed legislation will, by
undermining previous commitments and reopening previous
agreements, significantly damage critical, ongoing negotiations
with Germany and other governments for the continuation and
expansion of hundreds of millions of dollars in crucial funding
immediately required for survivors in need in the United States
and worldwide. Without question, these negotiations offer the
real prospect of substantial benefits for many survivors now,
as compared to the doubtful likelihood of insurance recoveries
for more than a few survivors and their heirs offered by the
enactment of H.R. 1746.
the context in which icheic was established
Since the beginning of World War II and continuing for almost the
next 60 years, few Holocaust survivors were able to recover the
proceeds of their unpaid Holocaust-era insurance policies. During that
period, survivors faced enormous obstacles in their efforts to obtain
payment on such policies, thousands of which remained unpaid, and few
attorneys stepped forward who were willing to help with their plight.
Insurance companies certainly were averse to pay or even give a
fair hearing to such claims. Indeed, there are chilling examples of
companies insisting that claimants produce death certificates,
including from Auschwitz, of deceased policyholders. The absence of
relevant documentation, statutes of limitations, and the prohibitive
costs and time involved proved insurmountable obstacles to successful
recovery for virtually all potential claimants. In addition, many
insurance companies that had sold insurance in prewar Europe no longer
existed after the war and Communist control of Central and Eastern
Europe prevented insurance recoveries for survivors in those countries.
Clearly, there was a vacuum in post-war insurance restitution
efforts. There was no effective way for survivors to obtain payment for
their prewar insurance claims. After struggling to survive Nazi
concentration camps, hardly any survivors had the documentary proof
necessary to establish the existence of insurance policies, or the
evidence simply no longer existed as it was destroyed or lost during
and after the war. Therefore, few survivors or members of their
families were able to convert the policies they had purchased into the
compensation they were owed.
That is precisely why the ICHEIC agreement was reached: To
establish a process to fill this void and enable claimants to attain a
measure of justice which, up to that point, had not existed.
The agreement to establish ICHEIC, known as the Memorandum of
Understanding, was signed in 1998 by the following parties: The World
Jewish Restitution Organization and the Claims Conference--both
included representatives from the American Gathering of Holocaust
Survivors and the Centre of Organizations of Holocaust Survivors in
Israel--which are organizations that, for years, have represented and
worked on behalf of survivor rights; the National Association of
Insurance Commissioners, which represented the State insurance
commissioners of all 50 States; six (which later became five) large
European insurance companies; and the State of Israel. In addition, as
part of the negotiations with the German Government and industry, which
ultimately led to the establishment of a DM 10 billion fund, primarily
for former slave and forced laborers, the German insurance companies
also became part of the ICHEIC process.
ICHEIC provided a forum--at not cost to survivors and without
regard to statutes of limitations--to identify, process, and compensate
previously unpaid claims based on Jewish Holocaust-era insurance
policies. ICHEIC, however, did not receive funds covering the entire
European market. Rather, the five European companies which signed the
Memorandum of Understanding, along with the German companies which were
part of the German Foundation agreement (collectively, ``ICHEIC
companies''), which provided funding for ICHEIC, represented only a
portion of the vast European insurance market. Insurance companies
representing the larger part of the market did not participate in the
ICHEIC process.
No funding or any other sort of participation, for example, was
forthcoming from insurance companies which, prior to the war, had been
located in the former Czechoslovakia, Hungary, Poland, Romania, and the
former Yugoslavia, among other Central and Eastern European companies.
These companies, or their assets, were nationalized, went bankrupt, or
otherwise went out of business. Although such companies issued
thousands of Jewish Holocaust-era insurance policies, they paid
nothing, nor have the governments which took over such companies, or
their successor governments, paid a penny to survivors for their
insurance claims.
Nonetheless, ICHEIC took on the obligation to make payments to
claimants even for such policies, despite the fact that no funds were
provided by these companies or governments. Information regarding such
policies was difficult if not impossible to obtain. Yet, ICHEIC,
through its own research, located available information on the policies
and evaluated them through a special process created for claimants of
policies from Eastern European companies that had been liquidated,
nationalized, or for which there was no known successor. These claims
were evaluated by ICHEIC staff according to ICHEIC rules and
guidelines, including ICHEIC valuation standards.
A continual stream of complications had to be resolved during
negotiations with the insurance companies which participated in the
ICHEIC process. One such issue related to the differing data protection
and privacy laws of each country--Germany, Italy, France, and
Switzerland--in which these companies are located. In an effort to have
as many names as possible identified and disclosed of those most likely
to have had a life insurance policy during the relevant period and who
were thought likely to have suffered any form of Nazi persecution, each
country's laws needed to be addressed individually. Publication of
large numbers of names, where the overwhelming majority of the
individuals were neither Jewish nor Holocaust victims, was of paramount
concern to European governments. Yet, in spite of this and many other
obstacles, ICHEIC was able to publish the names of over 500,000
Holocaust-era insurance policyholders which were most likely to have
been victims of Nazi persecution.
Further, ICHEIC developed and implemented a liberal evidentiary
approach which no court of law would follow. No court of law, for
example, would or could rule in favor of an individual making a claim
based on an insurance policy not presented in court. However, as we
know, many Holocaust-era insurance policies were destroyed, lost, or
otherwise cannot be produced. In contrast, ICHEIC agreed to--and did--
pay claimants who did (and could) not produce an insurance policy. This
is no small matter. Without an insurance policy, how is the identity of
the policyholder, the face value of the policy, the premiums paid and,
most importantly, the beneficiary ascertained, so many years later? How
can a court rule in favor of any claimant when the beneficiary of a
policy is unknown? ICHEIC decided, as a matter of principle, that the
family would receive compensation for the policy to address such
circumstances.
Moreover, it is rare, in Holocaust-era insurance policy cases, to
have definitive proof concerning whether a policyholder continued to
pay premiums. Yet this is important information because if premium
payments were not made, the beneficiary would receive less than the
full face value of the policy. ICHEIC addressed this issue as well,
deciding that all premiums were deemed to have been paid if they had
been paid as of the start of the war in each country.
As a result, ICHEIC paid on claims in circumstances where the
company was not named and the insurance policy was not produced. It
also paid on policies which were produced, but which had been issued by
Central and Eastern European companies which had been nationalized or
whose assets had been nationalized.
In sum, the ICHEIC process was a response to the ineffectiveness of
lawsuits and compensation programs in dealing with issues raised by
Holocaust survivors related to their prewar life insurance policies. It
became the first--and, indeed, the only--organization ever to offer
Holocaust victims and their heirs a mechanism to pursue claims against
insurance companies, at no cost, with no regard for any statute of
limitations, even if neither the claimant nor the insurance company
could produce the policy in issue. However, the companies which
participated in the ICHEIC process did not represent the entire, nor
even the majority of, the Holocaust-era European insurance market.
the value of jewish-owned holocaust-era insurance
The various assertions made these past months, regarding the
percentage of unpaid Jewish Holocaust-era policies paid through ICHEIC,
makes at least one thing clear: There is no universal agreement on the
relevant figures. There have been wide-ranging, sometimes completely
unrealistic, estimates offered regarding the total value of Jewish
Holocaust-era insurance policies which remain unpaid, and
unsubstantiated allegations regarding what portion of that amount was
paid by companies which participated in ICHEIC (without any
determination having been made of how much of the relevant market can
be attributed to policies actually sold by ICHEIC companies).
Not surprisingly, almost seven decades after the outbreak of World
War II, such calculations will necessarily vary broadly depending on
available documentation and on which values and methods--out of a broad
range of possibilities--are used for the calculations.
To be able to function and begin processing claims, ICHEIC had to
resolve a number of such issues regarding what values and methods were
appropriate to use, in the face of profound differences between the
Jewish side, on the one hand, and the insurance companies, on the
other. After lengthy arguments, the parties involved in ICHEIC
recognized the virtually endless potential for disagreements over such
determinations and ultimately were able to develop a methodology
accepted by the parties which, in turn led to the negotiated
settlements and compromises essential to moving a slow and difficult
process forward.
The determination of the present value of unpaid, prewar Jewish
insurance policies requires, under the ICHEIC valuation system or any
valuation system, a number of calculations involving many complex
factors, including the following:
(i) The total face value of all life insurance policies at
the beginning of the Holocaust period, in the local currency at
the time;
(ii) The Jewish share of the total value of all life
insurance policies, based on the percentage of the Jewish
population in a given country;
(iii) The propensity for Jewish individuals to purchase
insurance in greater numbers and at a higher value than the
rest of the population;
(iv) An adjustment for policies which have been paid; and
(v) A system of valuation by which unpaid Holocaust-era
Jewish policies (which includes heirless claims and others who
did not or could not make a claim) are converted into today's
value.
However, there is no single, correct measure for any of these
factors, while the range of possible values for each factor is vast. No
consensus exists, for example, regarding how much higher than the
average the Jewish propensity to purchase insurance was, or how much
higher than the average the face values of such Jewish policies were.
Moreover, a number of the currencies which had been used to
purchase policies before World War II became virtually worthless.
Companies argued, both in ICHEIC and in court cases, that the policies
were, therefore, also virtually worthless. ICHEIC, in the end, did not
accept that argument.
These represent a few of the many complex determinations that had
to be made to reach a decision regarding the total value of unpaid
Jewish Holocaust-era insurance policies. Nonetheless, the final
conclusions one can reach--as to the amount of the entire relevant
market and what percentage of that total was paid through the ICHEIC
process--radically differ depending on which values and methods, out of
the extensive range of possibilities, are selected for the relevant
component factors.
icheic sought to resolve all claims submitted, regardless of the
company identified in the claim
Although the Memorandum of Understanding called for the resolution
of claims against Holocaust-era insurance policies issued by the
companies participating in the ICHEIC process, ICHEIC's efforts went
well beyond that.
First, only a small percentage of all the claim forms submitted to
ICHEIC named a specific company, and few claims included any documents
linking the policy in issue to the specific company named in the claim.
Further, some claims that did identify the policy-issuing companies
turned out to be companies which were not signatories to the Memorandum
of Understanding, nor German insurance companies. To ensure that these
claims would be treated properly, ICHEIC entered into agreements with
other agencies and transferred these claims as appropriate.
Second, to ensure the broadest possible reach, when ICHEIC received
anecdotal claims that did not identify a specific insurance company, it
nonetheless circulated such claims to all member companies that did
business in the policyholder's country of residence.
Third, claims brought by survivors or heirs of survivors on
policies written by Central and Eastern European companies that were
defunct after the war and have no present-day successor, were not only
reviewed by ICHEIC but, in many cases, paid through an in-house process
it developed.
Finally, although the ICHEIC process has closed, the participating
insurance companies have made commitments, orally and in writing, to
accept and process any Holocaust-era claims they continue to receive,
with no cost to the claimant and in spite of any statute of
limitations.
conclusion
Was ICHEIC perfect? Clearly not. When dealing with matters relating
to the Holocaust and the atrocities committed, the most that can be
achieved is an imperfect justice. Nothing can remedy the wrongs that
were perpetrated.
And yet, ICHEIC was successful. What it accomplished was without
precedent:
First, ICHEIC filled a void by establishing a mechanism to
identify and process Holocaust-era insurance claims, even when
claimants typically had no documentation. Prior to the ICHIEC
process, there was, practically speaking, nowhere to go to
recover the proceeds of unpaid Holocaust-era policies;
Second, the ICHEIC process was at no cost to survivors, and
without regard to statutes of limitations;
Third, ICHEIC paid claims against insurance companies which
no longer existed, whether due to nationalization, bankruptcy,
or other reasons;
Fourth, the insurance companies which participated in the
ICHEIC process have continued to accept and process claims--
again, at no cost to the claimants and regardless of statutes
of limitations. Claimants may obtain, at no charge, the
assistance of the Holocaust Claims Processing Office in filing
such claims;
Fifth, an archive consisting of over 500,000 most likely
Jewish insurance policyholders is now available to survivors,
historians, and other researchers; and
Sixth, in total, over $\1/2\ billion in payments to
Holocaust-era insurance policyholders and heirs, as well as to
programs benefiting Holocaust survivors has been distributed as
a result of ICHEIC. The payments included providing critically
needed home care funding for elderly and ailing Holocaust
survivors.
These, by themselves, are an impressive list of achievements,
particularly considering that survivors had virtually nowhere to go
with their insurance claims before ICHEIC was established.
My apprehension regarding H.R. 1746 is that it will not achieve its
goal of providing an effective avenue to successfully compensate
Holocaust victims and their heirs for unpaid insurance policies. Thus,
whatever ICHEIC's shortcomings, they will not, in any meaningful way,
be remedied by the enactment of the bill.
The bill mandates that insurance companies, notwithstanding the
strict, European data privacy laws, disclose the names of all
policyholders during the entire relevant period, but this
extraordinarily costly effort will yield little new information
regarding Jewish policyholders. This is especially the case regarding
the five insurance companies which signed the Memorandum of
Understanding and the German companies which were part of the German
Foundation agreement--they already have disclosed most, if not all, of
their Jewish-purchased, Holocaust-era insurance policies. Thus, almost
all policies which would be disclosed will not be those purchased by
individuals who suffered Nazi persecution; many of the policies may
have been paid; and many of those not paid, will have been previously
compensated
In addition, litigation of such claims will be lengthy, and the
associated costs, time, and effort required will prove excessive and
unreasonable, certainly for elderly survivors. My fellow survivors and
I will, most likely, not be alive to see the results of any of the
lawsuits the proposed legislation authorizes.
While a handful of survivors and their heirs, at most, may benefit
from H.R. 1746, I am also concerned that the bill's enactment will
unjustifiably generate huge expectations that, in the end, will not be
met, which will have a profoundly negative impact on survivors.
Finally, I am extremely concerned that the Holocaust Insurance
Accountability Act will severely damage the common goal of those
looking to help survivors. It will jeopardize critical, on-going
negotiations with governments for the continuation and expansion of
funding to meet the vast, immediate needs of Holocaust survivors, both
in the United States and worldwide. For example, German insurance
companies were included in the ICHEIC process as part of the
negotiations which ultimately resulted in the formation of the German
Foundation, a DM 10 billion fund primarily for former slave and forced
laborers. Those negotiations and the working of the German Foundation
occurred with the involvement, and under the auspices and approval, of
the German and U.S. Governments, among others. The proposed legislation
threatens to undermine such negotiations. Moreover, I also worry that
the support the U.S. Government provides Holocaust survivors will be
undermined as the German Government loses faith in the ability of the
U.S. Government to keep its commitments.
recommendations
Thus, instead of the proposed legislation, I respectfully suggest
that congressional action addressing the following issues would provide
critical assistance to survivors and their heirs.
First, the insurance companies which participated in ICHEIC have
committed to continue, indeed have been, processing claims they
received after the close of ICHEIC. In order to ensure that this
undertaking is properly implemented, it would be valuable for Congress
to help develop a mechanism to monitor the processing of such new
insurance claims (which are not otherwise already supervised).
Second, most of the remaining unpaid, Jewish Holocaust-era policies
were issued by companies which did not participate in the ICHEIC
process. Thus, it would be helpful for Congress to focus its effort on
developing measures to have companies that were not involved in ICHEIC
address the issue of Holocaust-era insurance. As a related point,
reimbursement is still being sought from Eastern European governments
for claims paid by ICHEIC to claimants who held policies issued by
Eastern European insurance companies that were nationalized or had
their assets nationalized. We would request congressional assistance in
the efforts to recover such funds, as well as in the broader problem of
having Eastern European countries address and resolve, in a meaningful
way, the restitution of property confiscated during World War II.
The U.S. Congress has played a major role over the years in efforts
to secure Holocaust-era compensation and restitution, as well as to
ensure that the Holocaust is not forgotten. You have the gratitude of
the survivor community for such support and assistance and we hope that
you will continue to provide such help in the future.
Senator Bill Nelson. Thank you, Mr. Kent.
Mr. Jack Rubin.
STATEMENT OF JACK RUBIN, HOLOCAUST SURVIVOR AND MEMBER OF THE
ADVISORY COMMITTEE, HOLOCAUST SURVIVORS OF WEST PALM BEACH,
BOYNTON BEACH, FL
Mr. Rubin. Good afternoon. My name is Jack Rubin. I live in
Boynton Beach, FL. I want to thank our own Senator Bill Nelson
for holding this important hearing and inviting me as a
Holocaust survivor to speak my own mind about these issues of
grave concern. I would like to begin by saying how honored I am
to be able to address this committee of the insurance Senate.
I am here on behalf of thousands of Holocaust survivors and
family members of Holocaust victims, to ask you to pass a
companion to H.R. 1746, the Holocaust Insurance Accountability
Act of 2007, without any further delays.
After surviving the Holocaust, I was fortunate to come to
America and earn a living and raise a beautiful family in
Fairfield, CT. I retired in 1995 and in 1998 I moved to Boynton
Beach. I have been very active in several Florida survivors
groups, as well as my synagogue and other Jewish organizations
in Palm Beach County. I also volunteer as a member of the
Holocaust survivors advisory committee of the Jewish Family and
Children's Services of Palm Beach County, which serves the
needy Holocaust survivors in our community. in addition, I am a
member of the executive committee of the Holocaust Survivors
Foundation USA, Incorporated, which represents thousands of
Holocaust survivors from all over the United States.
I am here today to talk about part of my family history
that isn't so happy, our brutal treatment at the hands of the
Nazis and their puppets, the Hungarians. I was born in 1928 in
Vari, Czechoslovakia, which was annexed by Hungary in 1938. We
lived in a building where my father's general store was also
located. There was a sign that said the building and premises
were insured by ``Generali Moldavia.'' I am certain that my
father, who was a careful businessman, had all kinds of
insurance, including life insurance, because he spoke about it
often. From our conversations, I even remember the name of the
agent, Mr. Joseph Schwartz.
We were forced out of our home in April 1944 with only the
clothes on our back and one suitcase each and taken to the
Beregsastz Ghetto. There the Nazis forced everyone to turn over
their jewelry, watches, wedding rings, and hand over everything
of value. I was given a pail to go around and collect all those
valuables. We were then deported to Auschwitz and that was the
last time I saw my parents.
Mr. Chairman, I was the only son of my parents and I cannot
tell you the pain I've been living with all my life. They don't
have a burial plot. I can't go by there and say the Kadish. The
Kadish is the Hebrew prayer of the deceased. I've been living
with this all my life.
After the Holocaust, I had no way to find my papers, such
as insurance policies. Our home and our business was destroyed.
After ICHEIC was created, I applied because of the esteemed
individuals and publicity encouraging applications. I gave them
all the information I had, including the name on the building
and the name of Mr. Schwartz, the agent. Four years later I
received a letter from Generali stating they had no records
from their subsidiaries and no records of any policies in my
family. This is absurd because I know we had insurance.
ICHEIC did not even ask the company to give records of
Generali Moldavia, a known subsidiary, and did not require
Generali to produce information about Mr. Schwartz, the agent
from our town. ICHEIC just took Generali's word and my claim
was denied.
ICHEIC added insult to injury. They sent me a $1,000 check
and called it ``humanitarian payment.'' Really, they called me
a liar. They tried to give us $1,000 to keep quiet, instead of
giving what we demanded all along, the right to control our own
destiny and to learn the truth about the way Generali and the
companies treated our families.
If you want to get an angry reaction from survivors or
their children or their grandchildren, just mention ICHEIC. We
all know that ICHEIC was controlled by the insurance companies.
Sure there were Jewish organizations present, but we never
asked them or anyone else to represent us. We survivors did not
ask the Claims Conference or Mr. Kent or Mr. Eizenstat or Mr.
Eagleburger to handle our affairs. We can speak for ourselves,
but ICHEIC denied us even the obvious level of respect.
We question the deal that everyone talks about, but
remember this: Survivors did not agree to any deals and did not
agree to any legal peace. The fact that some groups took it
upon themselves to pretend like they had the authority is not
acceptable to us and never was.
I am here today to ask you, Mr. Chairman, to fix this by
passing H.R. 1746 because it will require the companies to open
their records and to allow us to go to court for the truth.
I am fighting for this bill to honor my parents, Mr.
Chairman, and I owe this to my parents. I cannot understand how
anyone can even think that we should be willing to settle for
less.
Senator Bill Nelson. Could you wrap it up.
Mr. Rubin. This is why I was one of the several survivors
who appealed the recent class action settlement of the
litigation of Generali, those who got burned by ICHEIC and will
not benefit from the settlement. This is why we appealed.
If Congress does not act soon, our rights might be totally
swept away by this so-called settlement. Decision could come
any day. Please move swiftly and make it clear that the U.S.
Congress does not endorse the denial of the basic rights of the
survivors.
I would like to make a point, Mr. Chairman. How about the
millions of insurance policies that went up in flames in
Auschwitz, Dachau, and thousands of killing fields? Why should
the insurance companies be the heirs of their Jewish customers?
According to Mr. Zabludoff, this is over $17 or $18 billion.
There are tens of thousands of needy Holocaust survivors in
this very United States who are suffering without the care they
need. I see many of them in Palm Beach County and my HSF
colleagues see this problem all over America. The local Jewish
Family and Children's Services, where I volunteer, never has
enough funds to meet the needs of the poor survivors. They
cannot afford medical expenses, or their medicines, eyeglasses,
home care, nutrition, walkers, or dental care. They cannot
afford their rent, utility bills. There are 80,000 survivors of
the Holocaust in the United States in this condition. Where is
justice to this?
There should be a legal peace--there should be no legal
peace with companies until the Holocaust survivors have moral
peace. We are far from that today, Mr. Chairman.
Senator Bill Nelson. And thank you----
Mr. Rubin. Senator Nelson, Senator Nelson, you were one of
the first public officials to recognize the problem survivors
were facing with long-term care and all their health care
needs. You tried to help back in 1998 and 1999. Our community
was and it is grateful for the concern you showed for our
fellow survivors in need. But the truth today is that not
enough has been done, not by corporations, not by governments
who injured us and stole from us, and not by the institutions
that were supposed to be responsible for helping us.
[The prepared statement of Mr. Rubin follows:]
Prepared Statement of Jack Rubin, Holocaust Survivor and Member of the
Advisory Committee, Holocaust Survivors of West Palm Beach, Boynton
Beach, FL
My name is Jack Rubin, and I live in Boynton Beach, FL. I want to
thank our own Senator Bill Nelson for holding this important hearing
and for inviting me, as a Holocaust survivor, to speak my own mind
about these issues of great concern. I would like to begin by stating
how honored I am to be able to address this committee of the United
States Senate. It is very humbling and historic, as I realize that I am
one of a very small number of Holocaust survivors, which includes Elie
Wiesel, who has ever had this privilege.
Last Thursday, May 1, was the 63rd anniversary of the day I was
liberated. It was also Yom Hashoah, the Day of Remembrance, when Jews
all over the world say a prayer for the 6 million martyrs, our loved
ones, and the loved ones of millions, who perished at the murderous
hands of the Nazis and their collaborators. Today, the fact that I, a
survivor of that indescribable hell now known as the Holocaust, will
have my words become a part of the official record of this body is an
honor and privilege I never imagined.
I am here, on behalf of thousands of Holocaust survivors and family
members of Holocaust victims, to ask you to pass a companion to H.R.
1746, the Holocaust Insurance Accountability Act of 2007, without any
further delays.
First, I would like to tell you about my life in the United States,
and my activities over the years as an integral part of the local and
national Holocaust survivor community. I was liberated as I said on May
1, 1945, from hell, by the U.S. Army. I then spent 2 years in a
Displaced Persons Camp in Germany. In 1947, I was fortunate to come to
America, and I settled in Connecticut. I learned the trade to become a
furrier and was fortunate to be able to earn a living as a furrier and
raise a beautiful family in Fairfield, CT. I worked hard, was able to
retire in 1995, and in 1998 I moved to Boynton Beach. I have been very
active in several Florida survivor groups, as well as my synagogue and
other Jewish organizations in Palm Beach County. Over the years, I,
like many survivors who have been dedicated to Holocaust education,
having spoken to thousands of young people in public and private
schools about the tragedy our people endured in the Holocaust. I also
volunteer as a member of the Holocaust survivors' advisory committee of
the Jewish Family and Children's Services of Palm Beach County, which
serves the needy Holocaust survivors in our community. In addition, I
am a member of the executive committee of the Holocaust Survivors
Foundation USA, Inc., which represents thousands of Holocaust survivors
from all over the United States.
But I am here today to talk about the part of my family history
that isn't so happy, our brutal treatment at the hands of the Nazis and
their Hungarian puppets. I was born in 1928 in Vari, Czechoslovakia,
which was annexed by Hungary in 1938. We lived in a building where my
father's general store was also located. There was a sign that said the
building and premises were insured by ``Generali Moldavia.'' I am
certain that my father, who was a careful business man, had all kinds
of insurance, including life insurance, because he spoke about it
often. From these conversations, I even remember the name of the agent,
Mr. Joseph Schwartz.
Like all Jews in our town, we were forced out of our home in April
1944 with only the clothes on our back and one suitcase each, and taken
to the Beregsastz Ghetto. There the Nazis forced everyone to turn over
their jewelry, watches, wedding rings, and hand over everything of
value. I was given a pail to go around and collect all valuables. We
were then deported to Auschwitz, and that was the last time I saw my
parents. I survived Auschwitz and three other camps. Needless to say,
after the Holocaust, I had no way to find any papers such as insurance
policies. Our home and business was destroyed.
After ICHEIC was created, I applied because of the esteemed
individuals and publicity encouraging applications. They promised to
open company records and apply ``relaxed standards of proof.'' I filed
two claims, naming my father Ferencz Rubin and my mother Rosa
Rosenbaum-Rubin, and their birth years. I mentioned the sign on our
building for ``Generali Moldavia,'' and the fact that the agent Mr.
Schwartz was our agent, who also died in the Holocaust. This was all
the information I had, but under the circumstances it was certainly
enough to show we had insurance.
Four years later I received a letter from Generali stating that
they had no records from their subsidiaries and no records of any
policies in my family. This is absurd, because I know we had insurance.
Yet Generali did not produce one piece of paper to justify its
decision, and ICHEIC did not require the company to produce any proof.
They did not even ask the company to give records from Generali
Moldavia, a known subsidiary, and they did not require Generali to
produce information about Mr. Schwartz, the agent from our town. Don't
you think Generali, which even then was a global giant, would have kept
information about its insurance agents, and about its subsidiaries?
That's what big insurance companies do. But ICHEIC just took Generali's
word and my claim was denied.
Then, ICHEIC added insult to injury. They sent me a $1,000 check
and called it a ``humanitarian payment.'' Really they were calling me a
liar. They tried to give us $1,000 to keep quiet, instead of giving
what we demanded all along--the dignity of controlling our own rights,
and finding out the truth, and getting what my father was promised when
he trusted Generali with his family's security as his insurance
company.
Other Holocaust survivors, who I speak with every day, are also
beyond disappointed by the way ICHEIC treated us. We are outraged. If
you want to get an angry reaction from survivors or their children or
grandchildren, just mention ICHEIC. So many people I know had the same
humiliating experience. Not only are we disgusted with the way our
claims were handled, but we cannot believe ICHEIC took money and used
it for ridiculous programs such as summer camp programs and paying
college students to keep survivors company. Who made ICHEIC the king of
our families' legacies?
Let's face it, ICHEIC was controlled by the insurance companies.
Sure, there were Jewish organizations present but we never asked for
them or anyone else to represent us. We, the survivors, did not ask the
Claims Conference or Mr. Kent, or Mr. Eizenstat, or Mr. Eagleburger, to
handle our affairs. We can speak for ourselves, but ICHEIC denied us
even that obvious level of respect. We question the ``deals'' that
everyone talks about. But remember this--survivors did not agree to any
deals, and did not agree to any legal peace. The fact that some groups
took it upon themselves to pretend like they had that authority is not
acceptable to us and never was.
ICHEIC was also conducted in secret. Why? To protect the companies,
that's why. Once again, we survivors were denied access to the truth.
Stealing our money is bad enough, but concealing the truth from
Holocaust survivors is a terrible thing. The companies betrayed us and
up until now, the U.S. justice system has blocked our access to the
truth. I am here today to ask you to fix this by passing H.R. 1746,
because it will require the companies to open their records, and allow
survivors and heirs to go to court for the truth.
I know ICHEIC was flawed because I know we had insurance but it
wasn't acknowledged. But I am fighting for this bill to honor my
parents, because my father bought insurance to provide for us if
something happened. I owe this to my parents. I can't understand how
anyone can even think we should be willing to settle for less.
And there is another thing. What about the millions of insurance
policies that went up in flames at Auschwitz, Dachau, and thousands of
killing fields? I was one of the few who survived that hell. What about
the millions who died? What about their insurance? Why should the
insurance companies be the heirs of their Jewish customers? The
survivors and the second generation agree on this point as well--there
should be no legal peace for the companies until the Holocaust
survivors have moral peace. We are far from that today, Mr. Chairman.
This is why I was one of several Holocaust survivors who appealed
the recent ``class action settlement'' of the litigation against
Generali. In 2006, the ``class action lawyers'' who were supposed to be
representing us agreed to a settlement with Generali. Under the
settlement, Generali's obligations would have been limited to what was
done by ICHEIC. The benefits from the settlement are very small in my
opinion, but for those of us who tried ICHEIC and were denied, the
impact of the settlement is clear. We get nothing. We are finished.
ICHEIC decisions would be final.
Since I personally witnessed how ICHEIC did its business in secret,
and allowed companies like Generali to deny claims without any
supervision and oversight, and didn't do any independent investigation
and didn't require the company to produce records to us, I believed
this settlement would be a terrible disservice to survivors. Those of
us who were denied in ICHEIC would have no opportunity whatsoever to
benefit from the settlement. Therefore, I joined several of other
survivors and objected to the settlement. When the judge approved it
anyway, we appealed.
What else could we do? If the class action settlement is approved,
our rights against Generali will truly be lost forever. I know my
father had Generali insurance, but ICHEIC said no. ICHEIC said Generali
behaved properly but I know it isn't so. I believe our appeal is valid
because we know that ICHEIC did not serve the Holocaust survivors
properly and the settlement embracing ICHEIC can't be correct. But if
we lose the appeal, then Generali will be able to perpetrate the lie
that we did not have insurance with that company. I felt we needed to
do everything in our legal rights to protect our ability to get the
truth one way or another.
So if this Congress does not act quickly to pass H.R. 1746, I am
afraid that all the survivors' rights against Generali might be lost. I
am not a lawyer but one sure way to restore our ability to get the
truth from Generali or the other companies is to change the law
immediately. If the court of appeals decides the class action appeal
before Congress acts, I am afraid it will complicate matters. That
decision could come any day. Please move swiftly and make it clear that
the U.S. Congress does not endorse the denial of basic rights to
survivors.
I want to remind this committee that the legislation would not cost
companies anything unless we prove our family had insurance. In that
case, the companies would have to pay us and pay our lawyer, too. If we
lose, we get nothing and our lawyer would get nothing. This legislation
would restore our ability to make decisions for ourselves with the
advice of our own counsel. That is all we are asking for, Mr. Chairman.
Mr. Sid Zabludoff, an independent economist, has testified several
times in Congress. He said the amount of money owed by the companies is
at least $17 billion. That is $17 billion, with a ``b.'' That is a
conservative estimate of what the companies stole. Yet at the same time
tens of thousands of needy Holocaust survivors in these very United
States are suffering without the care they need. I see many of them in
Palm Beach County, and my HSF colleagues see this problem all over
America. The local Jewish Family and Children's Services, where I
volunteer, never has enough funds to meet the needs of the poor
survivors. They cannot afford their medical expenses, or their
medicines, eyeglasses, home care, nutrition, walkers, or dental care.
They cannot afford their rent or utility bills. There are 80,000
survivors in the U.S. in this condition. Where is the justice in this?
It is now 2008. The companies succeeded in stonewalling us for 50
years. Then, in 1998, there was ICHEIC. To most of us, that has meant
another 10 years of frustration and delay. Let's not get bogged down in
obsessing over ICHEIC's successes or failures. It is over. Please focus
on the companies' conduct, and on Holocaust survivors' rights to a full
accounting of the companies' behavior.
I attended the House Financial Services Committee meeting and I
wish every citizen in America could have seen it. Every person at that
committee, including Chairman Barney Frank, showed such passion and
respect for the rights of Holocaust survivors and showed that they
truly understand the meaning of justice. They all ridiculed the
arguments we are hearing today again from nonrepresentative groups
pretending to speak and act for Holocaust survivors. The Financial
Services members insisted on a full accounting for the companies. They
did not care about judging ICHEIC. They did not care about protecting
reputations. They all said, simply, that the survivors should have our
human rights restored by the Congress of the United States. Period.
That is also how the survivors feel, Mr. Chairman.
involvement in other restitution matters
As a Holocaust survivor, I have witnessed firsthand many of the
restitution proceedings over the past 10 years. This has not been a joy
for me, but it has been a solemn responsibility. From my standpoint,
and I know my views are shared by many survivors, most of what has
transpired has not been good. Only in rare instances have the survivors
been treated with dignity and respect.
Because of the Holocaust, all of us were financially injured by
several businesses and governments. The Nazi terror was so extensive
that I and most survivors I know were victimized by so many Nazi
collaborators and other profiteers that we have had a legal, economic,
and moral stake in several ``Holocaust restitution'' matters. This
includes German manufacturers using slave labor, Swiss banks profiting
from dormant accounts and fencing looted assets, and insurance
companies failing to pay their customers who entrusted them with their
savings. In my case, since my home was annexed by Hungary during the
war, I was one of about 60,000 Hungarian survivors now living whose
property might have been on the Hungarian Gold Train and illegally
taken by the United States Government after the end of the war.
``hungarian gold train'' case
The Gold Train case, Rosner v. United States of America, was filed
in the United States District Court for the Southern District of
Florida, in Miami. I was one of about 15 survivors who attended every
hearing in that case before the Honorable Patricia Seitz. We had the
chance to see and hear for ourselves the kinds of legal and factual
issues the judge was taking into account. This gave us a concrete
understanding about how our prospects were faring. Sometimes
developments were good, and sometimes they weren't so good. But we were
kept informed and had a great deal of input into the way the case was
handled by our lawyers.
After nearly 5 years of litigation, the Gold Train case was settled
with a cash payment of $25.5 million to be used over a 5-year period
for social services for Hungarian survivors in need, the creation of an
archive to collect and document the history of the Gold Train and
Hungarian Jewry, and the issuance of an apology by the U.S. Government.
Truthfully, we had all hoped for a larger financial recovery from the
United States Government after all those years. But having sat through
the case for almost 5 years, we understood that the judge was doing her
best to hear us as survivors and the children of prosperous families
who had no way to prove in the year 2004 what the U.S. Government did
with our property in the late 1940s.
Not that we didn't try. Our lawyers and the historians they hired
spent over a year and a half going through documents in the National
Archives, the Clinton Presidential Library, and archives in Israel and
Hungary to prove our connections to the property on the Gold Train. The
judge ordered the Government to open its records to our lawyers, and
they found several smoking guns that helped our case a lot. Our lawyers
took sworn depositions of the Army's historians and the Government's
experts and obtained damning information about the Government's case.
Our lawyers persuaded the court to require the Government to submit for
mediation with a prestigious mediator (current White House Counsel Fred
Fielding) who could get the parties to the table. And, we the survivors
and the clients were kept informed all the time.
Eventually, we decided to settle the case with $25.5 million in
cash, which would be distributed over a 5-year period to provide vital
social services to Hungarian survivors in need all over the world. This
wasn't an easy decision because each survivor believed he or she had a
right to direct compensation, but the difficulty of proof made it risky
to go to a trial. But those of us involved believed that to be able to
get funds to supplement the desperate shortfall in social services for
Hungarian survivors over a 5-year period, and to have a complete public
archive of the Gold Train events, and to receive an apology from the
strong but humble U.S. Government, was worth giving up our individual
rights.
It was important that every class member was given a clear,
complete notice about the settlement and an opportunity to opt out of
it if his or her own conscience dictated. Our lawyers insisted that
every survivor be told the truth about the settlement in advance of the
notice. Everyone was told that they might not receive any money
themselves. Yet, only 100 Holocaust survivors chose to opt out. I
firmly believe the overwhelming majority of survivors accepted the
settlement because they knew the process had been fair, they were told
what was going on along the way, and they had confidence in their own
lawyers to do what was right, with our input. In other words, the
survivors were treated as adults, with dignity and respect for our
rights and ability to choose for ourselves what kind or legal and moral
result was acceptable to settle the theft of our families' property and
legacies.
I had the chance to address Judge Seitz to speak in favor of the
settlement. Here is a part of the transcript from that hearing where I
and my fellow Hungarian survivors spoke in favor of the settlement in
September 2005:
I was here in March, Your Honor. As you remember, I gave a
very short bitter speech [about how] as a 15 year old I was
collecting all the valuables when I was in the ghetto. . . .
I know whatever the settlement will be given to us, it will
give me much satisfaction that we will be able to help the
needy Hungarian survivors. . . .
First, we survivors and our families had the opportunity to
seek justice against the United States Government in this court
of law under that government's very own laws. And to receive a
fair hearing in that process. I have watched Your Honor preside
over these hearings and although we didn't always agree with
you we know you have been just and fair and tried to apply the
law the best way you can.
Second, the survivors have had the opportunity to participate
directly in this litigation. We spoke frequently with the
lawyers as the case had its ups and downs. We sat in this
courtroom and witnessed justice at work. When it came time to
negotiate, we had real input and it was part of the settlement.
We spoke with the Department of Justice. We spoke with other
survivors. . . .
The settlement is one that the survivors feel they had a part
in creating. All of its elements are important--specifying the
dollars and the services, requiring strict reporting and
auditing, using a fair distribution formula, receiving an
apology. These were all important to us, and the fact that we
had the chance to shape the settlement ourselves along with
survivors from around the world was important, and unique.
Third, after reaching a settlement we had the chance to speak
directly to this court about what it meant to us. And we had
the chance to shake the hand of the Government's lawyers, and
thank the United States for rescuing civilization in World War
II, and providing many refugees such as ourselves with a home
and a chance for a new life. And finally to thank the
Government for finally being accountable for the Gold Train.
Thank you very much Judge Seitz in the name of all the
Hungarian Holocaust survivors for your fairness and honesty.
Transcript of September 26, 2005, Rosner Final Fairness Hearing, at 57-
58.
I was very proud to have been a part of the Gold Train case,
especially after Judge Seitz announced her decision approving the
settlement. She told the parties how proud she was to have presided
over a case in which the plaintiffs and defendants were so well
informed and able to make prudent judgments about the merits of the
litigation.
Here, because of the outstanding work of the lawyers, we have
been able to not only resolve the conflict, but to begin a
healing process and bring closure. So this is one in which--it
is the unusual case in which there is a compromise where I
think that the whole of the compromise is better than the sum
of the parts that any of us could have hoped for. I am just
very proud of everyone in this courtroom and I thank all to
have had the opportunity to meet all of you, to work with you,
and to be part of this historic moment. God bless you all and
God bless the United States.
Transcript of September 26, 2005, Rosner Final Fairness Hearing, at
147-48.
Mr. Chairman and members of this committee, please look at the
difference between what happened in the Gold Train case and what
happened with our insurance policies. In the Gold Train case, we the
survivors were represented by advocates of our own choosing. This never
happened in ICHEIC, because surrogates not of our choosing were the
ones at the table. We did not ask them to handle our insurance rights.
In the Gold Train case, our chosen representatives had the
opportunity, under court supervision, to inspect all of the defendant's
records. This never happened under ICHEIC. The companies kept all their
documents and only showed us what they wanted to. ICHEIC had no
authority to demand production of the kinds of files that would have
given claimants the ability to see if the companies were lying or not.
In the Gold Train case, we could observe the decisionmaker at
work--a United States Federal judge who operated in open court, ``in
the sunshine'' as we say in Florida. In ICHEIC, everything was secret
and all survivors ever received were impersonal letters with mechanical
denials; denials which came from a ``claims process'' we now know
ICHEIC did nothing to supervise. In fact we now know from Albert Lewis
that ICHEIC had an internal policy that without any documentation,
claimants had a ``heavy burden.'' This has been called a ``phantom
rule'' because it is opposite of the ``relaxed standard of proof'' that
was promised. You get the picture.
So my experience in the Gold Train case should be instructive to
this committee. What survivors want and deserve are fairness,
transparency, due process, respect, and the ability to make our own
decisions about our families' financial legacies. If that happens, even
outcomes that do not meet our most optimistic expectations will be
acceptable and accepted. It is simply disrespectful for the one group
of people who suffered the unique crime now known as the Holocaust
should have any less rights than any other consumer who is defrauded or
cheated by corporations who exploit one or more catastrophes to deny us
our rightful funds. This dignity and respect is precisely what ICHEIC
denied us, and what the U.S. courts up until now have denied us. Please
don't allow Congress to fall into that same column.
swiss bank looted assets class allocations
In the Swiss Bank class action, I was among several dozen survivors
and survivor groups from throughout the Untied States who objected to
the district court's allocation of the Looted Assets Class portion of
the settlement. So far that has been $205 million. Judge Korman ruled
that 75 percent of the Looted Assets class settlement funds should be
given to the Former Soviet Union, while only 4 percent of the Looted
Assets Funds were earmarked to help poor survivors in the United
States. He concluded the FSU survivors were ``poorer'' and stated that
the tens of thousands of admittedly indigent and elderly American
survivors should look to the wealthy Jewish community in the U.S. for
help.
We opposed this allocation because the U.S. represents 20 percent
of the world's survivor population and nearly 30 percent of the world's
death camp survivors. We appealed the court's decision because we
believed it was unfair and out of character with the basic notion of
fair play of the U.S justice system. The Holocaust Survivors Foundation
USA opposed the allocations because they stripped American survivors of
their legal rights, providing nothing in return except insult.
The U.S. survivors do not deny that there are needs in the FSU, but
we think it is wrong for an American judge to become a philanthropist
with survivors' money from a legal settlement. Remember, unlike what
happened in the Hungarian Gold Train case, the court and the lawyers
did not tell the Holocaust survivors in the Swiss Bank case how the
money would be distributed at the time of the settlement notice.
Everyone was in the dark but somehow we were supposed to decide what
was fair as a settlement with the Swiss banks without this basic
knowledge. This was outrageous and remains a very sore spot for
American survivors and our families.
The district court's allocation of the first $205 million in Looted
Assets funds was, unfortunately, affirmed by the appellate court.
Today, there is almost $400 million from the Swiss settlement that
has been sitting in the bank for over 8 years. It is waiting to be
distributed under a formula the judge is supposed to reconsider. But
how many survivors have died suffering without food, medicine, and home
care while the judge has been sitting on all this money? This has been
a great tragedy that survivors cannot forget.
We also cannot understand why the U.S. Congress has not
investigated this highly unusual set of judicial actions.
claims conference
Also, the Claims Conference is sitting on hundreds of millions of
dollars. Survivors do not believe there has been an adequate accounting
of the property obtained from Germany and the uses of those funds. We
deserve a full accounting, because survivors are suffering. I am sure
you have seen the news stories year in and year out, including a major
article in the Associated Press last week, about how survivors
everywhere are desperate for a more serious accounting by all these
institutions including the Claims Conference. The needy survivors do
not deserve to suffer again.
I hope you will require all institutions to make a complete audit
of where the survivors' money has gone, because we know it isn't coming
to those who were looted, or those in need.
Senator Nelson, you were one of the first public officials to
recognize the problems survivors were facing with long-term care and
other health care needs. You tried to help back in 1998 and 1999. Our
community was and is grateful for the concern you showed for our fellow
survivors in need. But the truth today is that not enough has been
done. Not by the corporations and governments who injured us and stole
from us, and not by the institutions who are supposed to be responsible
for helping us.
When I hear Mr. Kent and the Claims Conference and its affiliated
groups and clients echo the threats of the German Government to
withhold additional support for Holocaust survivors because of H.R.
1746, it makes me very angry. How dare these groups come here and try
to hold our rights hostage to such a threat from Germany. The German
Government. Should Holocaust survivors be punished for standing up for
our constitutional rights? God forbid. It is a shame, Mr. Kent, and
shame on the German Government, and shame on the groups who are
lobbying you behind the scenes pretending to have the interests of
survivors at heart. They have no brief to interfere with our rights.
I have a simple question for Mr. Kent, and the other Claims
Conference acolytes who are now opposing H.R. 1746. Putting aside the
gross violation of our constitutional rights, if the reason H.R. 1746
shouldn't pass is to preserve the Claims Conference's negotiating
status, what has the CC actually done worth preserving? If 40,000
survivors in the U.S. live in poverty, and another 40,000 are so poor
they cannot afford basic food, medicines, health care, home care, and
the like, what has the CC really accomplished? What about the thousands
of needy survivors in Israel, Europe, Canada, and South America.
We are supposed to give up our insurance rights, Mr. Kent, so you
and your colleagues (most of who belong to organizations that get money
from the Conference) can continue to beg for a few thousand dollars
here and a few thousand dollars there from Germany? Meanwhile, tens of
thousands of Holocaust survivors are suffering without enough food on
their tables, heat in the winters, or medical care or medicines for
their injuries? I am on the front lines, Mr. Chairman. I am the one out
there having to tell needy survivors at the Jewish Family and
Children's Services that there is not enough funds to pay for their
medicines or their wheelchairs or their dental work or for someone to
simply come clean the home of an elderly, frail survivor so they can
live in dignity.
common theme
There is a common theme in the restitution area. There has been
secrecy, and the deals have been made by people we did not appoint or
approve. We have been denied the truth, and that is outrageous. We
survivors, who are the most affected, were not allowed to participate
and the results are terrible. We need Congress to give meaning to the
words ``never again'' that we always hear. We need Congress to take
action to respect the rights of Holocaust survivors.
We are lucky in South Florida that nearly all of our
representatives--led by Ileana Ros-Lehtinen and Robert Wexler, and
joined by Ron Klein, Tim Mahoney, Debbie Wasserman-Schultz, Alcee
Hastings, Kendrick Meek, and Lincoln Diaz-Balart, have cosponsored H.R.
1746. They are willing to stand up to the powerful companies and the
German Government and the State Department and confront this scandal
head on. All of the money the companies stole should be paid to the
survivors or their legal heirs, or if there are no heirs, the money
should be used to help needy Holocaust survivors. But we need a lot
more support and we are counting on this committee to move this
legislation to passage in the Senate.
One of the things I heard in February in the Financial Services
Committee is the idea for an extended process where the companies are
once again trusted to pay claims without any judicial or governmental
oversight. Mr. Eizenstat even suggested that the State Department be
charged with reporting the results of this extended new ICHEIC-style
process. Now we are hearing about a similar plan involving the State of
New York Claims Processing Office. PLEASE DO NOT FALL FOR THIS TRAP.
Those who believed the companies would act honorably without the threat
of legal liability had their chance, and it was called ICHEIC, and it
is over. Let it stay over. Please, no more commissions, no more
monitors, no more toothless reporting standards that are never honored
and never enforced. No more weak substitutes for justice. We want our
rights back, and nothing more will do in the year 2008.
I have submitted a few news articles on these subjects, which I
hope you will allow for the record.
______
[From JTA, the Global News Service of Jewish People]
Survivors Still Seek Justice
(By Edwin Black)
New York (JTA).--Reaction to recent revelations of corporate
complicity, unrevealed insurance company involvement and the great
number of IBM punchcards among the papers in a secret archive in Bad
Arolsen, Germany, have reignited a grassroots campaign among Holocaust
survivors to recover Nazi-era insurance claims against companies such
as the Italian insurance giant Generali.
Following a series of revelations that began last year in Jewish
media, grassroots survivor and second-generation groups in Miami and
New York have mounted a fierce campaign in Congress to supersede
international agreements brokered by the State Department to settle
insurance claims through the International Commission on Holocaust Era
Insurance Claims (ICHEIC), as well as a variety of adverse Supreme
Court rulings that have denied survivors the right to sue to recover
policy claims or disgorge profits from the insurance companies.
The groups have used revelations about the unreleased Bad Arolsen
records as a rallying point to prove that their insurance claims have
been pushed into oblivion. Key congressional leaders agree and have
promised swift action.
Thus, two separate issues--the opening of the Bad Arolsen archives
and the quest to recover unpaid insurance claims--have been joined into
a single cause among survivor groups and key congressional leaders.
The latest round of efforts began last fall, when officials of
survivor groups unsuccessfully demanded that ICHEIC and other
authorities postpone the final disposition of claims pending further
research in the International Tracing Service files at Bad Arolsen. The
groups include such elected bodies as the Miami-based Holocaust
Survivors Foundation USA and the Queens, NY-based National Association
of Jewish Child Holocaust Survivors.
The International Tracing Service, or ITS, was established by the
Allies after the war to help families trace Holocaust and war victims.
The Allies forwarded millions of captured documents to the facility in
Bad Arolsen. The International Red Cross was given custody and control
of the archives, which provided information on individuals only to
survivors and their families. A typical family request could take years
to process.
In January, Holocaust survivors petitioned Federal Judge George
Daniels to reject a settlement with Generali because ICHEIC had failed
to publish the names of all Jews whom the company insured before World
War II. The petition, which included numerous quotations from the
Jewish media about Bad Arolsen's insurance documentation, decried the
alleged rush to judgment.
Judge Daniels temporarily delayed a decision, but ultimately
finalized the permanent settlement with a limited extension for claims
based on discoveries that might emerge from the Bad Arolsen archive.
Having lost in court--and convinced that established Jewish
organizations would not aid them--survivor groups lobbied Congress to
link the campaign to open Bad Arolsen to the separate campaign to
recover insurance claims and compel disclosure of the names of those
insured.
On March 28, U.S. Representative Ileana Ros-Lehtinen (R-FL)
introduced the Holocaust Insurance Accountability Act of 2007, to
enthusiastic support on both sides of the aisle.
The act seeks to supersede international agreements brokered by the
State Department to settle insurance claims through ICHEIC. The bill
concludes that ICHEIC, which is due to terminate operations soon, ``did
not make sufficient effort to investigate'' or compile the names of
Holocaust-era insureds or the claims due to survivors. The bill adds
that recent media disclosures about the contents of Bad Arolsen have
given new justification to such legislation.
In response, a representative for ICHEIC said the Commission had
accomplished its mission of identifying and settling unpaid Holocaust-
era life insurance claims by processing more than 90,000 claims and
distributing more than $306 million to more than 48,000 claimants. More
than half of the funds distributed via ICHEIC were the result of
ICHEIC's archival research and matching work, the representative said.
Still, Ros-Lehtinen's bill would require insurers to disclose
comprehensive lists of Jewish policyholders from the Nazi era. The
legislation also would enable Federal lawsuits to recovery money from
insurers, thus overruling ICHEIC's final word and a variety of Supreme
Court rulings that have denied survivors' rights to sue or gain access
to policyholder names.
The proposed law thus would trump both the executive and judicial
branches on Holocaust-era insurance.
The same day that Ros-Lehtinen's bill was introduced,
Representative Robert Wexler (D-FL), chairman of the House Foreign
Affairs Committee's Subcommittee on Europe, convened an extraordinary
hearing on Bad Arolsen. The purpose was to orchestrate congressional
pressure on the 11 governments--the United States, France, England,
Belgium, Greece, Luxembourg, Netherlands, Poland, Israel, Italy, and
Germany--that control the ITS to rush full access to its archives,
providing the insurance information that has been submerged for
decades.
Members of the Foreign Affairs Committee sat stony and grim-faced,
some holding back tears, as the hearing unfolded about the Bad Arolsen
archives and their impact on survivors' decades-long effort to recover
their insurance claims. Survivor David Schaecter of Miami, who admitted
he was ``emotionally overcome,'' spoke of impoverished survivors in
South Florida who cannot afford housing or medicine because their
insurance payouts were first denied by the insurance companies and then
by ICHEIC.
``I am begging this Congress,'' he implored, ``to please believe
us. We have been wrongly stripped of our pride and property.''
Leo Rechter of Queens pleaded, ``Open up Bad Arolsen to expose the
Holocaust profiteers.''
Representative Albio Sires (D-NJ) held back tears both in the
hearing room and in the corridor. Wexler promised to fast-track
legislation and action to open Bad Arolsen.
``We will take the next step and then the next step, and then the
next step,'' Wexler said.
______
For Holocaust Survivors, It's Law Versus Morality
(By Adam Liptak--March 14, 2004)
In 1998, after Swiss banks agreed to pay $1.25 billion for keeping
the property of victims of the Nazis and for laundering the profits of
Nazi slave labor, the question arose: How should the money be spent,
given that only part of that sum could be traced back to individuals
who had their money stolen?
On Tuesday, a Federal judge in Brooklyn ruled that the poverty of
Holocaust survivors in the former Soviet Union required the bulk of the
available money, saying that current need is more important than
perfect restitution. In essence, he said survivors who live in richer
countries should receive less than those in poorer ones.
But that answer leaves some people, including many Holocaust
survivors, angry and frustrated. ``The whole point of restitution is to
compensate people for their actual suffering at the time of the
crime,'' said Thane Rosenbaum, a law professor at Fordham University
and the son of Holocaust survivors.
History rather than charity should supply the guiding principles,
said Mr. Rosenbaum, the author of a forthcoming book, ``The Morality of
Justice,'' which argues that the legal system often fails to achieve
moral results. The Swiss bank settlement, he says in the book, is such
a case.
``From a moral perspective, it's the victims' money,'' Mr.
Rosenbaum said, adding that it is up to survivors to determine how the
money should be used.
Edward R. Korman, the chief judge of the Federal district court in
Brooklyn, acknowledged the difficulty of the problem. ``A comparison of
needy survivors is by definition an odious process,'' he wrote in the
decision issued last week. But morality required him, he said, to send
some 70 percent of what may amount to $400 million to survivors in the
former Soviet Union, and only 4 percent to survivors in the United
States.
Of the 900,000 or so Jewish survivors of Nazi persecution, 19
percent to 27 percent live in the former Soviet Union while 14 percent
to 19 percent live in the United States. Those in the former Soviet
Union, the judge wrote, live in desperate poverty. The poverty of some
American survivors is by contrast ``clearly less pressing,'' he said,
given the public assistance and private charity available to them.
But Samuel J. Dubbin, a lawyer for the Holocaust Survivors
Foundation-USA, which says it represents more than 50 organizations and
20,000 American survivors, objected to the judge's reasoning.
``You can't say that a survivor in need here is less worthy than a
survivor in need in the former Soviet Union,'' he said. ``The reason
you can't say that is that this is survivor money. Maybe you could say
that if this was community money, if this were charity.''
Instead, the foundation asked Judge Korman to base future
distributions on pro rata allocations to the nations where large
numbers of survivors live and only then require distribution within
those nations to the neediest survivors.
``There's not enough money to hand out to all the survivors,
unfortunately,'' said Leo Rechter, a 76-year-old retired banker who was
born in Vienna and spent the war in hiding. ``The next best solution is
that all the needy people be taken care of. The percentage of
survivors' money in each country should be allocated to that country,''
said Mr. Rechter, whose father died at Auschwitz, ``and from that money
the needy people there should be taken care of.''
Judge Korman rejected that and other alternatives. He wrote that
trying to adjudicate claims individually would be unwieldy, expensive,
and in many cases impossible. A simple pro rata distribution, on the
other hand, would yield ``literally pennies to each of the millions of
individuals'' victimized by the Nazis, including all survivors and
their heirs. He called the hybrid solution proposed by Mr. Dubbin and
the survivors' foundation frivolous and inconsistent with law and
morality.
Should other lawsuits for historical wrongs succeed, the problem in
the Swiss Bank case is likely to recur. Burt Neuborne, who represents
the plaintiffs in the settlement, has written that some claims should
by their nature give rise to indirect compensation in the form of
social programs.
For instance, he said, if lawsuits seeking damages for American
slavery ever produce damages, the proper response may be affirmative
action or providing money to assist for poor blacks.
And Stuart E. Eizenstat, deputy treasury secretary from 1999 to
2001 and the author of ``Imperfect Justice: Looted Assets, Slave Labor
and the Unfinished Business of World War II,'' an account of the
negotiations leading to the settlement, said such suits have an
important moral and political aspect that may call for ignoring some
usual legal remedies.
``A purely legal response,'' he said, ``does not work.''
In this case, all agree that the dispute needs a speedy resolution.
The average survivor is 77 years old if living in Israel and 84 if
living elsewhere. Their numbers, according to a report issued in 2000
by the court-appointed special master in the case, Judah Gribetz, are
projected to fall by 6 to 8 percent each year through the end of the
decade and faster afterward.
______
Settlement Approved in Holocaust Victims' Suit Against Italian Insurer
(By Joseph B. Treaster--Feburary 28, 2007)
A Federal judge approved a settlement of a class action suit
yesterday against an Italian insurance company, ending a long-running
dispute over payments on life insurance policies taken out by Holocaust
victims.
The settlement provides less money than Holocaust survivors and
relatives had hoped to receive from the company, Assicurazioni
Generali, and it significantly raised the chances that the insurer
would be able to avoid public scrutiny of its records from the Nazi
era.
But Judge George B. Daniels of Federal District Court in Manhattan
said he was convinced that the deal was the best the survivors and
their relatives could get.
``The settlement is not perfect,'' he told a room of lawyers and a
handful of survivors and relatives. But he said that for most families
who had bought coverage from Generali, it ``may be their only real
opportunity for any monetary recovery.''
Lawyers representing the survivors had reached an agreement with
Generali last summer after another Federal judge dismissed their claims
and they decided the odds of winning an appeal were low.
Judge Daniels had interrupted an initial hearing on the fairness of
the settlement on January 31 after Samuel J. Dubbin, a Miami lawyer
opposing the settlement, appealed for more time to give survivors and
relatives a chance to look for evidence to support their insurance
claims in long-sealed Holocaust-era archives in Bad Arolsen, Germany.
The United States and 10 other countries that control the archives
have agreed to open them and are meeting in the Netherlands on March 7
and 8 to discuss speeding up the process.
At Judge Daniels's urging, Generali and lawyers for survivors and
relatives amended their agreement to extend the deadline for filing
claims to take account of evidence found at Bad Arolsen until August
31, 2008. The judge said yesterday that the extension eliminated his
major concern. The deadline for all other claims remains March 31.
Before the settlement Generali had paid about $100 million in
claims on Holocaust-era policies, mainly through a commission in
Washington. It agreed to pay $35 million more as a result of the
settlement. The company said the $135 million covered 5,500 claims.
Generali said it had received 3,300 more claims as the settlement
has been pending, and Robert A. Swift, a Philadelphia lawyer for the
Holocaust survivors, estimated that the company would pay another $10
million on those and other claims made before the deadlines. Generali
will pay about $4 million in legal fees.
Mr. Dubbin has contended that Generali sold policies worth billions
on which it has never paid claims. But Generali and the lawyers in the
class action suit take issue with Mr. Dubbin's estimates.
Mr. Dubbin also argued that Generali had failed to adequately
publicize the settlement. He and other advocates for the survivors said
that because Generali has refused to publish a full list of its
policyholders, tens of thousands of Holocaust survivors and relatives
have been unaware that they had reason to file a claim--with the
approval of the settlement they would be foreclosed from ever doing so.
Generali has published the names of many policyholders, but
contends that survivors and relatives have other ways of knowing
whether they are eligible to file claims.
Mr. Swift, who helped draw up the agreement, used almost the same
words as Judge Daniels in characterizing the settlement.
In a statement distributed before the hearing, Generali said it
viewed the settlement ``as an important step in its longstanding
commitment to bring fair closure to the Holocaust-era claims process.''
In the late 1990s, American lawyers filed lawsuits against more
than 20 European insurance companies, accusing them of refusing to pay
claims on billions of dollars in policies they had sold to people who
became victims of the Holocaust.
The other lawsuits were either dropped or resolved. The settlement
ends the biggest case against Generali. But a handful of lawyers,
including Mr. Dubbin, are continuing to appeal the earlier dismissal of
a group of lawsuits against the insurers. In dismissing the case, Judge
Michael B. Mukasey cited a Supreme Court ruling that dealing with
Holocaust claims in United States courts could interfere with the
President's ability to resolve international disputes.
In an interview, an aide to Representative Ileana Ros-Lehtinen, a
Republican of Miami, said the lawmaker was planning to introduce
legislation that would require Generali and other insurers to publish
lists of policyholders--a longstanding request of survivors and
relatives--and would attempt to provide jurisdiction for European
insurance cases in American courts.
Generali says its policy is to pay valid claims and has denied
accounts by Holocaust survivors that its representatives demanded
copies of policies from people who had lost everything and death
certificates for policyholders who died in camps.
In the settlement, the company acknowledges no wrongdoing.
``This is a sad day for Holocaust memory and historical justice,''
said Thane Rosenbaum, a son of Holocaust survivors and a professor at
the Fordham University law school. ``The only entity that really
benefited from this is Generali. They avoided having to pay tens of
thousands of claims and they avoided opening up their archives and
historical records to reveal what happened, how and why.''
Senator Bill Nelson. Mr. Rubin, we need to ask you some
questions.
Mr. Rubin. Yes, please.
Senator Bill Nelson. OK. I'm going--as a courtesy to my
colleagues, I'm going to defer my questions until the end. So I
would ask Senator Coleman.
Senator Coleman. Thank you. Thank you, Mr. Chairman.
Obviously this is an issue of great emotional impact and
individuals who have suffered and whose families have suffered
greatly. Let's see if we can sort some things out.
Mr. Kent, in your written testimony you talk, and in your
verbal you kind of reference this, you talked about the damage
H.R. 1746 would have with ongoing negotiations with the German
and other governments. Could you give me, on what basis do you
make that assertion? Have any governments expressly stated that
ongoing restitution and compensation efforts would be
jeopardized if H.R. 1746 became law?
Mr. Kent. Yes, Senator. I can reply to you that, as I said,
I've been negotiating with the governments, particularly German
and others, for many years. And they have expressed to me in
the last few months very clearly--and I emphasize this word,
``very clearly''--what is the sense for us to negotiate with
you when afterward we will have to the court and start all over
again; it would be better for us not to negotiate and let's go
to the court; it will take years, 5, 10 years. We'll see. But
we might as well stop.
Why I am in this is simply because I have seen the need of
the survivors. Jack is right, there is tremendous poverty among
survivors, and nobody gives them the help except the so-called
Claims Conference basically, and the money is through the
negotiations. So if we stop the negotiation, we will not
provide the need of survivors.
Senator Coleman. You raise the issue of going through the
courts. I'd like to turn perhaps to Mr. Rubin on this, just to
make the statement that--I believe in your testimony you talked
about exaggerated expectations or survivors being disappointed,
say false hope. The ICHEIC process was one which had rules of
evidence and admission that were different from a court. I
would turn to Mr. Rubin. Would there be concern that if these
matters were in Federal court the reality is that it may take a
very long time for them to be resolved? The standards for the
admission of evidence are such that it would be very, very
difficult in cases perhaps such as your own.
Do you have any concern that H.R. 1746 would raise false
hopes and would make worse the very serious concern that you've
laid on the table?
Mr. Rubin. Not necessarily. At least we have a right to go
to court, even if it takes 2 years, 3 years, or 5 years. If not
us, our children or our grandchildren will be able to follow it
up. They shouldn't get away with it. They stole so much of it
that there's not enough money in this world they could repay
what they did to us. But let's not stop now. If we cannot do
it, our children will do it. I'll make sure of that. I have
three beautiful children and four grandchildren. They've been
taught what happened to us. They should follow it up if I'm not
around.
Senator Coleman. There's probably not a lot of time and
there are so many questions here. One of the concerns about
ICHEIC--I turn to Mr. Kent on this one--has been questions
about claims valuations. Did you have any concerns--you were a
commissioner and so you played a role in some of that. Did you
have any concerns and objections in terms of the calculation of
claims valuation?
Mr. Kent. May I just take one moment to reply to Mr. Rubin
that, yes, every survivor should have the right to go to the
court, but, like you justly said, Senator Coleman, it will take
ages. We will not live to it. But in the meantime, the needy
survivors that need the help now will get no help. This is why
my heart, my soul, is in this, what I am doing for survivors
for now, because they need it. They went through hell and they
deserve better.
Now, to reply to you, yes, Senator, there was a lot of
discussion about the valuation and, practically speaking, there
is not the right way or the wrong way about the valuation. It
depends what avenue you will take. Therefore, ICHEIC finally
accepted certain valuations.
I might tell you only that I have accepted the valuation as
such to be more proper. Were we 100 percent right? No; because
there are very different ways to valuate it. But I can only
tell you one thing, that when I heard the reports by various
people that only 3 percent was given, this is like saying that
the insurance commissioners, the insurance company, nobody knew
anything. And I can assure you that the insurance commissioners
of the United States, of the United States, are not so foolish
as to accept valuations that would give only 3 percent value as
a payoff. They are not so foolish. They are bright, they are
people with integrity. They would not accept it. This is just
as a P.S.
Senator Coleman. I know my time is almost up, Mr. Chairman.
To both witnesses, I appreciate the passion that you bring and
the commitment for justice to be done on this issue.
For you, Mr. Kent, I would like to submit for the record,
there are some questions about recommendations you've made
regarding post-ICHEIC processing.
Senator Bill Nelson. Take the time.
Senator Coleman. We have a little time here. Just so I can
kind of step forward: One, how would you characterize--I'm
concerned about Central and Eastern Europe folks who were not
involved, who didn't have an opportunity even to go through
ICHEIC. What should Congress do to bring about agreements with
the Eastern European countries to ensure survivors there have
some remedy?
Mr. Kent. This is a difficult question, but I would say
that I would definitely be willing, our organization, to work
with you to submit a more detailed proposal. And I would break
it, talking from the top of my head, into two categories. There
are some Eastern European countries that are right now members
of the European Union. Therefore, the members of the European
Union, I would be much more stringent that they should apply
proper restitution law because, after all, this is what the
western civilization is.
So I would have like a two-tier approach to the Eastern
European countries, the ones that are in the European Union and
the ones that are not. And we will gladly, by your request,
write to help you to be more specific in what and how to do it.
[The information referred to above was not available when
this document was sent to press.]
Senator Coleman. I look forward to that followup
conversation.
Mr. Rubin. May I just ask Mr. Kent one question, please?
Senator Bill Nelson. Did you have a question?
Senator Coleman. I've finished my questions.
Mr. Rubin. May I ask a question? Mr. Kent, which
organizations do you represent?
Mr. Kent. I represent American Gathering----
Mr. Rubin. No; you do not, Mr. Kent. The board voted
against it, that you no longer are the chairman of the
Gathering. So please, don't misrepresent to this body.
Senator Bill Nelson. The witnesses will direct their
questions through the chair. That is the protocol and that is
the Senate Rules.
Mr. Rubin. I'm sorry.
Mr. Kent. I beg your pardon.
Senator Bill Nelson. All right. Senator Cardin.
Senator Cardin. Thank you, Mr. Chairman.
I want to thank both the witnesses for being here. I know
this is a very difficult subject. You put a face on the issues.
Each one of the victims of the Holocaust has a story. Some have
no survivors to tell those stories. Some will never have
records ever available to present the unjustified denial of
their rightful claims. So this is a very difficult matter.
Mr. Kent, I thank you for your leadership in stepping
forward and trying to help find a solution.
Mr. Rubin, I thank you for being here to let us see
firsthand a face of the victims of the Holocaust. It's been a
long time, and I am worried that people in this country may
start to not recognize the atrocities that were done during
World War II and that many victims have yet to be satisfied. So
I thank you for that.
But I think we have a real problem here with the insurance
issues. I look at the process that was set up as a recognition
by many countries that a wrong was done and as an effort to
develop a workable way to remedy that. The process comes from
the point of view of an acknowledgment and a meaningful
contribution to the victims in addition to Holocaust education
and remembrance. I think that's what was set out to accomplish,
because there was no way that we could now reconstruct a clear
picture of the claims that were out there. The information that
was made available at best would be partial, could never be
complete. So it's a very difficult undertaking.
I might just by way of example: When I first came to
Congress, which was 21 years ago, I met with the Japanese-
American community affected by the internment camps during
World War II. They were wronged by their government and felt
that there should be a way that they are compensated for what
was taken away from them, their personal freedom and their
opportunity for advancement during a period of time where they
were confined to a camp.
At that time we looked at how to determine the individual
values. Now, I know in insurance claims if you have records you
may be able to establish the specific dollar amount, but that's
not going to be the typical circumstance here. A collective
remedy was developed in working with the community and
Congress. To me the major part of that was an acknowledgment,
an acknowledgment that a wrong had been done. Second, it was a
meaningful contribution to try to remedy that. It wasn't
perfect. It certainly didn't represent the damage that was
done. None of us would have substituted our place with someone
who was interned during World War II for the compensation they
received.
I'm not sure there is the right answer here, but I think
judgments were made on moving forward with this process, and
really good people worked on it who were very sensitive to the
pain, Mr. Rubin, that you and the victims sustained, to try to
find a just solution.
I want to follow on what Senator Coleman said. I have real
concern as to taking action against governments that have not
acknowledged this problem. We still have many countries in
Eastern Europe that have not taken the appropriate steps to
deal with not only insurance, but property restitution, and
community property restitution. They have the means to do it
and they have resisted coming to grips with that part of their
history. They use various excuses for not doing it. I think
that's where our focus needs to be, to deal with those
countries.
Again, there's one part that I'm going to asking the next
panel specific questions about and that is how much cooperation
we got in opening up the records. I agree with the comments
that have been made on transparency. I hope that we have as
much information that's available as possible in order to have
the best historical record of how people were victimized by the
insurance industry during World War II. Additionally to
recognize their failure to step forward and accept
responsibility until they were sort of required to do so by the
actions of people in our country and the international
community.
Thank you, Mr. Chairman.
Senator Bill Nelson. Thank you, Senator Cardin. You are a
cosponsor along with Senator Gordon Smith and Senator Coleman
of a resolution that I'm introducing about those countries that
have never stepped up to acknowledge their responsibility.
Senator Menendez.
STATEMENT OF HON. ROBERT MENENDEZ,
U.S. SENATOR FROM NEW JERSEY
Senator Menendez. Thank you, Mr. Chairman.
I want to echo a lot of what my colleague Senator Cardin
said. I appreciate the passion that you both bring to the issue
and the sense of purpose.
I am here today because I have actually heard from
constituents on both sides of this point of view in New Jersey.
So I don't come to the issue with a preconceived idea of what
is right or wrong. I wanted to listen and learn. So I
appreciate hearing from both of you.
I do have a question or two in pursuit of being further
educated in this respect. Mr. Kent, let me ask you, what do you
see as the principal reasons for European insurance companies
not releasing the list of policyholders from the prewar period?
Mr. Kent. This is a complicated issue, but to try to put it
in perspective let me say to you that every country--that
includes our country--we have a privacy law. So when we are
talking about records of maybe 8 million insurance policies
that were written between 1933 to 1945, they would have to open
privacy law. Every country--Germany, Italy, Switzerland,
France--each one have privacy laws. And we have encountered it
in our negotiations. It was almost an impossible thing to
conquer.
Finally, what we have also arranged, No. 1, that we have
to--the bottom line to it was that we have eventually released
over 520,000 names that we have acquired from the so-called
list. One of the reasons we were able to go around some of the
privacy law was that we have worked through--it cost a lot of
money, but we worked through Yad Vashem and we have a sounding
process, that we were able to take the list of the total
companies and sound which were kind of a Jewish sounding name.
This is one of the reasons we got around the privacy law. This
is why it is so complicated.
If I have the way of saying right now, we were talking here
a lot of times about justice. I heard the word ``justice''
mentioned so many times. Justice cannot be given to me or to
Jack, because justice would be to get our parents, our cousins,
our mothers back. There is no way to it.
So what we are trying to do is to create what was so
appropriately named in the book that Ambassador Eizenstat
wrote, ``Imperfect Justice.'' We're trying to create out of
this chaos, out of the Holocaust, out of this madness,
something that we can help some people that are still alive.
Senator Menendez. I appreciate that. Since my time is eaten
up, I'll take a moment to interrupt you.
I understand the privacy thing, but I also could view the
alleged bar of privacy for the purposes of limiting liability
and damages. So there's a flip side to that that makes me
concerned.
Let me ask you this: In your testimony, which I read, you
talk about your concern that pursuing legislation would
undermine previous commitments and also the possibility that
Germany and other governments would continue and expand upon
the funds that have so far been brought to date. How real are
those negotiations in terms of what meaningful possibilities do
they present?
Second, you also talk about that in fact some of the
insurance companies that have participated in this process say
they will continue to honor claims by Holocaust victims and
their heirs using the relaxed standards of proof recognized by
ICHEIC. What mechanisms are there to guarantee that process?
Mr. Kent. This, Senator, is one of the issues which I
mentioned previously, right now previously in my testimony,
that it would be important for both of us, for all of us, to
work together to see that we can somehow create certain means
which are maybe not yet right now in effect to make sure that
the continuing process of processing the claims continues.
Senator Menendez. So that's an aspiration; that's not
something that's under way?
Mr. Kent. No; but in the mean time we have from them not
only verbal, but also written assurances that they are going to
process these particular claims as long as they get the claims.
Now, we also discussed this with the New York--with the New
York insurance commissioners. They are going to provide some of
the claims and they promise that they will do it.
I welcome, as far as I am concerned, any other suggestions
that we can put together that the Congress can also be, and
call it, and supervise the processing of the claims.
Senator Menendez. Mr. Chairman, with your indulgence. And
the question about how real are these negotiations with Germany
and other countries for expanding upon their commitment to
date?
Mr. Kent. Are you talking right now about----
Senator Menendez. In your testimony you talked about
Germany. In your testimony on page 3, you talk about the
ongoing negotiations with Germany and other governments for the
continuation and expansion of hundreds of millions of dollars
in crucial funding.
Mr. Kent. This is very real. It's not only real; this is
one of the main reasons why I am so much against this
particular bill, because this bill will not solve the problem
for now, for the needy survivors. The real negotiation with the
Germans contains many things. For example, millions of dollars
for home care. Where do we get money for home care? This is the
real negotiation with the Germans. We got a few years ago $10,
$12 million. We got $15 million right now. We're talking about
$45 to $80 million for home care. This is pending.
If you ask me my opinion right now, unfortunately I would
say it might be stopped, because I have received verbal
statements from ambassadors from Germany that, what's the sense
of negotiating if we have to go to the court later on? Let us
wait and go to the court. So we'll take a year, 5 years. Then
yes, we will wait until it gets through the court.
We have pending Social Security for thousands of survivors,
because the Social Security in Germany is so cockeyed that some
people got it, some people didn't get it. For example, in one
family one person of the family was in the same camp, got it,
the other one didn't get it. We are trying to straighten it
out.
So we have many. We have article 2 fund, where people are
getting thousands of dollars, hundreds of thousands of dollars
when you take totality. We have a lot of negotiations, and
we're getting it every year. So this is real, it is very real.
Senator Menendez. Thank you, Mr. Chairman.
Senator Bill Nelson. We want to thank the two of you. Both
of you are Holocaust survivors. And we particularly wanted the
two of you to be the first panel, to hear from the people who
are affected the most. You've done, both of you, a very
admirable job. Thank you for lending your passion and your
expertise to the deliberation of this issue. Thank you very
much.
Now I would like to call up the second panel.
If you could take your seats, we're ready to go.
As the witnesses are taking their seats, you'll notice that
we have tried to balance out this issue so that we can hear
both sides. Secretary Eagleburger and Ambassador Eizenstat will
present one side. Mr. Rosenbaum and Mr. Dubbin will present
another side. And then we want to hear from Ms. Rubin, who is
here for the State of New York claims processing office. So we
will go in the order in which the agenda has been printed.
I remind you again, 5 minutes, and the clerk of the
committee will stand at the end of 5 minutes and if you could
wrap up at that point.
Secretary Eagleburger.
STATEMENT OF HON. LAWRENCE EAGLEBURGER, FORMER SECRETARY OF
STATE AND FORMER CHAIRMAN, INTERNATIONAL COMMISSION ON
HOLOCAUST ERA INSURANCE CLAIMS (ICHEIC), CHARLOTTESVILLE, VA
Mr. Eagleburger. Thank you, Mr. Chairman. Thank you for the
opportunity to appear before you today. I appreciate the
committee's efforts to examine the issues underlying the
Holocaust-era insurance claims, including the work of ICHEIC,
and I certainly remember our earlier cooperation, sir, when you
were still operating in the vineyards instead of up here at the
higher level.
ICHEIC's mission was to identify and compensate previously
unpaid Holocaust-era insurance policies. Everyone working for
ICHEIC was committed to achieving our mission and there was
passion in their work. We were successful in our work,
resolving more than 90,000 claims and ensuring that over $306
million was offered to Holocaust survivors and heirs for
previously unpaid policies.
Of this amount, more than half went to individuals unable
to provide policy documentation or identify the company that
may have issued the policy. The commission also distributed
nearly $200 million more for humanitarian and social welfare
purposes, largely to honor the heirless claims.
Justice was done. Justice has been done.
The commission included many U.S. insurance regulators,
representatives from Jewish organizations, insurers, and the
State of Israel. Credit also goes to the NAIC for their efforts
to resolve the complex issues of unpaid Holocaust-era insurance
claims.
We only came to appreciate the challenge as we worked
through the undertaking. We were creating a process to address
claims that were over 70 years old, from more than 30
countries, in more than 20 languages, involving currencies with
no relevant value and with little documentation.
To start, we researched the prewar and wartime insurance
market and then invested heavily in extensive global outreach,
utilizing all means available and emphasizing that anyone,
regardless of the documentation they possessed, should file a
claim. We established an agreement on relaxed standards of
proof and created valuation standards that could be calculated
without the usual policy documentation.
We also developed an extensive research database and a
matching system. We instituted a separate but related
humanitarian claims payment process for unnamed, unmatched
claims and for claims on Eastern European companies that had
been liquidated, nationalized, or for which there were no known
present day successors.
One of the commission's first priorities was to gain a
clear understanding of the overall volume and estimated value
of potential claims. The Pomeroy-Ferras Task Force, utilizing
outside experts, helped establish the size and the scope of the
insurance market to determine appropriate settlement amounts.
ICHEIC's archival research was similarly critical to build
the information provided by claimants, constructing an ICHEIC
research database that ultimately could be matched with
companies' information. As a byproduct of this research, ICHEIC
published the names of over 519,000 potential Holocaust-era
policyholders on the Web site. While historically important,
finding a name on a list published by the commission was
neither necessary to file a claim nor proof that a previously
unpaid claim existed.
We recognized also that our credibility depended on
adequate oversight. ICHEIC established four key controls:
First, two-stage independent third party audits; second, an
executive monitoring group that could conduct real-time
evaluations of companies; third, an in-house verification
process to cross-check every decision on every claim that named
a company; and fourth, an independent appeals process.
The successful settlement of ICHEIC claims, coupled with
restitution efforts during the immediate postwar period and the
ongoing work of existing entities to resolve the remaining
unpaid insurance policies within their respective
jurisdictions, addresses a preponderance of the prewar
insurance market. Assertions that billions remain unpaid do not
bear scrutiny.
Moreover, for any claims that may remain outstanding, every
company that was a member of the commission, as well as the
German Insurance Association and the Shoah Foundation, reaffirm
their commitment to continue to review and process claims sent
to them.
[The prepared statement of Mr. Eagleburger follows:]
Prepared Statement of Hon. Lawrence S. Eagleburger and Diane Koken,
Former Chairman and Vice Chairman, International Commission on
Holocaust Era Insurance Claims (ICHEIC), Charlottesville, VA
Chairman Nelson, Senator Vitter, members of the subcommittee, we
appreciate the opportunity to appear before you today, and thank you
for the work you have done in seeking to examine to the fullest extent
possible the issues underlying Holocaust-era insurance claims in the
context of considering legislation on this subject. We also want to
thank you, Chairman Nelson, for your significant contributions to the
work of International Commission on Holocaust Era Insurance Claims
(ICHEIC) as a founding member of the Commission during your term as
Florida's State Treasurer, Insurance Commissioner and Fire Marshal.
The International Commission on Holocaust Era Insurance Claims
(ICHEIC) resolved more than 90,000 claims for Holocaust survivors and
their heirs. This testimony will provide an understanding of why and
how the Commission approached its mission--to identify and compensate
previously unpaid Holocaust-era insurance policies--and how the
organization was structured around that mission.
Chairman Nelson, you are uniquely situated to appreciate the
Commission's challenges and approach. In your role as Florida's
insurance commissioner, you were central to driving the Commission's
creation, and organization, and to ensuring both the mission--to
identify and compensate previously unpaid Holocaust-era insurance
policies--and also building the concept of humanitarian funds, to be
able to provide at least in part some form of ``coverage'' for the many
Holocaust victims who did not survive, or had heirs survive to make
claims.
I was selected to chair ICHEIC in the Commission's early days, and
remained committed to achieving our mission throughout what was a long
and difficult process. As you know, Diane Koken was a member of the
Commission throughout her tenure as Pennsylvania Insurance
Commissioner, from 1997-2007, and remained as vice chair until ICHEIC
closed. We believe ICHEIC was largely successful in accomplishing its
mission. We were joined in this effort by many State insurance
regulators from all parts of the country, major Jewish groups and
survivors' organizations, the State of Israel, as well as European
insurance companies and associations. We commend all these participants
who worked to create a process to identify and ultimately settle valid
and previously uncompensated Holocaust-era insurance claims at no cost
to claimants.
why success--what achieved
The Commission concluded its work with over $306 million paid to
more than 48,000 Holocaust victims or their heirs for previously unpaid
insurance policies. Of this amount, more than half went to individuals
with so little information about their potential claim that they were
unable to identify even the company that may have issued the policy.
The resolution of these undocumented claims 60 years after the
devastation of the Holocaust and the Second World War clearly
illustrates the success of ICHEIC's research efforts. Moreover, the
successful settlement of these claims through the ICHEIC process, along
with restitution efforts during the immediate postwar period and the
present ongoing work of ICHEIC-related entities \1\ to resolve
remaining unpaid life insurance policies within their respective
jurisdictions, addresses a preponderance of the prewar insurance
market.
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\1\ Examples include the Claims Resolution Tribunal (CRT), which
was created as a result of the Swiss banks class action settlement and
the General Settlement Fund (GSF), a result of agreement between the
United States and Austrian Governments.
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In addition to the over $306 million payments made by ICHEIC
companies or related entities, ICHEIC distributed nearly $200 million
more for humanitarian purposes. At ICHEIC's concluding meeting, every
company that was a member of the Commission as well as the 70-odd
companies of the German Insurance Association through its partnership
agreement with ICHEIC reaffirmed their commitment to continue to review
and process claims sent directly to them. Since that time, four of the
five ICHEIC companies--AXA (which also now controls Winterthur),
Generali, and Zurich--wrote to Diane Koken directly, in the context of
her testimony before the House Financial Services Committee in
February, to reaffirm the commitments they made at the ICHEIC meetings.
The German Insurance Association and the Dutch Insurance Association
respectively sent letters to Chairman Frank of the House Financial
Services Committee, commenting on the legislation, in which they
referenced their ongoing commitments to process claims.
Our primary concern throughout our service to ICHEIC has been
assisting Holocaust survivors, and the families of those who perished,
seeking to recover the proceeds of unpaid prewar insurance policies.
We appreciate the care we must take with the expectations of
survivors and their heirs; we know that the path to closure is a
difficult one. In the late 1990s, the question of Holocaust-era asset
restitution reemerged and numerous class action lawsuits were filed, At
that time, U.S. insurance regulators sought the most effective means to
address issues raised by survivors and families seeking the proceeds of
unpaid prewar life insurance policies of those who had been persecuted
during the war. They recognized that given the understandable challenge
of documentation, the length of time that had passed, and the effort
and costs involved, the path of litigation presented significant
difficulties for this highly sensitive and emotionally charged issue.
For these reasons we explored routes other than litigation to
resolve these unpaid claims. By conducting interviews, researching the
historical background, and organizing informational hearings across the
country, the NAIC sought to better understand the issues raised by
individuals like Roman Kent and other survivors. Working through State
insurance regulators, the NAIC then identified the companies most
likely affected and worked with these companies to arrive at a means of
resolving the issues presented.
We worked to gain an understanding of the defining characteristics
of prewar life insurance markets in Europe, and the geographic
limitations and procedural shortfalls of prior compensation programs.
With this work in mind, ICHEIC was created in August 1998. With ICHEIC,
we established processes to identify claimants, locate unpaid insurance
policies, and assist Holocaust survivors and their families, and the
families of those who did not survive, in resolving claims. Survivors
and the heirs of any Holocaust victims who may have held policies, most
of whom could provide no documentation beyond anecdotal information,
were able to submit claims to insurers and related entities, at no
cost.
As part of the ICHEIC process, we examined insurance company files,
built a database constructed from research in archives across Europe,
worked to make sure potential claimants worldwide knew how to file
claims, developed a Web site to provide easy access to information
about our efforts, established a system to process the more than 90,000
claims submitted, and established an independent appeals system
presided over by jurists who, over the life of the process, reviewed
hundreds of appeals that provided every claim that named a company the
opportunity for review. The relatively small percentage of reversals on
original decisions underscored the strength of the initial system of
checks and balances we had constructed, which included internal ICHEIC
staff verification of every company decision, and outside independent
audits of companies' records and decisionmaking practices to make sure
they complied with ICHEIC rules and guidelines.
As we offer more detail on each of these steps, we will describe
how the Commission was structured and why, and the nature and scope of
the companies and entities with which the Commission had agreements. It
is important to have an understanding of this groundwork to appreciate
(1) how much of the Holocaust-era insurance market ICHEIC claims and/or
ICHEIC-related agreements covered--and thus why the over $306 million
plus in claims payments plus the nearly $200 million in humanitarian
fund commitments, essentially on behalf of would-be heirless claimants,
was a substantial proportion of the estimated market share; and (2) the
degree to which the combined experience, authority, and
responsibilities of U.S. insurance regulators; Jewish representatives
of Holocaust victims and their heirs; and European insurance companies
and entities together were necessary to forge workable agreements, as
well as internal operating rules and guidelines.
structure and approach
In the mid-1990s a growing body of public evidence suggested that
several major insurance companies had sold policies to European Jews in
the 1920s and 1930s, and that for many of these policies, claims were
still outstanding. In the summer of 1997, NAIC members reached out to
the World Jewish Congress and by September of that year, the NAIC held
its first public hearing and established a Working Group on these
issues. By May 1998, the Working Group became a more formal task force,
and consulted with Roman Kent, President of the American Gathering of
Jewish Holocaust Survivors, and others. We agreed then that dialogue,
rather than confrontation, should be a cornerstone of the Commission
because we were seeking a voluntary process. For the Holocaust
survivors still living there was little time for further litigation or
debate.
Major European insurance companies who shared an interest in the
U.S. market participated in the discussions, ultimately signing a
Memorandum of Understanding to create the Commission, and indicating
their willingness to become members. These companies were Allianz, AXA,
Basler, Generali, Winterthur, and Zurich. All but Basler remained
ICHEIC Commission members throughout the process; Basler participated
in processing ICHEIC claims but through its membership in the German
Insurance Association. The Dutch Association of Insurers joined the
Commission in May 2000. The Commission included U.S. insurance
regulators, Moshe Sanbar and Roman Kent representing survivor
organizations, and the State of Israel. In addition, regulators, Jewish
organizations, and companies also had alternates and observers who
actively participated in the process.
Property issue
Information revealed through the hearings and discussions leading
up to the formation of the Commission indicated that the issue of
unpaid claims went beyond life insurance policies and also included
unpaid property claims. Life insurance policies are generally held for
longer periods and retain value even after premiums are no longer paid.
Property insurance policies differ in that they are usually written on
an annual basis and have no residual value if they are cancelled for
nonpayment of premiums.
In general, property insurance covers property damage, not
expropriation and most policies include an exclusion for acts of war.
When assessing post-war compensability of such policies, among other
issues, it is necessary to determine whether the policy was in effect
at the time the insured event occurred and whether the insured event
was the direct result of persecution or was caused by an act of war,
such as an air raid. Although ICHEIC accepted property claims, given
the issues, claimants needed to provide specific answers to worksheet
questions in response to property-related claims.
determining scope/size of market; negotiating agreements and forming
valuation guidelines
In the fall of 1999, having identified the building blocks of the
claims process and initiated a global outreach campaign that would
eventually result in receipt of 120,000 claims forms from 30 different
countries, the Commission sought macro-level guidance on the overall
volume and estimated value of potential claims. For this effort, we
appointed Glenn Pomeroy, then North Dakota Insurance Commissioner and
former president of the NAIC and Phillippe Ferras (then executive vice
president of AXA France) as joint chairmen of a task force to report on
the estimated number and value of insurance policies held by Holocaust
victims.
The task force was staffed by outside experts as well as ICHEIC
members, and included economists Frank Lichtenberg from Columbia
University Graduate Business School and Helen Junz, a member of the
Presidential Advisory Commission on Holocaust Assets in the United
States who assisted the Volcker Committee with a project on estimating
the size and structure of the wealth of the Jewish population in Nazi-
affected countries before World War II, as well as actuaries with the
Office of the California State Insurance regulator and AXA-Paris. The
Pomeroy-Ferras report, available at www.icheic.org, provided data that
allowed the Commission to assess the scope and size of the European
pre-Holocaust insurance market relevant to Holocaust victims and their
heirs.
The Pomeroy-Ferras report determined how the relative maturity of
the various European insurance markets might have affected local
populations' access to insurance. It provided an overall view of what
total damages might be by trying to determine the Jewish population's
respective rates of participation in the life insurance market and by
estimating the average value of life insurance policies, based on the
scope of the insurance market and the size of the Jewish population in
each country. While the propensity of the Jewish population to insure
was found to be two to three times that of the regular population in a
given country, the propensity to insure differed significantly from
country to country, which dramatically affects the overall estimates of
market size.
By way of example, Poland had a very significant Jewish population
(3.3 million at that time and by far the highest in Europe) but also
had a highly agrarian economy and was one of the poorer countries in
the region. In contrast, Czechoslovakia's Jewish population (396,000),
while constituting a smaller percentage of the overall population,
would have been likely to be far more highly insured given the maturity
of the insurance market. As noted in the Pomeroy-Ferras report, in 1937
the average policies per capita was 0.074 in Czechoslovakia and 0.0077
in Poland.\2\ The Pomeroy-Ferras task force discussed as well what
proportion of policies in each market might be deemed to have remained
unpaid.
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\2\ The primary sources of data used by the Pomeroy-Ferras task
force were the ``Assekuranz Jahrbuch'' published annually and Neumann's
``Jarhbuch for Germany.''
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The Pomeroy-Ferras report also details some of the challenges that
participants faced in accurately assessing the value of unpaid
policies. While the task force reached consensus on the overall size of
each country's insurance market and estimated the propensity of Jews to
purchase life insurance, it was far more difficult to determine the
number, average value, and percentage of unpaid Jewish-owned policies.
Given these considerations, the Pomeroy-Ferras report generally
provided a range of figures in different categories for different
markets. These ranges served to guide the Commission as it entered its
deliberations on how to assess appropriate settlement amounts company
by company (and in some cases, with national insurance associations)
across markets in Europe. In the case of the German market, for
example, the settlement amount provided in the 2002 agreement between
ICHEIC, the German Foundation, and the German Insurance Association
exceeded the companies' estimates of unpaid policies in Germany.
The various national commissions working to assess their own
situations have confirmed the reliability of the Pomeroy-Ferras work.
For example, the Dutch commission's data showed the insured sum of all
policies surrendered to the Nazi authorities to be within 5 percent of
the task force's mid-range value for Jewish policyholders. The Belgian
commission found results very close as well. The French commission,
when defining the policies that could have belonged to victims of the
Holocaust, generated a number that fell within the mid-range of the
task force's number for France. The total overall settlement reached by
the Commission with all its entities, approximately $550 million, was
premised on the Pomeroy-Ferras work, and has thus proven the test of
time, both with respect to the over $306 million paid out in claims,
and the remaining amount going to humanitarian activities to honor the
memory of those who were not able to make claims directly.
outreach
From inception, the Commission strived to identify as many people
with possible unpaid Holocaust-era policies and encourage them to file
claims, even if they lacked detailed information about their family's
coverage. To do this effectively, we sought to define a target
audience. We knew that we had potential claimants throughout the world.
So we worked closely with the same experts who had conducted outreach
for the Swiss Bank settlement's Claims Resolution Tribunal (CRT), using
free and paid media extensively.
Our outreach initiatives included both a 24-hour ICHEIC call center
and grassroots efforts through global Jewish communal and survivor
organizations and representatives of other victims groups. We
distributed packets to survivor communities and Jewish organizations
that included press releases, posters, and guidance on how to request
and complete a claim form. In addition, the Commission worked with U.S.
insurance regulators, particularly in California \3\, Florida \4\, New
York \5\ and Washington, who already designated staff to reach out to
and assist constituents.
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\3\ http://www.insurance.ca.gov/0100-consumers/0300-public-
programs/0100-holocaust-insur/index.cfm.
\4\ http://www.fldfs.com/Holocaust/index.htm.
\5\As part of this effort, New York State's Holocaust Claims
Processing Office expanded to include potential insurance claims
(http://www.claims.state.ny.us).
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To supplement the work with survivor and Jewish groups and the
regulatory community, the Commission launched a global press and media
campaign to publicize the process. We ran ads in major and parochial
media markets and capitalized on as much free media as outside
institutions were willing to provide. We did this not only at launch,
but also when announcing the last deadline extension, alerting
potential claimants via all means available, including a live Web cast
in which I participated in as ICHEIC chair.
While conducting its outreach, ICHEIC initially publicized a claims
filing deadline of January 31, 2002. Subsequently, as the Commission's
archival research efforts generated more information that ICHEIC
published on its Web site, this claims deadline was extended six times,
with the final date set as December 31, 2003.\6\ Claim forms requested
by December 31, 2003, and returned to ICHEIC by March 31, 2004, were
deemed to have been timely filed.
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\6\ Deadlines were set at the following dates: January 31, 2002;
February 15, 2002; September 30, 2002; March 30, 2003 (new names
published on March 8, 2003); September 30, 2003 (new names published
April 30, 2003); December 31, 2003 (with claim forms to be received by
March 31, 2004).
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As a result of this outreach, during the 5 years that the
Commission accepted claims, it received 120,000 claim forms in more
than 20 languages from more than 30 countries.\7\
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\7\ Approximately, 30,000 of the claim forms received by the
Commission either did not fall under ICHEIC's mandate and were
therefore forwarded to the appropriate agency, for example, the Sjoa
Foundation, Buysse Commission, CRT, or did not pertain to life
insurance policies, i.e., slave labor, forced labor, Swiss bank
accounts.
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ICHEIC's extensive and targeted outreach prior to the filing
deadline was important given our understanding that many of those who
filed would do so with little documentation or information about
policies. In order to generate as many successful matches as possible
from the information gathered through ICHEIC's research and company
records it was necessary to impose deadlines on both claimants and
companies. Results of this matching exercise were conveyed to the
companies for review and adjudication, allowing companies to complete
the decisionmaking process by June 30, 2006. The end result was that
member companies were ultimately able to match 16,243 unnamed claims
against these records.
icheic agreements partners organizations and related entities
The Commission used the Pomeroy-Ferras report to help guide
discussions on contribution levels for ICHEIC member companies. In
addition, the Commission negotiated agreements with various entities
and outside associations, the most significant of which was the
trilateral agreement between ICHEIC, the German insurance association,
and the German Foundation. The so called Tri-Partite Agreement
incorporated the settlement with Allianz and adopted almost identical
rules and processes to those applied to non-German ICHEIC companies,
but with procedures such as those to provide for archival research on
German post-war compensation.
The Commission reached separate operating agreements with the
Holocaust Foundation for Individual Insurance Claims in the Netherlands
(also known as the Sjoa Foundation, which was a member of ICHEIC,
although its claims were processed separately), the Jewish Community
Indemnification Commission in Belgium (Buysse Commission), and the
Austrian General Settlement Fund (GSF) to make sure that claims
received were processed. Additionally, claims that were the province of
Swiss companies covered by the Global Settlement Agreement were
redirected to the Claims Resolution Tribunal (CRT) in Zurich,
Switzerland. The combined efforts of ICHEIC and these parallel entities
covered a vast section of the prewar European insurance market.
As the Commission began receiving claims, it became increasingly
apparent that the bulk of the claim forms contained very little
detailed information, that policy documentation was the exception
rather than the rule, and that many claims did not name a specific
company, or named a company that ceased to exist before 1945. So we
worked to establish relaxed standards of proof and create valuation
standards that could be calculated without the usual policy
documentation, as well as an extensive research database and matching
system. Furthermore, we instituted a separate but related humanitarian
claims payment process for unnamed, unmatched claims, and for Eastern
European claims on companies that had been liquidated, nationalized, or
for which there were no known successors. All these elements became
part of the critical architecture of the Commission. Our lists
publication decisions grew from it; our need for filing deadlines were
dictated by it; the audits to which all companies were subjected,
conducted by outside independent auditors, proved its effectiveness;
and our ability to carry out our mission depended on it.
relaxed standards of proof
During its existence, the Commission directly or through its member
companies/partner entities offered payment totaling over $306 million
to more than 48,000 of the 91,558 who made inquiries. Only a small
percent of all the claim forms the Commission received named a specific
company and far fewer contained policy documents. Survivors who had
attempted to recover the proceeds of insurance policies during the
immediate postwar period had been frustrated by companies' demands for
death certificates and proof of entitlement that they could not
provide. Understanding that expecting such documentation was both
insensitive and in most cases impossible, the relaxed standards of
proof adopted by the Commission did not require claimants to submit
such evidence to make a claim.
Even before the end of the war, the records maintained by the
International Tracing Service at Bad Arolsen assisted families in
documenting the fates of victims of Nazi persecution. These records
offer basic information regarding persecution, such as the date of
deportation or when the policyholder perished. While the increased
public accessibility of the Bad Arolsen archives is important because
researchers and historians can now access information that was
available only to survivors and their relatives in the past, it does
not mean individuals would have opportunities to further enhance their
claims against European insurers.
The increased accessibility of the Bad Arolsen archives would not
generate information that could lead to more eligible Holocaust-era
insurance claims than identified through the claims and appeals
processes of ICHEIC, for two reasons: (1) ICHEIC always assumed that a
person was persecuted unless information was presented that pointed to
the contrary; (2) ICHEIC offered full valuation in instances where it
was unclear exactly when a policyholder had died. Moreover, because
survivors and their relatives, families of those who perished, and
their representatives already had access to the Bad Arolsen archives,
in effect the Commission also had full access to this information.
Under ICHEIC's relaxed standards of proof, the claimant produced
whatever evidence the claimant had available. Individuals filling out
claim forms were asked to provide all information available to them,
including copies of existing documents in their possession that might
be relevant. In some instances, claimants had actual copies of
policies, but there was no expectation that such would be the case. The
relaxed standards of proof allowed claimants to provide nondocumentary
and unofficial documentary evidence for assessment.
Companies were similarly required to produce the evidence they had,
with the objective of helping claimants to establish sufficient
evidence of a contractual relationship. Once the existence of a policy
was substantiated, the burden shifted to the company to show the status
of the contract or to prove the value of the contract had been adjusted
or the contract had been paid. All parties agreed, however, that the
relaxed standards of proof were to be interpreted liberally in favor of
the claimant.
The relaxed standards of proof adopted by the Commission aimed to
ensure that every claim, no matter what evidence the claimant could
produce, would be reviewed to identify whether evidence could be
located sufficient to substantiate the existence of a contract.
valuation
In order to define the guidelines for assessing present-day value
of Holocaust-era insurance products, the Commission created a Valuation
Committee, which examined historical records, the realities of inter-
war economic history and specific cases to establish valuation
guidelines. Fairly early on the committee reached agreement on the
components required for any calculation: The insured sum, the duration
of the policy, and the date of the insured event.
In addition, it became clear that the final valuation guidelines
would need to take into account a number of factors. For example, we
needed to determine whether the insured person had perished or had
survived the Holocaust, in what currency the underlying policy had been
written, whether any adjustments had been made in
the insured sum prior to the Holocaust (such as loans or voluntary
reductions to the sum insured) and how any relevant laws of general
application in the country of issue affected the terms of the policy.
Since the majority of claims submitted to ICHEIC contained little
or no information, the Valuation Committee established rules and
guidelines that would permit appropriate assumptions in lieu of
documented policy terms or details regarding the fate of the
policyholder. Drawing on the findings of the Pomeroy-Ferras report, the
committee agreed on country-specific average values, and so-called
``deemed dates'' that provided assumptions regarding confiscation of
assets and dates of death of policyholders. As a result, ICHEIC's
Valuation Guidelines contain dates for each country that identify the
start of persecution and the start of confiscation in that country.
The Commission sought to make as much information as possible about
our efforts to resolve these unpaid claims publicly available.
Therefore, the final valuation guidelines as well as committee
structures, claims processing statistics, audit reports, quarterly
reports, a guide to how the process worked, and annual meeting
presentations, were published on the ICHEIC Web site at www.icheic.org.
Arrangements have been made for this Web site to be maintained by the
U.S. Holocaust Museum.
archival research/building research database (and lists)
Working closely with European insurance companies, ICHEIC
established protocols to make sure that information provided by
claimants was matched to all available and relevant surviving records
in the companies' possession. Since many claimants had little or no
information about specific insurance policies, ICHEIC also conducted
archival research to locate documents that were relevant to Holocaust-
era life insurance claims. ICHEIC commissioned experts to conduct
research in public archives and repositories in Central and Eastern
Europe, Israel, and the United States to collect as much relevant
information as possible. These efforts led to the creation of a
database that provided a critical tool used by companies and ICHEIC to
further enhance information provided by claimants and thus chances of
identifying policies on submitted claims.
ICHEIC's research spanned 15 countries and included over 80
archives. Researchers reviewed three types of records. The first,
representing the bulk of the material reviewed, consisted of Nazi-era
asset registration and confiscation records. Files pertaining to the
post-war registration of losses made up the second category. The third
category was comprised of insurance company records located in public
and regulatory archives. ICHEIC researchers located almost 78,000
policy specific records. This research augmented the often limited
information provided with claims. It is worth noting the significance
of more than half of the $306 million that was awarded went to
individuals who were unable to identify a policy or name a company that
was the source of their claim.
Concerns were raised at the House Financial Services hearing in
February that German archival records remain sealed. A misimpression
was left about the impact on ICHEIC research. Under German data
protection laws documents are always available to the individuals or
their heirs or representatives who are the subject of the
documentation--e.g., postwar compensation, even while records
containing personal information are not accessible to the general
public until 50 years after the date of the documents. Moreover, since
asset declarations predate the war, they are actually fully accessible.
In addition, in February 2002 the German Parliament passed an amendment
to the Archives Law, allowing still broader access to personal records
of victims of Nazi persecution.
ICHEIC conducted research in German archives and repositories first
in 2000, and again from late 2002 through April 2003.\8\ Through this
research many asset declaration files were reviewed and a considerable
number of polices were identified. Overall research in German archives
contributed information on 41,540 insurance policies belonging to
27,886 policyholders.
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\8\ As part of ICHEIC's agreement with the German foundation
``Remembrance, Responsibility and Future.''
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lists
The role of the published lists within the overall scope of the
Commission's work and the relative utility of publishing more names
going forward have received a great deal of attention, but continues to
be widely misunderstood. Development of the lists that were published
was a by-product of the Commission's efforts to match claim form
information with relevant policy information discovered through
archival research or in companies' records. Finding one's name on a
list published by the Commission was never intended either as necessary
to file a claim or as any proof that a previously unpaid claim existed.
Since ICHEIC's mission was to find potential claimants, identify
unpaid Holocaust-era insurance policies, and settle valid insurance
claims at no cost to claimants, the Commission sought to maximize
opportunities to identify policies and ``match'' policies with claims,
even when submitted claims might have contained little accompanying
documentation. The Commission did so by supplementing the information
that claimants provided with relevant archival information through
agreed-upon procedures. This research and matching work identified
thousands of policies related to claims where the claimant was not able
to name a company.
Consistent with the Commission's mission of reaching out to the
broadest possible universe of interested parties, ICHEIC published on
its Web site its research and the 519,009 potential Holocaust-era
policyholder names who were thought likely to have suffered any form of
racial, religious, or political persecution during the Holocaust. In so
doing, however, the Web site also carried a clear warning that finding
a name on the Web site was not evidence of the existence of a
compensable policy. There were many similar names with spelling
variations, policies that might have been surrendered or paid out prior
to the Holocaust, and some policies that had already been the subject
of previous government compensation programs, rendering them ineligible
for any further payments under the ICHEIC process. The list remains
accessible to the public through the Yad Vashem Web site
(www1.yadvashem.org/pheip).
The broad obligation to publish potential policyholder names as
described in the legislation, H.R. 1746, which mandates publication of
all policyholders during the entire relevant period, would be of
limited value and create confusion and raise false expectations. The
number of policies issued during the period (1920-1945) would be
considerable and in many cases, records, when available, would not be
in a database but on microfiche, film, and paper. The prewar proportion
of the persecuted population (as determined by ICHEIC's research) was
only a fractional part of the prewar insurance market.
ICHEIC's published lists--as components of ICHEIC's research
database--result from working closely with archival experts in Germany,
Israel, the United States, and elsewhere, and drawing on information
from company policyholder records. During the ICHEIC process, companies
had to identify which policyholders might potentially fit the
definition of Holocaust victim.\9\ For companies with many surviving
records, this presents a considerable challenge, because in most
instances, insurance companies did not identify policyholders based on
racial, religious, political, or ideological factors. Nor was it
possible to filter solely on the basis of ``Jewish''-sounding last
names: The name Rosenberg, for example, often believed to be a typical
Jewish name, was also the name of one of the Nazi party's highest-
ranking ideologues. Similarly, Anne Frank shares her last name with the
notorious governor-general of occupied Poland, Hans Frank, who was
hanged at Nuremberg.
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\9\ ICHEIC took as its definition of Holocaust victim or persecutee
the German federal indemnification legislation definition, as follows,
anyone who: ``Was deprived of their life, suffered damage to their
mental or physical health; was deprived of their economic livelihood;
suffered loss or deprivation of financial or other assets; suffered any
other loss or damage to their property; as a result of racial,
religious, political or ideological persecution by organs of the Third
Reich or by other Governmental authorities in the territories occupied
by the Third Reich or its Allies during the period from 1933 to 1945.''
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The Commission considered all these factors, and culled out from an
overall list of policyholder names that are those most likely to have
been persecuted during the Holocaust. The Commission's list also
contained many more names of policyholders likely to have been
previously compensated on their policies because the majority of
policies issued in Germany had already been subject to prior postwar
compensation programs.
H.R. 1746 legislation would cast a far broader net, resulting in
the publication of millions of policyholder names, to the extent
companies were legally and practically capable of doing so, and still
complying with the data protection and privacy regulations in force in
their jurisdiction. Yet a very small percentage of the published names
would be relevant to ascertain those who were persecuted during the
Holocaust.
claims process--and humanitarian claims payments
A fundamental component of the claims process was the development
of a company-country matrix. This matrix illustrated historical
portfolio transfers including mergers, acquisitions, and other company
changes across prewar and Holocaust-era Europe. With one axis
representing the company responsible for life insurance policies during
the relevant period and the other representing the country of issue,
the point of interception identified the current day successor
responsible for specific prewar and Holocaust-era portfolios. The final
version of the company-country matrix included 340 companies from over
30 countries. The Company-Country matrix enabled the Commission to
identify the policies for which each member company was responsible and
facilitated the timely submission of those claims to the relevant
company.
Claims on policies written by Eastern European companies that were
nationalized or liquidated after the war and had no present day
successor were reviewed and settled via ICHEIC's in-house process. To
ensure the broadest possible reach, anecdotal claims that did not
identify a specific insurance company were circulated to all companies
that did business in the policyholders' country of residence. Having
located unpaid policies, ICHEIC's settlement process determined present
values based on negotiated guidelines that provided historical currency
conversions. By the conclusion of the Commission's process, 2,874
claims from Eastern Europe were evaluated and offers of approximately
$31 million were made using the Commission's humanitarian funds.
Anecdotal claims which, despite ICHEIC's relaxed standards of proof
and its research efforts, could not be linked to a specific policy,
were referred to ICHEIC's humanitarian claims process for review.
Qualifying claims were paid on a per claimant (rather than a per
policy) basis. This process, named after section 8A1 of our Memorandum
of Understanding, was designed specifically for those claims that,
despite all efforts, had to be reviewed and evaluated based solely on
the information provided in the claim form. Thus the 8A1 humanitarian
claims payment process made 31,384 offers of $1,000 per claimant,
totaling approximately $31.3 million.
audits; verification; executive monitoring grp
The Commission adopted a series of oversight structures to make
sure that decisions on claims were processed correctly and in
accordance with ICHEIC rules and guidelines. Independent third-party
audits for the claims review processes of each participating company
and partner entity were carried out to assess the status of existing
records, and make sure that records were appropriately searched and
matched. The rules for these audits were dictated by written agreements
between ICHEIC and its participating companies and partner entities,
and were reviewed and ultimately approved by ICHEIC's Audit Mandate
Support Group, which was staffed by representatives from state
regulators' offices, and Jewish organizations.\10\
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\10\ For example, under the Commission's rules, if a company's
records were found to be comprehensive for a time period in question,
as determined by the agreed upon audit process, the company could
assert that lack of registration of a given policy in its records as
evidence that such policy did not exist with that particular company.
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In response to concerns about the potential for flaws in the
companies' claims processing, ICHEIC created an Executive Monitoring
Group, which was staffed by representatives from the U.S. regulators,
Jewish groups and the claims process manager in ICHEIC's London office.
This group reviewed in ``real time'' segments of participating
companies' as well as ICHEIC's own claims processing operations.
Through this review, the team recommended new measures to establish and
maintain consistency in claims handling across companies and make sure
that decisionmaking was in accord with ICHEIC's rules and guidelines,
provide for reconciliation of databases, and review company internal
matching systems.
ICHEIC created an in-house verification team to cross-check every
company decision. The verification team also conducted a series of
large scale exercises to review decisions made by member companies.
Discrepancies were reported back to the companies for reassessment and,
where appropriate, remedial action. This process included verification
that names added to files after they were originally submitted were
properly researched. At the conclusion of ICHEIC's work, the
verification team also carried out major reconciliation exercises, to
make sure that all research information in ICHEIC's database conformed
to and had been matched against companies' policyholder information,
and that all claims filed had been checked against all companies'
decisions.
In conclusion, the claims process was comprehensive in terms of
participants, those whom it served, and how it addressed historical,
legal, and operational complexities. Although the work of the
Commission was unprecedented and filled with unique challenges, as no
one here today knows better than does Chairman Nelson, we were able
through amicable and inclusive dialogue to voluntarily adopt a new
approach toward the resolution of unpaid Holocaust-era insurance claims
for the benefit of Holocaust survivors and their families and those who
did not survive.
In the end, it was about people and about justice. We recognize
that no Commission can resolve the wrongs done by the Holocaust. We
firmly believe, however, that our efforts brought some measure of
justice to the lives of thousands of survivors, their families, and the
families of those who perished.
Senator Bill Nelson. OK, if you could wrap up, Mr.
Secretary.
Mr. Eagleburger. I have. I did.
Senator Bill Nelson. Thank you very much.
Ambassador Eizenstat.
STATEMENT OF HON. STUART E. EIZENSTAT, PARTNER, COVINGTON &
BURLING LLP AND FORMER SPECIAL REPRESENTATIVE OF THE PRESIDENT
AND SECRETARY OF STATE ON HOLOCAUST ISSUES, WASHINGTON, DC
Ambassador Eizenstat. Thank you for the hearing, Mr.
Chairman, and for your role as insurance commissioner in
getting this process started.
I've testified 13 times before congressional committees on
this issue. We were able to settle with a variety of countries
for $8 billion in compensation, benefiting more than a million
and a half survivors of the Holocaust and other victims of Nazi
atrocities or their heirs. Insurance was a part of that
negotiation.
Our country has a long history of negotiating lump sum
settlements on behalf of the claims of nationals through
executive agreements, dating back to 1799. In many cases such
agreements have provided that individual claims be submitted,
as here, to a commission to adjudicate and pay the claims of
individual claimants. So the ICHEIC process was not in any way
revolutionary.
In typical settlement negotiations with foreign countries,
the U.S. Government is the sole negotiating power on behalf of
American claimants. But here there was more protection for U.S.
citizens than that. There were attorneys, some of the premier
class action attorneys in the country, representing the class
of survivors. The State of Israel actively participated at the
instance of the Prime Ministers of Israel. Jewish groups such
as the Claims Conference and the World Jewish Restitution
Organization also insisted on favorable terms for Holocaust
survivors and their families. The interests of survivors and
their heirs were broadly and vigorously represented through all
the negotiations.
It's the policy of the United States Government to resolve
Holocaust claims through negotiation, not litigation. The
reason was speed, because of the age of victims and the length
of time for which justice had been denied; also because of
foreign policy considerations in working with our European
allies, including Germany, and the State of Israel.
It was also the policy of the United States, which I
enunciated on numerous occasions, that ICHEIC would be the sole
remedy for resolving insurance claims. This was reiterated in a
letter I wrote to Secretary Eagleburger at the end of November
2000. This was motivated by the desire to get as many companies
as possible to participate in the ICHEIC process so as not to
be constrained by the limited jurisdictional reach of U.S.
regulators and U.S. courts over foreign insurers.
This is critical to understand. The only companies that
would be subject to jurisdiction of U.S. courts are those that
do business here. We were trying to get an even broader
universe of companies engaged in the ICHEIC process, and we
were able to do that. Ultimately, many European insurers who
did not conduct business in this country and therefore would
have been beyond the reach of U.S. courts participated in the
ICHEIC process. Indeed, as Secretary Eagleburger indicated,
ICHEIC actually paid policies in full under the same basis for
those companies that were liquidated, nationalized, and no
longer in existence. And if you filed a claim even against an
existing company and you had no proof, you still got a
humanitarian claim.
The role also of German insurance companies is critical to
understand. If legislation like the House legislation were to
pass, it would upset all the work we did on behalf of victims,
because we could not have settled for 10 billion deuschmarks
the slave labor cases with German companies. Insurance was the
critical element. Allianz and the other German companies said:
If you don't settle with all German companies, including
insurers, no payments, period.
So we had to negotiate with all of them. We ended up, of
the 10 billion deuschmarks, $5 billion, taking $550 million and
passing it through to Mr. Eagleburger's ICHEIC commission. And
I can assure you my negotiations with the gentleman on my right
were almost as difficult in terms of how much of that we passed
through as they were with the Germans and the class action
lawyers.
Mr. Eagleburger. It's all right.
Ambassador Eizenstat. ICHEIC was ultimately successful. It
paid $306 million to 48,000 Holocaust victims and their heirs
under legal standards that would never have survived in an
individual court case, highly relaxed standards. They paid $169
million for humanitarian programs and humanitarian claims as
well.
Now, as a consequence, if we pass legislation similar to
what the House does it would upset all the work we did, all the
reliance that companies paid money for in Austria, in Germany,
in Switzerland. They paid money to get legal peace. If they
hadn't gotten legal peace and an assurance from the executive
branch of that, they wouldn't have paid these $8 billion that
we were able to achieve.
Please don't upset that assurance.
It would also affect ongoing negotiations that I think the
United States should be engaging in more vigorously with
countries like Poland. This is where your resolution comes, Mr.
Cardin. Poland has done nothing, nothing, nothing, on
restitution. If we finally get them to do it, how would they do
it with any confidence if they thought the Congress would come
back and allow suits at a later date?
Now, how do we proceed? There is a way to accomplish some
measure of additional justice. First, the ICHEIC companies have
assured the world that they will indeed process----
Senator Bill Nelson. OK, could you wrap up.
Ambassador Eizenstat [continuing]. Claims according to
ICHEIC standards. We should hold them to that. And what we
should do--and I've laid it out in my testimony--is require
them to submit to the U.S. Government through the State
Department's Office of Holocaust Issues, which I helped create,
and to the insurance commissioners and to the New York State
Office, with copies to the Congress, to show which claims have
been submitted, how they dealt with those claims under the
ICHEIC standards.
We should also ask them to put back on the Web page the
500,000 names, so if people didn't see them the first time they
could easily access those. And you should hold continued
oversight hearings to hold those companies to their pledge that
they will continue to process these claims according to ICHEIC
standards.
[The prepared statement of Ambassador Eizenstat follows:]
Prepared Statement of Ambassador Stuart E. Eizenstat, Partner,
Covington & Burling LLP and Former Special Representative of the
President and Secretary of State on Holocaust Issues, Washington, DC
Mr. Chairman, Ranking Member Lugar, I want to thank you, and the
members of the committee, for inviting me here today to testify on the
very important issue of Holocaust-era insurance claims. For many years,
the Foreign Relations Committee has focused on Holocaust compensation
and restitution matters. You have provided a strong voice of moral
leadership on a wide variety of Holocaust-related issues, and I,
therefore, thank each of you for that leadership. Senator Nelson, your
leadership as Insurance Commissioner of Florida was indispensable in
highlighting the importance of addressing Holocaust-era insurance
policies and providing justice to victims and their families.
Over the years, I have testified before various committees of the
Congress 13 times on Holocaust issues, including in my capacity as the
Special Representative of the President and the Secretary of State for
Holocaust Issues during the Clinton administration. In that capacity I
negotiated agreements with the German, Swiss, Austrian, French, and
other European governments that have resulted in the payment of more
than $8 billion in compensation to more than 1.5 million Holocaust
survivors, their heirs, and the heirs of those who did not survive.
Those agreements, and the subsequent payments to Holocaust victims and
their families pursuant thereto, were the result of the concentrated
work of many people, including representatives of 11 agencies of the
U.S. Government, their counterparts in numerous foreign governments,
leaders of many Jewish organizations, foreign companies, and a large
number of skillful lawyers representing the interests of Holocaust
survivors and heirs.
There are five things I would like to accomplish through my
testimony today. First, I will address the emergence of the
International Commission on Holocaust Era Insurance Claims
(``ICHEIC''). Second, I hope to enhance the subcommittee's
understanding of the United States Government's Holocaust compensation
and restitution efforts during the period I served as the
administration's leader for these issues--particularly regarding the
executive agreement between the United States and Germany and the
resulting German Foundation--and how ICHEIC fit into these broader
efforts to secure compensation and restitution for Holocaust victims
and their heirs. Third, I will suggest that the bill currently pending
in the House, H.R. 1746, the Holocaust Insurance Accountability Act, as
currently drafted, threatens the integrity of the U.S. Government's
longstanding policy of resolving Holocaust-era claims through
negotiation, not litigation. Fourth, I will highlight several
characteristics of the ICHEIC process and contrast them with what is
found in a court of law. This contrast indicates to my mind that the
bill may not add appreciably to the likelihood of additional recovery
on Holocaust-era insurance policies since the European insurance
companies are committed to continuing to process future claims using
ICHEIC's loose and flexible standards, and undercuts the successful
U.S. Government policy of finding nonlitigious ways to compensate
Holocaust victims and their families without resort to costly, lengthy,
and uncertain lawsuits. Finally, I will recommend measures the Congress
could take which, in my opinion, offer a greater potential to assist
Holocaust survivors and heirs than does H.R. 1746.
Since the end of the Second World War, restitution for Nazi crimes
has been an important policy objective of the United States Government.
Unfortunately, the ability of the United States Government to seek
restitution and compensation for many individuals was compromised
during the cold war. Efforts to seek funds directly from European
companies were particularly hindered in this regard. Following the end
of the cold war, however, the United States Government's policy was to
seek justice and to do so with urgency. We wanted to ensure that
survivors and their families received justice, but it was equally
important that they get some measure of justice quickly. The 50-year
duration of the cold war meant that time was running short.
The twin goals of justice and urgency gave life to what became the
fundamental policy of the United States with regard to Holocaust-era
claims. We made the decision that the interests of survivors would be
best advanced by seeking compensation and restitution through
mechanisms based on negotiation and administrative processes, and not
on litigation or any other adversarial process. The timing issue, of
course, was not the only reason litigation was an impracticable option,
although it was an important one. Defenses which defendant companies
and governments could use in lawsuits including post-war settlements,
transaction costs including attorneys' fees, statutes of limitation and
rules of evidence, as well as the burden of proof that would apply to
survivors' claims in U.S. courts, made it unlikely that litigation
offered a useful path to obtain restitution and compensation. Indeed,
several Federal judges dismissed Holocaust-related claims for slave
labor payments.
emergence of the icheic process
The ICHEIC process emerged initially not from our efforts inside
the Federal Government, but rather from the impetus provided by the
insurances regulators of a number of states. The initiators of the
ICHEIC process were Neil Levin, at that time the New York
Superintendent of Insurance, and Glen Pomeroy, the vice chairman of the
National Association of Insurance Commissioners and North Dakota's
Commissioner of Insurance. You, Senator Nelson, were also a key leader.
You and the other insurance regulators had seen a growing number of
claims relating to unpaid Holocaust-era insurance policies. In
response, you and your colleagues met with Holocaust survivors, who
told their stories of purchasing insurance policies to provide for
their families' futures, of deaths of family members during the
Holocaust, of their own survival, and of their unsuccessful attempts to
receive payment under their insurance policies.
In the spring of 1998, the insurance commissioners and Holocaust
survivor organizations invited the Clinton administration to support an
international commission to resolve unpaid Holocaust-era claims and
asked us to use diplomatic efforts to bring the affected European
governments and companies into the process. We agreed to support this
effort, which became ICHEIC. We also agreed to become an ICHEIC
Observer, although the United States was never a member. My able
deputy, J.D. Bindenagel, served as the Observer and kept me abreast of
ICHEIC's activities.
Our support for the ICHEIC process was premised on the Government's
interest in obtaining as quickly as possible some measure of justice
for Holocaust victims and their families, including many U.S. citizens.
The ICHEIC process also offered a way for us to resolve outstanding
claims in a way that enhanced our diplomatic and economic relations
with our European allies as well as with the State of Israel.
At the time, I was at the State Department. I was approached by the
representatives of European insurance companies that had faced
criticism and lawsuits in the United States for nonpayment of
Holocaust-era claims. It was clear to me that while insurance in our
system is an activity that is regulated by the states, the resolution
of these 60-year-old claims had to be merged with our forthcoming
broader negotiations with Germany on Holocaust-era claims, as well as
with other future negotiations. The merger was essential because our
negotiations and those of the state insurance regulators were both
seeking funds from the same universe of companies in Germany, and
eventually also Austria. Moreover, under the class action settlement
with the Swiss Banks which I helped facilitate (and which U.S. District
Judge Edward Korman completed), all Swiss companies, including
insurance companies, received certain protections from further lawsuits
relating to Holocaust-era claims. The companies, understandably, did
not want to pay twice for the same wrongs.
We also felt that we had to ensure the inclusion of the broadest
possible number of companies and countries because, as a practical
matter, the state insurance regulators had influence over only those
European companies with significant operations in the United States.
Indeed, the insurance companies that signed the ICHEIC Memorandum of
Understanding were essentially the only European companies in that
category, and thus were the only European insurance companies subject
to U.S. state regulation. They were also, for the most part, the only
insurance companies that survivors and heirs could sue in U.S. courts.
Yet we knew that European insurance companies with operations in the
United States did not constitute the complete universe of companies
that had issued policies to Holocaust victims. Ultimately, many
European insurers that did not conduct business in the United States
and, therefore, would have been beyond the reach of U.S. courts,
participated in the ICHEIC process.
So, as I met with the heads of insurance companies or other
insurance company representatives, I put them in touch with Glen
Pomeroy and Neil Levin, and at the same time searched for a mechanism
to link them to our broader efforts on behalf of Holocaust survivors
and heirs. In August 1998, the Memorandum of Understanding between the
European insurers, state regulators, and survivor representatives,
including the State of Israel, was signed with our support, and the
ICHEIC process was launched.
The U.S. Government took a number of steps to support the ICHEIC
process beyond assisting in diplomatic negotiations:
The State Department organized a seminar in Prague to help
spur efforts to create a fact-based history of the very complex
issues relating to insurance policy assets seized by the Nazi
regime and to help translate into action existing research into
these issues so as to settle quickly the insurance claims of
Holocaust survivors.
The U.S. Government publicly supported ICHEIC at a 1998
meeting of the National Association of Insurance Commissioners
in New York City.
The State Department organized the so-called ``Washington
Conference'' on Holocaust-era assets, which was held in
November and December 1998 and at which I voiced the U.S.
Government's support for the ICHEIC process and encouraged
European insurers to participate in it. The proceedings of the
Conference were published and remain available online.
The participants at the Washington Conference urged the resolution
of still-pending insurance issues, but they also acknowledged past
German Government efforts to compensate the victims of Nazi
persecution. Those efforts began in the early 1950s. West German
Chancellor Konrad Adenauer expressed, in September 1951, the need for
Germany to provide Holocaust victims with ``moral and material
indemnity.'' In October 1951 and in an effort to avoid direct
negotiations with West Germany (East Germany having refused any
responsibility), the State of Israel, led by Prime Minister David Ben-
Gurion helped create the Conference on Jewish Material Claims Against
Germany (the ``Claims Conference'') along with 23 Jewish organizations
that were Claims Conference members. These actions led to the two 1952
Luxembourg Agreements with West Germany on one side and the State of
Israel and the Claims Conference, respectively, on the other. Under
these and later agreements which together became known as the German
``Federal Indemnification Laws,'' Germany has paid some 100 billion
marks (equal to more 60 billion euros or 100 billion in today's
dollars) to Holocaust survivors and heirs around the world.
On behalf of the U.S. Government, I strongly encouraged all
insurance companies that had issued policies during the Holocaust era
to join ICHEIC and participate fully in the process. That policy was
reflected in testimony I gave before the House Banking Committee on
September 14, 1999, in which I stated that ``[w]e continue to believe
that [ICHEIC] is the best vehicle for resolving Holocaust-era insurance
claims. . . .'' It was reiterated numerous times, including in my
letter of November 28, 2000, to former Secretary of State Eagleburger,
who served as Chairman of ICHEIC, in which I stated that it was the
foreign policy of the United States that ICHEIC ``should be recognized
as the exclusive remedy for resolving all insurance claims that relate
to the Nazi era.'' That policy has never changed.
I met with the Prime Minister of the Netherlands to encourage him
to get the Dutch insurance companies to join ICHEIC. Indeed, the State
Department worked with ICHEIC and representatives of the Dutch
Government, insurance industry, and survivor organizations to
incorporate the Dutch companies into ICHEIC. And through executive
agreements that I negotiated with Austria and Germany, the United
States Government ultimately brought the entire German and Austrian
insurance industries into the process as well.
It is important for the committee to understand that the ICHEIC
process emerged voluntarily. It was not forced on the insurance
companies. New York Insurance Superintendent Levin once described the
theme of the effort to establish ICHEIC as ``voluntary action based on
a moral foundation.'' Neil Levin tragically died in the September 11
attack on the World Trade Center, yet all of the participants in
ICHEIC--including the state insurance regulators, the European
insurers, and survivor's representatives--have labored on to complete
the work that he; you, Senator Nelson; and your colleagues inspired.
u.s. government's broader restitution and compensation efforts
ICHEIC and the insurance claims it processed were only one part of
the U.S. Government's broader Holocaust restitution and compensation
efforts. As noted above, the United States was limited in its ability
directly to pursue restitution and compensation during the cold war,
although Germany paid substantial sums beginning in the early 1950s. I
first became involved in these issues when I was asked, in the mid-
1990s while serving as U.S. Ambassador to the European Union, to
encourage the newly independent states of Eastern Europe to restore to
their Jewish communities communal property (including Synagogues,
cemeteries, and community centers) that had been taken during World War
II. Soon, however, I became the administration's point person for a
much broader effort.
The single largest piece of the broader effort was the executive
agreement between the United States and Germany as a part of which the
German insurance companies participated in the ICHEIC process. This
came about because in the fall of 1998 the German Government and German
industry turned to me for help in facilitating the resolution of class
action lawsuits brought against German companies. Germany proposed the
creation of a foundation to make dignified payments to slave laborers
and to resolve property and insurance issues. We agreed to work with
them in that process. After 18 months of very difficult negotiations,
on July 17, 2000, the United States and the reunified Germany signed an
executive agreement which committed Germany to operate a foundation
under the principles to which the parties in the negotiations had
agreed, and at the same time, committed the United States to take
certain steps to assist German companies in achieving ``legal peace''
in the United States.
As an initial matter, the United States has a long history of
negotiating ``lump sum'' or similar settlements of its nationals'
claims through executive agreements, a practice which dates back to
1799. Typically, executive agreements settle the claims of individuals
against a foreign state. In the case of Holocaust claims, individuals
had claims against foreign corporations as well as against foreign
states. As the Supreme Court noted in its Garamendi decision, however,
this ``distinction does not matter.'' It does not affect the United
States Government's authority to settle claims through executive
agreement. Additionally, in many situations, such executive agreements
have provided that individual claims be submitted to a commission,
which would adjudicate and ultimately pay the claims of individual
claimants. So the ICHEIC process was not revolutionary in this respect
either.
In typical settlement negotiations with foreign countries, the
United States Government is the sole party negotiating on behalf of,
and seeking to protect the interests of, individual American claimants.
In the case of our Holocaust-related negotiations, however, the
interests of the survivors and heirs were represented by a number of
different groups, each of which had every reason to seek the best
settlement possible. First, they were represented by a number of the
United States' premier class action lawyers. Second, the State of
Israel actively participated, in the person of Bobby Brown, in all
negotiations. Third, Jewish groups, such as the Claims Conference and
the World Jewish Restitution Organization (``WJRO'') insisted on
favorable terms. The WJRO is an umbrella organization of 10 other
Jewish groups created in 1992 by the State of Israel and the World
Jewish Congress to represent the interests of world Jewry in regaining
Jewish property after the fall of communism.
As shown, the interests of survivors and heirs were broadly and
vigorously represented throughout the negotiations, and in the end, all
parties accepted the Foundation ``Remembrance, Responsibility and the
Future'' as a worthy result. The U.S. Government has filed Statements
of Interest recommending that it was in the foreign policy interest of
the United States that court cases against German companies for wrongs
committed during the Nazi era be dismissed on any valid legal ground,
and the U.S. Government remains committed to do so in future cases that
are covered by the Foundation agreement. The United States, however,
has not extinguished the claims of its nationals or of anyone else. It
was and remains the policy of the United States Government that
Holocaust claims should not be resolved by litigation.
The most difficult issues in our German negotiations were the scope
of the beneficiaries to be covered--not just Jewish slave laborers but
also non-Jewish forced laborers, for example; the total amount to be
paid in by Germany; the allocation of those funds to the various
classes of claimants; and the provision of ``legal peace'' for the
German companies and government.
The foundation which was created as a result of our negotiations
was capitalized at 10 billion marks with the German Government
providing 5 billion marks, and German industry providing another 5
billion marks, plus 100 million marks in interest. A board of trustees
provided oversight of the foundation's operations, and the foundation
was managed by a three-member board of directors. Of the 10 billion
marks, 8.1 billion was allocated to cover slave and forced labor
claims, while another 1 billion marks was to cover property claims not
fully captured by earlier German compensation and restitution programs.
Of the one billion marks, 550 million marks were allocated to insurance
claims. The German Foundation also created a Future Fund of 700 million
marks. (The remaining 200 million marks were for legal and
administrative costs.)
The 26 members on the board of trustees included representatives of
the German Government, the U.S. Government, the State of Israel, German
companies, and also Jewish organizations and plaintiffs' attorneys. The
foundation has been subject to legal oversight by the German Government
and is audited by two of its agencies. If one considers the United
States-Germany Executive Agreement of July 17, 2000, one will find that
it provides a framework for the treatment of claims made against German
insurance companies but leaves the details of implementation to the
responsible parties.
The role of the German insurance companies in the negotiation of
the executive agreement was a critical one. In fact, without their
participation, there could have been no broader executive agreement
between Germany and the United States. There were two issues. First,
was the money. It was impossible for Germany to provide the full 10
billion marks which we had agreed upon without the participation of the
German insurance companies. Second, was the issue of legal peace.
German insurer Allianz, a key member of the German private sector
negotiating team, and the German companies together, refused to settle
unless German insurance companies also received ``legal peace.'' This
was particularly complicated because ICHEIC was also engaged with
German insurance companies. I was negotiating with the German insurance
industry, the plaintiffs' attorneys, and the Jewish groups, on the one
hand, and with Secretary Eagleburger, on the other. My negotiations
with Secretary Eagleburger, chairman of ICHEIC, were difficult since he
wanted the moneys allocated from our German settlement to ICHEIC.
Ultimately, we reached a solution whereby 550 million marks of the
global 10 billion mark settlement amount would be ``passed through'' to
ICHEIC. In return, the United States Government agreed to submit a
Statement of Interest in any appropriate litigation involving any
German company, including German insurance companies, stating that it
is in the foreign policy interests of the United States for the court
to dismiss on any valid legal ground as found by the court cases
against them in return for the 10 billion mark payment. This was to
afford the companies the legal peace they desired.
The United States-Germany Executive Agreement provided that
insurance claims made against German insurance companies were to be
processed by the companies and the German Insurance Association on the
basis of claims-handling procedures that were to be adopted in an
agreement between the foundation, ICHEIC, and the German Insurance
Association. The Government of the United States and the Federal
Republic of Germany were not part of those tripartite negotiations, but
we made every effort to facilitate and encourage all sides to come
together and resolve their differences.
By the time I left government in January 2001, these negotiations
had not yet been brought to a conclusion. It took until October 2002 to
conclude the so-called ``Trilateral Agreement'' on claims-handling
procedures. It took until July 2003 to conclude an agreement with three
other non-German ICHEIC members (AXA, Winterthur, and Zurich), and it
took until December 2003 to conclude an agreement with the Austrian
General Settlement Fund.
It must be said that ICHEIC got off to a painfully slow and
expensive start due to the complexity of the issues and the distrust of
the parties. Eliminating that distrust took years, but in the end,
ICHEIC was able to achieve its mandate of providing some measure of
justice for Holocaust survivors and their heirs as quickly as possible.
ICHEIC ultimately was successful. It paid $306 million to 48,000
Holocaust victims and their heirs under relaxed legal standards--far
lower than would satisfy a court. It also paid $169 million for
humanitarian programs and humanitarian claims. A surplus in the claims
fund of $27 million for specific social welfare programs for Holocaust
survivors went from ICHEIC to be administered by the Claims Conference.
ICHEIC paid claims regardless of whether the company which issued
the claimant's policy was actively participating in the ICHEIC process.
This is important, because it meant that individuals who owned policies
issued by companies that were liquidated, nationalized, or otherwise no
longer existed, could still submit a claim to ICHEIC and be paid the
full value of the claim. Approximately $31 million was paid out on such
so-called ``8a2'' claims. The normal relaxed ICHEIC standards applied
equally to these claims.
In the final analysis, ICHEIC successfully compensated individuals
for their Holocuast-era insurance policies. Much has been said about
the substantial administrative costs ICHEIC incurred, which amounted to
approximately 17.4 percent of the funds it paid out. But it is
important to understand what is included in this 17.4 percent figure.
It includes all costs incurred by ICHEIC in publicizing its programs;
in researching all claims at no cost to the claimants; in creating and
staffing U.S. and European offices to work with local claimants; and in
maintaining a call center that potential claimants could contact to
receive more information about and assistance with the ICHEIC process.
h.r. 1746 jeopardizes u.s. government policy on holocaust restitution
and compensation
The United States Government's policy on Holocaust restitution and
compensation matters was and is that claims should be resolved through
negotiation and cooperation, using administrative processes without
payment of attorneys' fees, and not through a slow, costly, uncertain
adversarial process like litigation. The policy is based on a belief
that it was necessary to work with our European allies and other
interested parties to secure restitution and compensation as quickly as
possible. The policy also recognizes that litigation presents what
would be, in the vast majority of cases, prohibitive barriers to
recovery--including statutes of limitation, rules of evidence, and
burdens of proof--and significant transaction costs in the form of high
attorneys' fees. The policy is based also on consideration of the
United States' broader foreign policy interests, in particular that we
work closely with, and not against, our European allies and the State
of Israel.
The bill currently pending in the House is squarely at odds with
this United States Government policy. The bill provides for an
adversarial, litigation process. It imposes the probability of
litigation on companies that have cooperated fully with the United
States Government and in the ICHEIC process and that have paid tens of
millions of dollars in an effort to satisfy their obligations. It
further imposes the probability of litigation on companies that have
been deemed by the United States Government to be entitled to ``legal
peace,'' thereby undermining the word and credibility of the U.S.
Government itself.
I am concerned with two groups of companies that could be subjected
to litigation under the bill. First, are the German insurance
companies. These companies participated in the ICHEIC process pursuant
to the executive agreement between the United States and Germany, an
executive agreement which enjoyed strong support by key Members of
Congress. In return for their participation, which was monitored by the
German government and audited by two of its agencies, the United States
Government agreed that all German companies including German insurers
should enjoy legal peace. The bill, as currently drafted, would vitiate
that commitment by the United States Government and would be an example
of gross bad faith after payment of 10 billion marks in settlements.
The second group of companies are those that participated fully in
the ICHIEC process without the benefit of an executive agreement
calling for a Statement of Interest in the event of litigation. While
there was no technical legal peace extended by the U.S. Government with
respect to these companies, they nonetheless participated in good faith
in a process that the United States Government had decided was the
``exclusive remedy'' for resolving all Holocaust-era insurance claims.
I testified before Congress on this very policy and it was broadly
supported on a bipartisan basis. There is no justification for now
subjecting them to some other remedy. This is a conclusion shared by
the United States Supreme Court, in its Garamendi decision dealing with
a State of California statute that conflicted with our agreement, and
now-Attorney General, then-Judge, Michael Mukasey determination in his
In re Assicurazioni Generali decision dealing precisely with this
issue.
The consequences of upsetting United States foreign policy
interests will likely be wide-ranging. First, the bill essentially and
fundamentally threatens our existing executive agreements with Germany
and Austria and would undermine confidence in our executive agreement
with France. Second, survivors' groups, such as the Claims Conference,
continually seek to increase payments under our existing arrangements.
It will impair the ability of those groups to successfully negotiate
such enlargements in the future if Congress passes the bill. Third, the
United States Government continues to seek agreements with other
governments and industries that have not yet dealt fully with Holocaust
restitution and compensation. Its ability to negotiate likewise would
be impaired. Countries and companies will be unwilling to negotiate
with survivors' groups or the United States Government if it appears to
them--not unreasonably--that the United States is incapable of
maintaining its end of a bargain.
h.r. 1746 will not increase the likelihood of recovery on holocaust-era
insurance claims
The ICHEIC process included extremely favorable rules for claims
processing. Rather than being required to prove his or her claim by a
``preponderance of the evidence,'' a claimant before ICHEIC was
required only to prove that his or her claim was ``plausible.'' Even in
the absence of evidence establishing plausibility, thousands of
claimants received humanitarian payments which required an even lesser
showing.
Participants in the ICHEIC process likewise were not bound by any
rules of evidence. The insurance companies agreed that ``anything
goes'' on the evidentiary front.
Finally, claims were resolved through the ICHEIC process at no cost
to claimants--unlike costly discovery in lawsuits. This included
considerable research ICHEIC performed to help claimant's develop their
claims.
The U.S. courts would not be so friendly a venue. Litigants would
be faced with statutes of limitation, jurisdictional arguments, rules
of evidence, and burdens of proof. They would be faced with
considerable costs, including attorneys' fees, which might only be
recovered at the end of the process if he or she wins (and wins on
appeal). Such as cause of action would likely raise the hopes of
survivors without offering them a real chance at additional recovery.
But most importantly, litigation would take time--time that survivors
on the whole do not have.
a better way forward
I urge the committee to find a better way forward than H.R. 1746. I
understand fully the desire to create a cause of action and to require
publication of all Holocaust-era insurance policies as an aid to
potential claimants. I have already noted my concerns about a new cause
of action. I also am concerned that the Holocaust Insurance Registry
proposed in the bill would place European insurers in the untenable
position of being forced to violate European privacy laws in order to
comply with U.S. law.
To avoid this situation but to ensure future processing of claims
under ICHEIC standards, I believe that the better way forward is,
first, to ensure that ICHEIC companies continue to process all claims
submitted to them using ICHEIC's relaxed standards as they have pledged
to do, and, second, to require that those companies submit periodic
reports to an appropriate office of the United States Government on
their claims processing. This reporting should include the number of
new Holocaust-era claims submitted, the number granted, the reasons for
any refusal, and the amount offered in compensation. The report could
be submitted to the State Department's Office of Holocaust Issues, or
some other appropriate office, and it should also be shared with the
National Association of Insurance Commissioners and New York State's
Holocaust Claims Processing Office (``HCPO''), to assist in their
efforts to aid individuals with Holocaust claims. The HCPO, which will
assist any individual--not just New Yorkers--in making Holocaust-
related claims, is working in concert with the National Association of
Insurance Commissioners to provide this continuing service.
Congress also should hold periodic oversight hearings to assure
that claims submitted are being handled properly and in conformity with
ICHEIC standards. These requirements would strengthen U.S. policy of
resolving Holocaust claims through nonadversarial processes and could
be complied with without forcing European insurance companies to
violate any European privacy laws, which otherwise may prevent them
from participating in a wholesale publication of the names attached to
all Holocaust-era insurance policies.
Third, I suggest that is necessary that the list of approximately
500,000 names published by ICHEIC be made available in perpetuity,
perhaps on the Web sites of the National Association of Insurance
Commissioners, the HCPO, and the State Department's Office of Holocaust
Issues. Additionally, the ICHEIC insurance companies should publish
newspaper notices in the United States and Europe bringing to the
attention of the general public the existence of the list, of the
companies' willingness to process future claims under ICHEIC standards,
and of the availability of the HCPO in assisting with claims.
Finally, I would suggest that efforts of the Congress and the rest
of the U.S. Government should focus on those countries and industries
that have done nothing yet to compensate victims of the Holocaust.
Since the ICHEIC claims process was completed in late 2006, each
insurance company that participated has agreed to continue to process
claims that could have been submitted to ICHEIC. They have agreed to do
so using favorable ICHEIC standards of evidence and burden of proof and
to do so without cost to claimants. In a letter of April 23, 2008, the
German insurance association (``GDV'') recently has committed in
writing to continue to process both named and unnamed claims according
to ICHEIC standards and has expressed its willingness to report to the
State Department or other appropriate agency on the results of such
claims. Congress should hold the GDV and other ICHEIC companies to this
commitment.
conclusion
In conclusion, I would simply like to say that I appreciate and
share the emotions which motivate the desire on the part of Congress to
do something to help Holocaust survivors and heirs. However, as one who
has spent many years working diligently on Holocaust compensation and
restitution issues, I urge the Congress to err on the side of
discretion and to consider the potentially catastrophic effect that
certain measures, like H.R. 1746, would likely have on existing and
future efforts to secure some measure of justice for victims of the
Holocaust and would likely do so without giving survivors any
additional real chance of recovery. At the same time, I would support
legislating a reporting requirement to ensure that European insurers
pay claims in the future under ICHEIC standards and do so with
continuing congressional supervision. I would support republication of
the ICHEIC list of names and renewed efforts to inform the public of
the availability of claims processing by the ICHEIC companies and
assistance by the HCPO. Finally, I would encourage the United States
Government to focus its resources on obtaining restitution and
compensation from countries and industries that have done nothing to
atone for their role in the Holocaust.
______
Department of State,
Washington, DC, May 5, 2008.
Hon. Bill Nelson,
U.S. Senate,
Washington, DC.
Dear Senator Nelson: I am writing to you to transmit Administration
views on H.R. 1746, the ``Holocaust Insurance Accountability Act of
2007.'' I understand that you are planning a hearing on May 6 on what
may become a Senate version of this bill. We continue to oppose this
bill.
While we appreciate the intentions behind this proposed
legislation, we believe it would undermine the policy the United States
has advanced for the past decade. The bill would, if enacted, directly
conflict with a number of U.S. bilateral agreements with other
countries on Holocaust-related compensation and thus create significant
foreign relations problems for the United States. Moreover, we believe
that the International Commission on Holocaust Era Insurance Claims
(ICHEIC) has already achieved many of the objectives of the draft
legislation.
The Administration has long sought to ensure that Holocaust
survivors receive a measure of justice for their suffering and that the
survivors and heirs of Holocaust victims obtain compensation for
property stolen during the Holocaust. We continue to do so.
An enclosure to this letter outlines in more detail our concerns.
Should you seek more information, I will be happy to discuss this
matter personally with you.
Sincerely,
Daniel Fried,
Assistant Secretary of State (P)
Enclosure.
______
Administration views on H.R. 1746
We oppose H.R. 1746, the ``Holocaust Insurance Accountability Act
of 2007,'' which would support a federal cause of action in certain
Holocaust-related insurance matters. While we appreciate the intentions
behind this proposed legislation, we believe it would undermine the
policy the United States has advanced for the past decade. The bill
would, if enacted, directly conflict with a number of U.S. bilateral
agreements with other countries and create significant foreign
relations problems for the United States. Moreover, we believe that the
International Commission on Holocaust Era Insurance Claims (ICHEIC) has
already achieved many of the objectives of the draft legislation.
The policy of the United States with respect to claims for
restitution or compensation by Holocaust survivors and other victims of
the Nazi era is and has been that concerned parties, foreign
governments, and nongovernmental organizations should act to resolve
such matters through dialogue, negotiation, and cooperation, not
through litigation. Examples of the successful implementation of this
policy include Executive Agreements with Germany and Austria which have
facilitated the payment of billions of dollars to victims of the Nazi
era, including those with claims based on unpaid or confiscated
insurance policies.
Similarly, the United States has supported ICIIEIC since its
establishment and has consistently stated its belief that the ICH-EIC
should be viewed as the exclusive remedy for unresolved insurance
claims from the Nazi era. ICIIEIC members included organizations
representing Holocaust survivors, U.S. insurance commissioners, and
foreign insurance companies, and the Department of State has been an
observer on ICHEIC's governing body since its inception. Any interested
party is welcome to review the work of the ICHEIC, via the Commission's
Web site, www.icheic.org, or by consulting the report conducted by the
National Association of Insurance Commissioners at www.naic.org.
ICHEIC's efforts resulted in the payment of approximately $300
million to some 48,000 claimants--beneficiaries or heirs of
beneficiaries of policies issued to Nazi victims during the period 1920
to 1945--the vast majority of whom could never have otherwise received
anything. It published a list of 500,000 names and provided widespread
publicity during a four to five year claims period. While some
claimants had documents regarding policies, the vast majority of them
did not. Nevertheless, at no cost to the claimants, ICI: LEIC undertook
the research and found policies in many cases. On such policies, ICHIEC
paid the full amount plus interest since World War II, usually this
amounted to $10,000 to $20,000 per documented claim, but occasionally
it was much more. In addition, some companies, against which there were
valid claims, had gone out of business. Nevertheless, ICHEIC and the
participating companies paid the claims.
In addition to the $300 million paid out for claims, ICHEIC also
made available $169 million mainly for social welfare projects that
benefited Holocaust survivors. These funds do not include millions of
dollars devoted to insurance claims outside of ICHEIC, such the $25
million earmarked for insurance claims by the Austrian General
Settlement Fund (created pursuant to a U.S.-Austria agreement), which
is continuing to pay claims. We estimate that over $500 million dollars
have reached Holocaust survivors and heirs as payments for insurance
claims and related projects.
None of this would have been possible if the foreign governments
and companies providing these payments believed they would be subject
to continuing litigation in United States courts over Holocaust-era
claims. In return for $6 billion in payments to Holocaust victims,
including to holders of Holocaust-era insurance policies, the United
States agreed, with respect to German and Austrian companies, that
continuing litigation would be contrary to its foreign policy interests
and that those companies should instead have ``legal peace.'' The
United States has made these interests clear in numerous courts, all of
which have dismissed litigation that would have undermined these
important policy goals.
The proposed legislation would take the opposite course. Its
primary effect would be to enable and facilitate renewed litigation,
even where the claims at issue had already been explicitly settled in
U.S. courts. We believe such litigation would be acrimonious,
expensive, and ultimately unsuccessful. In addition, it would cause
significant problems for the foreign relations of the United States,
especially with respect to countries with which we have bilateral
agreements and which will see enactment of this legislation as a
repudiation of such agreements. If such legislation is enacted, we
expect it will be extremely difficult to achieve cooperation from other
countries in their taking additional domestic steps on Holocaust
restitution matters.
The Administration is well aware that the ICHEIC process was not
perfect. There can be no ``perfect'' justice when it comes to the
Holocaust. But, in our judgment, H.R. 1746 would detract from rather
than advance the cause of bringing some measure of justice to Holocaust
survivors and other victims of the Nazi era, a cause for which the
United States has been in the forefront for the past 60 years.
Senator Bill Nelson. Thank you, Ambassador Eizenstat.
Mr. Rosenbaum.
STATEMENT OF THANE ROSENBAUM, JOHN WHELEN DISTINGUISHED
LECTURER IN LAW, FORDHAM UNIVERSITY SCHOOL OF LAW, NEW YORK, NY
Mr. Rosenbaum. Senator Nelson, other Senators on the
committee: Thank you so much for convening today this
afternoon's hearing.
My name is Thane Rosenbaum. I'm grateful for being invited.
I'm a law professor at Fordham Law School, specializing in the
area of human rights and moral justice. I've written a number
of books on Holocaust-related themes, both fiction and
nonfiction, and I've written hundreds of articles for all of
the major newspapers in the United States and outside of the
United States dealing with Holocaust-related matters, including
restitution.
What I'd like to do is set the moral table, because when
you're dealing with an atrocity your starting point must always
be the moral dimension. There are some matters that need to be
clarified. There's somewhat of a misunderstanding, and let me
see if I can assist the committee in a way that might be
helpful.
First the question of what is restitution. Restitution
doesn't even occur unless the victims feel restituted. It's the
first priority. It's the moral dimension of what restitution
means, that victims need to feel satisfied.
Senator Cardin earlier said something about acknowledgment
and I was interested in that, but acknowledgment is not enough.
Acknowledgment is symbolic and it's significant in its own
right, but the victims themselves must walk away and feel
respected and dignified and treated as if there was a just
resolution. Acknowledgments are not provided for Senators or
for me; acknowledgments are for the victims. It is they who
have to feel good.
The Holocaust survivors by and large throughout all of
these restitution proceedings, unfortunately, have not felt
good about what has been done on their behalf, have not felt
restituted, partly because they've been infantilized. They have
not been able to participate in the process. They have not been
able to make decisions for themselves. They have not been able
to confront the people who have harmed them. They have not been
able to seek the truth of their family histories. They have not
been able to achieve any discovery.
Essentially, what this legislation does is restore to
survivors their dignity and give them a private right of
action. Essentially, it liberates the survivor again, and this
time it's for the purposes of controlling his or her own
destiny in order to finally participate in the process.
Another misunderstanding is that there's something extreme
or Draconian about this legislation, and I don't believe that
it does. It strikes me that the legislation is a very
unaggressive, almost passive, bill. It's not a legislation of
disgorgement. If anything, it's merely legislation of access
and empowerment. It provides the survivor with a legal remedy
and a legal forum in which to pursue that remedy.
The passage of this legislation in both Chambers of
Congress doesn't result in the exchange of one dollar in
insurance payments to survivors. All it really does is provide
the threat of a lawsuit, essentially, by requiring the
publishing of the names of policyholders and the historical
justice that's achieved through such disclosure, and through
access to the courts by requiring insurance companies to settle
cases on fair and reasonable terms.
The legislation functions as an implicit reminder to play
fair, to make things right, to give survivors an opportunity to
regain their property and honor. Insurance companies have
nothing to fear unless they have something to hide.
Under ICHEIC, that's exactly what happened. The insurance
companies were able to hide. Why? Well, the insurance companies
were included within ICHEIC. There was no meaningful document
discovery. There was an absence of truth-seeking in very
fundamental ways. Lawsuits, the threat of lawsuits, opens up
the process, not just to survivors. Senator Nelson certainly
knows that law suits create yet another invitation for State
insurance commissioners to participate and get back in the
game. It places pressure on the European industries to make
public what they've done. It calls attention to these matters
to the public and to the media. Congressional pressure can be
reinvigorated and renewed, of course, by this legal pressure.
I published an op-ed in yesterday's New York Sun. It was
really an invitation for the insurance industry to regain their
goodwill, to not hide behind ICHEIC and to finally do what's
right.
My final point goes to a point that we've heard again today
from Mr. Eizenstat. We've read it repeatedly. It's this
question of rough justice and legal peace. I have an enormous
amount of respect for my friend Stuart Eizenstat, an enormous
amount of respect. But I can tell you, I've been a law
professor for 17 years. I don't have the slightest idea what he
means when he says rough justice and legal peace.
I have a vague idea. These terms have become fashionable,
they've been acceptable terms of art in these proceedings. But
what he's really saying is that under these circumstances of
Holocaust restitution we really don't accept--we can't expect
justice, we can't expect it in any meaningful way. We must
accept inadequate justice, insufficient justice, substandard
justice, discounted justice, essentially rough justice.
Now, why? I'll sum up in a second. Will that be all right,
Senator Nelson? Thank you, sir.
Senator Bill Nelson. If you could wrap up.
Mr. Rosenbaum. I will, sir. Thank you.
I would think that in this instance, given the enormity of
the Holocaust, as with all victims of genocide, we would expect
the exact opposite. The Nuremberg prosecutors didn't accept
rough justice. We accept that victims of genocide are an iconic
people, the possessors of forbidden knowledge. We don't settle
for less than complete justice. We actually should ultimately
settle for more.
This basic idea that we should accept something as if it's
better than nothing is obviously not enough. It's not enough
for survivors because they're not satisfied. It hasn't in any
way relieved their resentment or their sense of unjust
resolution in this case. So ultimately there's no sense of
restitution.
The victims of the Holocaust and genocide in general
require not rough justice, but actual moral justice; not legal
peace, but moral peace. This is not about making governments
and corporations feel better about themselves so they can sleep
easier at night. In fact, it ought to be about allowing
survivors to feel restituted in some truly meaningful way.
Senator Bill Nelson. Thank you, Mr. Rosenbaum.
Mr. Rosenbaum. And to also allow the dead to rest in peace.
Thank you, chairman.
[The prepared statement of Mr. Rosenbaum follows:]
Prepared Statement of Thane Rosenbaum, John Whalen Distinguished
Lecturer in Law, Fordham University School of Law School, New York, NY
Mr. Chairman, and the Senators on this committee, let me begin by
thanking you for inviting me to testify here today in connection with
the Senate's consideration of H.R. 1746, the Holocaust Insurance
Accountability Act. My name is Thane Rosenbaum. I am a law professor
specializing in the area of human rights and moral justice. Over the
years I have written a great number of books, articles, and essays that
concerned Holocaust-related themes and issues. I have been quoted in
various national news media stories on matters involving Holocaust
restitution. I have been a Yom HaShoah (Holocaust Memorial Day) speaker
at synagogues, churches, universities, and public memorials in cities
all across America. In fact, last week I was simultaneously writing
this statement while preparing to deliver a Yom HaShoah address.
Finally, I am the only child of two Holocaust survivors, both
concentration camp victims, neither of whom are alive today. I have
made no claims for restitution relief on behalf of my parents. I am
here today at your invitation and without any tangible benefit to
myself. Indeed, I am here only because when it comes to the Holocaust,
this committee, this Chamber of Congress, is the appropriate place to
be.
Let me begin by stating that what you do here today is vitally
important on so many grounds, most especially, for reasons of humanity
and morality. Given my emotional, familial, and professional
involvement in all things related to the Holocaust, I want to thank and
commend you for convening this hearing. To my mind, there is great
potential that your efforts here today will lead to righting a historic
wrong and vindicating the rights of those who were the principal
victims of the Nazi genocide.
The voice of the Holocaust survivor has, tragically, and for far
too long, been silenced throughout these restitution initiatives. And,
in making this assessment, I am including here the measures taken
against Swiss Banks, German industries for their use of slave labor and
the confiscation of gold bullion and artwork, and now the matter of
European insurance companies and their unconscionable denial of claims
and $17 billion in unjust enrichment, which forms the centerpiece of
this committee's hearings for today.
Along the way, however, throughout each of these restitution
efforts, the Holocaust survivor has been repeatedly stripped of his
rights, separated from his property, and deprived of his dignity. No
one ever bothered to stop and ask Holocaust survivors what they wanted.
There was so little curiosity as to whether Holocaust survivors even
had an opinion about how to best redress the crimes committed against
them. And there has been great neglect from those who were purportedly
entrusted to guard their interests. Finally, and perhaps most
insultingly of all, Holocaust survivors have been readily dismissed and
deemed too insignificant to speak for themselves. Self-appointed
surrogates stepped in as custodians and proxies and immediately
regarded the survivors as too unsophisticated to define their own
interests and dictate the terms of how to proceed against those who had
harmed them--six decades after their improbable survival.
So few people can claim to have endured what they survived, and yet
so many presume to speak for them, and speak so casually about what
they should accept as restitution for the nightmares they experienced
firsthand. Rare has been the case where Holocaust survivors
meaningfully participated in the negotiations that have presumably
addressed their losses, their property, and their family history.
It is, in fact, grossly ironic that Holocaust survivors have been
so infantilized during the last days of their lives. Those who survived
the Nazi death camps as indefatigable teenagers have, in their old age,
been reduced to voiceless reminders of fraud and neglect. After the
recent various disclosures of wartime thefts of the Nazis and the
complicity and self-dealing of other European nations and corporations,
the objective should have been to find ways to empower Holocaust
survivors to reclaim their property and discover the truths of how they
were so cruelly defrauded and deceived. Instead, the very opposite
outcome occurred. The failure of ICHEIC is but one example of how these
well-meaning restitution initiatives only served to further marginalize
and degrade Holocaust survivors during their greatest hour of need and
during the final hours of their lives.
What you do here today is a most righteous task. You have the power
to enable a depleted community of Holocaust survivors, many of whom are
living in poverty, to restore their rights, their dignity, and, most
especially, their voice.
Restitution is primarily about righting a historic wrong. It is
about providing relief to those who have been subjected to the most
unimaginable forms of human suffering. And it is relief in the broadest
sense--relief that actually makes victims feel relieved. Restitution is
not only about the recovery of assets and the receipt of monetary
compensation. That is too simplified an understanding of restitution--
the language and mindset of lawyers rather than the wishes of moral men
and woman. At its deepest most profound core, restitution demands the
public acknowledgment of loss and the public reckoning that is achieved
only by learning the truth. This is what historical justice means: The
duty that is owed to victims, and the duty that is owed to history, can
only be achieved when the truth is discovered, internalized, and
preserved.
The legislation before you serves this broad moral purpose. First
and foremost, H.R. 1746 restores the survivor his voice and
decisionmaking authority. It allows victims to finally receive their
day in court and opportunity to testify to their losses--both personal
and financial--in their own words and with their own appointed
representatives. This legislation would also enable survivors to
confront those who have harmed and defrauded them, and to do so in the
most human terms possible--not as faceless entities folded into a vast,
anonymous government bureaucracy, but as principals seeking to
vindicate their rights in American courtrooms.
Furthermore, H.R. 1746 would require European insurers to publish
the names of all Holocaust-era insurance policies. For various and
apparent self-condemning reasons, they have been reluctant to do so.
This legislation would finally compel full disclosure as to these
insurers' postwar misdeeds, and it would result in the necessary truth-
seeking that has been entirely absent from these proceedings for well
over a decade. By finally acknowledging the names of, and being held
accountable for their conduct toward, their customers, European
insurance companies will invariably be forced to disclose how, and by
how much, they benefited from the murder of those whose lives they were
contractually entrusted and obligated to insure.
In addition to achieving the historical justice that comes with
truth, the threat of private lawsuits would empower Holocaust survivors
to negotiate on their own terms, without surrogate institutions that
otherwise seek to aggregate, standardize, and depersonalize claims.
Institutions don't take things personally; individuals do. Restitution
relief always requires some form of personal engagement--sometimes
minimal, sometimes symbolic, but always personal. Given the enormity of
their loss and the grotesque moral failure that gave rise to that loss,
Holocaust survivors must retain substantively meaningful self-
determination over their family histories. Anything less is neither
moral nor consistent with the objectives of restitution. Private
lawsuits permit such personal engagement; courtrooms, after all, are
places where individual losses are counted and damages are assessed.
Under ICHEIC, however, which had the ostensible purpose of
maximizing efficiencies and reducing costs, each survivor became simply
a number that needed to be processed in order to establish that
something was done, regardless of whether that something amounted to
anything meaningful or just. In the vast majority of cases, such
processing resulted in the alarmingly swift denials of casually
disposable claims. ICHEIC was all too focused on maintaining global
friendships and generating goodwill for future negotiations that may,
ultimately, have nothing to do with the Holocaust at all. The legal and
moral claims of the individual Holocaust survivor, however, ended up
being the collateral damage of these perceived international
commitments.
There can be no restitution if the victim does not ultimately and
actually feel restituted. This is precisely why so many of these
restitution initiatives, and especially ICHEIC, despite all good
intentions, have failed so miserably on moral grounds. The fundamental
imperative to measure success only by looking at the score sheet of
actual victims went completely ignored. No one asked Holocaust
survivors how they felt about the tactics deployed on their behalf, or
whether they were satisfied, or what they actually wanted. There are
many possible remedies in addition to the face value of an insurance
policy. Many survivors wanted to know the truth of their family
histories--who purchased the policy, when and where? Other victims
merely wanted to assist other Holocaust survivors in need. Instead,
government leaders, Jewish institutions, and class action lawyers
blithely went about their business as if they had the moral authority
to speak for survivors and determine their level of satisfaction--or
ignore their wishes altogether.
Yet, what is undeniably true is that in order for restitution to
have meaning--both in a strict moral and legal sense--it must offer a
pathway to the relief of human misery and resentment. If restitution
doesn't actually produce relief and dissipate resentment, then it may
be many things, but it is decidedly not restitution. It is a
halfhearted legal resolution that resolves nothing, a mere symbolic
gesture, or, as my friend Stuart Eizenstat repeatedly proclaims, it is
a measure of rough justice, a way to achieve some legal peace.
But the entire concept of legal peace is such a curious idea; one
that is purely legal and not at all moral. Peace for whom? Governments?
Corporations? Lawyers, diplomats, and government negotiators who wish
to rest much easier, or, more peacefully, at night? Something is
terribly twisted here. After all, doesn't our duty to achieve peace and
secure restful nights remain only with the survivor? And do we not have
an equal duty to the memory of the dead? Isn't that what is meant by
``rest in peace''? Why should the legal peace offered to nations
supersede the moral peace owed to actual victims?
Notions of rough justice and legal peace only appease the interests
of governments, corporations, and morally lazy judges; they do not
restitute and restore victims. These proclaimed remedies are, by
definition, perfunctory--placebos that carry no moral weight or
currency with the victims for whom these self-congratulatory measures
were intended to benefit. In the end, short of bringing about relief,
the futility and frustration of these restitution efforts have given
rise to an unrelievedly mechanized process that has only added insult
to injury.
In the case of ICHEIC, its legacy, unfortunately, will be
remembered for this familiar pattern of institutional callousness and
neglect. European insurance companies stole premiums (or shared them
with Nazi and Axis authorities), refused to pay on policies and failed
to fully disclose the names of their Jewish customers, even though they
were quite aware of the existence and special vulnerability of this
particular class of insureds. Indeed, they marketed life insurance
policies specifically to Jews, knowing full well that everything about
European Jewry was soon to become irreparably short-lived. And then,
after profiting from the premiums, they handed over their Jewish files
and records to the Nazis without regard to this breach of fiduciary and
contractual duty. Despite this level of duplicity and deceit, with a
guilty party that was, stunningly, this guilty, ICHEIC, a public entity
created to achieve justice, failed to achieve justice or to give
victims any sense that it was capable of advancing their interests and
fighting their cause.
The recovery of 3 percent of the $17 billion in unpaid Holocaust-
era insurance policies hardly amounts to even rough justice. This is
particularly true given the amount of poverty in the Holocaust survivor
community and the astonishing wartime and postwar theft of the European
insurance industry, whose entities are now counted among the largest
corporations in the world. The relative benefit derived from these ill-
gotten gains, in which a mass shakedown of insurance policies would
help these insurers grow to become financial behemoths, compared with
the suffering of so many in the Holocaust survivor community, is a
laughably poor demonstration of ``rough justice.'' Moreover, ICHEIC
authorized the use of funds to promote Holocaust education over the
needs of destitute Holocaust survivors; and the majority of claimants
received $1,000 humanitarian payments in lieu of the proceeds of their
policies, which has far more in common with a consolation prize than
any true sense of justice, even of the ``rough'' variety.
Mr. Eizenstat speaks with a certain degree of conviction as if
ICHEIC was a success, as if all of its advertised benefits upon
creation were actually realized, as if the Holocaust survivor community
should be grateful for the relaxed standards of proof that ultimately
resulted in tens of thousands of claims NOT being paid. We are reminded
that the great benefit of ICHEIC is that Holocaust survivors were
spared attorney's fees; through the beneficence of ICHEIC, Holocaust
victims were shielded from having to engage in costly and protracted
litigation in order to vindicate their rights, the very thing that H.R.
1746 would unleash.
But in not having to hire a lawyer, what did Holocaust survivors
receive in return? The overwhelming majority was treated with the
indignity of having their claims rejected, making a mockery of the
presumed liberal evidentiary standards under which their claims were
supposed to have been evaluated. ICHEIC stood in the shoes of the
insurance companies, and, ultimately, echoed the same defenses that
were uttered decades ago: Show us a death certificate or get lost. The
token $1,000 humanitarian payments trivialized their actual losses and
exonerated European insurers for now, and for history. What insurance
company wouldn't sell life insurance policies if it knew that the lives
that were being insured were so dispensable and worthless that six
decades later, with the premiums long invested and with no dividends to
pay out, the contract could be discharged with a mere check for $1,000?
The point, all along, should have been to disgorge the insurers of
their wartime booty and disclose the truth of their postwar deceit.
Instead, ICHEIC administrators flew first class and initially spent
more money on administrative expenses than in the payment of actual
claims. The overall consequence of ICHEIC has produced not only the
widespread feeling of justice denied and a windfall preserved for the
European insurance industry, but also a renewed sense of resentment
among the Holocaust survivor community--this time compounded and
directed not only against their former insurers, but also America's
deeply flawed ICHEIC experiment.
And that's precisely why this is a job for the legislative branch.
Indeed, it should have always fallen to Congress to establish the
rights of those who had been defrauded in this sordid arena of
international commerce, and to establish the jurisdiction of Federal
courts in the service of redressing these crimes.
The powers of the executive branch to conduct foreign policy surely
cannot be expanded to allow the suppression of facts in the hands of
foreign corporations that collaborated with the Nazis and defrauded its
customers. Whether there is a compelling foreign policy interest here
or not, the executive branch simply cannot preempt and cancel the
rights of citizens to avail themselves of American courtrooms. Unless
Congress acts decisively in this matter, the forfeiture of these legal
rights is exactly what will have happened. The legal and moral
authority of the Holocaust survivor to seek justice in his or her
lifetime, surely under these circumstances, should supersede all other
considerations of a political, as well as foreign policy, nature.
As Mr. Eizenstat is here today to reaffirm, the executive branch
always operates under a different set of priorities. Surely the State
Department would prefer that European insurers look upon the American
Government favorably for having spared them from lawsuits in the United
States for crimes committed over 60 years ago. But absent a formalized
agreement that would have purported to deprive Holocaust victims of a
private right of action, of which there is none, nor, constitutionally
speaking, could there ever be one, all that remains is the presumption
that the insurers are somehow entitled to full immunity--a position the
government never agreed to when the German Foundation was negotiated,
and, never could have agreed to.
To deprive Holocaust survivors of their day in court constitutes a
twisted manipulation of realpolitik, the privileging of vague notions
of international diplomacy over the moral duties that are fundamentally
owed to victims of genocide. (The irony, of course, is that the State
Department's obsession with realpolitik resulted in the abandonment of
the Jews during World War II. Now, over 60 years later, similar
concepts of global ``diplomacy'' are being reintroduced with respect to
the vindication of the rights of these very same victims.)
In order to have negotiated a payment of $5 billion from the German
Foundation as compensation for slave labor ($3 billion of which was set
aside for non-Jews; $1 billion for Jews; and another $1 billion for
other compensatory purposes), Mr. Eizenstat maintains that it was
necessary to limit the future rights of Holocaust survivors to sue
insurance companies for claims arising out of their policies. Under
what moral criteria is it appropriate for one group of victims, who had
once purchased insurance contracts that entitled them to legal relief
in any country in the world in which the insurer did business, to
forfeit those rights as an inducement for the German Foundation to make
restitution for slave labor--an obligation they should have undertaken
years earlier and without regard to whether Jews owned insurance
policies that were never honored? Did anyone consult Holocaust
survivors to see whether they were willing to waive their legal rights
under their insurance contracts in order to ease the negotiations on
behalf of an entirely different category of Nazi victims?
Moreover, in every sense of the word, Holocaust survivors stand as
a separate category of Nazi victim. Their position is unique because
the Nazis deemed them so; indeed, the Final Solution was conceived
entirely for them. Slave laborers were surely victims of war, but they
were decidedly not, by definition, selected for extermination and
destined for the murderous flames of the Holocaust. While non-Jewish
slave laborers surely deserve restitution, why should the insurance
policies of those who stood fixedly atop the hierarchy of Nazi
suffering be leveraged in order to bring German industries to the
negotiating table to pay restitution to others? The $5 billion
restitution payment for slave labor is worthy and impressive, but it
devalues the nature of victimhood and the relative experiences of
suffering by calling it a Holocaust settlement, and it should have no
bearing on whether Jewish policyholders of life insurance can bring
lawsuits against the companies that had defrauded them.
Imagine if Mr. Eizenstat were testifying here today and took a
similar position with respect to the victims of Hurricane Katrina. What
if he told us that the casualties of a natural disaster could not avail
themselves of Louisiana courtrooms in their pursuit of legal remedies
against corporations that failed to honor their property insurance
contracts? And what if the reason behind this forfeiture of rights was
some foreign policy objective that necessitated the negotiating away of
these legal remedies--rights otherwise guaranteed by contract and
enforceable under American law--all for the purposes of achieving some
other benefit for another party that had never before weathered a
hurricane? What would this committee say if we were to invalidate those
insurance contracts, and for these professed reasons?
Let's look at a different type of injury and even a different class
of victim--for instance, the makers of dangerous substances and
defective products; and, more specifically, unwitting consumers who
were damaged by say, tobacco smoke or faulty seatbelts. Should the
competing considerations and nuances of foreign policy--with all that
give and take and winks and nods--stand in the way of smokers and car
accident victims to seek redress, under either tort and contract law,
against those who may have harmed them? Would this body stand for that?
Yet, today, in this hearing, we are faced with the legacy of the
Holocaust. Holocaust survivors--as would be the case with the survivors
of any genocide--have always been understood to be deserving of special
treatment and protection. They were not, in any ordinary sense, the
consumers of defective products. On the contrary, there was nothing
voluntary about the nature of their victimhood. They couldn't simply
have chosen to stop smoking or promise never again to step inside a
car. They were the victims not of consumption, but rather human
barbarism. For this reason, they stand in a privileged position in the
eyes of the world, largely because they are eyewitnesses to the very
thing that humanity is all too afraid to look at--the reflection of
unimaginable evil. Holocaust survivors are the custodians of this
forbidden knowledge, and therefore the range of responsibility that is
owed to them is greater than any courtesy that might otherwise be
exchanged in the course of international diplomacy.
Realpolitik has no place in the world of atrocity. In this
instance, and with respect to this legislation, the burden to do what
is right is higher, because the burden that Holocaust survivors endured
was greater. This committee, this Chamber of Congress, has, with H.R.
1746, an opportunity to grant Holocaust survivors the return of their
rights and the restoration of their dignity, both of which have been
withheld from them--throughout these restitution proceedings--for far
too long. And in empowering Holocaust survivors and exposing European
insurers to the imperatives of truth, this committee will also serve as
a moral voice that the United States offers no protection to those who
profit from the suffering of others and who take advantage of the
spoils of man's darkest hour.
______
[From the New York Times, June 14, 2007]
Losing Count
(By Thane Rosenbaum)
The Holocaust has always been marked by numbers. There was the
numbering of arms in death camps and the staggering death toll where
the words six million became both a body count and a synonym for an
unspeakable crime. After the Holocaust, Germany performed the necessary
long division in paying token reparations to survivors. More recently,
Swiss banks and European insurance companies have concealed bank
account and policy numbers belonging to dead Jews.
Only with the Holocaust have dehumanization and death been as much
a moral mystery as a tragic game of arithmetic. And the numbers
continue, although now largely in reverse.
After 60 years, Holocaust survivors are inching toward extinction.
According to Ira Sheskin, director of the Jewish Demography Project at
the University of Miami, fewer than 900,000 remain, residing primarily
in the United States, Israel and the former Soviet Union. Most are in
their 80s and 90s. Unless immediate measures are taken, many of those
who survived the Nazi evil will soon die without a proper measure of
dignity.
According to Dr. Sheskin's data, more than 87,000 American
Holocaust survivors--roughly half the American total--qualify as poor,
meaning they have annual incomes below $15,000. The United Jewish
Communities, the umbrella organization of the American Jewish
Federations, determined that 25 percent of the American survivors live
at or below the official federal poverty line. (The poverty figure in
New York City is even higher.) Many are without sufficient food,
shelter, heat, health care, medicine, dentures, eyeglasses, even
hearing aids.
Conditions worldwide are similar. It's a sad twist that the
teenagers who mastered the art of survival so long ago have been
forced, in their old age, to call on their survival instincts once
again.
It doesn't have to be this way. Although the various global
financial settlements represent only a small fraction of the Jewish
property that was plundered during the Holocaust, they still amount to
billions of dollars. Which raises questions: Why aren't the funds being
used to care for Holocaust survivors in whose name and for whose
benefit these restitution initiatives were undertaken? Why weren't
survivors permitted to speak for themselves in the very negotiations
that led to the recovery and distribution of their stolen assets?
Take the Swiss bank settlement, for instance. A federal judge in
Brooklyn distributed 75 percent of the looted assets to survivors in
the former Soviet Union, leaving only 4 percent for destitute survivors
in the United States, even though roughly 20 percent of the world's
Holocaust survivors live in America. Assets that had been stolen by the
Swiss were once again diverted, this time by the charitable
inclinations of a judge who, ignoring the voices of survivors, severed
the connection between the victims of the theft and the proceeds of the
recovery.
On the matter of insurance, a federal judge in Manhattan recently
approved a settlement in which fewer than 5 percent of the life
insurance policies that had been sold to Jews would be restituted,
allowing the Italian insurer, Generali, to escape with more than $2
billion in unjust enrichment. By not requiring Generali to disclose the
names of policyholders, the settlement amounts to a coverup. Tens of
thousands of Holocaust survivors are being kept from the truth and will
likely be foreclosed from bringing individual claims against the
corporation that defrauded them.
The Jewish Claims Conference, an organization established in the
1950s to recover and distribute Jewish property, has assets under its
care estimated at $1.3 billion to $3 billion, which includes a vast
inventory of cash, real estate, and artwork. Despite the urgency of
human suffering, the conference insists that it cannot respond to the
unmet needs of Holocaust survivors.
Meanwhile, it spent about $32 million last year on programs
dedicated to ``research, documentation, and education.'' Some of those
millions went to a program that paid $700,000 to a ``consultant''--a
friend of the organization's president--who, in an interview with The
Jewish Week, couldn't recall what he had been asked to consult on.
While the conference supports many worthy projects, it is controlled
not by survivors but by surrogates, and operates with limited oversight
and financial accountability.
The Holocaust, so large an atrocity, has a way of overshadowing
everything, including its survivors. In focusing on the past in order
to prevent history from repeating itself, we have forgotten those who
are the direct casualties of this crime. Amid all the Holocaust hoopla
the survivors have become secondary.
This neglect is widespread. Even the United States Holocaust
Memorial Museum has regarded itself as primarily a home for historians
and a monument to history, but not as an institution that places
survivors first. Yet without their anguished presence the museum would
not exist.
One demonstration of its inattentiveness involves the imminent
transfer to the museum of electronic copies of Germany's Bad Arolsen
archives, which hold 50 million documents pertaining to the fate of
more than 17.5 million victims. Unfortunately, the museum has failed to
commit to making the archives accessible on the Internet so that they
can be accessed as easily by Holocaust survivors as by visiting
scholars.
So what can be done to honor those who survived but who seem to
have been forgotten?
First, all traceable assets held by the claims conference and the
negotiated settlements with Swiss bankers and European insurance
companies must be returned to their owners, with the remainder used for
survivor needs.
Second, Congress should pass the proposed Holocaust Insurance
Accountability bill, which would require insurers to publish the names
of policyholders and allow survivors to resolve claims on fair and
truthful terms.
Third, all Holocaust documentation, like the Bad Arolsen archives
and the recently disclosed Austrian war records, must be made readily
accessible. Survivors and their families must have easy access so
family histories can be recovered and property claims verified. These
archives cannot be just the province of scholars.
Finally, if both the World Jewish Congress and the claims
conference fail to achieve transparency in their operations, then
Congress or law enforcement should publicly account for the funds that
have been controlled by institutions that survivors never elected and
did not authorize.
Surviving the Holocaust, which was against all odds, is still a
numbers game. The percentages are always against the survivors. Nearly
murdered, shamefully defrauded and with the clock ticking, they wait
for justice, accountability and, most of all, respect.
Senator Bill Nelson. Thank you, Mr. Rosenbaum.
Mr. Dubbin.
STATEMENT OF SAMUEL J. DUBBIN, PARTNER, DUBBIN & KRAVETZ, LLP,
MIAMI, FL
Mr. Dubbin. Mr. Chairman, I'm Sam Dubbin from Miami. I want
to thank the chairman for holding the hearing and the others in
attendance.
I am here because, as a South Florida attorney, I was asked
by members of the survivor community back in 1997--in fact, it
was at a hearing held by Commissioner Nelson at the time--to
get involved on their behalf, because their experience with the
institutions that were charged with their affairs were not
good. They felt they had been excluded all those years. They
worried that with the issues coming up over asset restitution
that they would be left out of the dialogue and out of the
discussion. It's on their behalf that I sued some insurance
companies. We tried to get Judge Korman in the Swiss Bank case
to make an adequate provision of assistance for survivors in
the United States.
They are the ones who, because ICHEIC closed with such
paltry results, have insisted that, instead of the
nontransparent, nongovernmental, non-due process-oriented
system that was produced, that they get a chance to go to
court, where a judge and a jury can examine the conduct of the
companies and get to the truth. So I'm here on their behalf.
Now, I have a lot to say about ICHEIC and the legal peace
process, but I want to start with the overriding point here
because I think it's crucial. The argument being made is that
the elders, the philosopher kings who have taken it upon
themselves to do what they think is right, they think what the
survivors should accept, have basically said: You should
accept, not full payment of your insurance claims; you should
not accept the full truth about what these companies did with
your families' policies; but you should accept what we give
you, because we want to try to help people in general.
So they want to sacrifice property rights for doing
something for the general good. Now, as you know, Mr. Chairman,
I was at the forefront of trying to get a guarantee that all
survivors had adequate long-term care and that the companies
that stole billions be the ones to supply that.
So this goes to your question, Mr. Menendez. If they're
saying that people's property rights, guaranteed by contracts
entered into in good faith, enforceable in the courts of this
country for the last 200 years, should be sacrificed, should be
thrown out, so that they can continue negotiations, the
question is: What's the purpose of the negotiations?
The data show that 80,000 survivors in this country either
live below poverty or are so poor they can't afford food,
medicine, dentistry, and the like. Unless the goal--why isn't
the goal to make sure that every one of those survivors has
what they need? That's not what you heard. You heard that we're
trying to get a few more pension dollars, we're trying to get a
few more payments here, a few more payments there.
The burden should be on those who want to substitute their
judgment for what the survivors want and need to justify the
status quo. The status quo is a failure, and you've heard that
from your constituents and you're going to continue to hear it.
So that is not an adequate substitute because that's what
Germany owes the victims. That's what they owe the victims, not
rough justice, not legal peace. And that's what they haven't
gotten today, and that's what the Claims Conference is not
obtaining for them in these various negotiations. That's the
principal question for those who talk about what other
discussions are being ``threatened.''
So let's talk quickly about, and I hope I get some
questions about the ICHEIC issues per se, because States all
over the country in 1998 passed laws requiring the companies
doing business in their States to disgorge information, to
produce records of how they treated customers after the war, to
pay claims, and to be susceptible to court action. Congress was
considering similar legislation and that's what brought the
companies to the table, make no mistake about it. It wasn't
some abstract desire to do right.
The ICHEIC process was set up and the way that that--it was
supposed to publish the names within a year and pay the claims
within 2 years. The names were not published until late 2003,
Germany ended up publishing about 400,000 names. But they did
not publish their names until the summer of 2003, when the
deadline for filing claims was almost over.
Generali, one of the biggest companies, published 10,000
names up until mid-2003 and then published another 30,000,
again at the end of the deadline. But they sold well over
150,000 policies to Jews easily, and the names of the Generali
subsidiary customers were not even published on the ICHEIC Web
site. So when they talk about the publication of names, it was
woefully, disgracefully inadequate and it's not an adequate
substitute.
The valuations? Two hundred fifty million dollars in claims
were paid, $31 million in $1,000 humanitarian payments. Those
aren't payments on claims. For them to stand here and tell you
that those were payment on claims, when Mr. Rubin told you that
that was an insult, there is a disconnect here between what the
survivors believe they were getting and what the establishment
thinks that they were giving them.
So the problem then became that court cases by people--let
me just tell you another fraction. The Germans and ICHEIC paid
10 cents on the dollar on the fair value. They paid at the same
rate they were allowed to restitute policies for after World
War Two. So when we hear that fair value was paid by German
companies, that's not true. My question is, they paid $82
million when a conservative valuation would have been $550
million. Why should Germany today be paying Marshall Plan
valuations? That's the system that was imposed on survivors, or
would be imposed unless you act and enact a bill like H.R.
1746.
[The prepared statement of Mr. Dubbin follows:]
Prepared Statement of Samuel J. Dubbin, Partner, Dubbin & Kravetz, LLP,
Miami, FL
My name is Samuel J. Dubbin. I would like to thank you, Chairman
Nelson, and all the members of the subcommittee, for holding this
hearing on the vital and very urgent problems facing Holocaust
survivors and heirs with unpaid insurance policies. The bottom line
from my clients' perspective, and thousands of other survivors and
families they represent, is that congressional action to restore
survivors' rights is long overdue.
For the past decade I have had the privilege of representing
Holocaust survivors and family members in attempting to recover assets
looted by a variety of governments and global businesses. In the eyes
of the survivors and heirs I represent, the restitution enterprise has
mostly failed. In their eyes, the interests of victims and families
have been given the lowest priority, with the interests of governments,
international corporations, and institutions having conflicting agendas
taking precedence. I am here today because they are crying out for
justice, and for a fair shake from the American political system.
Today, the focus of my testimony will be on the problem of unpaid
insurance policies that were purchased by Jews in Europe prior to World
War II but never paid to the insureds or their rightful heirs.
background representing holocaust survivors and heirs
I will begin by describing how I became involved as a lawyer for
survivors. Between 1993 and 1996, I served in the Clinton
administration as Special Assistant to Attorney General Janet Reno and
Deputy Assistant Attorney General for Policy Development in the
Department of Justice, and as Chief Counsel to the National Highway
Safety Administration (NHTSA) in the U.S. Department of Transportation.
After I returned to private practice in Miami, a group of survivors in
South Florida (the South Florida Holocaust Survivors Coalition)
approached me because they feared that they would be excluded from a
meaningful role in the emerging public negotiations, lawsuits, and
settlements over ``Holocaust asset restitution.''
They explained that for decades, Holocaust survivors had been
excluded from major decisions affecting their rights and welfare, as
nonsurvivor organizations purporting to speak on their behalf
controlled these processes without the consent of the victims
themselves. Meanwhile, tens of thousands of survivors in their
seventies, eighties, and nineties were suffering without adequate home
and health care, nutrition, shelter, dental care, and other essentials
of life. This shocked me, Mr. Chairman, because one article of faith
throughout my adult life has been that victims of the Holocaust occupy
a hallowed place in the conscience of every civilized person and
institution, and deserve every consideration possible in the
recognition of the unique horror they endured. In practice, their
experience has been quite the opposite.
As you recall, Mr. Chairman, the coalition leaders worked with you
in 1998 when you were the Florida State Treasurer and Insurance
Commissioner to enact legislation in Florida to hold insurers
accountable for policies sold to their parents and grandparents before
WWII. The law required insurers doing business in Florida to disclose
names of policyholders and allow survivors and heirs to bring lawsuits
in Florida courts for unpaid policies. It also negated any statute of
limitations defense for cases brought within 10 years, and, as with
other insurance consumer statutes in Florida, provided for treble
damages and attorneys fees for successful claimants. The legislation
the survivors are asking Congress to enact, H.R. 1746, is an almost
identical measure at the Federal level.
The survivors in Florida also recall with admiration your efforts
to obtain guaranteed long-term health care coverage for all Holocaust
survivors in the State (and ideally everywhere), and to find a funding
source beginning with some of the global insurers who profited from the
Holocaust. Unfortunately, the industry succeeded in ducking your
efforts and those of some of your NAIC colleagues to do the right thing
at the time, and have managed to avoid a full and honest public
accounting for their war-time and post-war conduct.
In the year 2000, the South Florida Survivor Coalition leaders
joined with elected survivor leaders from throughout the United States
who had also reached the conclusion that it was past time for survivors
to speak and act for themselves. They formed the Holocaust Survivors
Foundation USA, Inc. (HSF), which has become the leading grassroots
voice for survivors' rights to obtain a full and transparent accounting
of assets looted during the Holocaust, to recover assets traceable to
living survivors and heirs whenever possible, and to ensure that all
survivors in need receive priority funding from restitution proceeds
which are truly ``heirless.'' I have been the organization's legal
counsel since its inception. HSF's activities have been widely reported
over the last 8 years in national Jewish media such as the Jewish
Telegraphic Agency, the New York Jewish Week, the Forward, as well as
in national media such as the New York Times, the Wall Street Journal,
the Los Angeles Times, the Miami Herald, South Florida Sun Sentinel,
Palm Beach Post, and Associated Press. More information about HSF's
activities and goals can be found at its Web site, www.hsf-usa.org.
summary of house legislation--h.r. 1746
H.R. 1746 is essential to require the insurers doing business in
the American market to open their records, publish the names of
policyholders from the prewar era, and allow survivors and heirs to
bring actions in court if the companies refuse to settle on reasonable
terms. It also provides a 10-year window for such suits since most
survivors and heirs have no knowledge of the fact that these companies
sold their parents or grandparents or aunts or uncles insurance before
WWII.
Let me be clear about what is at stake. It is money, yes, because
the insurers profited outrageously from the Holocaust and turned their
backs on those who trusted the companies' supposed integrity. But this
law is also about the truth. And the current system, the status quo
represented by the ICHEIC legacy, has permitted the companies to hide
behind the secrecy of an unregulated and extra-legal process, chartered
in Switzerland and headquartered in London, and make decisions about
Holocaust survivors' rights with no governmental or judicial oversight.
The few times Congress has knocked on the door to see what ICHEIC was
doing, ICHEIC told Congress to get lost. ICHEIC refused to answer
serious questions in congressional hearings, and refused to provide
information required by statute. Now, its defenders say this regime
should be sealed with the imprimatur of the U.S. Congress as an
acceptable framework for the rights of the victims of history's
greatest crime. The survivors I represent urge you in the most
heartfelt way not to allow the bureaucratic and political focus
opposing H.R. 1746 to substitute for a decent respect for the financial
and human rights of Holocaust survivors.
H.R. 1746 provides a legally enforceable remedy that survivors and
family members have a right to control themselves. It places survivors
where they would have been in 1998 after State laws passed to allow
insurance consumers to pursue their traditional remedies against the
companies that profited from the Holocaust at the expense of the
families of the victims. Without legislative relief, hundreds of
thousands of unpaid policies worth $18 billion in 2007 dollars if not
more sold to Jews before WWII would evaporate--and be inherited by
multinational insurers such as Generali, Allianz, Munich Re, AXA,
Winterthur, Swiss Re, Swiss Life, Zurich, and others.
overview of representation of survivors' interests in litigation
Briefly, I wanted to give the committee an overview of my
experience representing Holocaust survivors and heirs in litigation
involving asset restitution.
swiss bank looted asset allocations
In 2000, Swiss Bank Class Action Judge Edward R. Korman earmarked a
total of $205 million in looted assets funds (from Swiss banks' fencing
looted property) for the needs of poor survivors around the world, with
75 percent of the funds allocated for the Former Soviet Union (FSU) and
only 4 percent for the survivors in the United States. The leaders of
the HSF and several other survivors and survivor groups challenged the
allocations because American survivors represented 20 percent of the
class members (all living survivors) and almost 30 percent of the death
camp survivors, including tens of thousands who are indigent. The FSU
was given $16 million per year, and about $800,000 per year was
provided for the 80,000 poor or near-poor U.S. survivors. Under the
settlement, most needy U.S. survivors received nothing, yet their
rights were extinguished.
The U.S. survivor leaders believed it was legally and morally wrong
for the Judge to use money obtained in the settlement of their legal
rights for others who he personally regarded as being ``needier.'' My
firm, Dubbin & Kravetz, LLP, represented their challenge and appeal of
Judge Korman's allocations formula. The Second Circuit Court of Appeals
acknowledged that it was unprecedented for a court to give the
overwhelming majority of settlement funds to a small minority of the
class, and to deprive most class members any benefit from the
settlement. However, it affirmed the allocation because of the wide
discretion afforded district courts in class action settlements. The
Supreme Court denied certiorari review of the survivors' appeal.
Several Holocaust survivors and HSF leaders who appealed that decision
testified about their perspectives in the Europe Subcommittee of the
House Foreign Affairs Committee on Foreign Affairs in 2007. See,
Testimony of Leo Rechter and David Schaecter before the Europe
Subcommittee of the House of Representatives Foreign Affairs Committee,
March 27, 2007, and Testimony of Alex Moskovic and Jack Rubin before
the Europe Subcommittee of the House of Representatives Foreign Affairs
Committee, October 3, 2007.
hungarian gold train
My law firm was one of three firms which successfully represented
Hungarian survivors seeking restitution and an accounting against the
United States Government for the United States mishandling of property
of the Hungarian Jews that was placed on the ``Hungarian Gold Train''
by the Hungarian Nazi collaborators and obtained at the end of World
War II by the United States.\1\ The case was litigated in the United
States District Court for the Southern District of Florida, Irving
Rosner v. United States of America. After nearly 5 years of extremely
intense litigation, the case settled, with the U.S. Government agreeing
to (a) provide over $21 million for social services for Hungarian
Holocaust survivors in need over a 5-year period ($25.5 million minus
attorneys fees and minus the cost of creating the Gold Train archive);
(b) to create of an archive of the history of the Gold Train and the
fate of Hungarian Jews in World War II; and (c) issue an apology for
its handling of the Hungarian victims' property on the Gold Train. Mr.
Jack Rubin, a Holocaust survivor from Boynton Beach, FL, who is
testifying at this subcommittee hearing, was active in the Gold Train
case and has discussed it in his statement.
---------------------------------------------------------------------------
\1\ The case was initiated by Jonathan Cuneo, of Cuneo Gilbert &
LaDuca, and Steve Berman of Hagens Berman Sobol & Shapiro; they
contacted my firm due to my representation of the survivor community.
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insurance litigation
I have also represented several survivors and heirs and
beneficiaries with claims against European insurance companies.\2\ In
addition, I assisted several survivors and heirs over the years who
attempted to navigate the ICHEIC system. In that role, I have observed
firsthand many of the inconsistencies, irregularities, and failures
voiced by survivors and reported in the media over the past several
years.
---------------------------------------------------------------------------
\2\ In February 1998, the House of Representatives Financial
Services Committee held its first hearing on the subject of unpaid
Holocaust victims' insurance policies. One of my clients, Dr. Thomas
Weiss, testified about the policies he believed his father purchased
before the war from Assicurazioni Generali, S.p.A. which remain unpaid
to this day. I also represented Holocaust survivor Arthur Falk in
litigation against Winterthur Insurance Company, a Swiss entity. Mr.
Falk testified before the House of Representatives Committee on
Government Operations in November 2001. The case settled.
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In the case of Thomas Weiss, M.D., Generali denied for years that
it sold his father (Paul Philip Weiss) any policies. In June 2000, he
brought a lawsuit against Generali in State court in Miami. Within
months of the suit being filed, Generali finally disclosed the
existence of one policy owned by Mr. Weiss. Mr. Weiss's name later
appeared more times on the ICHEIC Web site, along with the names of
many of his brothers and sisters who died in the Holocaust. When Dr.
Weiss attempted to secure information about those names, Generali
refused unless he could give the birth dates of his father's brothers
and sisters--all of whom were killed in the Holocaust before Dr. Weiss
was even born. Other survivors and heirs in my experience were given
similar impossible hurdles to overcome in the quest for family policy
information from ICHEIC and other companies, including Allianz.
Dr. Weiss's case was removed to Federal court and consolidated in
New York with the other putative ``insurance class action cases.''
These included cases brought against Generali, Allianz, AXA, RAS,
Victoria, Basler, Zurich, Winterthur, and other European-based
insurers.\3\
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\3\ After the German Foundation Agreement, in 2001, the cases
against the German insurers were voluntarily dismissed. They were not
settled on a classwide basis, but were dismissed without prejudice to
the rights of all others who were not named plaintiffs. This is
significant because, if the Agreement was supposed to forestall any
further litigation, the case would have had to have been settled under
full Rule 23 notice and hearing procedures.
---------------------------------------------------------------------------
In 2001, Generali moved to dismiss the case in favor of mandatory
resolution by ICHEIC. The District Court, Judge Michael Mukasey,
rejected Generali's argument in part because he found ICHEIC was
``clearly unsatisfactory'':
Defendants have moved to dismiss in favor of a private,
nongovernmental forum that they both created and control, the
continued viability of which is uncertain. Because of these
shortcomings, ICHEIC cannot be considered an adequate
alternative forum.
Id. at 355.
Among the court's findings was that ICHEIC was ``manifestly inadequate
because it lacks sufficient independence and permanence.'' Id. at 356.
It held:
ICHEIC is entirely a creature of the six founding insurance
companies that formed the Commission, two of which are
defendants in this case; it is in a sense the company store. .
. . The concern that defendants could use their financial
leverage to influence the ICHEIC process is not merely
theoretical. . . . ICHEIC's decisionmaking processes are and
can be controlled by the defendants in this case. . . .
Id. at 356-57.
However, in 2003, the United States Supreme Court held in American
Insurance Association, Inc., v. Garamendi, 539 U.S. 396 (203) case,
that executive branch actions supporting ICHEIC, though not required by
the terms of the U.S.-German Executive Agreement, preempted traditional
State law powers of regulators to investigate insurers' practices
toward its customers. After Garamendi, Judge Mukasey held that
Garamendi mandated that he dismiss the Generali cases, even though
there is no executive agreement between the United States and Italy nor
any other indication of executive branch interest in Generali. However,
the Supreme Court and Judge Mukasey both noted that Congress had not
addressed disclosure and restitution of Holocaust victims' insurance
policies, leaving the door wide open for congressional action today.
All plaintiffs, including Dr. Weiss, about 20 other individuals,
and the putative class action plaintiffs, appealed Judge Mukasey's
decision. On August 25, 2006, the ``class action'' lawyers entered into
a settlement agreement with Generali. The settlement in effect adopts
the results of ICHEIC as binding on those who tried and failed in the
process.
I was asked by several survivors including Floridians Jack Rubin,
Alex Moskovic, and David and Irene Mermelstein, Fred Taucher of
Seattle, Washington, and Hans Lindenbaum of Israel, who had attempted
unsuccessfully to navigate ICHEIC's labyrinths, to file objections to
the settlement. The district court judge, George Daniels, stated that
he had a very limited role and was not at liberty to judge ICHEIC's
effectiveness, and approved the settlement. He decided that given Judge
Mukasey's dismissal of the cases, the class members were better off
with ``something,'' however paltry and unpredictable it might be. About
250 class survivors and heirs opted out of the settlement, and my
clients appealed the decision.\4\
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\4\ On October 2, 2007, the Second Circuit Court of Appeals
reversed the class settlement because the parties failed to provide
individual notice to everyone who had applied to ICHEIC and whose names
and addresses were available to Generali. The court ordered a new
notice program and new deadlines for responses, a fairness hearing, and
a new briefing schedule. A new notice program ensued which generated an
additional 250 opt-outs, but the district court again approved the
settlement citing primarily the fact that the cases had been dismissed
by Judge Mukasey. Mr. Rubin, Moskovic, Mr. and Mrs. Mermelstein, Mr.
Taucher, and Mr. Lindenbaum were joined by Israeli survivors Hanna
Hareli and David Grinstein in appealing the settlement in January 2008,
which is still pending.
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The 20-plus appeals (including Dr. Weiss's) of Judge Mukasey's
decision applying Garamendi to the Generali cases is still pending in
the Second Circuit Court of Appeals, as is the separate appeal of Judge
Daniels' approval of the class action settlement. The Mukasey appeals
are fully briefed and the parties were recently informed that oral
argument has been tentatively set for the week of June 9, 2008. In
addition, the appeal by Mr. Rubin, Mr. and Mrs. Mermelstein, Mr.
Taucher, Mr. Moskovic, Mr. Lindenbaum, Ms. Hareli, and Mr. Grinstein of
the class action settlement is also fully briefed and awaiting a
decision.
impact of legislation on pending appeals
In my judgment as a lawyer, the appeal of Judge Mukasey's dismissal
of the Generali litigation is very strong. Garamendi allowed much
greater deference to executive branch actions untethered to any act of
Congress in the area of preemption, or international commerce, than had
ever preceded it, and Judge Mukasey went even further in the Generali
case. Since those decisions, recent Supreme Court precedent limiting
the executive branch's ability to ``make law'' governing enemy
combatants without congressional authorization strengthen the Generali
appeals. See, e.g., Hamdan v. Rumsfeld, 126 S.Ct. 2749 (2006).
Nevertheless, the pending appeals make congressional action urgent.
If H.R. 1746 or a similar measure is enacted that clarifies that
survivors and heirs continue to have a right to sue insurers in U.S.
courts notwithstanding the Garamendi decision, the Second Circuit Court
of Appeals would have no choice but to apply that law and reverse Judge
Mukasey's decision and remand for the cases to go forward. Plaut v.
Spendthrift Farm, Inc., 514 U.S. 211 (1995). Similarly, if such
legislation is enacted while the class settlement appeal is pending,
the court would undoubtedly have to revisit the underlying basis for
the district court's approval of the settlement, i.e., its pessimistic
view of the chances of the restoration of survivors' rights to go to
court to sue Generali and other insurers. Why should survivors and
heirs have to await judicial decisions when Congress has remained
silent and can change the dynamic with the legislation now on the
table.
The missing element in the survivors' battle for justice against
recalcitrant insurers has been Congress. Despite numerous hearings
documenting ICHEIC's inconsistencies and shortcomings, for reasons that
are impossible for my clients to fathom, Congress has been silent. This
is Congress's last opportunity to fulfill what should be a simple and
straightforward duty to give every survivor and heir a chance to get to
the truth about their families' policies, uninhibited by any political
or institutional machinations or agendas.
background of jewish people's insurance policies and insurers' conduct
The survivors I represent are only asking Congress to restore the
rights they always assumed they had and that no legislative body or
even executive branch action purported to deny them--the right to have
their injuries redressed in the courts of this country. They do not
regard ICHEIC as an evil in of itself nor do they intend any disrespect
for the intentions of many who participated there. However, given that
ICHEIC was the foundation on which their rights have been eviscerated,
it is necessary to discuss ICHEIC's creation and operation. That
unhappy story is rooted in the tragic events intertwined with the
Holocaust, the greatest crime in human history.
history
In the inter-war years, insurance was one of the few means
available for people to protect their families, both in Western and
Eastern Europe. Most banking systems were not safe (e.g., no FDIC
insurance) and many currencies were unstable. People could and did
however purchase insurance from domestic branches or subsidiaries of
global insurers such as Allianz, AXA, Swiss Life, Winterthur, Generali,
RAS, Victoria, Munich Re, Swiss Re, Zurich, Basler Leben, and other
insurers still in business today (or whose portfolios have been
acquired by extant companies). Frequently, these policies were
purchased in U.S. dollar denominations.
One of the key selling points of many companies was the contractual
right to receive policy proceeds ``wherever the customer requested'' in
the world. There is ample evidence that the companies emphasized this
feature in their sales to Jews who were increasingly living under the
dark clouds of Nazism in Europe. For example, the policies of Victoria
of Berlin provided: ``From the first day that the insurance becomes
effective, the insured person has the right to change professions and
residence and he may go to any other part of the world. Such changes
will not affect the validity of the policy in the least, which will
continue to be in effect as before.'' Evidence of similar provisions in
other companies' policies is abundant in the record that has developed,
limited though that is considering ICHEIC's secrecy.\5\
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\5\ As another example, Generali's marketing brochures and policies
highlighted the availability and value of overseas assets--including
assets in America--that would ensure the customers' ability to collect
their benefits outside of Czechoslovakia if they so requested. Buxbaum
v. Assicurazioni Generali, 33 N.Y.S.2d 496 (N.Y. Sup. Ct. 1942); Kaplan
v. Assicurazioni Generali, 34 N.Y.S. 2d 115 (N.Y. Sup. Ct. 1942).
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When the Nazis came to power in Germany in 1933, they carried out a
comprehensive scheme to identify and confiscate the property owned by
the Jewish people. Known as the Aryanization of Jewish property, this
included the forced redemption of insurance policies with short-rating
which yielded much needed cash to a Depression-era Nazi machine, and
proceeds such as accumulated cash values and prepaid premiums. Jews
were required to report to the Nazi authorities their property and
personal valuables, including insurance policies. Coupled with the
Germans' comprehensive census data identifying residents according to
their Jewish identity, including having up to one Jewish grandparent,
and laws that prevented the pursuit of livelihood, these human beings
were targeted by the Nazis for death and despoliation.
The rape of Jewish insureds in Europe was exacerbated by the fact
that German and Austrian census data identified Jewish residents and
their assets, and such data was also gathered in areas that became
occupied. This information pointed the way for the Nazi regime to use
the Gestapo to target Jews they could now locate by address for forced
``assignment'' of cash and other assets such as insurance policies. The
plaintiffs who sued the 20 or so major European insurance companies in
the late 1990s all alleged that the insurers and their affiliates
(including reinsurers) participated in and benefited financially from
the confiscation of Jewish-owned insurance policies (``short-rating'').
These allegations have not been denied in court, and much has been
written and published to corroborate this point. For example, historian
Gerald Feldman wrote in Allianz and the German Insurance Business,
1933-1945, Cambridge University Press, 2001:
The companies licensed to operate in the Protectorate were
also affected by the particularly rigorous and systematic
seizure of Jewish insurance assets, so that by July 1942 the
Prague Gestapo was able to report 54.4 million Czech crowns in
confiscated repurchase values, the bulk of which came from the
portfolios of Generali (20.1 million), Victoria (13.8 million),
RAS (5.9 million), and Star-Verisherungsanstalt (4.6 million).
Feldman, at 356.
Professor Feldman's book and other studies and records clearly document
how Allianz and other German, Swiss, Austrian, and Italian insurance
companies willingly participated in confiscation activities throughout
Europe.
After World War II, as Holocaust survivors and their families
struggled to reconstruct their lives, insurers refused to honor the
policies they had issued to insure property the Nazis seized and the
lives of those who perished before firing squads and in Holocaust death
camps. The companies stymied their former customers with evasions and
denials such as demanding original policy documents, demanding death
certificates, denying the existence of policies, denying that they had
records of policies from that period, claiming that their assets were
confiscated or nationalized by post-war Communist governments obviating
its obligations to Jewish Holocaust victims, and other bogus or legally
deficient denials that frustrated Holocaust survivors and their
families for decades.\6\
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\6\ There is evidence that one or more companies (or a number of
its affiliates and subsidiaries) was a mutual company at the time of
the war. If so, then in the demutualization process the policyholders,
who ICHEIC would pay a scant fraction of their ``insurance values,''
would be denied much greater sums owed in that the policyholders would
be the owners of the company.
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In 2002, the Government of Switzerland published the Bergier
Report, also known as the Independent Commission of Experts
Switzerland, Second World War (ICE) which addressed several areas of
Swiss corporate and governmental complicity in and profiteering from
the murder and plunder of Europe's Jews. The Bergier Report on
insurance is disturbing but not surprising in its description of the
Swiss insurers' dishonesty toward and disrespect for its Jewish
customers. For example, despite the fact that Swiss insurers had 9
percent of the German market, ``[i]n 1950 the Association of Swiss Life
Insurance Companies reported that its members could not find a single
policy whose owner had been killed as a result of the machinations of
the Nazi regime so that their entitlement to claim under the policy had
become dormant.'' Bergier Report, at 465. (Emphasis supplied). The
report also showed:
Immediately after the war, on 27 June 1945, representatives
of the four Swiss companies which had issued life insurance
policies in the Reich discussed in Zurich how they might avoid
claims from Jewish emigrants for restitution of such
confiscated policies. A large part of the discussion was
characterized by a decidedly aggressive tone. In a subsequent
memorandum, one of the companies concerned, Basler Leben,
stated: ``Jewish insurance holders aimed to compensate their
despoliation by the Third Reich by despoliating Switzerland of
its national wealth.''
Bergier Report, at 460.
Public denials of insurers' Holocaust profiteering have continued
even in the supposed recent environment of ``truth and transparency.''
In 1998, Allianz AG Board Member Herbert Hansmayer sought the
Congress's sympathy for the company's alleged devastation during and
after WWII:
Like the rest of the German insurance industry, life
insurance companies, such as our German life insurance
subsidiary Allianz Lebensversicherungs AG were bankrupt or near
bankrupt at the end of the war after having to invest in
government bonds that became worthless when Germany was
defeated. Allianz Leben also held properties that were lost or
destroyed in war-ravaged Germany.
Transcript of February 12, 1998, Hearing before the House of
Representatives Committee on Financial Services.
But Mr. Hansmayer's ploy was contradicted months later in a
detailed article in the Wall Street Journal in November 1999, which
explained that Allianz's immense current power in the German financial
world originated from its rich cash reserves available at the end of
WWII:
Allianz picked up the core of its stock holdings after World
War II. At a time when German companies were desperate for
capital, Allianz was one of the few sources of cash to rebuild
the bombed-out country. As German corporations regained
momentum and became global players, Allianz continued to invest
and maintain its influence in boardrooms.
Steinmetz and Raghavan, ``Allianz Eclipses Deutsche Bank As Germany's
Premier Power,'' The Wall Street Journal, November 1, 1999.
In the 1990s, after high-profile disclosures and revelations about
European corporate and governmental theft of Jewish peoples' assets
from the Holocaust, survivors began speaking publicly about family
insurance policies. State insurance regulators started examining the
conduct of insurers in the U.S. market who sold policies to European
Jews before World War II. Congressional committees held hearings as
well. While a small number of victims and heirs actually had scraps of
paper describing a facet of an insurance relationship, most recalled
statements by their parents that the family had insurance in case of
disaster, or recounted their memories of agents who came calling
regularly to collect a few Pengos or Zloty or Koruna as premiums on
family policies. Others described post-war recollections by parents who
survived Auschwitz only to be ``beaten'' by insurers out of large sums
of money.
icheic formed
In 1998 several States, including Florida, passed legislation
requiring European insurers to publish names of unpaid policies from
the Holocaust era and to pay claimants based on liberal standards of
proof, and extending the statute of limitations for the filing of
claims. Congress was poised to pass similar legislation when foreign
governments and insurers persuaded nonsurvivor Jewish organizations and
State insurance commissioners to create an ``international commission''
to supposedly standardize the process and avoid ``costly, protracted
litigation.'' The International Commission for Holocaust Era Insurance
Claims (ICHEIC) consisted of six companies, three ``Jewish
organizations'' (the Claims Conference, the WJRO, and the State of
Israel), and three State regulators. Former Secretary of State Lawrence
Eagleburger was appointed chairman.
Mr. Eagleburger has stated that ICHEIC was chartered under Swiss
law and headquartered in London to avoid the reach of U.S. courts'
subpoena powers. Decisions were to be made ``by consensus,'' with the
chairman breaking any ties when necessary. Congress stayed its hand
from enacting legislation.
Five years later, after several scandals were reported in the New
York Times, Los Angeles Times, and Baltimore Sun, the Economist, and
other media, Chairman Eagleburger admitted to the House of
Representatives Committee on Government Reform (September 2003) that
the ICHEIC had spent far more in administrative expenses (including
first class travel) than it paid to claimants. Survivors appeared at
this and other hearings and told horror stories of multiyear waits for
responses from ICHEIC, denials without any explanation other than ``no
match found''; demands for information that no survivors or legal heirs
could be expected to know; and denials by companies even in the face of
documentary evidence that policies existed. Nevertheless, Congress
again failed to act directly to address the companies' conduct or to
assist survivors at that time.
However, that year, Congress did mandate, in section 704 of the
2003 Foreign Relations Reauthorization Act, that ICHEIC provide reports
on its operations and the companies' performance to the U.S. State
Department. In spite of this congressional mandate, ICHEIC refused to
supply the required reports every year. Remarkably, State took no
further action. Neither did Congress. Unfortunately, ICHEIC completed
its ``mission'' in March 2007 and the results are catastrophic.
There were 875,000 estimated life insurance and annuity policies
outstanding valued at $600 million in 1938 owned by Jews. And while
Western countries conducted limited restitution of policies for
extremely low values, by 2007 the amount that was unpaid from policies
in force in 1938 was conservatively estimated to be worth $18 billion.
This estimate, by economist Sidney Zabludoff, is conservative because
it uses a 30-year U.S. bond yield to get to current value, whereas
insurance companies also invest in equities and real estate. Testimony
of Sidney J. Zabludoff before the U.S. House of Representatives
Financial Services Committee, February 7, 2008, and before the House of
Representatives Foreign Affairs Committee Subcommittee on Europe,
October 3, 2007.
When ICHEIC closed its doors in March 2007, it had paid less than 3
percent of the unpaid value of the policies and had left several
hundred thousand policies unaccounted for. The body paid out $250
million in recognition of insurance policies, it paid $31 million in
$1,000 ``humanitarian payments'' and allocated another $165 million for
``humanitarian projects'' through the Claims Conference (including
funds unrelated to survivors' needs). So, even if one adds all of
ICHEIC's claimed payments, totaling about $450 million, ICHEIC
generated less than 3 percent of the money stolen from European Jews'
insurance funds.
Meanwhile, ICHEIC's cost of operations exceeded $100 million,
though the exact cost has not to my knowledge been widely published. To
this day, Congress has not examined ICHEIC's operations despite this
terrible track record. ICHEIC operated in virtual secrecy for 9 years,
disclosing only the barest minimum of information about its processes.
Today's challenge for Congress is not to focus on ICHEIC, which has
completed its mission. However, a review of ICHEIC's performance is
necessary for the record because Garamendi and other decisions rely on
ICHEIC as the reason to limit Holocaust victims' legal rights.
Therefore, some particular concerns about ICHEIC's operations are
examined later in this statement.
arguments against h.r. 1746
Opponents of H.R. 1746 have coalesced around three major arguments:
(1) It is premised on inaccurate estimates of the unpaid value of
Holocaust victims' policies; (2) it violates ``deals'' to provide
``legal peace'' for German and other insurance companies who
participated in ICHEIC; and (3) it isn't likely to produce enough
successful claims by survivors to justify the political costs of the
ill will it will engender among foreign governments whose insurance
companies profited from the Holocaust.
H.R. 1746 estimates are accurate and conservative
Led by ICHEIC Chairman Lawrence Eagleburger's October 15, 2007,
Statement to the House Foreign Affairs Committee, opponents claim the
legislation is based on the ``erroneous allegation'' that ICHEIC paid
less than 5 percent of the total amount owed to Jewish Holocaust
victims and heirs. The Preamble to H.R. 1746 states that of the
conservative estimate of $17 billion in unpaid policies in 2006 values,
ICHEIC succeeded in paying only $250 million for policies.
Mr. Eagleburger also says the legislation's sponsors do not provide
substantiation for the figures cited. He is incorrect. In fact, the
Preamble to H.R. 1746 cites experts' estimates of the value of unpaid
insurance policies owned by Jews at the start of the Holocaust, as
ranging from $17 billion to $200 billion.
The $200 billion estimate was published in 1998 in the ``Insurance
Forum,'' the widely respected and quoted insurance consumer newsletter
published by industry expert Professor Joseph Belth of the University
of Indiana Business School. Professor Belth updated his 1998 estimate
to $309 billion in 2007. See, Letter from Professor Joseph Belth to
Baird Webel, Congressional Research Service, January 24, 2008.
The $17 billion estimate is based on an analysis by economist
Sidney Zabludoff in the spring 2004 ``Jewish Political Studies
Review.'' Mr. Zabludoff presented his analysis at the House Foreign
Affairs Subcommittee hearing on October 3, 2007, and at the House
Financial Services Committee on February 7, 2008. He used a base total
value of nearly $600 million for the total value of Jewish policies in
force in 1938, which was a consensus of ICHEIC participants. He then
subtracted out the amount of policies paid for in post-war restitution
programs (assuming 70 percent for most West European countries and 10
percent for East European countries). He then brought the remainder up
to date by using the extremely conservative 30-year U.S. bond rate. The
result is that value of unpaid value of Jewish policies is
conservatively estimated at $17 billion in 2006 prices. Therefore, the
opponents' criticism is unfounded.
Next, Mr. Eagleburger attempts to mock the sponsors' estimates by
citing the 1999 ICHEIC Pomeroy-Ferras Report as containing the ``actual
data on this issue.'' This criticism is odd because nothing in the
Pomeroy-Ferras Report contradicts the estimates of unpaid policies and
current values reported in the Preamble of H.R. 1746.
The Pomeroy Ferras Report actually agrees in large part with Mr.
Zabludoff's base calculations about the number and local currency value
of Jewish policies at the start of the Holocaust. The report did not,
however, make any effort to estimate the outstanding current value of
the Jewish life insurance policies.\7\ That is what Mr. Zabludoff did
in his 2004 article, using consensus numbers, to which the Preamble to
H.R. 1746 refers.
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\7\ The Pomeroy-Ferras Report states: ``The Task Force did not want
to make any proposal of a valuation process in order to bring the
Holocaust exposure to a 1999 value.'' International Commission on
Holocaust Era Insurance Claims, Report to Lawrence Eagleburger,
Chairman, by the Task Force cochaired by Glenn Pomeroy and Philippe
Feras on The Estimation of Unpaid Holocaust Era Insurance Claims in
Germany, Western and Eastern Europe, at 6-7.
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Consequently, the opponents of H.R. 1746 are incorrect when they
defend ICHEIC with such broad and inaccurate statements as the one Mr.
Kennedy made before the Financial Services Committee: ``ICHEIC studies
show that its claims and humanitarian programs did a credible job of
adjudicating and paying claims on life insurance policies in effect
during the Holocaust era.'' Ambassador J. Christian Kennedy, Special
Envoy, Office of Holocaust Issues, United States Department of State,
Statement before the House Financial Services Committee, February 7,
2008, at 6.
In his Europe Subcommittee testimony in October 2007, State
Department representative Christian Kennedy's argued that the total
current unpaid value is $3 billion, as opposed to the $17 billion
estimated by H.R. 1746. Although Ambassador Kennedy gave no explanation
for his $3 billion number, it was later explained to be an estimate of
the 2003 unpaid value of policies using the ``ICHEIC valuations'' as a
base. The ICHEIC valuation system was, a compromise that allowed the
companies to take advantage of post-war currency devaluations and
political events in Germany and Eastern Europe. This was the basis on
which claims were actually paid in the ICHEIC, not a value determined
by economists or by a judge and jury under expert rules applicable in
litigation.
However, even taking the $3 billion 2003 figure used by Kennedy,
and updating it to $3.6 billion for 2007, the most generous estimate of
insurance payments through ICHEIC, $450 million, is only 15 percent of
the sum owed to European Jews and their families.
H.R. 1746 opponents also misuse numbers to portray a false picture
of ICHEIC's performance. They say ICHEIC paid $305 million to 48,000
Holocaust survivors or their heirs for previously unpaid insurance
policies.'' This is not true. According to the June 18, 2007,
``Legacy'' document shown on the ICHEIC Web site, ICHEIC paid $250
million for unpaid policies. ICHEIC made an additional 31,000 payments
of $1,000 each (totaling $31 million) which were termed and treated as
``humanitarian'' in nature.
The ``humanitarian payments'' were neither intended by ICHEIC nor
interpreted by survivors as payments on policies. They were viewed as
an attempt to give ``something'' to the tens of thousands of applicants
whose family policies ICHEIC or the companies would not acknowledge.
ICHEIC paid $1,000 but promised to ``keep looking.'' Claimants have
stated that they considered the $1,000 as tantamount to calling them
liars. See, Testimony of Israel Arbeiter before the U.S. House of
Representatives Financial Services Committee, February 7, 2008, and
Testimony of Alex Moskovic and Jack Rubin before the U.S. House of
Representatives Committee on Foreign Affairs, Subcommittee on Europe,
October 3, 2007.
``Legal Peace''
The insurance industry, the German Government, the State
Department, and certain organizations that were part of ICHEIC (and
their affiliates) oppose H.R. 1746, saying that ``a deal is a deal,''
and the insurance companies were promised ``legal peace'' if they
participated in ICHEIC. The short answer to this argument is that the
U.S. Government did not agree to waive survivors' rights to sue
insurance companies in any executive agreement or other action arising
out of the Holocaust restitution cases and negotiations. Today,
opponents of H.R. 1746 want to give German insurers more than they were
able to negotiate for in 2000, and more than the U.S. Government has
the constitutional authority to provide.\8\
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\8\ Stuart Eizenstat's book ``Imperfect Justice,'' at page 270,
refers to a letter from Solicitor General Seth Waxman which addresses
the issue, but that letter has never to the best of this writer's
knowledge been made public. It is imperative that this committee review
this correspondence and make it publicly available so that survivors,
heirs, the general public, and Congress can be completely informed
about the formulation of this public policy decision that has
profoundly and adversely affected thousands of Holocaust victims and
families.
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Even though the U.S. never agreed to the immunity now demanded by
Germany, unprecedented court decisions have held that survivors may not
sue insurers over policies sold to their loved ones before WWII. But,
even those very court decisions limiting survivors' access to courts
today cite the absence of congressional action on the subject, an
obvious acknowledgement of Congress's authority to guarantee access to
courts through legislation. American Insurance Association v.
Garamendi, 539 U.S. 396 (2003), In re Asscurazioni Generali, S.p.A.,
Insurance Litigation, 240 F.Supp.2d 2374 (S.D.N.Y. 2004). H.R. 1746
would restore survivors' rights to sue recalcitrant insurers; rights
that were never questioned prior to Garamendi.
The basis now cited for the ``legal peace'' argument is the ``$5
billion'' German Foundation agreement. That agreement arose from the
dismissal of the lawsuits filed by Holocaust survivors against German
manufacturers seeking compensation for slave labor they were forced to
perform to survive. The courts held that international treaties
settling WWII, which encompassed infliction of personal harm during the
war, precluded the judicial branch from allowing suits for personal
injuries such as the injustices of slave labor. While the cases were on
appeal, Germany and the U.S. Government entered into a mediation to
settle the slave labor claims.
At the eleventh hour, after months and months of negotiations over
slave labor compensation, and after months of speculation on the total
to be offered, the Germans reportedly demanded that if the U.S. did not
agree to include ``insurance'' in the agreement, there would be no
slave labor settlement. Stuart Eizenstat's book about the negotiations
describes the Germans' aggressive tactics to include insurance in the
slave labor deal. Eizenstat, at 268. As part of the ``settlement,''
Germany agreed that its insurers would participate in ICHEIC, subject
to a cap on their potential exposure. The ``cap'' was determined
without any independent audit or investigation or analysis of the
actual amount of insurance theft the German companies committed. The
arbitrarily determined cap for all German insurers and those who sold
in the German market was approximately $200-$250 million--with a
portion earmarked for policies and a portion earmarked for humanitarian
programs. The U.S. agreed in return that if German companies were sued
in U.S. courts, it would file a ``statement of interest'' in the case
stating that it would be in the ``foreign policy interest of the U.S.
for the case to be dismissed ``on any valid legal ground.'' \9\ The
President did not agree to abolish survivors' right of access to
courts, nor could he have done so.
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\9\ The language of the agreement states: ``(1) The United States
shall, . . . inform its courts through a Statement of Interest, in
accordance with Annex B, and, consistent therewith, as it otherwise
considers appropriate, that it would be in the foreign policy interests
of the United States for the Foundation to be the exclusive remedy and
forum for resolving such claims asserted against German companies as
defined in Annex C and that dismissal of such cases would be in its
foreign policy interest.'' Annex B provides more detail on what the
Government would say: ``The United States will recommend dismissal on
any valid legal ground (which, under the U.S. system of jurisprudence,
will be for the U.S. courts to determine).''
---------------------------------------------------------------------------
The fact that Congress did not legislate directly on this problem
until 2003 does not mean that Members of Congress were satisfied with
these developments. Several Members of Congress immediately protested
the executive branch's decision to include survivors' insurance rights
within the German Foundation settlement, which was always believed to
be limited to slave labor. These members expressed strong disagreement
that the German-U.S. Agreement over slave labor was expanded to include
any kind of limits on insurance regulations or liabilities:
[W]e reject the notion that insurance claims estimated to be
worth billions could be satisfied by the arbitrary DM 300
million ($150 million) set aside in the German Foundation Fund.
Letter of September 11, 2000, from Congressmen Waxman, Lantos, et al.,
to the Honorable Janet Reno, Attorney General of the United States.
Several of these Representatives also wrote to the Solicitor
General of the United States to protest the inclusion of insurance in
the German-U.S. Agreement, and the Justice Department's efforts to
undermine States' authority over Holocaust survivors' insurance claims:
Since 1998, Holocaust insurance claims have been managed by
the International Commission on Holocaust Era Insurance Claims
(ICHEIC) under a seriously flawed process. As reported in a Los
Angeles Times story by Henry Weinstein on May 9, 2000, ICHEIC
has rejected three out of four of the claims that were fast-
tracked and considered well documented. No appeals process
exists and the courts have provided the only recourse available
to Holocaust survivors. We were shocked, therefore, to learn
that the recent slave labor settlement reached between the U.S.
and German governments would also resolve claims settled by
ICHEIC and undermine viable class action suits.
See, September 11, 2000, Letter from Congressman Henry Waxman, et al.,
to U.S. Solicitor General Seth P. Waxman (Emphasis supplied).\10\
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\10\ Even Roman Kent, according to ICHEIC minutes, did not agree
that insurance belonged in the slave labor agreement: ``Mr. Kent . . .
said the insurance question should not have been grouped with the slave
labor, as they are separate issues.'' See, ICHEIC Minutes, November 15-
16, 2001. Ironically, today, he is one of the institutional defenders
of the proposition that Congress should not pass legislation to restore
survivors' rights, because if it does Germany would consider it a
breach of trust and withhold funding for new programs periodically
negotiated by the Claims Conference.
In response to concerns raised by U.S. Congressmen, the Justice
Department made it clear that under the agreement, the Government did
not purport to eliminate Holocaust survivors' legal claims against
German insurers. Assistant Attorney General Raben, correctly stated
that the terms of the agreement only required the Government to state
``that it would be in the foreign policy interests of the United States
for the Foundation to be the exclusive remedy and forum for resolving
such claims,'' and ``that the United States does not suggest that its
policy interests concerning the Foundation in themselves provide an
independent legal basis for dismissal of private claims against German
companies.'' Id. (Emphasis supplied).
It is also ironic in light of the maximalist position now being
taken by the administration and others, that at the time of the
agreement, the Justice Department also acknowledged that if ICHEIC did
not prove to be an effective forum for solving survivors' claims, even
the limited protection that had been agreed to would be at risk:
``Should the German Foundation fail to be funded and brought into full
operation, or should the United States conclude that ICHEIC cannot
fulfill the function for which it was created, the United States will
certainly reconsider the balance reflected in its views on the
constitutional issues.'' See, September 29, 2000, Letter from Assistant
Attorney General Robert Raben to Congressman Henry A. Waxman.
In 2003, the United States Supreme Court in the Garamendi case held
by a 5-4 vote that though the executive agreement between the U.S. and
Germany did not expressly preempt State law, there was a separate
``Federal policy'' favoring ``nonadversarial resolution'' of Holocaust
victims' claims that preempted the California Insurance Commissioner's
power to subpoena records from German companies. In that case, several
Members of Congress filed an amicus brief supporting California's
primary jurisdiction over insurance regulation and opposing the
unlegislated ``implied'' expansion of Federal executive authority to
preempt State law. Unfortunately the congressional amici's position was
not adopted by the court, however.
This much is certain. No insurance company, and no country obtained
any agreement from the United States Government to abolish survivors'
and heirs' right of access to courts. No State legislature enacted any
law proscribing survivors' or heirs' rights to sue insurers. H.R. 1746
does not overturn any U.S. Government promise to provide legal immunity
to international insurers, in spite of all the rhetoric that it would
``break faith'' with the companies and countries that joined ICHEIC. To
the contrary, they all exploited the practical impediments created by
ICHEIC through the hushed tones of ``international diplomacy.'' The
fact that the promises of ICHEIC never occurred are irrelevant legally;
it could never have preempted State law rights prior to Garamendi and
Generali II. Unfortunately, the courts have for the moment accepted the
sweeping interpretation of executive authority advanced against
survivors, even though no legislature has or could erect such barriers.
But Congress clearly has the authority to enact legislation to correct
any interpretation or supersede any provision of the executive
agreement. Weinberger v. Rossi, 456 U.S. 25 (1982).
Congress retains the authority to restore the status quo ante for
Holocaust survivors and heirs, to enable them to bring court actions
against the insurers who took their parents' and grandparents' sacred
investments to protect their loved ones, then turned their backs on the
insureds, heirs, and beneficiaries after the horrors of the Holocaust.
Now is the time for Congress to rectify this 60-plus year injustice.
Congress, not the executive branch, has the constitutional and
statutory authority to regulate international commerce, and to define
the jurisdiction of the Federal courts. Therefore, H.R. 1746 invokes
fundamentally congressional prerogatives, which the executive branch's
unilateral actions undermine in an intolerable and harmful fashion.
Other issues precluding ``legal peace''
Congressman Wexler, in response to Ambassador Kennedy's ``legal
peace'' argument at the Europe Subcommittee hearing in October 2007,
asked what the survivors and heirs with possible insurance rights
received in exchange for the ``deal'' the Department now says should be
``honored.'' He pointed out the 3-percent payment rate as clear
evidence that whatever was contemplated surely was not fulfilled. Or,
as survivors and their supporters have stated, ``there can be no legal
peace until survivors have moral peace'' through an honorable,
transparent, and accountable process.
ICHEIC's poor performance is the result of a series of adverse
policy decisions dictated by the insurers' dominance of the panel, and
other failures of execution. There are many other shortcomings about
ICHEIC that have been presented to Congress or written about in the
media or discussed in the courts, and this summary only touches on the
surface of ICHEIC's failings.
Inadequate disclosure of policyholder names
ICHEIC was supposed to begin with a comprehensive dissemination of
names of policyholders in order to inform survivors and family members
about the possibility of an unpaid policy in their family, but only a
fraction of policies, including only 10 percent from Eastern Europe,
were published. Most were published in mid-late 2003, after the filing
deadline had been extended twice and shortly before the final deadline.
This failure undermined one of ICHEIC's basic tenets, i.e., that
almost all Holocaust survivors and the heirs of Holocaust victims would
have to depend on the insurance companies to publish policyholder
information before they would have any idea that they might have a
possible claim. On September 16, 2003, the Committee on Government
Reform of the U.S. House of Representatives held a hearing concerning
the efficacy of the ICHEIC and the impact of the Supreme Court's
Garamendi decision. Several members of the committee, and the survivors
and survivors' advocates who testified, expressed their dismay with the
ICHEIC. The concerns raised included the inadequacies in the
dissemination of policyholder names that had occurred after nearly 5
years, as well as the endless, frustrating, nontransparent, and
unaccountable claims handling practices conducted under ICHEIC's
auspices. See, Treaster, ``Holocaust Insurance Effort is Costing More
Than It Wins,'' The New York Times, September 16, 2003, Exhibit 11.
(``Lawrence Eagleburger . . . said today that his organization had
spent 60 percent more for operations than it had persuaded insurers to
pay in claims. . . . Independent Holocaust experts asserted at the
hearing that the commission had been outmaneuvered by the insurers.'')
Ranking Committee Member Henry A. Waxman remarked:
ICHEIC is supposed to be a public institution performing a
public service, yet it has operated largely under a veil of
secrecy without any accountability to its claimants or to the
public. Even basic ICHEIC statistics have not been made
available on a regular basis and information about ICHEIC's
administrative and operational expenses have been kept under
lock and key. There is no evidence of systematic changes that
will guarantee that claims are being handled by ICHEIC in at
timely way, with adequate follow up.
Even worse, many of the insurance companies remain
recalcitrant and unaccountable. ICHEIC statistics show that
claims are being rejected at a rate of 5:1. . . . The Generali
Trust Fund, an Italian company, has frequently denied claims
generated from the ICHEIC Web site, or matched by ICHEIC
internally, without even providing an explanation that would
help claimants determine whether it would be appropriate to
appeal.
Statement of Henry A. Waxman, House Government Affairs Committee,
September 16, 2003.
Mr. Waxman continued, with a critique of the failure of the ICHEIC
to publicize names of policyholders from the areas of Europe in which
large numbers of Jews lived and owned businesses:
Look at a chart of Jewish population distribution throughout
Europe before the Holocaust and look at the chart of the names
that have been published through ICHEIC for each country.
Germany makes up most of the names released on ICHEIC's Web
site: Nearly 400,000 policies identified in a country that had
585,000 Jews. But look at Poland, where 3 million Jews lived
but a mere 11,225 policyholders have been listed, or Hungary,
where barely 9,155 policyholder names have been identified out
of a prewar Jewish population exceeding 400,000. In Romania
where close to 1 million Jews lived, only 79 policyholders have
been identified. These countries were the cradle of Jewish
civilization in Europe. Clearly, these numbers demonstrate that
claimants are far from having a complete list.
Statement of Congressman Henry Waxman, Committee on Government Reform,
September 16, 2003.
It is true that in mid-2003, 5 years after ICHEIC was created, 3
years after the German-U.S. executive agreement, and after two
extensions of the published filing deadlines for ICHEIC claims, an
additional 360,000 names were added to the ICHEIC Web site from
Germany, and in late 2003 approximately 30,000 more names of Generali
customers were published. However, these were published long after the
vigorous publicity that had occurred fully 3 years earlier, and after
most who had been interested had simply become frustrated and
disgusted. In October 2004, the Washington State Insurance Commissioner
wrote:
The deadline for filing claims was December 31, 2003. Despite
the terms of the MOU (Memorandum of Understanding), up until
the very end of the claims filing period the companies
continued to resist releasing and having the names of their
policyholders published, in some cases citing European data
protection laws. By failing and/or refusing to provide
potential claimants with the information they often needed to
file initial claims, the companies succeeded in limiting the
number of claims and their resultant potential liability. Had
the companies released the number of policyholder names that
could and should have been published over the entire ICHEIC
claims filing period, it is likely the number of claims would
have been significantly higher than the present 79,732.
The German companies' and the GDV's claim for leniency from the
proposed legislation based on their publication of 360,000 names
requires close scrutiny. It is belied by their inexplicable 3-year
delay in reaching an agreement with ICHEIC and producing the names it
possessed. The U.S.-German Agreement was made in principle in December
1999 and formalized in July 2000. Yet the German companies haggled and
fought over minute details for their participation in ICHEIC (under
separate rules than other countries) and no agreement was reached with
ICHEIC until October 2002. They did not publish the 360,000 names they
claim represent the universe of possible Jewish policies until April
2003. By then, as the Washington Insurance Commissioner noted,
virtually no one was paying attention and the deadline was looming.
Several of the legislation's opponents argue that the
``nonadversarial'' ICHEIC process, which avoided the necessity of
``costly, prolonged litigation,'' was superior as a way for survivors
to obtain redress of their claims against the culpable insurers. For
example, Ambassador Kennedy stated:
ICHEIC dealt with these issues by adopting relaxed standards
of proof and doing the claimants' research for them, but no
such relaxed standards will be available in court. Litigation
is also, of course, time-consuming and costly, and this
legislation would not ensure that any claims are resolved
within the lifetimes of the survivors.
Kennedy Financial Services Testimony, February 7, 2008, at 5.
However, that argument, with ICHEIC taking 9 years to complete its
work and recovering only a small fraction (3 percent) of the victims'
losses, would seem to falter under its own weight. Rather than speedy
and effective, ICHEIC was slow, bureaucratic, and seriously defective,
as has been well-documented in the public record.
However, a few examples of actual cases will illuminate for this
committee the realities of how ICHEIC operated, which was stifling
bureaucracy and no oversight to enforce even the nobler goals and rules
adopted at the beginning of the process.
Take, for example, the case presented by the GDV in its materials
distributed to Members of the House in opposition to H.R. 1746. The GDV
describes the odyssey of ICHEIC claim number 00010595, which was first
made to ICHEIC on January 11, 2000. It was sent by ICHEIC to the GDV on
May 28, 2003. GDV sent the claim to the ``responsible insurance
company' over a year later, on September 20, 2004. The company offered
the claimant a payment on December 20, 2004. So, ICHEIC's grand
efficient and claimant-friendly process took 4 years, 11 months, and 19
days to pay in the example cited by the GDV. Is this the ``speedy
alternative to litigation'' that Congress would embrace?
Another example is provided by the New York Legal Assistance Group
(NYLAG), which represents hundreds of indigent clients in the New York
City area. NYLAG also objected to the Generali class action settlement
based on its clients' ICHEIC experiences and filed an amicus curiae
brief in the court of appeals. One of the cases they presented to the
court was that of Miklos Griesz. Mikos Griesz was a named beneficiary
of his mother's policy, that Generali had that information in its
records including the Policy Information Center (PIC), but that they
all failed to inform Mr. Griesz of that fact because he filed as a
beneficiary of his father's policy, not his mother's. Generali sat on
that information for more than 4 years, without ICHEIC doing anything
to help. That isn't unusual--the ICHEIC process really didn't have any
kind of enforcement mechanism built in unless a claimant filed an
appeal of a denial.
Mr. Griesz submitted his ICHEIC claim on April 6, 2000. His claim
form listed Generali as one of two possible companies that sold a life
insurance policy to his father Arnold Griesz in Budapest, Hungary. It
also identified three possible heirs, ``my mother, my brother, and
myself.'' On February 24, 2004, the Generali Trust Fund in Israel (GTF)
denied the claim on the basis that ``no match [was] found.'' However,
it the evidence later unearthed show that all that time, Generali had a
record that it sold a policy to Alice Spiegel Griesz, which listed
``her son Miklos'' as a beneficiary. Yet, in nearly 4 years, Generali
and the GTF either did not find this vital piece of information in its
files that Miklos Griesz was a named beneficiary on a policy (sold in
Hungary), or they withheld the information from the claimant and
erroneously denied the claim on the ground that there was ``no match
found.''
Even after Mr. Griesz's counsel found his mother's name on the
PHEIP Web site and the appellate arbitrator ordered the company to
search its records for a match of the mother's name, Generali's
response was not a model of full disclosure nor what would be expected
in a system with ``relaxed standards of proof.'' It reported:
That there is an insured in the archives of Assicurazioni
Generali named Alice Spiegel Griesz. We wish to clarify,
however, that this is the first time the claimant has brought
this name to our attention.
It is fortunate for Mr. Griesz that he had the assistance of the New
York Legal Assistance Group, which recruited two top New York City law
firms to assist in Mr. Griez's claim. The appellate arbitrator
eventually required Generali to pay, but under the normal ICHEIC
protocol, the ICHEIC system did not prevent the case from lasting more
than 5 years. Without his own counsel Mr. Griesz likely would have
never recovered even though Generali had sold his parents insurance and
had that information in its records.
In normal litigation, Generali's conduct in denying Mr. Griesz's
claim while it held information that he was beneficiary under a policy
issued to his mother would constitute bad faith and subject the company
to treble or exemplary damages. E.g., Allstate Indem. Co. v. Ruiz, 899
So.2d 1121 (Fla. 2005) (``if an insurance carrier engages in outrageous
actions and conduct that constitutes an intentional tortious act, it
may be liable for bad faith damages). This information was in
Generali's possession for decades, yet Mr. Greisz did not recover his
family's legacy for over 60 years. Why shouldn't he have the option of
a judicial remedy if he chooses that route?
Hundreds of thousands of relevant archive files were not reviewed
Another significant failure is the incomplete examination of
European archival records to locate files of Jews' asset declarations
from the Gestapo which in many cases showed the name of the victims'
insurance company and the value of the policy. This research was
helpful in many cases, but overall it was inconsistent and incomplete.
Final Report on External Research commissioned by the International
Commission on Holocaust Era Insurance Claims, April 2004, available at
www.icheicorg.
For example, the researchers reported that they had access to the
Slovakian Central Property Office, which contained ``more than 700
boxes of records dealing with the ``aryanization'' of Jewish firms in
Slovakia. Those files contained information about ``the assets of the
firms and of their Jewish owners . . . declared on a special form.''
However, the researchers searched only ``a small sample'' of those 700
boxes, which provided information about ``18 policies.'' No explanation
was given for leaving most of the 700 boxes unsearched.
Another entry, for an archive in Berlin, says that the archive
``comprises declarations on property belonging to the enemies of the
Reich submitted by insurance companies and various custodians. Some
10,000 of about 1,000,000 existing files were researched and
contributed 11,067 insurance policies.'' The obvious question from the
report is why didn't ICHEIC look at the other 990,000 files? According
to the finds, these unreviewed files might well have evidence of
hundreds of thousands of insurance policies. Remember, the files were
turned over to the Reich by the insurance companies themselves.
So, this information raises many important points, including not
only the fact that the ICHEIC process failed to review a huge amount of
relevant information for claimants, but contradicting the insurance
companies' frequent refrain that there is no evidence that they turned
over customer information to the Nazis.
It is also likely that the ICHEIC researchers only examined a
fraction of the relevant archives. However, this is somewhat academic
because the primary source of information, i.e., the company records
and the records of the reinsurers, would indeed provide much of the
information that would enable survivors and family members to locate
policy information. Today, the imperative of requiring the companies to
disclose its records, not ICHEIC's performance, is the only relevant
matter.
the icheic ``audits'' were limited and secret until icheic closed
Opponents of H.R. 1746 cite the audit program as a reason to defend
the process. But the public and policymakers had no way of ascertaining
what the audits actually signified, much less what they found. No
ICHEIC audits were published until after the body closed its doors in
March 2007.
One of the startling revelations that was put on the ICHEIC Web
site in March is that the audit for the Generali Trust Fund in Israel,
the entity that handled all of the Generali ICHEIC claims between 2001
and 2004, determined that the Generali Trust failed its audit. That
audit was concluded in April 2005, but not disclosed until 2007.
According to a letter from ICHEIC management to the New York Legal
Assistance Group, ICHEIC made no systematic effort to go back and
rectify mistakes that might have been made by the Generali Trust Fund
during that time.
Moreover, the ICHEIC audits were extremely limited. Under ICHEIC
rules, the companies decided what the relevant scope of investigation
and analysis would be in searching for names to publish, and in
determining whether claims were ``valid.'' All the audits did was test
whether the companies did what they said they were going to do.
Therefore, even the audits that ``passed'' under this extremely limited
ICHEIC mandate do not offer any comfort to claimants who were rejected,
much less any basis for Congress to abandon the field in favor or
ICHEIC. For example, the Deloitte & Touche LLP Stage 2 audit
``passing'' Generali Trieste, which was not even issued until March
2007, states:
Our opinion . . . is not in any way a guarantee as to the
conduct of Insurer in respect of any particular insurance
policy or claim thereon at any time or in any particular
circumstances.
What ICHEIC did not require was a comprehensive disgorgement of
relevant company files, which survivors and heirs would have access to
in litigation. So, Congress must be careful about drawing any
conclusions about the insurers' arguments that ICHEIC audits should
give them confidence about the integrity of the companies' performance
and undermine the need for legislation such as H.R. 1746.
appeals were biased against claimants
Another ICHEIC ``safeguard'' was the availability of an appeal
mechanism for claimants who were dissatisfied with company decisions.
However, after ICHEIC closed, one of the appellate judges, former New
York State Insurance Superintendent Albert Lewis, disclosed that he was
pressured by the ICHEIC legal office to deny appeals on claims he
considered valid, based on a ``phantom rule'' that violated the
published ICHEIC rules. He disclosed that he was pressured by ICHEIC's
legal office to require claimants without documentation but with
credible anecdotal evidence of a policy to overcome a ``heavy burden''
to prevail.
In an amicus curiae brief submitted to the Second Circuit Court of
Appeals, Mr. Lewis revealed not only that he witnessed a bias against
claimants in ICHEIC appeals from the ICHEIC London office, but that it
led to the de facto adoption of an unduly restrictive burden of proof
on survivors by other arbitrators as well. In that brief, he stated:
In my experience as an arbitrator I witnessed bias against
the claimants by ICHEIC's London office and especially as
manifested by the administrator, Ms. Katrina Oakley. She
demanded that ICHEIC arbitrator apply an erroneous and phantom
burden of proof rule in deciding appeals, a rule that would
force ICHEIC's arbitrators to deny an otherwise valid claim.
Mr. Lewis explained that in at least two of the appellate decisions
he reviewed, he concluded that the claimant had given plausible
evidence that his family had an insurance policy, based on the
``relaxed standards of proof'' published in the ICHEIC manual and in
the rules provided to claimants who interacted with ICHEIC. Yet, when
he provided a draft opinion to the ICHEIC legal office to have it
reviewed for administrative form, he was pressured to deny the claim,
based on what the ICHEIC legal office called a ``heavy burden'' imposed
on claimants without documentation. Mr. Lewis's amicus brief in the
Generali class action settlement compellingly shows how this ``phantom
rule'' violated applicable ICHEIC rules and standards:
[The ICHEIC rules and standards] contained no rule that
resembled in any manner or form that where no record of a
policy is produced by the claimant and the company that the
claimant's burden of proof is a heavy one. This rule is
contrary to the intent of the MOU.
(Emphasis by Mr. Lewis).
icheic failed to apply ``relaxed standards of proof''
Appellant Jack Rubin's claim is an example of Generali's strict
standards that resulted in the denials of thousands of possibly
meritorious claims. In light of Albert Lewis's disclosures, it is now
apparent that Mr. Rubin's claim was denied due to the ``phantom rule''
surreptitiously instigated and imposed by the ICHEIC legal office.
Mr. Rubin filed a claim with ICHEIC stating that the building that
housed his family home and his father's general store in Vari
(Czechoslovakia, later Hungary) had a sign affixed stating the building
and premises were insured by ``Generali Moldavia.'' Mr. Rubin's family
was forcibly removed from their home in April 1944 and taken to the
Beregsastz Ghetto, and then deported to Auschwitz. His parents perished
in the Holocaust but he survived. Mr. Rubin filed two claims with the
ICHEIC, which named his parents Rosa Rosenbaum-Rubin and Ferencz Rubin,
with their years of birth. He noted that when he returned from the
camps, his family home and business were destroyed and he could not
locate any records. He even noted that ``[t]he agent's name was Joseph
Schwartz. He did not survive the Holocaust.''
Mr. Rubin received a letter from the Generali Trust Fund in Israel
which acknowledged that Generali Moldavia was a property insurance
subsidiary of ``the Generali Company'' in Hungary, but denied any
payment in the absence of a document proving the insurance. The letter
stated that it could find no evidence of a life insurance policy in the
main company's records for his parents or himself, but acknowledged
that ``the archives of the Generali company did not contain the water
copies of the policies issued by subsidiaries.''
The arbitrator also upheld the denial of the life insurance claim
based on Generali's representation that there was no evidence in its
records pertaining to Mr. Rubin's family. The arbitrator did not demand
any actual evidence from Generali's records pertaining to Mr. Rubin's
family, such as data on common customers between Generali Moldavia and
any life insurance branch or subsidiary, or whether or not it had an
agent named ``Mr. Schwartz'' in the region where Mr. Rubin's family
lived, nor examine files on agents. In court, Mr. Rubin's lawyer would
have this right.
The ICHEIC arbitrator stated the following in rejecting Mr. Rubin's
claim:
Where no written record of a policy can be traced by the
Member Company, the burden upon the Appellant to establish that
a policy existed is a heavy one, even when the burden is to
establish that the assertion is ``plausible'' rather than
``probable.'' Where the Appellant is not able to submit any
documentary evidence in support of the claim, as in this case,
the Appellant's assertions must have the necessary degree of
particularity and authenticity to make it entirely credible in
the circumstances of this case that a policy was issued by the
Respondent.
(Emphasis supplied).
The Arbitrator's use of the ``heavy burden'' of proof imposed upon
Holocaust survivors such as Mr. Rubin is contrary to the ICHEIC rules,
and the adoption and application of this extraordinary ``phantom rule''
that was not only never formally adopted by ICHEIC, but in fact was
contrary to the rules ``relaxed standard of proof'' that were supposed
to be applied. Mr. Rubin's experience demonstrates the unfairness of
the processes thousands of survivors were forced to accept.
The ``relaxed standards of proof'' which ICHEIC companies were
supposed to apply were found to be ignored in a large number of claim
denials, such as by Lord Archer on behalf of the ICHEIC Executive
Management Committee in 2003. The Washington State Insurance
Commissioner in October 2004 cited a multitude of other failures--
including companies' denials of claims in violation of ICHEIC rules, or
denials submitted without providing the information in company files
necessary to allow the claimants or the ICHEIC ``auditors'' to
determine whether relaxed standards of proof were applied, failure to
supply claimants with any documents traced in their investigations,''
and routine denial of claims by simply saying, even when a claimant
believes he or she is a relative a person named on the ICHEIC Web site,
that ``the person named in your claim was not the same person.''
icheic did not require companies to disgorge information it provided
about its jewish customers
ICHEIC never required the companies to be accountable for their
true conduct during and after the Holocaust, and this failure robs
survivors of any sense of true justice, and robs history of the truth
about this facet of the Holocaust. It is well-known that companies
turned over records and funds relating to their Jewish customers to the
Nazi and Axis authorities. ICHEIC failed to render a proper accounting
of the companies' participation in the forced redemption of Jews'
insurance policies and other practices whereby the companies assisted
the authorities in looting their customers' property.
The companies defense of their conduct for the last decade has
centered on the representation that they ``could not identify who was
Jewish'' among its customers after WWII, hence shouldn't be viewed as
monsters for failing to pay policies of Jews who were Holocaust
victims. However, contrary to such statements, records have surfaced
that reveal at least one company's Italian portfolio had data entries
including:
``Jewish race of policyholder (starting from 1938)''
``Jewish race of the insured person (starting from 1938)''
``Jewish race of beneficiary in case of death (starting from
1938)''
``Jewish race of beneficiary in case of survival (starting from
1938) at maturity''
This source of the information is an ``examination of the collected
data on unpaid policies shows that some of the insured had to specify
their `Jewish race.' '' This revelation contradicts statements made
over the last decade by the companies and their representatives.
In addition, documents such as Generali's letter to the ``Prefect
of Milan,'' in which the company did indeed identify its Jewish
customers to authorities, repudiates the companies' denials:
The holder of the policy in the margin is Mr. Arrigo Lops
Pegna of Ertore--the beneficiary is the wife. Mrs Gemma Servi
in Lopes--Milan, O sc C Ciano 10, both of whom belong to the
Jewish race. We renounce the aforementioned policy and signify
to you that the same is in effect for an insured sum of L.
100,000.
How many of these kinds of transactions were ``otherwise settled before
maturity?'' Don't survivors and doesn't history have a right to all
these facts?
How much more information like that lies in their records? No one
knows because ICHEIC did not probe that issue nor require the companies
to disclose all records pertaining to their interaction with the
authorities during the war, nor their internal accounting records or
board minutes showing how they dealt with Holocaust victims' policies
after the war.
Survivors should not be deprived the right to choose for themselves
whether to go to court to recover their families' insurance proceeds.
Under traditional common law, Holocaust survivors and heirs and
beneficiaries of Holocaust victims would be guaranteed access to the
courts of the States to sue insurance companies who fail to honor their
family policies. The legislatures of Florida, New York, California, and
several other States in 1997 and 1998 enacted specific statutes to
ensure that Holocaust survivors and their beneficiaries and heirs could
go to court to advance their claims for unpaid insurance policies. No
legislatively enacted statute either at the State or Federal level has
provided that Holocaust survivors can be denied access to courts due to
ICHEIC. The current legal landscape is entirely a creation of judicial
decisions attempting to interpret executive branch actions in the
absence of congressional direction.
For example, Florida's Legislature and Insurance Commissioner have
consistently rejected the proposition that the ICHEIC should be treated
as a substitute for Florida's Holocaust Victims Insurance Act and
traditional remedies under Florida law. In 1998, when Florida Insurance
Commissioner Bill Nelson, now chairman of this committee, agreed to
execute the Memorandum of Understanding which created the ICHEIC, he
did so subject to several specific conditions, including the express
acknowledgment that Florida laws would not thereby be diminished: ``The
Florida Department of Insurance expressly reserves the right to enforce
all applicable Florida laws and regulations to protect the interests of
Florida citizens.'' See, April 29, 1998, letter from Florida State
Treasurer and Insurance Commissioner Bill Nelson to the Honorable Glenn
Pomeroy, NAIC President.
Commissioner Nelson again rejected the idea that ICHEIC
participation created a ``safe harbor'' from Florida law in a
subsequent letter to the members of the ICHEIC: ``Participation on the
Commission should not be seen by any company as a means to shield
itself from Florida's laws. When I signed onto the Memorandum of
Understanding establishing the International Commission, as every one
knows, I stated: ``The Florida Department of Insurance expressly
reserves the right to enforce all applicable Florida laws and
regulations to protect the interests of Florida citizens. This has
always been and continues to be my position.'' \11\
---------------------------------------------------------------------------
\11\ Further, in resolutions adopted in 1999, both houses of the
Florida Legislature emphatically rejected the idea that the ICHEIC
could serve as an exclusive forum for Holocaust victims' insurance
claims.
---------------------------------------------------------------------------
The principal Senate sponsor of the Florida Holocaust Victims
Insurance Act and Senate Resolution 2730, State Senator Ron Silver,
explained that claimants' rights to go to court in Florida are part of
the bedrock of the State's common law and statutory scheme to protect
the rights of Holocaust victims and heirs. In a letter to the Honorable
Michael Mukasey, he wrote: ``One of the key elements of our legislation
was to establish a right for survivors, heirs, or beneficiaries to go
to court in Florida to enforce their rights in relation to insurance
policies sold before the Holocaust.'' Senator Silver's letter explains:
In 1999, I sponsored Senate Resolution 2730, which reiterated
the legislature's strong policy in favor of assisting Holocaust
victims and their families to recover unpaid insurance policies
from companies. We were very aware of the work of the State
Insurance Commissioner, who was participating as a member of
the International Commission for Holocaust Era Insurance Claims
(ICHEIC), as well as working to enforce the provisions of the
Holocaust Victims Insurance Act. The reason we adopted S.R.
2730 was to restate the legislature's conviction that,
notwithstanding the efforts of the ICHEIC and other global
negotiations, individuals should retain the right to go to
court to press their claims for unpaid insurance policies from
the Holocaust era. . . .
See, Letter from Florida Senator Ron Silver to Hon. Michael Mukasey,
October 31, 2001
Cost/benefit analysis of H.R. 1746
Perhaps the most cynical objection raised to H.R. 1746 is that it
might not generate enough actual payments to Holocaust survivors to
justify the political opposition mounted by the insurance companies and
the governments seeking to protect them. The analysis above
demonstrates that more than 60 years after the end of WWII, only 3
percent of the funds owed by these insurers to Holocaust victims'
families has been repaid, after an excruciating 9-year hiatus in which
ICHEIC was given sway to allow some companies to fly below the radar
screen and still succeed in holding onto over 95 percent of their
unjust enrichment.
The provisions of H.R. 1746 represent common sense and common
decency in allowing Holocaust survivors and families access to the
United States court system to control their own right to obtain
information from the culpable insurers, seek the truth about their
families financial history, and recover the funds they might be owed.
Given the shortcomings in ICHEIC's names disclosure record and claims
payment record, H.R. 1746 is necessary to allow all victims' families a
fair chance to recover their financial due. The status quo creates one
subclass of Americans who cannot go to court to sue insurers that
pocketed their hard-earned money--Holocaust survivors. This is an
untenable position for America in the year 2008.
Companies that did not participate in ICHEIC won an even greater
windfall, but they would be required to publish policy information
under H.R. 1746 if they want to do business in the United States.
Further, as Congressman Robert Wexler pointed out at a public forum
in South Florida on December 10, H.R. 1746 also sets a marker that the
public policy of the United States will not tolerate or condone
corporate or institutional profiteering from atrocity, whether against
Jews or against any other people. It is appropriate and morally
required to use all the tools at our society's disposal to discourage
and even punish enterprises that do business with ruthless and
genocidal regimes like those that do business with the Sudan, given the
atrocities of Darfur.
The evidence that multinational insurers profited from the
Holocaust to the tune of some $17 billion in today's dollars is
overwhelming. Making them pay for their unjust enrichment--even 63
years after the end of the war--sends a message to other enterprises
that might turn a blind eye to murder, and thereby save lives and
prevent future atrocities.
conclusion
As Holocaust survivor Jack Rubin stated before the Europe
Subcommittee in October, it is indeed possible and even likely that
tens of thousands of Jews' insurance policies went up in the smoke of
Auschwitz. But why should the companies be able to retain the billions
in unjust enrichment due to their greed and cynicism? Even if only a
few additional policies are repaid to individuals, there is no
plausible reason to allow the financial culprits from the Holocaust
rest easy in 2007 or ever, until they have disgorged their ill-gotten
gains. Their unjust enrichment is tainted and must be returned, to the
owners or to survivors in need if necessary.
______
Report to Congress: German Foundation ``Remembrance, Responsibility,
and the Future''--Bureau of European and Eurasian Affairs, March 2006
[As required by Section 704 of the Foreign Relations Authorization Act,
FY 2003 (as enacted in Public Law 107-228)]
introduction
Section 704 of the Foreign Relations Authorization Act, FY 2003, as
enacted in Public Law 107-228, requires the Secretary of State to
report to the appropriate Congressional committees on the status of the
implementation of the Agreement between the Government of the United
States of America and the Government of the Federal Republic of Germany
concerning the Foundation ``Remembrance, Responsibility, and the
Future,'' signed in Berlin on July 17, 2000, and, to the extent
possible, on payments to and from the Foundation and on certain aspects
of the functioning of the International Commission on Holocaust Era
Insurance Claims (``ICHEIC''). This is the seventh report submitted
pursuant to that law.
background
The United States Government played a critical role in a
multilateral effort that resulted in the establishment of a Foundation
under German law entitled ``Remembrance, Responsibility, and the
Future'' (``Foundation''). The Foundation was capitalized with 10
billion German Marks (DM), valued at the time at approximately five
billion dollars. Since June 2001, the Foundation has been making
payments to survivors in recognition of the suffering they endured as
slave and forced laborers. The Foundation also covers other personal
injury claims and certain property loss or damage caused by German
companies during the Nazi era, including claims against German banks
and insurance companies. Further background is available in previous
reports submitted to the committees.
implementation of the agreement
The United States and the Federal Republic of Germany have taken
various steps to implement the Foundation Agreement. In August 2000, a
German law establishing the Foundation took effect. In October 2000,
the United States and the Federal Republic of Germany exchanged
diplomatic notes to bring the Foundation Agreement into effect. The
United States note indicates that the German law, as clarified and
interpreted by several German Government letters, is fully consistent
with the Foundation Agreement, which sets forth the principles that
shall govern the operations of the Foundation.
The United States Government has filed statements of interest
recommending the dismissal, on any valid legal ground, of lawsuits
brought against German companies for wrongs committed during the Nazi
era, and is committed to do so in future cases that are covered by the
Foundation Agreement.
On May 30, 2001, the German Bundestag declared that ``adequate
legal certainty'' had been achieved for German companies in the United
States. Under the law establishing the Foundation, this declaration by
the Bundestag authorized the Foundation to make funds available to the
seven partner organizations (foundations that had previously been
established in Belarus, the Czech Republic, Poland, Russia and Ukraine,
as well as the Conference on Jewish Material Claims Against Germany and
the International Organization for Migration) that would make payments
to individual recipients.
funds available to the foundation
By early 2002, the entire sum of 10 billion DM had been made
available to the Foundation by the Federal Republic of Germany and by
German companies.
payments from the foundation
As of December 2005, approximately $5.1 billion (4.265 billion Euro
or 8.3 billion DM) had been paid to approximately 1,646,000 surviving
slave and forced laborers. This represents 98 percent of the funds (8.1
billion DM plus an additional amount from interest earnings) available
from the Foundation's capital for slave and forced labor payments. The
remaining funds will continue to be paid out over the next six months.
A breakdown of payments by partner organizations follows:
------------------------------------------------------------------------
Number of Amount (in
Partner organization recipients euro)
------------------------------------------------------------------------
Belarus/Estonia........................ 129,000 345,300,000
Conference on Jewish Material Claims... 154,000 1,116,800,000
Czech Republic......................... 76,000 209,200,000
International Organization for 87,000 366,300,000
Migration.............................
Poland................................. 483,000 971,000,000
Russia................................. 245,000 392,000,000
Ukraine................................ 472,000 864,500,000
--------------------------------
Total............................ 1,646,000 * 4,264,800,000
------------------------------------------------------------------------
* Approximately US$5.1 billion.
icheic
The law establishing the Foundation provides funds to ICHEIC for
the payment of claims arising from unpaid insurance policies issued by
German insurance companies, as well as for the associated costs, and
also a contribution to the ICHEIC humanitarian fund. The Foundation
Agreement provides that insurance claims made against German insurance
companies will be processed according to ICHEIC claims handling
procedures and under any additional claims handling procedures that may
be agreed among the Foundation, ICHEIC, and the German Insurance
Association.
Following two earlier extensions, the deadline for filing claims
was extended to December 31, 2003. The later filing deadline was
designed to provide additional time for applicants, assisted by a
publicized list of names, to determine whether to file a claim.
Applicants who contacted ICHEIC prior to the December 31 deadline to
obtain claim forms had until March 31, 2004, to complete the form and
send it so that ICHEIC receives it by that date.
The Department of State was unable to obtain such information on
the ICHEIC claims process as required by section 704(a)(3)-(7). Some
information about ICHEIC, including statistics on claims and appeals,
however, is publicly available on ICHEIC's Web site (www.icheic.org).
______
[From the Wall Street Journal, Nov. 1, 1999]
Allianz Eclipses Deutsche Bank As Germany's Premier Power
(By Greg Steinmetz and Anita Raghavan
Munich, Germany.--Not much happens in corporate Germany without
input from the country's largest insurer, Allianz AG.
In September, when German conglomerates Veba AG and Viag AG
announced their $14 billion merger, a pivotal question was whether
Allianz would go along. Earlier in the year, truck maker MAN AG said it
planned an acquisition spree, and investors immediately asked if
Allianz had signed up. Investment bankers have tried to lure German
drugmaker Schering AG and other companies in Allianz's portfolio into
mergers for years. Instead of going to the companies, the bankers often
go first to Allianz.
In the U.S., Allianz is best known for owning Fireman's Fund and
the controversy over missed insurance payments to Holocaust survivors.
In a bid to expand its reach, it has reached an agreement to buy a 70%
stake in Pimco Advisors Holdings LP, a U.S. asset-management company,
for $3.3 billion, people familiar with the situation say. Allianz plans
to list its shares on the New York Stock Exchange, but in the sprawling
U.S. insurance market, it remains just a face in the crowd.
Back home, it's another story. Here, Allianz is known as the
``spider in the web'' of Germany Inc. In the clubby world of German
business, where few degrees of separation stand between the top
companies, no organization has more board seats or larger stakes in
major German corporations than Allianz.
image problems
``We are not always embarrassed by having the label `powerful,' ''
says Diethart Breipohl, the company's chief financial officer. ``But we
would prefer the label global or European.'' He says the company's
image creates problems overseas. Headlines with the words colosso
tedesco (Italian for giant German) or le giant allemand (French for
giant German) tend to scare the public, he says.
Allianz has been a power broker for decades. What's new is how its
influence is increasingly unrivaled. Power in corporate Germany used to
cleave evenly between Allianz and Deutsche Bank AG. Deutsche Bank is
the world's biggest bank in terms of assets, but in the past few years
the balance of power in Germany has shifted to Allianz.
That's partly because of Deutsche Bank's embarrassing string of
slip-ups. It stumbled with its investment-banking strategy and got
blamed for some of Germany's most high-profile corporate disasters,
including Metallgesellschaft AG, which brushed with bankruptcy six
years ago because of trading losses.
Meanwhile, Allianz has stayed clear of trouble while increasing its
muscle. It expanded outside Germany and has done well in its key
domestic growth market, eastern Germany. Since 1994, Allianz's share
price has sharply outperformed Deutsche Bank's. Allianz now has a stock
market value of $71 billion, considerably larger than that of its
Frankfurt rival.
deutsche bank trims stake
Indeed, some of Allianz's success has come at the expense of
Deutsche Bank, which used to be a close partner but is now its biggest
rival. On Thursday, Deutsche Bank, in an effort to further unwind its
relationship with Allianz, reduced its stake in the insurer to 7% from
9.1%, selling off $1.5 billion of stock in the process.
The relationship began unraveling in the early 1990s when Deutsche
Bank broke an unwritten truce with Allianz by going into the insurance
business. At the time, Deutsche and Allianz owned stakes in each other
and each sat on the other's board. At a 1993 board meeting, the rivalry
broke into the open. Deutsche Bank's then chief executive officer,
Hilmar Kopper, came to an agenda item about insurance, prompting
Allianz's chief executive, Henning Schulte-Noelle, a stern figure with
a dueling scar on his cheek, to excuse himself.
As Mr. Schulte-Noelle was leaving, Mr. Kopper quipped, ``No, why
don't you stay? We have no secrets, and perhaps you can give us some
good advice.'' Mr. Kopper says the remark was meant in good faith, but
others saw it as sarcastic.
Shortly after Deutsche Bank entered into insurance, Allianz
countered by stepping up its interest in banking. In 1992, it raised
its stake in Dresdner Bank AG to 22% from 19% and might have kept going
had federal cartel authorities not ordered it to stop.
tensions surfaced
Two years ago, tensions surfaced again when Deutsche Bank bought a
stake in Bayerische Vereinsbank AG, the biggest bank in Allianz's home
state of Bavaria. Rumors flew that Deutsche Bank wanted to buy up the
rest. Eager to block Deutsche Bank, Allianz sanctioned an $18 billion
merger between Vereinsbank and Bayerische Hypotheken- & Wechsel-Bank
AG. Allianz held stakes in both banks. At the time, the deal, which
created HypoVereinsbank AG, was the largest bank merger in European
history.
Allianz remained a powerful force after the merger. When the merged
bank fell on hard times, shareholders looked to Allianz for a solution.
Allianz sanctioned the departure of the bank's supervisory board
chairman. Then, on a Sunday morning last April, Mr. Schulte-Noelle sat
in his office with Kurt Viermetz, the former vice chairman of J.P.
Morgan & Co., and offered Mr. Viermetz the job. Mr. Viermetz accepted.
Economists question whether the German economy benefits from a
company with so much power. Growth has been sluggish in Germany, and
one factor is the slow pace of corporate restructuring. To get growth
moving, German companies need to step up the pace of reform, even if it
means allowing foreign companies to come in and do it, economists say.
difficult for foreigners
But Allianz stands in the way. ``If you have these Allianz-type
networks, it's hard for foreign investors to come in and break them
up,'' says Paul Welfens, an economist at the University of Potsdam. In
situations where a company might best be served by layoffs or asset
sales that only an outsider would undertake, Allianz's solution is
often inferior, he says.
One example might be the case of MAN, a truck maker that also makes
printing presses and has other business. Analysts say it makes little
sense for those operations to be under the same roof. Sensing value in
a breakup, investment bankers have been circling MAN. But instead of
selling out, MAN is instead looking for acquisitions.
The reason, bankers say, is because Allianz protects it. Allianz
heads an investment group that owns more than a third of MAN's stock.
Though Allianz could make a tidy profit by selling, bankers suggest it
won't because it fears a backlash. As Germany's largest seller of life
and car insurance, Allianz worries about its reputation and wouldn't
want to be blamed for sponsoring layoffs.
Mr. Breipohl, the Allianz finance chief, disagrees. ``Job losses
are not something you want to be associated with,'' he concedes, but he
notes that MAN's stock has performed well so there isn't any reason to
break up the company. If the objective is to realize value by breaking
up MAN, Allianz can do it without the help of outsiders, he says.
``Investment banks are always useful but we also have the in-house
experience to conduct such a process should it be necessary.''
takeover of schering
Allianz is also blamed for holding up a takeover of Schering, the
large, Berlin-based pharmaceutical company in which it owns 10%. Two
years ago, Eli Lilly & Co. of the U.S. approached Schering about a $8
billion takeover, according to people familiar with the situation.
Schering told Lilly to go away. Schering and Lilly wouldn't comment.
Mr. Breipohl denies having heard about Lilly's approach. But
bankers say they have gone directly to Allianz with other takeover
plans for Schering and been turned away.
Allianz could profit handsomely by unloading its Schering stake.
But given that Schering is one of the bright lights of German industry,
Allianz wants to avoid blame for letting the company slip into foreign
hands, investment bankers say.
Mr. Breipohl says that isn't so. In principle, he says, Allianz
would never stand in the way of a foreign company buying a German
company as long as the price was fair. ``We are not the defenders of
corporate Germany, and we would not want to be perceived as playing
that role,'' he says. He notes that Allianz made possible the takeover
of Germany's BHF Bank by the Dutch bank ING and the takeover of the
Berlin waterworks by Vivendi SA of France.
opposition to french firm
But there was at least one occasion when Allianz openly opposed a
foreigner. In 1992, French insurer AGF sought to take control of a
German insurer, Aachener & Muenchener Beteiligungs AG. Threatened by
the presence of a big French insurer on its home turf, Allianz led a
group of financial companies that bought a large stake in Aachener.
At the time, Allianz said its investment in Aachener was purely an
investment. Now Mr. Breipohl concedes that Allianz was unhappy with
AGF's foray into Germany. It wasn't because it feared a French
competitor, he says. Rather, it was because AGF was then controlled by
the French government. ``If you have to compete against the state,
regardless of whether it is a domestic or foreign government, then
something is wrong,'' he says.
That stake later proved extremely valuable. Two years ago, Italian
insurer Assicurazioni Generali SpA made a hostile bid for AGF, which
had been privatized some years before. The hostile bid prompted AGF to
look to Allianz as a white knight. Allianz agreed to let Generali take
over Aachener, and Generali dropped its bid for AGF. Allianz is now one
of the biggest insurers in France.
Allianz picked up the core of its stock holdings after World War
II. At a time when German companies were desperate for capital, Allianz
was one of the few sources of cash to rebuild the bombed-out country.
As German corporations regained momentum and became global players,
Allianz continued to invest and maintain its influence in boardrooms.
grudging move
Mr. Breipohl says it did so grudgingly. Compared to the U.S.,
Germany has few companies big enough for Allianz to invest in, so it
had no choice but to concentrate on the big players.
Fundamental to Allianz's character is discretion. While Deutsche
Bank CEO Rolf Breuer is often seen before the cameras and often gives
interviews, Mr. Schulte-Noelle is more reticent. Deutsche's twin towers
are fixtures in the Frankfurt skyline. But visitors have to hunt to
find Allianz's five-story headquarters tucked behind a Munich
university. Deutsche executives sit as board chairmen on a number of
German companies. Allianz has a rule that executives take no job higher
than deputy chairman. Mr. Schulte-Noelle sits on nine corporate boards
and is deputy chairman of three.
Allianz prefers discretion because it is a target. For decades,
Germans have debated the powers of banks and insurance companies, which
have broader powers than they do in the U.S. Populist politicians want
to rein them in.
But Allianz will speak out when cornered. This year, the government
of Chancellor Gerhard Schroeder sought to raise taxes on insurance
companies. Helmut Perlet, a top Allianz official, threatened to
relocate some Allianz operations outside Germany if the government
didn't relent. A few days later, the government slashed the tax
increase.
Senator Bill Nelson. Thank you, Mr. Dubbin.
Ms. Rubin.
STATEMENT OF ANNA B. RUBIN, DIRECTOR, NEW YORK HOLOCAUST CLAIMS
PROCESSING OFFICE, NEW YORK STATE BANKING DEPARTMENT, NEW YORK,
NY
Ms. Rubin. Good afternoon, Chairman Nelson and members of
the committee. Thank you for the opportunity to appear before
you today and share my knowledge on the important issue of
Holocaust-era insurance claims. As Director of the Holocaust
Claims Processing Office, I am pleased to be able to provide
some insight into New York State's attempt to provide some
measure of justice to the victims of a painful chapter in world
history.
For over 10 years, the State of New York has been at the
forefront of efforts to ensure a just resolution of unresolved
claims for assets lost due to Nazi persecution and in June 1997
established the HCPO as a division of the New York State
Banking Department. Claimants pay no fee for the HCPO's
services, nor does the HCPO take a percentage of the value of
the assets recovered. The goal of the HCPO is to advocate for
claimants by helping to alleviate any cost and bureaucratic
hardships they might encounter in trying to pursue claims on
their own.
Since its inception, the HCPO has assisted nearly 2,300
individuals from 41 States and 24 countries in making claims
for insurance policies. For the most part, the claims are for
compensation of life, dowry, and education policies. To date,
the combined total of offers extended to HCPO claimants for
bank accounts, insurance policies, and other asset losses
amounts to more than $118 million, over $28 million of which is
compensation for insurance policies.
Claims received by the HCPO range from the purely anecdotal
to the partially or even fully documented. In response to the
complex nature of restitution claims, the HCPO developed a
systematic method, broadly described in four steps, to handle
cases. First, individual claims as assigned to members of the
HCPO's staff who assist in securing documentation through
research in domestic and international public and private
archives.
Second, the HCPO determines where to file a claim. In order
to submit a claim to the appropriate company or claims process,
it is necessary to establish what present-day company or
process is responsible for the policy in question. For claims
for policies issued by companies still in existence, finding
the appropriate successor is relatively straightforward. But
for others determining the successor is more complex.
Third, the HCPO staff submits claims to all appropriate
companies, regulatory authorities, governments, and any
independent organization established to resolve these claims.
Prior to establishment of ICHEIC, the HCPO submitted claims for
insurance policies directly to the issuing insurance company or
its present-day successor if one could be located. With the
launch of ICHEIC, the HCPO transferred over 2,100 insurance
claims to the commission for settlement. The HCPO also
submitted claims to a variety of other processes, either
directly or in accordance with ICHEIC's partnership agreements.
Throughout, the HCPO closely monitored the progress of these
claims.
Since ICHEIC has ceased operation, ICHEIC member companies,
as well as members of the German Insurance Association,
reiterated their commitment to continue to review and process
claims sent to them, and now once again the HCPO deals directly
with insurance companies to resolve outstanding claims.
The final step in the HCPO process involves evaluating
decisions and working with claimants on payment or appeal. The
HCPO reviews a decision to ensure that it adheres to agreed-
upon processing guidelines. Decisions are discussed with
claimants and staff follow up with the organization issuing the
determination as needed. In addition, we help arrange for
payment to be made directly to claimants.
For the past decade the HCPO has been successful in
obtaining closure for many Holocaust victims and their heirs
who have been trying to arrive at resolution for more than half
a century.
Recently, the National Association of Insurance
Commissioners, the HCPO, and the Banking and Insurance
Departments of New York State have begun discussions of a
proposal by which the NAIC will provide financial support for
the HCPO's efforts at monitoring and reporting the insurance
claims.
Like the missing property we search for, no two claims are
alike. Each requires conscientious individual attention and
painstaking effort. The process of restitution is difficult and
distressing for claimants. The HCPO's successes show that it is
possible to obtain compensation for assets lost during the
Holocaust era through open and mutual cooperation and at no
cost to Holocaust victims or their heirs.
Thank you again for the opportunity to discuss the HCPO and
I would be happy to address any questions you may have.
[The prepared statement of Ms. Rubin follows:]
Prepared Statement of Anna B. Rubin, Director, Holocaust Claims
Processing Office, New York State Banking Department, New York State
Insurance Department, New York, NY
Good afternoon, Chairman Nelson, Ranking Member Vitter, and members
of the subcommittee. Thank you for the opportunity to testify before
you today and share my knowledge on the very important issue of
Holocaust-era insurance claims. As director of the Holocaust Claims
Processing Office (HCPO), I am especially pleased to be able to provide
some insight into the work of New York State in its attempt to provide
some measure of justice to the victims of a painful chapter in world
history. Today I would like to provide you with background on the HCPO
and in particular our experience working on Holocaust-era insurance
claims, our cooperation with numerous compensation organizations, and
our more recent efforts to assist individuals with outstanding
insurance claims.
i. introduction to the holocaust claims processing office
For over 10 years New York State has been at the forefront of
efforts to ensure a just resolution of unresolved claims for assets
lost due to Nazi persecution. As you are undoubtedly aware, disputes
over Holocaust-era dormant Swiss bank accounts and unpaid life
insurance policies came to the forefront in the late 1990s. During
those early days, before settlements and claims processes, New York
State recognized the need for an agency to assist individuals
attempting to navigate the emotionally charged maze of Holocaust-era
asset restitution and, as a result, established the HCPO as a division
of the New York State Banking Department in June 1997. The HCPO is
jointly funded by the New York State Banking Department and the New
York State Insurance Department.
The HCPO was initially intended to assist individuals hoping to
recover assets deposited in Swiss banks. It soon became apparent that
claimants also needed help recovering a range of other property and by
the end of its first year of operation, the HCPO expanded its mission
to assist in the recovery of assets held in non-Swiss banks, proceeds
from Holocaust-era insurance policies, and works of art that were lost,
looted, or sold under duress between 1933 and 1945.
The HCPO is the only government agency in the United States that
assists individuals to file claims with a variety of multinational
restitution processes. Claimants pay no fee for the HCPO's services,
nor does the HCPO take a percentage of the value of the assets
recovered. To date, the combined total of offers extended to HCPO
claimants for bank accounts, insurance policies, and other asset losses
amounts to more than $118 million, $28.3 million of which is
compensation for insurance policies. (See, Section 1.--New York State
Banking Department Holocaust Claims Processing Office Annual Report.*)
The goal of the HCPO is to advocate for claimants by helping to
alleviate any cost and bureaucratic hardships they might encounter in
trying to pursue claims on their own.
ii. the hcpo's insurance claims
Overall, the HCPO has handled in excess of 13,000 inquiries, of
which 4,300 have been insurance-related inquiries from individuals in
46 States and 29 countries. Of the 4,300 insurance-related inquiries,
the HCPO assisted 2,290 individuals from 41 States and 24 countries in
making claims for insurance policies. For the most part the claims are
for compensation of life, dowry, and education insurance policies.
iii. hcpo claims research
Claims received by the HCPO range from the purely anecdotal to the
partially or even fully documented. Some claimants are able to furnish
documentation such as the actual policy or premium receipt; handwritten
lists kept by families that itemized their assets; and prewar and
wartime confirmation letters from insurance companies referencing
policy numbers and policies. In other instances, claimants document
policy ownership through Nazi-era asset declarations; in some cases
policy ownership is revealed by postwar compensation files.
Those who cannot provide documentation often know significant
details. Claimants know there was insurance; they even recall
purchasing it, and they remember perhaps the name and location of the
agent. They remember accompanying parents to medical exams, or to
photographers for dowry policy photographs.
Individual claims are assigned to members of the HCPO's staff of
seven professionals--comprised of historians, economists, political
scientists, lawyers, art historians and linguists--who provide
assistance in a variety of ways. They assist in securing documentation
through research in domestic and international public and private
archives. As a result, the HCPO has cordial working relationships with
archives, historical commissions, financial institutions, trade
associations, and governmental colleagues at the Federal, State, and
local levels in many different countries. This network enables the HCPO
to research prewar, Nazi-era, and postwar documentation to obtain
evidence about an individual's asset ownership, details of the
dispossession, and prior attempts at recovery.
Claimants have approached the HCPO convinced that the policies they
are seeking were written by one company and the HCPO's research has
been able to determine that it was in fact quite another. For instance,
a claimant, originally from Vienna, approached the HCPO relatively
certain that his father's life insurance policy was written by Der
Anker or Phonix. Neither Der Anker nor UNIQA (the Phonix successor) had
any record of a policy. The HCPO obtained a copy of the claimant's
father's asset declaration from the Austrian Federal Archives, which
revealed a Victoria life insurance policy, and even cited its
repurchase value as of July 1938. In turn, the HCPO submitted the claim
to the International Commission on Holocaust Era Insurance Claims for
resolution.
iv. hcpo submission of claims to appropriate entities
With as much information in-hand as possible regarding the
claimants' insurance policies, the HCPO must still determine where to
file the claim. In order to submit a claim to the appropriate company
or claims process, it is necessary to first determine what present-day
company or claims process is responsible for the policy in question.
For claims for policies issued by companies still in existence, finding
the appropriate successor is relatively straightforward. But for
others, determining the successor is more complex.
A considerable amount of the HCPO staff's time is devoted to
successor company research. Researching successor companies is
complicated by the following facts: Policies written in contested
geographical areas were transferred to a variety of companies and
different portfolios within these companies; the prewar Nazi
consolidation of the insurance industry and the postwar reconstruction;
and in some instances nationalization of the industry led to further
changes in corporate structures. Moreover, the ravages of war and the
passage of time have left many companies with little or no
documentation regarding their prewar holdings or the holdings of their
subsidiary companies.
Published industry handbooks and government statistical bulletins
from the relevant time period help the HCPO determine where companies
did business and provide some information regarding the aggregate
statistics of the prewar insurance market as well as the market share
of individual companies. For example, it is possible to state with some
certainty which companies sold life insurance policies in Germany and
Poland in 1936 and that in that same year the domestic German insurance
market comprised 48.78 percent of the continental European insurance
market, whereas the Polish market made up 0.68 percent of the market.
(See, Section 2.--Overview of the Interwar Economy and European
Insurance Industry.*)
Once all of the HCPO's research is complete, the HCPO's role
changes from detective to advocate and facilitator. The HCPO staff
submits claims to all appropriate companies, regulatory authorities,
governments, and any independent organization established to resolve
these claims.
A. The International Commission on Holocaust Era Insurance Claims
The International Commission on Holocaust Era Insurance Claims
(ICHEIC) was established in October 1998 by the National Association of
Insurance Commissioners in cooperation with several European insurance
companies, European regulators, representatives of several Jewish
organizations, and the State of Israel. ICHEIC was charged with
establishing a process to address the issue of unpaid insurance
policies owned by victims of the Holocaust. To accomplish this task,
ICHEIC entered into agreements with European insurers and created
mechanisms by which the Commission was able to identify, settle, and
pay individual Holocaust-era insurance claims, at no cost to claimants,
using relaxed standards of proof. With the launch of ICHEIC's claims
process in February 2000, the HCPO transferred over 2,100 insurance
claims to the Commission for settlement. The HCPO worked closely with
ICHEIC staff in Washington and London, participated in working groups,
provided technical assistance and ensured claimants' concerns were
adequately addressed.
B. The Austrian General Settlement Fund
The Austrian General Settlement Fund (GSF) Law of 2001 created the
legal basis for dealing with the financial claims of Holocaust victims.
The Austrian Insurance Association and its member companies passed a
unanimous resolution in April 2001 to contribute $25 million to the
GSF. The GSF has assumed the task of processing the insurance claims of
Holocaust victims and their heirs. The HCPO has submitted claims on
behalf of over 360 claimants either directly or through the GSF's
partnership with ICHEIC. The HCPO continues to monitor these claims and
conduct additional research.
C. Other claims processes
In addition, HCPO insurance claims have been forwarded to a number
of other entities for resolution, including the Generali Fund in Memory
of the Generali Insured in East and Central Europe Who Perished in the
Holocaust (GTF), the Holocaust Foundation for Individual Insurance
Claims (Sjoa Foundation), the Claims Resolution Tribunal (CRT), and the
Belgian Jewish Community Indemnification Commission (Buysse
Commission). Claims were submitted to these organizations either in
accordance with ICHEIC's partnership agreements with these entities or
directly by the HCPO.
D. Insurance companies before and after ICHEIC
Prior to the establishment of ICHEIC, the HCPO submitted claims for
insurance policies directly to the issuing insurance company or its
present-day successor, if one could be located. At ICHEIC's final
meeting in March 2007, all ICHEIC member companies, as well as over 70
companies in the German Insurance Association, through its partnership
agreement with ICHEIC, reiterated their commitment to continue to
review and process claims sent directly to them in accordance with
ICHEIC's relaxed standards of proof. Since ICHEIC ceased operations at
the end of March 2007, the HCPO has once again resumed dealing with
insurance companies directly to resolve outstanding claims.
v. resolution of claims
Once a company or claims process has completed its review of a
claim and reaches a determination, the HCPO reviews the decision to
ensure that it adheres to that entity's published processing
guidelines. Since claimants may lose track of all the claims they have
submitted, and since each agency has unique and often complex
guidelines, the HCPO helps claimants to understand these guidelines in
order to interpret decisions.
In the event that a claimant disagrees with a company or claims
process determination of his or her claim, the HCPO guides claimants
through appealing the decision and offers whatever further assistance
it can. Alternatively, when claimants receive positive decisions that
include monetary awards, the HCPO facilitates payment by explaining the
various release and waiver forms and by following up with the claims
agency to confirm payment.
vi. naic proposal
Recently, the National Association of Insurance Commissioners
(NAIC), the HCPO, and the Banking and Insurance Departments of New York
State have begun discussions of a proposal by which the NAIC will
provide financial support for the HCPO's efforts at monitoring the
insurance claims submitted to European insurers now that ICHEIC has
ceased operation. It is anticipated that the HCPO will serve as the
primary contact point for insurance companies and claimants with
inquiries concerning Holocaust-era policies and ICHEIC guidelines. In
order to facilitate the monitoring effort, the NAIC and its members
will work with the HCPO to develop a bulletin on claims reporting, to
help inform claimants of the opportunity to submit claims and the
HCPO's ability to assist them. The HCPO will report the results of its
monitoring activities to the NAIC.
Through this partnership, the HCPO will oversee the processing of
any claims submitted through the HCPO to insurance companies to ensure
compliance with ICHEIC's relaxed standards of proof. By monitoring and
regular reporting, and by serving as a primary contact point for
insurance companies and claimants, the HCPO can facilitate a process
that will hopefully obviate the need for recourse to the judicial
process. (See, Section 3.--Correspondence between the NAIC and New
York.*)
vi. conclusion
Like the missing property we search for, no two claims are alike;
each requires conscientious individual attention and painstaking
effort. The process of restitution is difficult and distressing for
claimants; however, the HCPO's successes show that compensation for
assets lost during the Holocaust era is still possible. Experience has
taught that the HCPO can greatly minimize the difficulties in dealing
with matters of Holocaust-era asset compensation.
* [Editor's note.--The information referred to above is located in the
Appendixes to this hearing transcript.]
Senator Bill Nelson. Thank you, Ms. Rubin.
Senator Coleman.
Senator Coleman. Thank you.
Ms. Rubin, why don't I start with you. I appreciate the
work that you've been doing. You indicated that the HCPO has
been successful in obtaining closure for Holocaust victims. Is
some of that closure through the ICHEIC process?
Ms. Rubin. Yes, sir.
Senator Coleman. I don't know if I can--the Professor
talked about ``restituted.'' I'm not sure that any victims can
ever be restituted when their parents are gone, their brothers
are gone, their sisters are gone. But in terms of just this
process, is it your sense that there has been some successful
closure by going through the ICHEIC process?
Ms. Rubin. Through our experience, we have been able to
obtain closure for claimants, either by showing that the policy
had been paid out prior to the war, had been compensated
immediately after the war, or compensated through the ICHEIC
process.
Senator Coleman. I'm not sure that you can answer this, but
one of the issues on which there's been a lot of discussion has
been the valuation of insurance claims, the Zabludoff study
that estimated claims in the $17 billion area, other studies,
more recent information, that it's been less. But can you
provide any insight as to, what's the universe of claims that
are out there?
Ms. Rubin. The universe of remaining claims?
Senator Coleman. Well, yes. Do you have any sense? Who
should we look to? I've seen different studies here. Perhaps
someone else can respond to that, but what are we looking at?
What's the present day value of insurance claims that are still
out there?
Ms. Rubin. I can tell you that from the HCPO's experience,
since ICHEIC closed we've only received about a half a dozen
new claims. We have recently attempted to assess the scope of
the market by reviewing the premium income from 1936 as a
sample prewar year, to assess the size of the market. It is
difficult to assess how many claims might remain.
Senator Coleman. Is there anybody else who can give--Mr.
Dubbin, if you can respond?
Mr. Dubbin. Sure. There is no exact number, obviously,
because there's no exact census. But based upon the agreed-upon
base value from the Pomeroy-Ferras report of $600 million in
valuation in 1938, Mr. Zabludoff, who is an economist, using a
30-year bond rate as a multiplier, calculated that the value
today of those policies would be $18 billion.
The number of those claims--the number of policies that
remain uncompensated in any way is clearly several hundred
thousand, several hundred thousand.
Now, there was a statement earlier that the work of ICHEIC
and subsequent analyses verified that what was paid in by
ICHEIC basically ratified their decisions. But ICHEIC itself
never made an effort to bring that 1938 value up to current
date. The Pomeroy-Ferras report, ``did not want to make any
proposal of a valuation process in order to bring the Holocaust
insurance exposure to a 1999 value.'' That wasn't done by
anybody until Mr. Zabludoff in his published article in 2004.
So when ICHEIC paid back, generously speaking, $300 million
out of $17 or $18 billion, that's a lot. But the emphasis of
the legislation--I mean, if it was only a half a billion, if it
was only a half a million, the point of the legislation and
what survivors want is the right to go to court, because
they're the only citizens in this country who can't sue an
insurance company who stole money from their families, the only
Americans who don't have access to the courts.
Senator Coleman. I only have time for one more question.
Ambassador Eizenstat. May we answer that?
Senator Coleman. Yes, Mr. Eizenstat, and then I do, just
one other question that I'd like to at least put on the table.
Ambassador.
Ambassador Eizenstat. Let me take an initial stab and then
let the Secretary conclude. On your specific question, first of
all, the enormous bulk, the great percentage, Senator Coleman,
of the policies written for Holocaust-era victims were written
by those companies that participated in the ICHEIC process,
either the Dutch companies, the Swiss companies, the German
companies--Generali--or by companies that no longer exist, that
were nationalized, that went out of business.
Claims were permitted by ICHEIC and pursued by ICHEIC
processes for all of those companies--all the German companies,
even if they weren't subject to jurisdiction of a U.S. court;
all the Dutch companies, even if they weren't subject to the
jurisdiction; Generali; the Swiss companies, and the like.
Again, as I emphasized, payments were made as well for those
companies that no longer existed, that could never have been
sued.
So the notion that there are hundreds of thousands of
claims that haven't been paid--one wonders where the companies
are. Now, what I suggested in my testimony is that, have the
ICHEIC companies publish newspaper notices reminding people
that they're willing to continue to pay and process claims,
giving them the Web site to the 500,000 names that were
published based upon the research of ICHEIC itself, going
through State archives, going through insurance archives.
The notion that discovery in an individual class action is
going to do a better job than all of this, against companies
who couldn't be subject to jurisdiction, is very difficult,
frankly, to comprehend.
Senator Coleman. Ambassador Eagleburger.
Mr. Eagleburger. I would refer you all to the HCPO document
that was submitted and its appendix 2. And I understand this is
complicated and so I will try to make it short, in fact too
short perhaps, and you can correct me if I do things
incorrectly.
But if you look at that chart--let me back up. I think that
the Zabludoff and other, whatever other estimates may have been
made, are fundamentally flawed. I think they are much too high
and there's no supporting evidence for them.
Now, in regard to the HCPO document here, very quickly, let
me simply say that, first of all, there are issues such as the
propensity to insure, the number of Jewish policyholders in the
first place in a population. Let me give you just one example
to try to demonstrate what I'm getting at. If you look at this
chart, you will find that Poland, with a population of
32,133,000 in 1936, had a Jewish population of 2 percent of
that total figure and as a consequence of that if you can find
any way in the world in which you can judge from the fact that
in the Polish case, if you take a look at it, in the Polish
case there were very few who insured in the first place--I'm
going to have to shorten this or it'll take forever.
But my point is, and we could work on it later if it makes
it any easier--we can submit something for the record. But the
fundamental point is that the statistics simply do not give you
any sense that their figures are in the neighborhood of $17
billion or $200 billion, and we've seen both figures here.
I apologize for not doing a very good explanation of your
chart. But the point I'm trying to get at here is, the
statistics which show the population in Poland, for example,
and the number who insure and the number of Jewish population
within that Polish population provides you with no evidence
whatsoever that anything like these figures could have existed.
Senator Bill Nelson. For the clarity of the record, we will
insert in the record at this point the chart to which Senator
Coleman has referred.
[The information referred to above can be found in the
Appendixes to this hearing transcript.]
Senator Bill Nelson. Senator Cardin.
Senator Cardin. Thank you, Mr. Chairman.
There was a comment made by Mr. Rubin on the last panel
that I would like to follow up, where he claimed that the
privacy rights of insurance companies--at least I think that's
what he was saying--meant that some of the records could not be
made available. I would like to know how extensive the
information was made available to those who negotiated the
claims from the insurance companies or governments and how
confident we are that we have gained access to all available
information in order to know whether we have the widest
possible efforts to find claimants.
Mr. Eagleburger. First of all, I'm not sure he was talking
about the privacy rights of the companies, but rather the
privacy rights of the insured. So that's the first question I
have.
Certainly, in terms of our ability, for example in ICHEIC,
to provide some of the information, a good bit of the
information, from the claimants, was that when we went out to
them with a proposal telling them they could file and they came
back with a file, they were asked and they always signed off
saying that these rights were private rights, we were not to be
able to release them.
Senator Cardin. I respect an individual's right to privacy.
I'm talking about the companies', your access to the company's
archives.
Mr. Eagleburger. I just want to say, the fact of the matter
is, with regard to the companies, we had as close to complete
access as I can possibly explain to you. There may have been
some places where it wasn't total, but I never saw any of them.
In Alliance, the case of Allianz, or any of the other
insurance companies, I will say it took some time and it took
some work. But we got what we needed.
Let me add to that that in addition to being able to go
into the files with the companies, we had the audits which
also--audits which also looked into the companies' files to see
whether we had gotten everything that we needed.
Senator Cardin. When the lists were released by, I think
you said, the German Government of 400,000 or a total of about
519,000----
Mr. Eagleburger. That was the total for us, yes.
Senator Cardin [continuing]. Was there verification by the
commission as to how accurate that list was, based upon your
access to their records?
Mr. Eagleburger. We did--what commission are you talking
about?
Senator Cardin. I assume--the names were released, you
said, by the German Government, or who released----
Mr. Eagleburger. No, no.
Mr. Dubbin. Who released them?
Mr. Eagleburger. Our 519,000----
Mr. Dubbin. Who released the--there was something about
Germany released 400,000.
Mr. Eagleburger. Well, I don't know what the Germans did. I
do know we released 519,000 names, which is what we're talking
about.
Mr. Dubbin. ICHEIC released that----
Mr. Eagleburger. ICHEIC released them, put them on the Web
site, yes.
Ambassador Eizenstat. Of that, Senator, of those 519,000
about 300,000 were German names. That came significantly from
the German census.
Mr. Dubbin. But that didn't come from the records. That
didn't come from insurance company records.
Ambassador Eizenstat. It came from both. They were matched
up with the records. But they also--Germany, unlike other
countries, had a very good census and, unfortunately, had
required Jews to register and register their property. So that
was cross-checked against company records.
Senator Cardin. And you're satisfied that you had access to
the company records that were currently available?
Mr. Eagleburger. You're talking about him?
Mr. Dubbin. Mr. Ambassador.
Mr. Eagleburger. I am satisfied absolutely that we had
access to all of that, and we had double-checking of it and we
had audits. I am convinced that we got everything we wanted,
everything we needed.
Mr. Dubbin. I need to speak to this, Senator.
Senator Cardin. Certainly.
Mr. Dubbin. Names were published, the companies published
some names. Some names were found in archives by a researcher,
because indeed there are property declarations where or the
Jewish people had to state their assets. So some of the
policies were found in the asset records documenting the names
of some of the policyholders. So some of the names that were
published on the Web site came from the companies, 360,000 from
the Germans.
Some of the names came from the archival research that was
done independently. Now, the archival report makes it clear
that it did not by any stretch of the imagination examine all
of the relevant records which either are available or could be
available if the State Department put more pressure on. So the
archival research was incomplete. The names publication, as I
said, was incomplete because Generali did not even publish the
names of its subsidiary policyholders. Generali published a
batch of names. Over 7,000 Generali policy names came from the
archival research that had not been produced by Generali. So
obviously they didn't publish all of the names of their
policyholders.
Now, that's just on the publication of names. Access to
records, I do believe Mr. Eagleburger is not entirely correct
on that point. ICHEIC did not do research into the company
records. It did not. What ICHEIC did was have auditors and the
auditors' job was to check out whether the companies in the
process of examining their own records did what they said they
were going to do. ICHEIC did not send auditors into the
companies to find out what happened.
The reason this is important is, you take Mr. Rubin's case,
for example, Generali Moldavia, a clear subsidiary of the
Generali company. Now, if you've read anything about that
period of time you know how business was done. The agents all
represented the same basic companies. So if there was a--so if
Generali Moldavia was the property subsidiary of Generali
Insurance Company and there was a plaque on the building, what
are the chances that there's not a life policy there as well?
But they did not in the ICHEIC process demand that Generali
produce any information about Generali subsidiary policies.
They did not demand that Generali produce any information about
the name of the agent where the records might have been found.
They didn't demand that Generali produce anything. Generali did
not produce one piece of paper to ICHEIC as part of that one
particular process.
Here's something else. You made the statement before that
the records----
Mr. Eagleburger. Are we going to be able to get in here?
Mr. Dubbin. That's fine, but this is important, because I
realize the Senator is focusing on a very important question.
You said the records cannot be reconstructed. That's not
true. That is not true. The records can be reconstructed, and
I'll give you another example. Here's a piece of paper----
Senator Cardin. Just so I clarify, since I have the time.
Mr. Dubbin. I'm just saying----
Senator Cardin. What I was saying, which I was implying, is
that with the victims went many of the documentations, and
therefore we cannot reconstruct the record.
Mr. Dubbin. From the victims' standpoint. But insurance is
a paper-driven business. The reinsurance records are there. The
company records are there. ICHEIC did not look at those
records. The reason why they didn't and the reason why the
legislation is necessary is because if a company wants to do
business in the United States then this Congress has the
authority and I believe the duty to force them to produce the
information that they have that would allow Mr. Rubin and
several thousand others--and I can give you example after
example after example where they acknowledge that a policy
existed but said it had been paid out before, but didn't
produce any proof of that.
Shouldn't a jury decide whether or not that was proper?
Senator Cardin. My time has run out. Mr. Eagleburger, we'll
give you at least--if I could ask the chairman for an
additional minute.
Mr. Eagleburger. This cannot go unchallenged. He's writing
fiction and doing it beautifully. But the fact of the matter
is, and then I'm going to end this thing as far as I'm
concerned--the fact of the matter is we had auditors who
checked to make sure that the names that we received from the
companies or that we got in dealing with the companies were in
fact legitimate and that we got everything we were looking for.
This was checked with auditors. We had I don't know how
many people going in and looking at these things. There was no
intent on our part--and this is one of the things that is
driving me nuts in this whole process. There was no intent on
our part to cover up anything at all. We did everything we
could to try to find, make sure that everything we said was in
fact correct. And this ``ICHEIC wasn't doing this, wasn't doing
that''--nonsense. The fact of the matter is we had 519,000
names we put on a list.
But the important thing is not that. It's not the list. It
is rather that anybody could file a claim anyway, whether they
were on a list or not on a list. The fact is people were
permitted to file a claim. They could make it up, as far as
that's concerned.
But the point I'm trying to get at here is that list did
not do anything to restrict what people could or could not
claim. They could make a claim whether their name was on the
list or not.
Mr. Rosenbaum. Senator.
Senator Bill Nelson. Mr. Eizenstat, did you want to
respond?
Ambassador Eizenstat. Yes, sir. Thank you.
First, some $10 million was spent on outreach to claimants,
making every effort to get the greatest universe of people
involved.
Second, as Secretary Eagleburger said, claims were
accepted, processed, reviewed, regardless of whether they were
on the list of 500,000. So that plus the independent auditors
did as good a job as one could have done in a lawsuit, with
more rigid rules of discovery.
What's interesting is everyone here is trying to do the
right thing for survivors, everyone is. There is no one who can
truly speak for those who were killed, including the one lawyer
on the panel who did not participate in our negotiations--we
had a half dozen of the toughest class action lawyers
representing claimants in all of these cases. They would have
had to go into court. They would have had to obtain
jurisdiction over the companies. They would have had to do
their own discovery, whereas ICHEIC did the discovery for the
claimants, at ICHEIC's expense, at the companies' expenses.
They would have had to go through procedures that would
have been very difficult to prove. And these class action
lawyers--unfortunately, Mr. Dubbin did not participate in our
process--decided that the settlements that we reached,
including the 10 billion deuschmark settlement, again 500
million marks of which were passed through to ICHEIC--provided
the best measure of justice for what would have been very, very
uncertain claims.
The notion that one now is operating on some kind of a
blank slate to which one can go back, as if companies had not
participated in this process, had not paid in reliance on this,
that an individual court could do a better job than auditors,
ICHEIC, going through archives, even paying for companies that
no longer exist, is simply not accurate.
Senator Bill Nelson. Senator Menendez.
Senator Menendez. Thank you, Mr. Chairman.
Let me just ask a question here from Professor Rosenbaum
and Mr. Dubbin. Do you ascribe any bad faith here, any bad
actors?
Mr. Dubbin. No; that's not what I was saying.
Senator Menendez. I didn't think you were. I just wanted to
make sure.
Mr. Dubbin. Sure. I was just trying to address the point
that ICHEIC was limited, it was a creature of compromise, it
was--the insurance companies had as much say about the policies
as the people supposedly representing the victims, and it was
limited.
The point isn't that it was bad. The point is it's over,
and the point is that survivors who were disserved by it--there
were 5,000 people who Generali acknowledged having paid--having
had a relationship with previously and then they denied the
claim based upon records they wouldn't show anybody.
Senator Menendez. So you don't ascribe bad faith?
Mr. Dubbin. That's right. I'm just saying that it's over
and people, survivors, want their right to go to court today,
not for class action suits, for individual suits, where they
and a lawyer can decide what to do.
Senator Menendez. I understand. You'll appreciate me trying
to move along so I can get all my questions in.
Professor Rosenbaum.
Mr. Rosenbaum. Thank you, Senator.
Senator Menendez. Are there any bad actors here?
Mr. Rosenbaum. No; I do not--I do not see evil at this
table. But I would say that Mr. Eagleburger's indignation here
today is so symptomatic of the problem. He pronounces--earlier
he screamed at us: Justice was done. And in the most
incredibly----
Senator Menendez. Screamed?
Mr. Rosenbaum. Well, it was for you. It struck me as a
little elevated. It was: ``Justice was done.'' From whose
perspective? The chairperson of ICHEIC, the person who presided
over ICHEIC, which has been incredibly discredited, which
received an enormous amount of media attention for the amount
of first class air travel that was undertaken. The first $100
million was spent for administrative expenses.
It just strikes me as so curious, the way he stands here
today with his incredible indignation to say everything was
done correctly, that justice was done, that ``we can't trust
their numbers.'' He says: ``Their numbers are fundamentally
flawed.'' Well, the truth is, Senator--let me just say, if I
may--the survivors don't trust his numbers, and that should
matter. It should matter to you that there is an enormous
amount of resentment in the survivor community that there was
injustice with ICHEIC and that these numbers--remember, when he
talks about audits he keeps forgetting to tell us that the
partners to ICHEIC were the companies that were being
investigated. So it's very different from a lawsuit----
Senator Menendez. I appreciate that.
Mr. Rosenbaum [continuing]. When you really discover truth.
Senator Menendez. I appreciate that.
Let me now move to, now that there's no bad actors here,
let me move to the question. Wasn't--in fact, as I listened to
you, Mr. Secretary, respond and maybe, Ambassador Eizenstat,
you can shed a little more light: To some degree you're
depending upon the companies giving you information and
therefore, while you say you audit them, you audit that which
you receive. In the first instance how do we know that the
information being given is in its totality accurate? That is to
say, that the companies did not in fact be totally forthcoming
we would obviously deal with a smaller universe.
Mr. Eagleburger. The answer to that it seems to me is best
said: For example, when we went to the companies to look into
their records and so forth, we sent--in one of the cases I
recall we sent, amongst others, Bobby Brown, who is a person on
the commission, but an Israeli. He went and met with, I think
it was, Allianz and spent a number of days there going over the
files with them.
He is not someone who is easily put off. In fact, he spent
a number of days going through things and then going back
again. My only point here is this is not that we simply went
and they gave us a list of names and that was all there was to
it. He went there, he looked into the files, he went through
the files with them.
But anyway, the point is that he--and this occurred in
every single case. It wasn't that we accepted simply what they
gave us. We went back and looked into what they were doing.
Senator Menendez. Did he have in that opportunity and
others the opportunity to look at all of their files----
Mr. Eagleburger. Yes.
Senator Menendez [continuing]. Or those files which they
brought forth?
Mr. Eagleburger. All I can tell you is, in any case that I
can recall--now it's been a while, but certainly in the case
you're talking about here, yes, he went through all, he had
access to all of the files. I recall I think in his case there
were some that he said, it's not necessary for me to look at
these.
Senator Menendez. When we say all of the files, we say all
of the files that existed during that period of time?
Mr. Eagleburger. I didn't understand the question.
Senator Menendez. When we say ``all of the files,'' so that
I understand that we're talking about apples and apples, that
all of the files that existed for that given insurance company
during that period of time?
Mr. Eagleburger. Yes. And I've been reminded here as well
that in the audit stage that we're talking about it looked at
the completeness of what the companies were providing to us and
the details of what was provided. Again, I'm assured, and this
goes back again to my recollections, but I had no indications
from any of these auditors--and they were usually members of
the commission included in these audits that went with them--I
had no indication at any point that they did not get everything
they demanded. That's the best I can say.
Ambassador Eizenstat. Senator, if I may just--you had asked
me also.
Senator Menendez. Yes, and then I'll turn to Professor
Rosenbaum.
Ambassador Eizenstat. The executive branch did not
participate in this part of the process. We served as an
observer. We blessed ICHEIC as the exclusive remedy. But we had
assurance of the thoroughness, not only because of the items
that Mr. Eagleburger mentioned, but because the participants
who participated in the ICHEIC process, the State of Israel
formally--Bobby Brown was not just an Israeli; he was the
official representative of the government of Israel. The World
Jewish--the Claims Conference, the American Jewish Committee,
all of these have blessed this. And ICHEIC was an invention of
the insurance commissioners of the United States, who had an
interest in seeing that the companies that they regulated,
including foreign companies doing business in the United
States, were being completely thorough in what they were
providing.
So although we didn't participate in those audits, we had
comfort in the fact that the various stakeholders in ICHEIC had
a deep interest in making sure that the most thorough job was
being done and the most thorough job possible, given the fact
that we were trying to reconstruct records that were over 60
years old.
Mr. Eagleburger. I should also add, if I may, that the
audits were done by professionals, Ernest and Young for
example. We hired them to do the audits. It isn't that we went
in there with some nonprofessionals. We had professional
auditors that were involved in all of this.
Senator Menendez. Well, after some of the auditing that's
gone on here in the United States, I sometimes wonder about
that.
Mr. Dubbin. Mr. Senator, let me----
Senator Menendez. Mr. Chairman, with your indulgence, just
one or two more questions and then I'll cease.
I know you want to opine on this a moment, but just let me.
Just hold on.
Ambassador Eizenstat, one other question. The difference
between what has been put out there as to the valuation,
understanding that there is no finite valuation because the
universe is hard to fully determine. But these figures that
come out, $17 billion versus--and then of course some who
extrapolate beyond that based upon value over periods of time.
But let's say at the low end of those numbers that are out
there, $17 billion. Does the amount that was achieved through
ICHEIC really reflect the most aggressive nature that could
have been achieved in terms of the actual sum of dollars?
Ambassador Eizenstat. Well, again, the executive branch did
not negotiate these agreements. ICHEIC did. But we had
confidence that the plus-up of policies, which was quite
similar to what was done in the Swiss settlement where we were
involved, which was essentially 10 times the face value with
the conversions, and the publication of 500,000 names was the
best universe that could be determined was a fair process.
Again, when we talk about how to best do justice, it's our
feeling that by doing the process ICHEIC did, by doing the
research it did, by doing the outreach it did, by finding
claimants, by identifying companies for them that they might
not have even known existed, they were doing a job that could
not be done by any individual court.
In addition, it was not only, Senator, the actual
policyholders of the companies, but ICHEIC went into the
archives of a number of the countries, which any court would
have great difficulty doing. So I think under the
circumstances, I think this was the best that could be done and
far better than what could be done under much more restrictive
rules of evidence, jurisdictional rules, by a single lawyer.
It's interesting that all the lawyers who have not been
called as witnesses, who participated in this process, who were
vigorously defending their interests, all settled. It's very
important for all the Senators to recognize. Two Federal
judges, the same day in your State, Federal judges in New
Jersey, dismissed the class action suits brought by very
competent lawyers against Ford and other companies for slave
labor, on the ground of statute of limitations, on the ground
of postwar agreements. And yet we still were able, even with
that, to get those companies to contribute half of the 10
billion deuschmarks, a good portion of that which was then
transferred to ICHEIC.
So we are dealing with a very imperfect ability of courts,
and everything about this was imperfect, but I believe this was
the best, most thorough, most comprehensive way of doing it.
And to pretend that again we're now operating on a clean slate,
as if nothing had happened, as if companies hadn't paid in
reliance on the legal peace that they were given--it would be a
tragedy to go and undercut the negotiations that we did with
Austria, with Germany, and say that those companies should now
be subject to lawsuits.
Senator Menendez. I appreciate that.
Mr. Rosenbaum. Could I address that?
Senator Menendez. Well, I had asked you to withhold, so if
you want to now go ahead.
Mr. Rosenbaum. That was very fine of you. Thank you,
Senator, but Mr. Dubbin will also have an opportunity as well?
Senator Menendez. Well, if the chair indulges it.
Mr. Rosenbaum. OK. Well, I'll let him, and then if you will
indulge me, Senator, I'd appreciate it.
Mr. Dubbin. I want to just remind everyone here what
``legal peace'' was. It's true the German negotiations
originated out of the dismissal of the slave labor lawsuits.
Mr. Eagleburger has said in his own book that at the 11th hour
the German said: If you don't roll insurance into this, you'll
get no money for slave labor.
The Germans demanded that in return that the United States
abolish insurance claimants' rights to go to court, and the
United States Government does not have the authority to do that
and the Germans were told that. So what they agreed to as legal
peace was that the United States would file a statement of
interest in these cases, not that the suits were abolished, but
that it would be in the foreign policy interest of the United
States for cases to be dismissed on any available legal ground.
Now, that was the executive agreement, and when Congress
reacted to that by sending a letter to the Attorney General the
Attorney General reiterated: We are not waiving anybody's right
to go to court. There is no abolition of the right to go to
court for insurance policies. And the class action lawyers who
were part of that, No. 1, when they dismissed their cases it
was the individual cases. They did not go through a class
action settlement process, which would have required notice to
everybody in the class. People would have had the right to opt
out. That would have made it real legally binding. But the
lawyers involved knew that thousands and thousands would opt
out.
So today the Germans have more than they were able to get
at the bargaining table back in the year 2000, because the
courts have subsequently said that the involvement of the
executive branch making a policy that nonadversarial resolution
was U.S. policy preempts the right of States to have laws to
let people get their insurance policies. But the court said
that Congress has been silent. That's what the courts have
said, and Congress's intervention is constitutional and it's as
a matter of policy what Congress ought to do.
So let's not be confused about what was actually agreed to
at the time. And when Congress also mandated--a lot of these
questions would have been resolved. In the Foreign Affairs
Authorization Act of 2003, Congress demanded that ICHEIC report
to the State Department all these facts about what the
companies were doing. ICHEIC refused to do that. ICHEIC refused
at the time. That's what the State Department's report said: We
could not get this information from ICHEIC. That should tell
you everything you want to know.
Mr. Rosenbaum. Senator----
Mr. Eagleburger. That's not true. That is absolutely false.
Senator Bill Nelson. Would the committee come to order.
Senator Coleman.
Senator Coleman. Thank you, Mr. Chairman.
Just one followup. Ms. Rubin, you're not a lawyer, are you?
Ms. Rubin. I am.
Senator Coleman. You are, OK. Let me ask you the question
then, because your testimony has been actually very helpful to
me. You mentioned that there were settlements that were based
on things that were either, claims that were either purely
anecdotal or partially documented, claims that HCPO took care
of. How were those--if those claims would have been litigated
in the Federal court, how do you think they would have turned
out?
Ms. Rubin. I'm afraid I can't really say. I have no
experience or I have no evidence of any of these cases being
settled in court, so I don't know. I'm sorry.
Senator Coleman. The reason I ask the question--and again,
I understand the great passion and the sense of frustration
folks have. Perhaps I'll ask Professor Rosenbaum or Mr. Dubbin
to respond to a concern, a specific criticism of Mr. Eizenstat
of H.R. 1746, and I'll quote: ``U.S. courts would not be so
friendly a venue. Litigants would be faced with statutes of
limitation, jurisdictional arguments, rules of evidence, and
burdens of proof. They would be faced with considerable costs,
including attorney's fees, which might only be recovered at the
end of the process if he or she wins and wins on appeal. Such a
course of action would likely raise the hopes of survivors
without offering them a real chance at additional recovery.
Perhaps most importantly, litigation would take time, time that
survivors on the whole do not have.''
How do you respond, particularly to this concern, claims
that are purely anecdotal, the partially documented, the
humanitarian claims? Give me your sense of kind of the sense of
justice or resolution that you think folks are going to get
with those kind of claims?
Mr. Rosenbaum. Well, Senator, the presumption that we keep
making is that ICHEIC was a success.
Senator Coleman. I'm not----
Mr. Rosenbaum. No; I know that you aren't.
Senator Coleman [continuing]. Talking about ICHEIC. I'm
asking you to respond to, if you have a partially--Ms. Rubin
said you have partially documented or purely anecdotal claims.
Can you give me a sense of how you think they can be resolved
in a Federal court?
Mr. Rosenbaum. Senator, my sense is what I said during my
opening remarks: Giving people autonomy, empowering them,
giving them an opportunity in court to provide testimony is a
moral and legal victory. It is true that they would not be
subject to the liberal standards of proof that purportedly
ICHEIC provided. ICHEIC didn't result in any victory, either.
What we're hoping for here is that--unprotected by ICHEIC's
organizational powers--the insurance companies on their own
accord, through these lawsuits may come to their senses. They
may seek an opportunity to restore their honor and regain their
respectability. We understand from a legal perspective what Mr.
Eizenstat is saying. From a moral perspective, however, there
is great potential in seeking some kind of movement, which has
been essentially intractable under ICHEIC because ICHEIC
essentially co-opted the entire restitution experience.
I was very moved by Senator Menendez's question to Mr.
Eizenstat, because he said, given the claim that there was $17
billion--Senator Menendez's actual question was: Do you think
ICHEIC was aggressive enough? I thought that was the
appropriate word. I think that what Mr. Eizenstat was again
suggesting was: No; we were diplomatic; we weren't aggressive.
And I think that that kind of response, that kind of approach,
has resulted in great injustice and an enormous amount of
resentment. And I don't see how we can do worse from that
position by pursuing claims in Federal court.
Ambassador Eizenstat. Senator----
Senator Coleman. Let me. I want to give you a chance, but,
Mr. Dubbin, if you can respond. Then Mr. Eizenstat, I'll give
you a chance to respond afterward.
Mr. Dubbin. The State laws could be amended to allow time
for people to bring those suits, which would abolish the
statute of limitations defense. That's constitutional. That's
done all the time. Congress had legislation pending that would
do the same thing.
The privacy issues are I think--even Mr. Eagleburger said
he thought it was the privacy of the customers that prevented
that information from being disclosed. If you do business in
the United States and if you're subject to U.S. jurisdiction,
then the court has the right to order you to produce your
records.
Again, I'm not saying ICHEIC was bad. It was just
incomplete. It wasn't as thorough as it could have been. I'm
looking here at documents from Generali where the German tax
office said to them: Would you please tell us whether or not
Mr. Herman Hyman is a Jew? And Generali said: We confirm that
the insured is a Jew.
Now, this is the kind of information that they obviously
had, but ICHEIC didn't ask them for the files of the inquiries
they received from the German tax office. I mean, that just
didn't happen. Now, a lawyer who has a private agreement with
the client and he goes in there with his eyes open would have
the ability to get discovery from Generali and the other
companies. I'm not singling out Generali. Mr. Feldman,
Professor Feldman, has shown that Allianz, Victoria and AXA and
the others did the same thing.
Those records are there. They're there. We did not get--the
documents can be reconstructed. The reinsurance agreements can
be reconstructed. The reinsurers are in London, they're in the
United States. The truth can actually be obtained, but it
hasn't been. And that's what people would have the opportunity
to do.
Like Mr. Wexler said in the House, this bill doesn't
require anyone to pay anything. Jack Rubin would have to walk
into a lawyer's office and say: This is what I know; will you
take my case? And just like in any other private arrangement,
like any other citizen would have the right to do against a
potentially difficult adversary, he would have to--the lawyer
would have to decide whether or not he wanted to be paid by the
hour or take the risk or whatever, and he would have the
ability to make that decision for himself.
Mr. Rosenbaum. Senator----
Ambassador Eizenstat. Excuse me. May I?
Senator Coleman. Mr. Eizenstat, if you can just respond.
Ambassador Eizenstat. I'm going to have to take leave of
the committee in a minute, I'm sorry.
I want to respond in two ways. First, to suggest that those
of us who spent 6 years of our life, 6 years of our life,
fighting hand to hand combat to get every nickel we could for
survivors, were not aggressive, that those of us who were on
the battlefield--and it was a battlefield, Senator--were not
aggressive, is inappropriate and unacceptable.
Now, I know--and Larry can't say this. I know the personal
sacrifices that were made to his health with the work that he
did. I know that for my entire team, my interagency team, this
was our second job. We had actual jobs in our departments. We
were doing this after hours, so to speak, and we put in
unbelievable time and effort. We were unbelievably aggressive.
Second, the reason that I say that we can't start from a
clean slate is that in the German case we made a commitment on
behalf of the President of the United States, with the full
knowledge of the Congress, that there would be legal peace for
all German companies, including German insurers, for all
Austrian companies, including Austrian insurers, for all French
companies, including French insurers, if they paid the amount
of money they paid.
It was 10 billion deuschmarks in the German case, close to
a billion dollars in the Austrian case, moneys that would never
have been obtained in court.
Last point. The United States Supreme Court in the
Garimondi case accepted the legal peace concept. It is true,
everything that Sam said. We did not cut off claims. We did not
believe we had the legal authority to cut off claims. What we
did, we said, as Sam said, it was in the foreign policy
interests of the United States. And the court accepted that.
Attorney General Mukasey, then Judge Mukasey, in a separate
case likewise accepted it, because we put the full faith and
credit of the United States Government behind these
settlements, working aggressively day and night for the
victims.
Thank you.
Mr. Rosenbaum. Senator, might I have a moment to respond?
Senator Coleman. I'm going to end my questioning there
because I think this could go back and forth. I think everyone
has made their point, and this is--I'm going to end my
questioning. Otherwise there will be a counterresponse and we
could go on. I think all sides have made very clear their
feelings. I'm going to leave it at that point.
Mr. Chairman, whatever you want to do here, but I just
think this could go back and forth.
Mr. Rosenbaum. I promise it won't. I'll be done.
Senator Bill Nelson. All right.
Mr. Rosenbaum. Thank you, Senator.
Senator Bill Nelson. Mr. Rosenbaum, if you will respond
quickly.
Mr. Rosenbaum. Yes; very quickly.
Senator Bill Nelson. We're going to wrap up this hearing.
Mr. Rosenbaum. Mr. Eizenstat, I'm very sorry if you were
personally offended by anything that I said. You know I have a
lot of affection and respect for you. But you also know that I
don't spend that much time in an ivory tower, and I resent that
question, because the point is I'm on the ground with the
survivors. I've heard from the survivors. I've heard from more
survivors than you will ever know, and they're not happy.
They're not happy with what you've done, they're not happy with
what ICHEIC has done. That's why I'm here today on my own
accord.
When I talk about lack of aggressiveness that Senator
Menendez alluded to, what would you call it? A $300 million
recovery out of $17 billion. I'm just sorry. If it's $300
million out of $17 billion, if that's the recovery, then it is
certainly not an aggressive recovery. It may be the best we
could have done under the circumstances, but it's not
aggressive.
Finally, I just want to ask the Senators who are still here
today, if Stuart Eizenstat were here at the table and there
were people from the State of Louisiana and they had been
victims of Hurricane Katrina and they were being told because
of some foreign policy objective, some agreement that he
undertook in order to achieve some kind of other settlement on
behalf of other people, that their contract rights for suing
global insurance companies for property and casualty insurance
for the destruction of their homes had somehow become
invalidated, what would we say to that?
Why is it that the Holocaust survivor is deprived contract
rights in American courtrooms under policies that they and
their heirs, they and their relatives had purchased, but we
wouldn't do that with any other policyholder in this country?
Senator Bill Nelson. All right. Gentlemen----
Mr. Eagleburger. May I have----
Senator Bill Nelson. Gentlemen, this commentary's going to
stop. We are going to adjourn this hearing, and the record will
be kept open for 2 days for Senators.
Ms. Rubin, I want to clarify something for the record
before we adjourn. Your operation has been open how long?
Ms. Rubin. We opened in June 1997.
Senator Bill Nelson. And at present you have how many
outstanding claims that you are processing?
Ms. Rubin. Insurance claims?
Senator Bill Nelson. Yes.
Ms. Rubin. About a dozen, a dozen non-Austrian, and then a
couple of hundred Austrian claims.
Senator Bill Nelson. Where in your testimony do I remember
the number six?
Ms. Rubin. New claims since ICHEIC's closing; we received
about a half a dozen new claims.
Senator Bill Nelson. OK. Lady and gentlemen, thank you for
your participation in a very spirited discussion. The meeting
is adjourned.
[Whereupon, at 5:07 p.m., the hearing was adjourned.]
A P P E N D I X E S
----------
Appendix I.--Responses to Additional Questions Submitted for the Record
by Members of the Committee
Responses to Additional Questions Submitted for the Record
by Senator Bill Nelson to Jack Rubin
Question. In your testimony you referred to the fact that in the
Swiss bank settlement, the court is still holding $400 million that
hasn't been spent? Do you know why those funds haven't been distributed
to survivors?
Answer. Two survivors I know well, Alex Moskovic and David
Mermelstein, attended a meeting in January 2006 in the chambers of
Judge Korman in Brooklyn, with a few other survivors. One of the topics
was why the Judge had not allocated the funds that remained at the time
from the Swiss bank settlement, when so many Holocaust survivors have
been suffering without desperately needed assistance. Judge Korman
acknowledged in that meeting that over $400 million remained unspent
from the settlement, but that his priority was to pay bank account
claims before using any of the money that remained for poor survivors.
I am attaching the minutes of that meeting as prepared by one of the
participants as Exhibit 1.
I have seen other reports as well from that time period that
indicated that around $400 million from the settlement remained
available for distribution but that no funds would be added to the
Looted Assets class, i.e. for needy survivors, until all bank account
claims were finished.
Question. In your testimony, you referred to the Holocaust
survivors in need and state that the needs are not being met by Jewish
social service organizations. How do you believe additional
compensation for insurance policies can help them, when there isn't
necessarily a direct link between any one policy and any one survivor
in need?
Answer. I have two answers for this question. First, it is obvious
to me that with the number of poor survivors in our community and other
communities, and with the hundreds of thousands of unpaid policies
estimated by Mr. Zabludoff, there are undoubtedly a lot of survivors
living in poverty today whose family policies haven't been paid. If the
insurers were required to make good, through litigation if necessary,
those survivors would be helped.
Of course, compensation for unpaid policies is a moral and legal
right of all survivors, whether they are poor or not.
Second, Mr. Zabludoff estimates that over $18 billion in insurance
policies have not been paid. (Only $250 million was paid by ICHEIC.).
With so many Jewish families having been destroyed in the Holocaust, I
am sure that even with the best legislation for allowing survivors to
go to court, billions would remain unpaid. These are the policies I say
``went up in smoke at Auschwitz.''
In my opinion, the insurance companies should not keep this money.
That would make them the heirs of the Jews who were murdered in the
Holocaust. Congress should not let this happen. Speaking for myself and
other survivor leaders such as the leaders of the Holocaust Survivors
Foundation USA, we believe those funds should be used to assist poor
survivors around the world. The companies stole the money, and all
survivors were deprived of their worldly possessions. For the companies
to prosper while survivors suffer is unacceptable.
As a member of the Advisory Board of the Jewish Family Services, I
am personally aware of the needs that cannot be met in our community.
Some of this information is contained on Exhibit 2. My fellow survivors
report the same things where they come from, and I have read the
studies and articles showing that tens of thousands of survivors in the
U.S. alone--about half--are too poor to meet their basic needs.
One of the possibilities I discussed with members of Congress and
their staffs was to allow the Government to recover this money from
insurers where there are really no living heirs. I understand the
Federal Trade Commission has such authority for other kinds of consumer
fraud. Why not extend this ability to recoup looted insurance policies
from the Holocaust and help survivors in need?
Exhibit 1
meeting on 1/20/2006 between chief judge edward r. korman, united
states district court for the eastern district of new york and special
master judah gribetz and representatives from the holocaust survivor
community mr. and mrs. jehuda evron, mrs. hanna hirshaut, mr, roman
kent, mr. david mermelstein, mr. alex moskovic, mr. joe sachs, mrs.
rosian zerner.
The first item on the agenda was to show that there was an
increased need for funds by survivors. There are more applicants with
greater need for more intensive care and far too many survivors do not
receive appropriate care. A chart was presented to Judge Korman that
showed that care for survivors in Dade County was reduced from about
3000 hours to 1200. Judge Korman found the figures unclear since the
same money was being distributed to survivors and there was
approximately the same number of needy survivors. He, and Master
Gribetz, then were asked to squash rumors and release a statement
listing all pay outs as well as various fees and administrative costs.
In Boca Raton, after the success of Cafe Europa and increased
membership in the survivor organizations, applications from needy
survivors increased by 50% while the funds received have remained
unchanged.
Judge Korman, with assistance from Special Master Gribetz
throughout the meeting, gave an update on the 1.2 billion collected
from the bank accounts held in Switzerland and said that 335,000 people
have been touched by the judgments so far. From the original figure,
800 million are gone, distributed to bank account holders and heirs.
That leaves US$425 million. A decision was made to allocate US$60
million to 12,000 ``plausible'' applicants who would receive US$5,000
per claim. US$365 million would then remain for future allocations and
to cover appeals - there have been 174 so far and there is expectation
of other settlements subject to review.
Judge Korman mentioned that he felt that the allocation to the
``plausible'' applicants could be controversial since it was a
difficult choice that may not satisfy everyone. For instance, an
applicant who had applied for 20 million and receives $5,000 would feel
very slighted, and if he had applied in the name of four other
additional family members, that $5000 would then be diminished to only
$1,000 per person distribution.
Judge Korman went on record to make assurances that distribution of
the remaining monies will continue only to survivors, but in most
instances it would be supervised through organizations. At the same
time he mentioned that 10 million were allocated to projects for Jews
and non-Jews like the Victim List project at Yad Vashem, USHMM and
other institutions. A suggestion was made by him that a new list of
names and other information is available on www.swissbankclaims.com and
invited survivors to explore the site.
Roman Kent then listed three points. 1) Asking for greater
allocation of the money from Switzerland to the USA 2) Reduction of the
time frame for the allocation from 10 years to 7. 3) Clarification of
attorney fees - especially, 4 million for attorney Burt Neuborne. I
list the reply accordingly:
1) Approximately 70% was allocated to the former Soviet Union
because they do not have the ``safety net'' that the needy in
the USA have - such as food stamps, housing and medical
assistance, etc--and are often destitute with nowhere to turn.
Judge Korman also suggested that survivors go to Jewish
philanthropists who give to Jewish and non-Jewish causes but
skip survivors and he mentioned Governor Bloomberg as an
example.
2) Although this issue was not directly addressed, it was
implied that survivors need to have a ``cushion'' now as well
as in the years to come and that 4 of the 10 years are already
gone.
3) The Judge could not comment on this since judgment has not
yet been rendered and this is a pending case. However, he
reminded the attendees that attorney Neuborne never charged for
all the negotiations to obtain the 1.2 billion and that if the
4 million would be assigned to him, it would be for
administration of the funds from 1999 and for being the lead
settlement counsel. In addition, he wanted us to be aware that
because attorney Burt Neuborne did the work pro-bono, Judge
Korman was able to negotiate with the other attorneys for
reduced fees and that instead of the projected 22 million to
lawyers fees he only gave out 6 million.
Before adjourning from the meeting, the survivors asked and were
promised communications on any new developments and updates on
accounting.
Rosian Zerner.
__________
Responses to Additional Questions Submitted for the Record
by Senator Bill Nelson to Samuel J. Dubbin
Question. If legislation granting a federal cause of action is
passed by Congress, do you have an estimate of the number of survivors
or heirs who would come forward to file lawsuits against insurance
companies?
Should past participation by a claimant in ICHEIC or one of the
other compensation processes or class action settlements limit the
ability of that claimant to participate in a newly created federal
cause of action? Would the ability to participate differ among
claimants who were:
Compensated for a policy?
Given a humanitarian award?
Denied by ICHEIC?
Appealed an ICHEIC determination?
Compensated by earlier restitution processes, but for less than
full value?
Do you have an estimate of the number of survivors or heirs who
have legitimate claims for restitution and will come forward to take
advantage of the cause of action provided by the legislation?
Answer. It is impossible to estimate the number of survivors or
heirs who would come forward to file lawsuits if the provisions of HR
1746 that passed the House Foreign Affairs Committee in October 2007
were to become law. However, federal legislation establishing a federal
cause of action and/or restoring state law rights of action is
justified by the moral imperative to restore the basic rights under
American law that have been eviscerated by court decisions concerning
the United States-Germany Executive Agreement, and statements by
Executive Branch officials relating to ICHEIC (the Garamendi decision
and Judge Mukasey's dismissal of the Generali cases 2004) far more
broadly than the President agreed, or would have the power to attempt.
Companies' Past Participation in ICHEIC or Other Forum.
In my opinion, and the opinion of the survivors I represent, mere
participation by a claimant in ICHEIC should not limit the ability of a
claimant to have access to U.S. courts to seek recovery of a family
insurance policy sold prior to the Holocaust. ICHEIC was always
understood to be a voluntary process that was available for survivors
and heirs to attempt, but was never supposed to be binding (unless a
claimant accepted an offer of payment). Moreover, there is sufficient
evidence of severe flaws in ICHEIC's performance, such as denials in
violation of ICHEIC rules, denials without explanations, denials
without producing existing documents, denials of documented claims,
failure of companies to produce policy holder names or of ICHEIC to
publish names, delays in the publication of names for long periods of
time so as to limit the number of claims that were filed under ICHEIC's
deadlines, publication of names without identifying the issuing
companies, secret use of a phantom rule that raised claimants' burden
beyond published ICHEIC standards, and other shortcomings that
survivors believe Congress has an obligation to enact a legislative
remedy to overcome the court decisions that have obliterated their
rights. The attached examples of Herbert Karliner, Suzie Marshak,
Alberto Goetzl, Sello Fisch, David David, and Jack Brauns are a small
but representative sample of problems encountered. See, also Yisroel
Schulman, ``Holocaust Era Claims, Mission Not Accomplished,'' The
Jewish Week, May 4, 2007; Stewart Ain ``Phantom Rule May Have Limited
Holocaust Era Awards to Claimants,'' The Jewish Week, June 29, 2007.
(Composite Exhibit 1).
The above answer would apply equally to the federal cause of action
contained in the House Foreign Affairs Committee version of HR 1746 and
to state law causes of action against ICHEIC companies that would be
restored by enactment of such legislation. Notwithstanding that the
Financial Services Committee voted out a significantly diluted version
of HR 1746 on June 25, 2008, my answers here will refer to ``original
version of HR 1746,'' i.e. the one that passed out of the Foreign
Affairs Committee on October 23, 2007, or simply ``HR 1746.''
Status of Claimants Who Had Been Through ICHEIC or Other Processes.
Under the original version of HR 1746, the right of action would be
available to any claimant, notwithstanding their participation in
ICHEIC or another process or case, unless that person received money
and signed a release.
Estimate of the number of court claims.
It is impossible to estimate the number of survivors or heirs who
``have legitimate claims for restitution and will come forward to take
advantage of'' such legislation such as is the original version of HR
1746, as noted above. It is beyond dispute that there are hundreds of
thousands of life, annuity, and endowment policies that were sold to
Jews before WWII that have not as of this date been paid to any
legitimate beneficiary or heir. (This number does not include non-life
policies.). How many of these potential claims might result in lawsuits
would depend on a number of factors, such as the quality of name
publication that would occur as a result of the legislation, the
quality of publicity that accompanies any publication of new names or
re-publication of the names previously published by ICHEIC, and other
factors. For example, though the German insurance industry (GDV)
published some 360,000 names via ICHEIC, it did not publish the names
of the issuing companies. Unless this loophole is rectified, many
legitimate claims against German companies might not be pursued.
Another important element in HR 1746 is the attorneys' fee
provision, which mirrors bad faith insurance statutes in many states.
These level the playing field between claimants and insurance
companies, which have the financial ability to outspend ordinary
claimants in the absence of statutes calling for exemplary damages and
attorneys' fees for prevailing claimants. See, e.g. Letter from Deborah
Senn, former Washington State Insurance Commissioner, to Hon. Barney
Frank, February 4, 2008.
It should also be noted that HR 1746 only clarified claimants'
rights to bring actions in courts and extend the period of time for
filing a case. A survivor or heir with a possible insurance claim would
have to convince an attorney that the case was sufficiently strong to
file. In other words, the legislation would not open the door to cases
except those which attorneys and clients working together believed
stood a significant chance of succeeding.
However, the fact that so many families were destroyed in the
Holocaust, leaving few if any heirs today, raises two important issues.
First, many meritorious suits will not likely be brought. Second, if
heirs do not exist today with whom the companies can settle, or who
would be able to bring lawsuits under the new law, the companies will
be unjustly enriched by billions unless Congress requires them to
disgorge their unjust enrichment. As Congressman Robert Wexler and
others have said, one of the principles that the status quo has
abandoned is the principle that no business or individual should be
unjustly enriched as a result of atrocities such as the Holocaust. We
ask this Committee to consider action to enforce this principle, both
to effect the necessary disgorgement of Holocaust insurance profits,
and to send the message to today's collaborators with the atrocities of
this era that the policy of the United States is that they will not be
welcome to do business in this country unless they disgorge their ill-
gotten profits and make full disclosure of their conduct. Perhaps, with
the kind of clear moral signal absent from the current paradigm, the
United States would set an example for global enterprises and
governments who might then be less likely to collaborate with regimes
committing or permitting atrocities of the kind now seen in Darfur and
elsewhere.
Question. At the hearing, Roman Kent expressed his concern that the
proposed legislation, H.R. 1746, would ``greatly damage critical
ongoing negotiations, especially with Germany, involving hundreds of
millions of dollars in Holocaust-related compensation which, as you
know, is desperately needed now. . . .'' How do you respond to this
concern?
Answer. The Holocaust survivors I represent reject in principle any
linkage between annual negotiations with the Government of Germany over
various programs and passage of HR 1746. I reject it as well.
As part of my answer to Question 2, I submit the attached July 31,
2008 Holocaust Survivors Foundation USA, Inc. Response to Argument that
HR 1746 Will Interfere With German Government Payments to Survivors,
dated July 31, 2008. (``HSF Statement''). (Exhibit 2). To quote the HSF
position: ``the House Foreign Affairs version of HR 1746 would
reinforce the principle that Holocaust survivors, and legal heirs, own
the rights to negotiate and make decisions over their own property
claims and their families' legacies.''
Moreover, as the HSF states, not only is the linkage objectionable
in principle, the threat is not substantiated by the record. Mr.
Scharioth, the German Ambassador to the United States, has never stated
publicly that passage of HR 1746 would threaten the German government's
commitment to provide funding for various programs for Holocaust
survivors. In fact he reiterates his country's acknowledgement of its
moral obligation for the Holocaust and for survivors. Moreover,
contrary to Mr. Kent's claim, representatives of the German Embassy in
Washington, when asked this question by various sources, have denied
that the German government would reduce benefits for poor survivors if
legislation such as HR 1746 were to become law.
However, this question does raise an additional important policy
issue for the Committee and the Congress, which is that the current
framework for funding social services for survivors today is totally
inadequate. To quote HSF again, the ``failure of Germany and the Claims
Conference to produce a minimal basket of social services for survivors
predates and is completely unrelated to HR 1746.''
Ira Sheskin, the leading American demographer of Jewish
communities, found in 2004 that over 40,000 Holocaust survivors in the
United States live at or below the official federal poverty level, and
another 40,000 have incomes so low they are considered poor. According
to the Greater Miami Jewish Federation, citing data from several Jewish
demographers filed with the Federal Court in 2004, the problem of
survivor poverty is a worldwide phenomenon.
----------------------------------------------------------------------------------------------------------------
Number In or Near
Country Survivor Population Poverty
----------------------------------------------------------------------------------------------------------------
United States............................................... 175,000 87,500
Israel...................................................... 393,000 137,300
Former Soviet Union......................................... 146,000 126,000
----------------------------------------------------------------------------------------------------------------
SOURCES: Sheskin, Estimates of the Number of Nazi Victims and Their Economic Status, January 2004; Brodsky and
Della Pergola, Health Problems and Socioeconomic Neediness Among Jewish Shoah Survivors in Israel, April 2005;
American Joint Distribution Committee, Presentation on the Condition and Needs of Jewish Nazi Victims in the
Former Soviet Union, January 2004.
It should also be noted that the principal source of funding for
social services for Holocaust survivors is not the German government,
but funds obtained by the Claims Conference through its acquisition and
sale of properties and businesses formerly owned by Jews in East
Germany that were not recovered by individual victims or heirs after
WWII. HSF and other survivor groups, including a growing movement in
Israel, have consistently raised questions about the efficacy,
transparency, and adequacy of this system. A few news articles
addressing this problem are attached as Exhibit 3. So, as HSF noted,
while the German government does periodically augment existing programs
for survivors, including $320 million announced in June 2008, the
status quo is not doing an adequate job across the board.
Here is what an analysis of the additional $320 million for
programs for Holocaust survivors announced by the Claims Conference in
June actually provides. First, $250 million is payable over a ten-year
period, so it in reality equals $25 million annually. Most of that sum
($166 million) represents an 8% cost of living increase for various
existing programs, payable primarily to residents of Eastern Europe.
Another $83 million (over ten years) will provide first-time payments
to some 2000 survivors who lived in Western Europe during the Holocaust
but who were excluded from prior pension programs.
A total of $70 million of the $320 million, representing a two-year
budget for home care funds for survivors, would directly augment social
services for poor survivors. That is an average of $35 million per year
in new home care funding for the entire world. When measured against
the actual needs of Holocaust survivors in the United States and
elsewhere, such supplemental funds make only a small dent in the
current shortfall in funding for survivors.
In 2004, the U.S. Jewish Federation system estimated that the
annual budget that would be needed to provide the unmet needs for basic
social services for poor survivors in the Untied States alone, exceeded
$70 million per year. With this population now in their 80s and 90s,
and with Holocaust-related trauma a cause of significant medical and
other problems, a major component of that shortfall is funding for in-
home care for survivors.
The average annual cost of in-home care for survivors in an average
U.S. city is $9,360. So, assuming for illustrative purposes that all of
the ``additional'' money Germany agreed to provide for home care for
the next two years, were spent in the U.S., would serve fewer than
4,000 Holocaust survivors per year on average. With tens of thousands
of poor survivors living in the U.S. alone, and with similarly dire
needs for home care and other vital social services throughout the
world, the average $35 million two-year home care fund announced this
year by the Claims Conference, is not nearly adequate to care for this
special population.
The issues of survivor poverty and insurance are related but not in
the way suggested by Mr. Kent. With so many insurance policies
remaining unpaid, there are undoubtedly a very large number of poor
survivors whose families' insurance policies remain unpaid that deserve
to have their families' property rights honored. But there is no
negative relationship between Congress acting to restore survivors'
rights of action to recover family insurance policies and the goal of
helping poor survivors achieve a dignified standard of living in their
final years.
Again, unrelated to restoring survivors' basic right of access to
courts to recover family assets looted by corporations doing business
in this country, survivors have been looking to Congress for leadership
in addressing the overarching problems facing survivors as they age.
With the level of looted insurance assets in the range of $18 billion,
and the value of other unreturned assets exceeding $160 billion, it is
puzzling and tragic that so many survivors today have to face their
final years in poverty and misery.
In 1997, the United States Senate unanimously passed a resolution
co-sponsored by Senators Moynihan, Graham, Hatch, Dodd, and Biden,
calling on Germany to provide adequate material and social service
support so that all Holocaust survivors could live in dignity. S.Con.
Res. 39, July 15, 1997. The resolution noted that retired SS officers
in Germany and elsewhere receive far more generous health care benefits
from Germany than Holocaust survivors. It called for, among other
goals, that ``the German Government should fulfill its responsibilities
to victims of the Holocaust and immediately set up a comprehensive
medical fund to cover the medical expenses of all Holocaust survivors
worldwide.''
Unfortunately, neither Congress nor the United States Government
followed through on persuading Germany to live up to these aspirations.
Germany, despite its significant commitment to Holocaust education and
outlawing Holocaust denial and neo-Nazi movements, and despite what it
might have genuinely believed years ago to be a significant set of
programs for Holocaust victims, has not committed to meeting this
rather minimal standard of decency for all living survivors. See,
correspondence from Holocaust Survivors Foundation USA, Inc. to
Chancellor Angela Merkel. (Exhibit 4).
The survivors I represent ask Congress and this Committee to
address this problem directly. Inasmuch as the current framework for
providing social services to Holocaust survivors, based principally on
funding from the Claims Conference's Successor Organization funds
derived from East German properties, but also including periodic
negotiations with the German government, has allowed tens of thousands
of survivors to slip into poverty and live without the dignity of food,
medicine, shelter, proper dental care, home care, and other vital
needs, this problem should be met head on. It is simply a red herring,
and a cynical one at that, for anyone to argue that individuals should
have their Constitutional rights to sue unjustly enriched insurance
companies eliminated due to the failure of the current restitution
establishment and the German government to adequately care for elderly
survivors of the Holocaust.
Question. In his April 24, 2008 letter, Robert Swift, the lead
counsel in the Generali class action litigation, writes:
I believe the proposed legislation will be detrimental, if
not fatal, to the August 25, 2006 Settlement between the Class
and Generali. That Settlement has been approved by the Federal
Court although processing of the over 40,000 claims has been
delayed by an appeal by six (6) claimants.
How do you respond to this statement?
Answer. Mr. Swift's position is completely undermined by Generali's
statements to two Congressional committees to continue to process ``new
claims'' notwithstanding ICHEIC's closure and notwithstanding the
passage of the deadline for filing new claims in the class settlement.
The survivors who appealed the Generali class settlement did so
because it would retroactively make ICHEIC binding on thousands of
survivors and heirs whose ICHEIC claims were denied, or who have no
knowledge about the existence of possible claims, due to the inadequacy
of ICHEIC's names publication. Because ICHEIC was always represented to
be voluntary, the retroactive imposition of ICHEIC as being binding on
class members who could not possibly benefit from the settlement
violates due process and Federal Rule of Civil Procedure 23. The
survivors who appealed objected to the releases that would be imposed
by the settlement under those circumstances.
Mr. Swift and class counsel argued to the district court and the
court of appeals that the releases to be imposed by the settlement were
necessary to induce Generali to enter into the agreement and process
``new claims'' even though ICHEIC had expired. But, in light of
Generali's promise to this Committee and the House Financial Services
Committee (through former ICHEIC official Diane Koken) to process all
new claims in any event, the releases that would be imposed under the
settlement are now clearly unnecessary, even if one assumed for the
sake of argument that the benefits of the settlement justified the
releases imposed. So, the survivors and heirs who have appealed were
correct not only because the settlement violated their rights, but
because Generali's recent actions have proven that the broad, damaging
release of tens of thousands of possible Generali policy holders, which
Mr. Swift and others agreed to in the settlement, were not in fact
necessary to generate the ``benefits'' of the settlement, i.e. the
reopening of the ICHEIC-Generali claims window for people who failed to
apply by the previous ICHEIC deadline.
In addition to the foregoing, my clients believe the settlement was
ill-conceived for a number of reasons, mostly arising from ICHEIC's
deficiencies. Before agreeing to the settlement, Mr. Swift and other
class counsel whose cases were dismissed by Judge Mukasey considered
ICHEIC to have been an inadequate forum for survivors and heirs with
possible insurance claims against Generali. See, Brief of Cornell
Plaintiffs in Second Circuit Appeal No. 04-2527 (Brief styled Appeal
No. 05-5602; joined by all plaintiffs) at pages 4-15. Mr. Swift and his
colleagues described ICHEIC as follows:
In theory, and as reflected in the Memorandum of
Understanding creating ICHEIC, Generali agreed to establish a
``just process'' that ``will expeditiously address the issue of
unpaid insurance policies issued to victims of the Holocaust.''
In reality, ICHEIC has simply forwarded claims to Generali,
which has then denied the vast majority of claims after
scrutiny under standards of review that directly violate the
ICHEIC agreement. The remainder of claims simply languish. \1\
---------------------------------------------------------------------------
\1\ Cornell Plaintiffs' Brief in In re Assicurazioni Generali,
S.p.A., Appeal No. 05-5602 et al, at 13.
Mr. Swift and others also cited the exchange between ICHEIC
Chairman Eagleburger dismissed the Generali Trust Fund (GTF), the
entity responsible for processing Generali ICHEIC claims between 2001-
2004, which Mr. Eagleburger dismissed in November 2004 for non-
performance. Id., at 13, note 21. After ICHEIC closed in March 2007,
the previously secret audits were published for the first time and it
was revealed that the Generali Trust Fund had failed its audit in April
2005. Its decisions were never revisited by ICHEIC according to
correspondence between ICHEIC officials and the New York Legal
Assistance Group (NYLAG).
Moreover, Mr. Swift alleged in his initial complaint, and argued in
his Second Circuit Brief, that Generali had collaborated with the Nazi
regime in the confiscation of Jewish customers' policies during the
Holocaust:
In the early 1930s, the government of Nazi Germany began
systematically to persecute certain groups, including Jews, by
confiscating or destroying their assets, deporting them to
concentration camps, forcing them into slave labor, and
inflicting mass extermination. . . . \2\
---------------------------------------------------------------------------
\2\ Cornell Plaintiffs' Brief in In re Assicurazioni Generali,
S.p.A., Appeal No. 05-5602 et al, at 10.
Generali facilitated these efforts. It encouraged Europeans who
were fearful of Nazi persecution to deposit their assets with and
purchase insurance from Generali to safeguard their families' futures.
In all this, Generali was little more than a bookie for the Nazi
regime. Generali knew that the Nazis were going after the property of
its insureds, including insurance policies and their proceeds. And,
Generali allowed it. Under Generali's watch, with its knowledge,
acquiescence, and participation, the Nazis liquidated and cashed in the
insurance policies that Generali had sold to victims of the Holocaust.
The proceeds were used to fund the Nazi war machine.
Yet, in justifying the settlement about which the Committee's
question applies, Mr. Swift echoed Generali's denials that it ever
identified its customers as Jews to the authorities:
Your Honor, it's not surprising that when Generali was
keeping its records, it didn't list in the records whether
someone was Jewish or not Jewish. There is no record that
Generali or anyone else can go back to to determine whether a
policy was issued to a Jewish family or to a non-Jewish family
or, for that matter, to people who were likely to be persecuted
in the years after the policy was issued.\3\
---------------------------------------------------------------------------
\3\ Transcript of January 31, 2007, Fairness Hearing, at 68.
In their appellate brief, Mr. Swift and the other settling
attorneys said ``Class counsel could find no basis in the extensive
documentation to distinguish a Jewish insured from a non-Jewish
insured, and Generali confirmed this.''\4\
---------------------------------------------------------------------------
\4\ Plaintiffs' Brief in Appeal No. 07-1380 at 14.
---------------------------------------------------------------------------
Documents submitted for the record to this Committee, and a huge
volume of historical evidence repudiates Mr. Swift's position. See,
Statement of Samuel J. Dubbin to Senate Foreign Relations Committee,
May 6, 2008, at 12-13, 40-43; see also Gerald Feldman, Allianz and the
German Insurance Business, 1933-1945, Cambridge University Press, 2001,
at 356 and passim. There is no serious historical question about this
point, but Generali and class counsel found it necessary to suggest
otherwise to justify the settlement. The reason this is important is
that the survivors who have challenged the settlement believe not only
that it unfairly extinguishes their opportunity for fair compensation,
but that it results in a cover-up of the history of their families'
policies, a cover-up that exacerbates the ICHEIC record of non-
disclosure of all companies' insurance records, contrary to the open,
transparent, claimant-friendly scenario that was promised to survivors
in 1998.
In short, not only is the basis for the settlement undermined by
Generali's commitment to process new claims regardless of the
expiration of other deadlines, the ``six'' survivors who appealed the
class settlement represent thousands of survivors, heirs and
beneficiaries of Generali policies whose rights were ignored by Mr.
Swift and the other class counsel, and rights that would be
unnecessarily and unfairly extinguished by the settlement. They are
looking to Congress for more direct relief in the form of legislation
such as the House Foreign Affairs version of HR 1746.
Question. It has been suggested that a significant portion of the
unpaid claims involve insurance companies that did not participate in
ICHEIC, primarily Eastern European insurance companies that were
nationalized or Eastern European companies whose assets were
liquidated.
Would H.R. 1746 enable survivors and their heirs to sue these
companies and go after those unpaid assets?
Assuming a value for unpaid policies of $18 billion, what
percentage of that $18 billion could be recovered under the
legislative language you drafted for introduction in the House?
According to one estimate, at least $13 billion of that $18 billion
expert estimate would not be recoverable under H.R. 1746. Do you agree
or disagree with that estimate?
Answer. This question raises a number of important issues that
reveal greater complexity about the nature of the enterprises engaged
in insurance business, and the nature of the relevant transactions and
relationships, than the question itself implies.
Nationalized Assets In Eastern Europe
Insurance was in the 1930s and 1940s and remains a highly
globalized business. The role of reinsurance reinforces the cross-
national and inter-company nature of the ``typical'' insurance
transactions engaged in by German, Swiss, Italian, and other insurers
and reinsurers that sold policies to Jews prior to WWII and should be
responsible for the losses unquestionable suffered by survivors, heirs,
and beneficiaries of these policies. For example, a 1998 study by
economist Sidney Zabludoff found that
The German and Swiss markets were highly interwoven . . . . The
normally tight Nazi foreign exchange controls were minimal, even during
the war, on reinsurance payments--which allow insurance companies to
spread their risks. The large German reinsurance companies had
subsidiaries in Switzerland such as Union Reinsurance Company and the
Universale Insurance Company, both of Zurich. Under the leadership of
Munich Reinsurance Company, a cartel was formed in 1941 that included
companies from Switzerland and Italy as well as Germany.
German Assets in Switzerland--End of World War II, published by the
World Jewish Congress, 1998, at 25. In addition, Mr. Zabludoff found
that ``shadow agreements'' existed in all reinsurance contracts in case
of war, which allowed Swiss companies to front for Munich Re in
countries with which Germany was at war.
The assumption that post-war nationalizations in Eastern Europe
would limit the effectiveness of the disclosure and litigation remedies
as against many current global companies called for in the original HR
1746 is incorrect for several reasons. First, for example, there is
evidence that Generali moved assets out of Eastern Europe including
premium income received from customers in Czechoslovakia, Hungary,
Poland, and Yugoslavia to safe havens such as Trieste, South America,
and the United States. In addition, Generali has recovered some or all
of the real property that was nationalized after WWII, and has received
compensation from Italy that was derived from agreements and treaties
involving Eastern European countries that nationalized property
belonging to Italian citizens and companies.
The fact that this information is extant as concerns Generali
certainly suggests that it would be ill-advised to make any assumptions
about the status of other companies' conduct or assets wherever they
operated, including Eastern Europe. Therefore, the use of the term
``whose assets were liquidated'' may represent only a narrow group of
companies, and there is strong evidence to suggest it does not apply to
the global insurers who did business in Eastern Europe and elsewhere
during WWII and who exist today, or whose portfolios were acquired by
extant companies.
Moreover, the law does not support the proposition that
nationalization of insurance companies relieves the companies of their
obligations to policyholders. See, e.g. Pan Am Life Ins. Co. v. Blanco,
362 F.2d 167, 170 (5th Cir. 1966) (nationalization of Cuban assets by
Government of Cuba did not excuse insurance company from its obligation
to pay insured under life insurance policy whose proceeds were payable
to the insured in the United States: ``It is difficult to see how the
seizure of the assets of the insuring obligors would of itself change
the rights of the insured obliges to be paid at the places and in the
currency stipulated.'').
In addition, in Generali's case, it has stated on its website that
at the meeting of the shareholders in 1946, the company ``approved the
1944 accounts.'' This is a remarkable admission and undermines the
assumptions underlying Question No. 4, at least as it pertains to
Generali. Generali apparently dealt with Holocaust victims' policies in
1946, prior to any socialist or communist confiscations. It is strange
for Generali, or any company that behaved similarly, to now argue that
they should be treated as victims of Communism, but that Holocaust
survivors and heirs of Holocaust victims (such as Generali's customers
whose accounts were ``approved'' by the shareholders in 1946), should
have their rights dishonored because of the passage of time, the loss
of records, Communism, or other myths propagated to justify paying only
a fraction of the policies and policy values of its Jewish customers.
Amount of Unpaid Insurance Policies Covered By HR 1746
The predicate underlying the House Foreign Affairs Committee
version of HR 1746 is that it would extend jurisdiction over insurance
companies and their subsidiaries and affiliates doing business in the
United States, to the broadest extent permitted by the U.S.
Constitution. While today's global economy reinforces the complexity
and international nature of the relationships involved, there are
undoubtedly a number of policies within the $18 billion estimate that
were sold by companies that no longer exist, or that would not be
subject to U.S. jurisdiction. Even if ``only'' $5 billion of the $18
billion outstanding would be subject to possible recovery under HR
1746, that sum is twenty (20) times greater than the amount paid to
claimants through ICHEIC in recognition of insurance policies. More
important is the standpoint of victimized individuals, whose
constitutional rights would be restored.
Question. Have you identified any insurance companies that issued
Holocaust era insurance, did not participate in ICHEIC, and do business
in the U.S., and therefore could be subject to suit?
If so, which insurance companies?
Answer. As noted in my answer to Question No. 4, the insurance and
reinsurance industries are so interrelated and globalized, and were in
the 1930s and 1940s, that it is overly simplistic to analyze companies'
business activity in terms of national borders and discrete corporate
entities. Their historical relationships are described in numerous
sources, including for example, reports of the Allied Military Command:
``Axis Penetration of European Insurance,'' Board of Economic Warfare,
June 15, 1943; ``A Study of German Insurance Companies, Combines, and
Associations,'' Decartelization Branch, Foreign Economic
Administration; April 30, 1947; ``Private Insurance in Italy;
Recommendations and Guide,'' Office of Economic Warfare, Reoccupation
Division, November 1943; Independent Commission of Experts Switzerland,
Second World War (ICE), Report of the Swiss Committee of Eminent
Persons, 2002 (Bergier Report), at 458-456; Zabludoff, previously
cited, and others. Whether their current affiliations and activities
would render them subject to suit under HR 1746 is a question that
would have to be addressed by courts on a case by case basis.
There are some companies that would seem to be subject to U.S.
jurisdiction who did not participate in ICHEIC, such as Swiss
Reinsurance, Swiss Life, and Basler Leben, to name a few. The reports
of state regulators who enacted laws such as California, Florida, and
New York in 1998-1999 would have a list of companies that understood
themselves to be subject to the legislative jurisdiction of those
states under the 1998-1999 statutes such as section 626.9543, Florida
Statutes. See, e.g. Florida Department of Insurance Holocaust Victims
Insurance Act Report to the Legislature, July 1, 2002. I have not
personally surveyed all of these reports.
But in general, the question of which companies would be subject to
suit under HR 1746 would require a court to review the company's and
its affiliates' activities in the state, or in the United States, and
apply a jurisdictional analysis to each case.
Question. Your testimony references one expert's estimate that sets
unpaid value of Jewish Holocaust-era policies as high as $300 billion.
What is the basis for that valuation estimate?
Answer. The basis for that valuation is an estimate by Joseph
Belth, Professor Emeritus of Insurance at the Kelley School of Business
at Indiana University, and publisher of the insurance consumer
newsletter The Insurance Forum, which he outlines in a letter dated
January 24, 2008, to Mr. Baird Webel of the Congressional Research
Service.
Question. My understanding is that the appeal of Judge Mukasey's
decision dismissing the consolidated lawsuits on the basis of the
Supreme Court's Garamendi decision finally is scheduled for argument in
June, after a long delay. If the Second Circuit rules that the case
against Generali was wrongly dismissed because there was no executive
agreement between the U.S. and Italy, allowing that suit to proceed,
would that affect the need for new legislation?
Would a decision by the Second Circuit that Generali is not
entitled to legal peace open the way for suits to be brought under
state laws, such as Florida's law on Holocaust era insurance
restitution?
Answer. The Second Circuit held oral argument in the appeal of
Judge Mukasey's decision on June 10, 2008. Even if the Second Circuit
reverses Judge Mukasey's decision, it would not necessarily obviate the
need for legislation. First, the possibility that Generali might seek
Supreme Court review and delay the claims of the named parties in the
Mukasey appeals presents a strong argument for Congress to settle the
issue of whether state claims are preempted. Moreover, even if the
Mukasey decision is reversed, enactment of HR 1746 would also settle
any possible statute of limitations issues that might be raised by
Generali on remand of the cases now on appeal, or of claims brought by
those who opted out of the class settlement. Though we would regard
such defenses as lacking in merit, survivors and heirs, after all these
decades of being manhandled by Generali, deserve a clear statement by
Congress as to their rights.
Question. In his testimony, Ambassador Eizenstat suggests that
ICHEIC paid claims under legal standards far more lenient than those
that would be applied by a court should your legislation creating a
federal cause of action be enacted? Do you agree with this statement
and, if so, how will the heightened evidentiary and jurisdictional
standards applicable in a court affect the ability of survivors and
their heirs to prevail in litigation?
Answer. There are two basic answers to this question. First, with
respect to the assertion that ICHEIC claimants were the beneficiaries
of ``lenient'' procedures, there is a substantial amount of evidence
that despite its published rules, which did purport to create a system
in which the burden of proof shifted to the companies if there was any
documentation to support the existence of policy, and in spite of the
repeated references to ``relaxed standards of proof'' by ICHEIC
defenders, in practice ICHEIC claimants did not enjoy the benefit of
``legal standards far more lenient that those that would be applied by
a court . . ..''
As I noted in my formal statement, whatever ``relaxed standards of
proof'' was supposed to mean, ICHEIC rules were found to be ignored by
companies in a large number of claim denials, such as by Lord Archer on
behalf of the ICHEIC Executive Management Committee in 2003. The
Washington State Insurance Commissioner in October 2004 cited a
multitude of other failures--including companies' denials of claims in
violation of ICHEIC rules, or denials submitted without providing the
information in company files necessary to allow the claimants or the
ICHEIC auditors to determine whether relaxed standards of proof were
applied, failure to supply claimants with any documents traced in their
investigations, and routine denial of claims by simply saying, even
when a claimant believes he or she is a relative a person named on the
ICHEIC website, that ``the person named in your claim was not the same
person.''
These and other practices that worked to the disadvantage of
claimants have been reported in several news articles and in testimony
and documentary submissions to this and other Congressional committees,
and detailed at some length in the Second Circuit amicus curiae briefs
of the New York Legal Assistance Group and former New York
Superintendent of Insurance Albert Lewis in opposition to the Generali
class settlement. See, also Yisroel Schulman, ``Holocaust Era Claims,
Mission Not Accomplished,'' The Jewish Week, May 4, 2007; Stewart Ain
`` `Phantom Rule' May Have Limited Holocaust Era Awards to Claimants,''
The Jewish Week, June 29, 2007.
Second, while many opponents of HR 1746 continue to refer to the
generalized rubric of ``relaxed standards of proof,'' or ``lenient
standards,'' that was a concept oft-repeated in testimony and
publications but never clearly defined. The published ICHEIC
retrospectives authored by ICHEIC participants do not cite examples of
claims paid based on ``relaxed standards'' hence it would be difficult
based on public information to prove IHEIC companies in fact applied
standards more lenient than a court would use. The most that can be
said of ``relaxed standards'' in practice is that some claimants who at
the outset of the process were not able to name the issuing company, or
who did not have original documents in their possession, nonetheless
were able to recover a payment for their policies. This is a far
different meaning than the one ascribed by ICHEIC at the time it was
created, or the meaning implied by Question 8.
If the practical meaning of ``relaxed'' standards under ICHEIC is
that some policyholders who did not know what company issued a family
policy were able to find that out, such a impact is identical to the
benefits that would have resulted from the publication requirements of
HR 1746, and the publication requirements of the California, Florida,
New York, and other State laws that are not enforced today because they
have been held to be preempted under Garamendi. Had enforcement of
those laws (which passed in 1998 and 1999) not been stymied, Holocaust
survivors and heirs would have received the information to allow them
to lodge claims with unknown companies long before the spring of 2003,
when the overwhelming majority of the names published by ICHEIC were
finally published. So, the fact that some ICHEIC claimants learned of
their family policies through ICHEIC and received an offer they were
willing to accept hardly justifies the denial of that opportunity to
the tens of thousands of other possible claimants not satisfied by
ICHEIC, or worse, the denial of access to courts that has emerged from
judicial decisions after Garamendi.
Further, when one considers the evidence required to succeed in
making a claim, ICHEIC's numerous failures to honor the published
principles of ``relaxed standards'' renders it an inferior tribunal to
court litigation who, unlike ICHEIC claimants, would be entitled to
have court-supervised discovery of the insurers' and reinsurers'
records. Moreover, ICHEIC's decision to invert the whole notion of
``relaxed standards of proof'' in allowing Generali to deny thousands
of documented claims based on ``negative evidence,'' i.e. were able to
deny claims for which policies could be proven but which Generali
claimed had been paid, lapsed, or surrendered, without providing
documentation of such transactions, is a far more difficult burden of
proof than claimants would have to deal with in most states, where once
a policy is established, the burden is on the insurance company to
prove that the policy was paid or lapsed, or any other defenses. See,
e.g., Pan American Bank v. Glinski, 584 So.2d 52 (Fla. 1st DCA 1991);
Viuker v. Allstate Ins. Co., 70 A.D.2d 295, 420 N.Y.S.2d 926 (N.Y. App.
1979); Sanchez v. Maryland Cas. Co., 67 A.D.2d 681, 412 N.Y.S.2d 173
(N.Y. App. 1979).
__________
Response to Additional Questions Submitted for the Record
by Senator Bill Nelson to Thane Rosenbaum
Question. If the present-day value of Holocaust-era policies is at
least five to ten times higher than the amount paid through the ICHEIC
process, what additional measures, other than litigation, could be
taken to compel European insurers and/or governments to pay closer to
the total value of unpaid policies?
Answer. I think we are well past the point where anything other
than litigation would help Holocaust survivors obtain the justice they
deserve. Indeed, that's the main thrust of this legislation: the stark
reality that ICHEIC,. the Claims Conference, diplomatic negotiations,
and class action lawsuits have simply failed to restore the looted
property of survivors, and worse, have so alienated them from the
restitution process that they have been left demoralized and
disempowered to speak for themselves.
The plain truth is that government negotiators, ICHEIC, Jewish
institutions; class action lawyers, and the Claims Conference have
exhausted whatever resources they were able to mobilize on behalf of
survivors. And while they have purported to act in the interests of
survivors, the result has not been especially favorable. Therefore,
given the advanced age and declining health of survivors, it is time
for other measures, such as . this legislation, to be implemented. Even
if these individual lawsuits do not succeed, at least will have the
advantage of empowering the survivors to exercise their own control in
vindicating their rights during the last phase of their life.
Passage of legislation restoring Holocaust survivors' and heirs'
rights of access to courts such as HR 1746 as passed by the House
Foreign Affairs Committee is an essential first step to redeeming the
unpaid policies due to victims and their families. This is because it
is not just ``litigation,'' but the threat of litigation, which would
facilitate payments by insurers to those to whom funds are still owed.
One of the obvious shortcomings of ICHEIC was that the companies
believed they were immune from court actions and so in addition to
controlling the process by virtue of their sheer numbers and the
structure calling for ``consensus,'' the insurers (especially after
American Insurance Association v. Garamendi) were able to deny claims
without the fear of being held liable for bad faith or punitive
damages.
In addition, I believe there is a moral perspective that should
motivate companies voluntarily to come forward to satisfy their debts
to victims of the Holocaust, and any legal heirs or beneficiaries who
are owed funds. My op-ed in the New York Sun published on May 5, 2008,
proposed as much, given the modern precedents in truth and
reconciliation commissions and the like arising from more recent
atrocities such as Rwanda.
Despite what the benefits I believe would accrue from such
acceptance of corporate responsibility, I still believe that victims of
the Holocaust should not have to depend for justice, and an accounting
of what happened to their families' assets, on the voluntary good will
of global insurance corporations. A law such as HR 1746, in its
original form, must be part of a society's acknowledgement that it is
the victims' who possess the right to determine when and how
``restitution'' has been finally achieved.
Question. In your written testimony, you stated that ICHEIC
required death certificates from claimants. Is this based on
information you have from claimants, official ICHEIC documents,
statements from ICHEIC officials, or Some other source?
Answer. My written statement is a metaphor describing the
ridiculous and patronizing treatment survivors received under ICHEIC,
which mirrored the original treatment Holocaust victims and their
families received from insurance companies when they sought to collect
on policies after WWII.
For example, I have seen evidence that companies participating in
that process required claimants to supply information that they could
not possibly have supplied, such as the birth dates of relatives who
perished in the Holocaust when the claimant - if a survivor - would
have only been a teenager at the most. I have seen examples of claims
where a company acknowledged that it sold a policy to a claimants'
father or other relative, only to deny the claim because the company
claimed the policy lapsed or was paid - but refused to supply evidence
of such terminating event to the claimant. I have seen examples where
companies refused to supply available records to the claimants unless
the claimant filed an appeal, even though ICHEIC rules required the
companies to supply all available information in response to a claim.
Such a practice obviously suppressed the utilization of appeals and
reduced claims paid.
The foregoing, and other practices such as the ``phantom rule''
cited by former New York Insurance Superintendent and ICHEIC arbitrator
Albert Lewis which placed a greater burden on claimants than the
published rules, undermine all of the rhetoric about ``relaxed
standards of proof'' on which survivors based their initial trust for
the process, and about which ICHEIC's defenders so ostentatiously but
unjustifiably in my view represent to the Congress and others was
employed. For respectable individuals and institutions to mock
Holocaust survivors in this way in the years 2000-2008 is no less
disgraceful than the insurers' original handling of these claims when
they asked for death certificates and original documents that everyone
knew survivors or the victim's children could not have had.
Question. In his testimony, Ambassador Eizenstat refers to the
substantial legal hurdles that would face survivors and their heirs if
they were to go into court to pursue claims under a federal cause of
action. These hurdles might substantially delay or prevent altogether
the ability of survivors to obtain compensation. Do you agree, and if
so, are you concerned that a federal cause of action would give rise to
false hopes and further disappointment for survivors?
Answer. Respectfully, I think we are asking the wrong question
here. The issue is not one of false hopes and further disappointments.
The issue is one of empowerment and dignity.
It should not matter whether the survivors ultimately prevail in
asserting their own individual legal claims. The victory arises in the
empowerment of those who have for too long been patronized and
infantilized. We should not be confused by utilitarian concerns, the
kind of zero sum thinking that unless the survivors can overcome these
perceived legal hurdles there is no point giving them back their
rights. The rights are theirs. Why they were taken away in the first
instance is a separate question and one that historians, hopefully,
will one day evaluate and judge accordingly. But the rights must be
returned, regardless of the potential outcomes of these individual
lawsuits. It is time for those who have deprived Holocaust survivors of
their day in court to be magnanimous and gracious rather than political
and legalistic.
Moreover, I not believe that the ICHEIC process was itself free of
legal hurdles. The purported flexible legal and evidentiary standards
that were supposed to be applied to insurance claims ultimately were as
Byzantine and obstacle laden (not to mention degrading and dismissive)
as anything that could possible be found in a court of law.
But even if one were to assume that ICHEIC was more flexible and
liberal than the courts would be, I believe as a matter of principle
that our justice system cannot deny Holocaust survivors, and heirs of
Holocaust victims, the ability to access federal or state courts to
pursue claims against insurance companies that sold their families
policies. It is inconceivable to me that any public official would
suggest that Holocaust survivors should not have the autonomy in the
United States of America to decide for himself or herself whether to
accept the highly compromised ICHEIC system or to have a judge and
jury, using traditional rules of evidence and due process standards,
decide their rights.
As Congressman Robert Wexler said, the original HR 1746 does not
require insurers to pay anyone, it would have only allowed a survivor
to find a lawyer willing to take the case based on the evidence
available using customary laws. In most states, these laws frown upon
insurance companies who use their superior economic might to deny
bargained- and paid-for insurance policies, with treble damages and
attorneys fees for prevailing consumers. Then again, HR 1746 does not
obligate any lawyers to take cases they do not want to take. So this
will be left to individual decisions. Holocaust survivors are full-
grown adults and are capable of deciding for themselves whether to
subject themselves to the legal process, and should have no fewer
rights than other. Americans in this respect.
This is a perfect example of what I meant when I referred to the
``infantilization'' of survivors by the status quo and the defenders of
the ICHEIC process. I submit that it is the responsibility of Congress
to legislate that victims of the Holocaust, having been denied their
humanity by Hitler, and been denied their property and insurance assets
by Allianz, Generali, and others, will not be denied their basic legal
rights by the U.S. Government.
__________
Responses to Additional Questions Submitted for the Record
by Senator Bill Nelson to Roman Kent
Question. How do you respond to Mr. Rubin's statement at the
hearing that no one asked survivors what they wanted and they never
agreed to ICHEIC or any other compensation process as their exclusive
means of obtaining compensation for Holocaust era insurance policies?
Answer. ICHEIC was established with substantial input from
Holocaust survivors. Both before and during the time in which ICHEIC
was formed, insurance regulators and survivor representatives made
numerous efforts to include Holocaust survivors--to try to understand
the circumstances surrounding the pre-war insurance policies survivors
had purchased, to solicit their suggestions and other comments, as well
as to explain proposed developments in the insurance claims process.
In this regard, it also is relevant to take into account the
context in which ICHEIC arose. For over a half century following World
War II, survivors faced difficult, if not impossible, obstacles to
collect on their unpaid Holocaust era insurance policies. Insurance
companies were not eager to pay or give fair hearing to such claims,
legal obstacles in courts proved insurmountable, and many of the
insurance companies at issue no longer existed after the war. Not only
was there no effective mechanism for survivors to obtain payment for
their pre-war insurance claims during this period, there was no
serious, concerted effort to establish any sort of process sensitive to
the circumstances survivors faced regarding their unpaid insurance
policies. ICHEIC, in spite of its eventual difficulties, provided
survivors--and proved to be--a much more effective forum than the
courts or appeals to individual insurance companies (if they still
existed) to convert the unpaid policies into the compensation they were
owed.
ICHEIC was founded, basically, by four groups: the National
Association of Insurance Commissioners (NAIC); insurance regulators
from Europe (who ultimately did not participate in the ICHEIC process);
a number of the largest insurance companies in Europe before World War
II; and Jewish groups.
There were three entities that comprised the Jewish groups--the
Claims Conference, the World Jewish Restitution Organization (WJRO) and
the State of Israel. Moshe Sanbar, the representative from the Claims
Conference, is a survivor who was the Chairman of the Board of
Directors of the Center of Organizations of Holocaust Survivors, the
umbrella organization for forty survivor groups in Israel. Mr. Sanbar
reported to the leaders of these survivor groups about developments
related to the formation of ICHEIC, as well as solicited suggestions
and comments from them. The survivor leaders, in turn, reported to and
heard from their constituencies. I represented the WJRO. I am a
Holocaust survivor and serve as Chairman of the Board of the American
Gathering of Jewish Holocaust Survivors, the umbrella organization for
survivor groups and landsmanshaften in North America. I reported about
developments and issues related to ICHEIC during leadership meetings of
the American Gathering. For example, during the time when the German
insurance companies, including Allianz, collectively negotiated with
ICHEIC--ultimately leading to a $350 million fund which was contributed
to pay for unpaid Holocaust era insurance policies issued by German
companies--I was involved in extensive discussions with the survivor
leadership in the American Gathering. These discussions with survivor
representatives, which included explanations of ICHEIC and the
solicitation of survivors' views, were considered in the formation of
ICHEIC and, for that matter, in the establishment of the German
Foundation Remembrance, Responsibility and the Future. The third Jewish
group involved was the State of Israel, which was represented by Bobby
Brown, a child of Holocaust survivors.
There were others involved in the ICHEIC negotiations who also
reached out to survivors, to tell them what was going on and to seek
their input in the process. Representatives of NAIC periodically
provided reports about ICHEIC to insurance regulators from the various
states. The regulators took it upon themselves to contact and apprise
their survivor constituencies of these developments. Indeed, by the
fall of 1997, NAIC had voted to establish a working group to deal with
Holocaust era insurance issues. The working group, made up of
representatives from 26 states and the District of Columbia, held
informational hearings in 1997-1998 in a number of cities with
significant survivor populations, including Chicago, Los Angeles,
Miami, New York, Philadelphia, Seattle, Skokie, Illinois, and
Washington, D.C. See, ICHEIC legacy document, entitled ``Finding
Claimants and Paying Them: The Creation and Workings of the
International Commission on Holocaust Era Insurance Claims''
(www.icheic.org), page 16. During the hearings, survivors presented
their insurance-related recollections and, along with regulators and
insurers sought to ``arrive at proposals for further action.'' See,
``Finding Claimants and Paying Them,'' page 16.
An additional point is relevant here. The representatives from the
Claims Conference, WJRO and State of Israel--consisting of two
Holocaust survivors and a child of survivors--would not always agree
with the views expressed by the representatives of the insurance
companies about the positions that ICHEIC should take. If, ultimately,
representatives of the survivors, insurance regulators and insurance
companies could not arrive at an agreement on particular issues, the
process placed responsibility for resolving such disputes with the
Chairman of ICHEIC. Moreover, even after the Chairman made his
decisions, the survivors involved in the negotiations, who had
advocated their positions as vigorously as possible, might still
intensely disagree with the result. Nonetheless, they accepted the
decisions for the sake of the larger goal of establishing a claims
mechanism for unpaid Holocaust era insurance policies which was a
substantial improvement over what had existed for decades following
World War II.
Question. Can you describe what negotiations presently are ongoing
between the Claims Conference and the German Government regarding
compensation and restitution?
Answer. As a result of negotiations with the German Government this
summer, the Claims Conference obtained an additional, estimated total
of $320 million for programs assisting Holocaust survivors over the
next decade. The funding consists of a combination of homecare funding
for Jewish victims of Nazi persecution, increased pension payments to
survivors, the inclusion of additional survivors in the pension and
one-time payment programs, as well as the establishment of a new one-
time payment program.
a. homecare for survivors
During the most recent round of negotiations this summer, the
Claims Conference obtained additional funding for in-house services for
Jewish victims of Nazi persecution worldwide, which is the most
urgently needed and most effective form of assistance. The German
Government agreed to provide a total amount of approximately $70
million (?49 million) for such homecare services for 2008 and 2009,
which can be immediately distributed for survivors in need.
This amount is more than double the funds obtained in previous
negotiations, as the Claims Conference had obtained approximately $30
million (?21 million) for 2006 and 2007. The Claims Conference will
allocate the funds to agencies which help needy Jewish victims of
Nazism around the world.
However, there is no agreement in place for German Government
funding of these critical homecare projects after 2009. Funding for
2010 and beyond will require further negotiations.
b. direct payments to survivors
Increase in Article 2 Fund and CEEF Pension Payments
The Claims Conference negotiated an increase of 8% in monthly
payments to 65,800 Holocaust survivors worldwide from the Article 2
Fund and the Central and Eastern European Fund (CEEF). This means that
an extra, estimated $166 million will be paid by these programs over
the next decade. Payment under the Article 2 Fund will increase to
approximately $430 (=300) per month; and payment under CEEF will
increase to approximately $320 (=224) monthly to survivors in EU
countries and approximately $260 (=182) monthly to survivors in non-EU
countries.
New Category for Article 2 Fund: Western European Survivors
The negotiations also resulted in Germany liberalizing criteria so
that certain Holocaust survivors from Western Europe who were in
concentration camps or ghettos, or who lost a family member and
received payment(s) from a German government source, may now--for the
first time--be eligible for Article 2 Fund payments. This compensation
will benefit an additional, approximately 2,000 Holocaust survivors and
will result in payments in the amount of $83 million during the next 10
years.
New Category for Hardship Fund: Leningrad
The negotiations will result in one-time Hardship Fund Program
payments--of approximately $3,760 (=2,635)--being made for certain
Jewish victims of the Nazi siege of Leningrad, so long as other
requirements of the Hardship Fund are satisfied. This means that
payments will be issued to several thousand Jewish victims of Nazism
from the former Soviet Union now living in the West. It is the first
time that the persecution of Jews who lived through the 900-day siege
of Leningrad has been recognized by Germany.
New Program Offering One-Time Payments: Budapest Ghetto
Further, the negotiations succeeded in establishing one-time
payments, of approximately $2,800 (=1,962), for every Holocaust
survivor residing in Eastern Europe who was in the Budapest Ghetto
during World War II and was alive on June 4, 2008. It is estimated such
payments will be made to approximately 6,000 survivors. In addition to
the compensation, these payments are an important acknowledgement of
the suffering of these Hungarian Jews who, previously, had not been
eligible for payment
c. other activities and open issues
During the negotiations, the Claims Conference pressed the German
Government for modifications in the processing of cases submitted by
Holocaust survivors for a social security pension as a result of work
performed during their incarceration in a ghetto. The Claims Conference
also urged a speedy and liberal implementation of the recently
established program providing for one-time payments for ghetto labor.
It is estimated that 50,000 survivors worldwide will be affected and
may receive, cumulatively, up to $150 million under this program.
Moreover, there remain a number of open issues, raised and
previously advocated by the Claims Conference, which will be the
subject of future negotiations. Among these open issues are the
following: increasing the payments made through the Article 2 and
Hardship Funds; lowering the time period required for Budapest Ghetto
survivors to be eligible for pensions; raising the stipulated income
level below which survivors are eligible for pensions; making survivors
who were in open ghettos eligible for payments; obtaining payments for
child survivors; and increasing homecare funding.
Question. What is the Claims Conference doing today to assist needy
survivors and are the resources available sufficient to meet the needs?
Answer. As they age, Nazi victims suffer from physical and
emotional distress at higher rates than the elderly population as a
whole. Prolonged malnutrition under the Nazis has affected the health
of survivors in later years of life, there are particularly high rates
of mental illness among Jewish victims of Nazism, and many are alone as
a result of having lost their entire family during the Shoah. Put
simply, the health needs of aging survivors around the world have
become increasingly urgent.
The Claims Conference, committed to easing the situation of
survivors, has been the primary organization which has identified and
addressed the unique social needs of victims of Nazi persecution. Once
the Claims Conference commenced receiving funds from Jewish property in
the former East Germany, through its Successor Organization, it
established programs throughout the world to assist Nazi victims. \1\
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\1\ The Claims Conference already has allocated a total of
approximately $1 billion to organizations addressing the social service
needs of Holocaust survivors and engaging in education, research and
documentation of the Shoah. This is in addition to compensation
payments--to over 500,000 survivors in 75 countries--totaling more than
$60 billion as a result of the work of the Claims Conference. The
institutional allocations of the Claims Conference are made from the
proceeds of the sales of unclaimed, formerly Jewish owned property in
the former East Germany, as well as from humanitarian funds established
for the benefit of Holocaust survivors by various governments and
businesses.
---------------------------------------------------------------------------
The Claims Conference funds vital services which are provided to
Nazi victims in more than 40 countries. In the United States alone,
over 50 programs, exclusively for Nazi victims, are now operational.
While more complete details about these services are available in the
annual report of the Claims Conference, which is attached, as well as
at http://ww.claimscon.org/allocations, some of the assistance provided
by Claims Conference funding includes the following: homecare--
including assistance with activities of daily living, such as washing,
dressing, cooking, laundry, housekeeping and shopping; hunger relief,
in the form of food packages and hot meals; meals on wheels; medical
assistance, such as doctors' visits, medical equipment and medicine;
emergency cash grants to help meet expenses, such as rent, utilities
and eyeglasses; winter relief (especially in the former Soviet Union)--
including coal, wood or gas, clothes, coats and blankets, and grants
for electricity; home nursing; counseling services; and numerous other
services and social programs which ease and enhance the lives of
elderly, Nazi victims.\2\
---------------------------------------------------------------------------
\2\ The Claims Conference believes that the involvement of the
local survivor community is essential to the success of the
institutional allocations program. Thus, the Claims Conference requires
that each recipient agency set up a local Holocaust Survivor Advisory
Committee. These survivor committees help to provide outreach and
oversight for the programs, as well as help to determine local needs
and identify survivors in need of assistance.
---------------------------------------------------------------------------
For programs in 2008, the Claims Conference has made allocations
that will total $170 million, primarily for agencies and institutions
around the world which provide services to survivors in need. These
allocations are primarily from Successor Organization funds, but also
other sources of Holocaust-related compensation and restitution, such
as ICHEIC, the Swiss Banks Settlement, German government funds
negotiated by the Claims Conference, the 2005 ``Hungarian Gold Train''
settlement, and Austrian funds negotiated by the Claims Conference.
At its annual meeting in 2008, the Claims Conference authorized to
increase annual funding from the Successor Organization to $135 million
for the next five to seven years. The allocations are made primarily to
social welfare agencies and institutions aiding Jewish victims of
Nazism in need in over 40 countries and are used for vital services.
For 2009, the total allocations which will be administered by the
Claims Conference, using funds from the Successor Organization and from
these other sources will amount to $193 million.
Further, with Claims Conference encouragement, local philanthropic
fundraising has made additional resources available to support programs
assisting Nazi victims.
While we believe that the Claims Conference has met many of the
most serious needs of Holocaust survivors worldwide, these needs are
continuing ones. To satisfy them, success in the ongoing negotiations
with the German Government regarding one-time payments, pensions and
funding for social welfare programs for survivors remains critical.
__________
Responses to Additional Questions Submitted for the Record
by Senator Bill Nelson to Lawrence Eagleburger
Question. What are the appropriate criteria for measuring ICHEIC
performance?
Answer. ICHEIC concluded its work with over $306 million paid to
more than 48,000 Holocaust victims or their heirs for previously unpaid
insurance policies. Of this amount, more than half went to individuals
with so little information about their potential claim that they were
unable to identify even the company that may have issued the policy. In
addition to the over $306 million payments made by ICHEIC companies or
related entities, ICHEIC distributed nearly $200 million more for
humanitarian purposes.
The resolution of these undocumented claims sixty years after the
devastation of the Holocaust and the Second World War clearly
illustrates the success of ICHEIC's research efforts. Moreover, the
successful settlement of these claims through the ICHEIC process, along
with restitution efforts during the immediate postwar period and the
present ongoing work of ICHEIC-related entities to resolve remaining
unpaid life insurance policies within their respective jurisdictions,
addresses a preponderance of the pre-war insurance market.
The criteria you list below are neither relevant nor useful tools
of measurement.
For example, you ask about the measuring of the percentage of names
a given company published. Such a measurement would bear no
relationship to ICHEIC performance. To measure percentages, you would
need to know the total number of policies for each company, by name.
Many companies do not have/retain names of policyholders. Victoria, a
major German company, had only policy numbers, not names, on record. If
the claimant could provide a policy number, then they could search
based on that information, but they could not search files by names.
Moreover, ICHEIC's list publication of potential policyholder names
was not based solely on records held by companies, but on independent
ICHEIC research. Take asset declarations, for example. Many of the
`policies' listed were from asset declarations. In many instances the
declarations did not include a company name but rather stated
``insurance policy, worth x.''
Similarly, measuring the relative value of policies paid to the
total outstanding begs the question of the impossibility of measuring
the universe of total outstanding policies. First, we cannot determine
what the Holocaust victim share of the market was, and second, we know
that some portion of Holocaust policies were previously paid in the
postwar period by companies and others through previous compensation
programs. For more on assessing the nature, size, and scope of the
market, please see my description below of the work of the Pomeroy-
Ferras task force.
Question. Are you aware of the statement of the Washington State
Insurance Commissioner in 2004 that the publication of the largest
number of names near the end of the ICHEIC claims filing period
seriously reduced the number of survivors and heirs who applied to
ICHEIC for payments?
How would you respond to that concern?
Why did it take so long to publish the list?
Did the insurance companies oppose publication of the lists?
Answer. First, from the outset, finding one's name on a list
published by the Commission was never intended either as necessary to
file a claim or as any proof that a previously unpaid claim existed.
From inception, the Commission strived to identify as many people with
possible unpaid Holocaust-era policies and encourage them to file
claims, even if they lacked detailed information about their family's
coverage.
Our outreach initiatives included both a 24 hour ICHEIC call center
and grassroots efforts through global Jewish communal and survivor
organizations and representatives of other victims groups. We
distributed packets to survivor communities and Jewish organizations
that included press releases, posters, and guidance on how to request
and complete a claim form.
As a result of ICHEIC's outreach, during the five years that the
Commission accepted claims, it received 120,000 claim forms in more
than 20 languages from more than 30 countries. ICHEIC's extensive and
targeted outreach prior to the filing deadline was important given our
understanding that many of those who filed would do so with little
documentation or information about policies. Even with ICHEIC's ongoing
messaging that finding one's name on a list was not predicate to filing
a claim, we extended the last deadline by some months to allow for
additional outreach, after the final tranche of names was added to the
list, to make our best efforts to reach the broadest audiences to
encourage filing. \1\
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\1\ Approximately, 30,000 of the claim forms received by the
Commission either did not fall under ICHEIC's mandate and were
therefore forwarded to the appropriate agency, for example, the Sjoa
Foundation, Buysse Commission, CRT, or did not pertain to life
insurance policies, i.e., slave labor, forced labor, Swiss bank
accounts.
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The role of the published lists within the overall scope of the
Commission's work and the relative utility of publishing more names
going forward have received a great deal of attention, but continues to
be widely misunderstood. Development of the lists that were published
was a by-product of ICHEIC's efforts to match claim form information
with relevant policy information discovered through archival research
or in company records. The end result was that member companies were
ultimately able to match 16,243 unnamed claims against these records.
The 2004 assertions of the Washington State representative are
without merit, as I stated at the time that the charge was first made.
For more detail on our effort with respect to lists, the time it
took to develop them, the research efforts that went into them, or the
like, I would recommend that you review my written submission to your
committee in preparation for the hearing, which contains extensive
discussion on this very topic.
Question. ICHEIC's claims-based approach resulted in the payment of
close to $400 million to individual claimants and to a ``humanitarian
fund'' for Holocaust survivors and their heirs. Estimates of the
present-day total value of insurance policies owned by Jews during the
Holocaust range from $3 billion to $17 billion and higher. Whichever
valuation one applies, why did the ICHEIC process recover far less than
the total value of Holocaust-era policies sold to Jews? Why did the
U.S. government back a claims-based approach rather than seek a global
settlement to recover closer to the estimated total value of unpaid
Holocaust-era policies?
Answer. I do not accept either of the estimates you advance as the
present-day total value of insurance policies owned by Jews during the
Holocaust. I have no idea about the basis nor the expertise from which
you are drawing these numbers. I can tell you that I know of no
reputable expert who would put estimates at a figure even approaching
the $3 billion on the table. Instead, let me explain, again, why those
who have long advised ICHEIC note that it is not possible to determine
with any precision the total value of Holocaust-era policies sold to
Jews. I would note as well that the figures you cite here do not appear
to take into consideration compensation provided for such policies in
the immediate postwar period.
Please recall, as we have explained previously, that the Commission
was created as a means of addressing the gaps and shortfalls of postwar
compensation programs of the 1950s and 1960s. It was intended to
provide an opportunity for thousands of Holocaust survivors and their
heirs to submit claims for the first time.
In the fall of 1999, the Commission sought macro-level guidance on
the overall volume and estimated value of potential claims. For this
effort, I appointed Glenn Pomeroy, then North Dakota Insurance
Commissioner and former President of the NAIC and Phillippe Ferras
(then Executive Vice President of AXA France) as joint chairmen of a
task force to report on the estimated number and value of insurance
policies held by Holocaust victims. The Pomeroy-Ferras report,
available at www.icheic.org, provided data that allowed the Commission
to assess the scope and size of the European pre-Holocaust insurance
market relevant to Holocaust victims and their heirs.
The Pomeroy-Ferras report determined how the relative maturity of
the various European insurance markets probably affected local
populations' access to insurance. It provided an overall view of what
total damages might be by trying to determine the Jewish population's
respective rates of participation in the life insurance market and by
estimating the average value of life insurance policies, based on the
scope of the insurance market and the size of the Jewish population in
each country. While the propensity of the Jewish population to insure
was found to be two to three times that of the regular population in a
given country, the propensity to insure differed significantly from
country to country, which dramatically affects the overall estimates of
market size.
The Pomeroy-Ferras report also details some of the challenges that
participants faced in accurately assessing the value of unpaid
policies. While the task force reached consensus on the overall size of
the each country's insurance market and estimated the propensity of
Jews to purchase life insurance, it was far more difficult to determine
the number, average value, and percentage of unpaid Jewish-owned
policies.
Given these considerations, the Pomeroy-Ferras report provided a
range of figures in different categories for different markets. These
ranges served to guide the Commission as it entered its deliberations
on how to assess appropriate settlement amounts company by company (and
in some cases, with national insurance associations) across markets in
Europe.
The various national commissions working to assess their own
situations have confirmed the reliability of the Pomeroy-Ferras work.
The total overall settlement reached by the Commission with all its
entities, approximately $550 million, was premised on the Pomeroy-
Ferras work, and has met the test of time, both with respect to the
over $306 million paid out in claims, and the remaining amount going to
humanitarian activities to honor the memory of those who were not able
to make claims directly.
With respect to your query about why the U.S. government backed a
claims-based approach rather than seek a global settlement process. Two
comments: first, you should direct that question to U.S. government
actors, and second, ICHEIC was a private enterprise and was not subject
to instructions from the U.S. government or any other government.
Finally, I do not accept that the estimates with respect to the total
value of unpaid Holocaust-era policies are accurate or reliable.
Question. One of the concerns that have been raised regarding H.R.
1746 is that the disclosure of the names of all Holocaust-era
policyholders would violate European privacy laws. What are the
specific concerns and how would the privacy law applicable to a given
company's disclosure be violated if all the names of policyholders were
disclosed. If privacy laws did not prevent the publication of a list of
potential Jewish policyholders that ICHEIC published, why would it
prevent the publication of a broader list?
Answer. In 1999, ICHEIC initiated the most extensive project ever
conducted to investigate and record information on Holocaust-era
insurance policies from archives and other sources from around the
world. In addition, the Commission was largely successful in acquiring
lists of policyholders from participating insurance companies, which
have been matched against Yad Vashem's database of Holocaust victims
using the broadest possible criteria, as well as from governmental
organizations in a number of countries. These combined efforts have
yielded substantial information regarding hundreds of thousands of
insurance policies in effect prior to and during World War II. Arranged
through ICHEIC, with publication on Yad Vashem's website
(www1.yadvashem.org/pheip/) and still referenced on the ICHEIC website,
(http://www.icheic.org), this information remains publicly available.
It is important to sound a cautionary note on policyholder names:
Although ICHEIC has published this extensive list of Holocaust-era
insurance policies, not all of them remain unpaid. Let me state that
another way: just because a name appears on the ICHEIC website, it does
not necessarily follow that the heir or beneficiary is entitled to
payment. Many of these policies have been compensated previously
through restitution programs or by the companies directly.
As we have explained, ICHEIC's claim filing process was
purposefully not dependent on an individual finding his or her name on
a list. Anyone who believed they might have any possible connection to
a Holocaust-era insurance policy was encouraged to file a claim, and
the information they provided was matched against all ICHEIC companies'
databases and ICHEIC's research database.
The list that ICHEIC was able to publish, and that remains publicly
available on a website now maintained by Yad Vashem, was possible
because ICHEIC worked with the companies to ensure that the processes
involved fell within exceptions to otherwise extremely restrictive
European data protection laws. We needed to ensure not only that there
was a direct and limited nexus between the names we sought and the
public interest at hand--but also that we had sufficient safeguards in
place to ensure that we were providing adequate levels of data
protection so that unintended information beyond the scope of the
exception would not be provided. And most important, through our
various matching and ``sound-ex'' processes we were doing our utmost to
cull out only the names of likely Holocaust victims.
HR 1746 takes the opposite approach in all respects, and thus
likely would run head first into a host of European data protection
legal challenges. It demands all policyholder names over a period of
years, with no methodology suggested for culling out the names of those
who were likely Holocaust victims (in fact, most sound methodologies
likely would result in a list largely duplicative of the already
existing publicly available ICHEIC list); it provides no means for
safeguarding how, where, when, or by what means this otherwise
restricted information would be provided. Moreover, its definitions of
geographic scope and nature of policies at issue are so broad that the
universe of data it potentially is demanding is overwhelming in nature,
making compliance on a purely practical level virtually impossible.
Question. In his written testimony, Roman Kent emphasized that
``the companies which participated in [ICHEIC] did not represent the
entire, not even the majority of the Holocaust-era European insurance
market.'' What percentage of the Holocaust-era insurance market did the
ICHEIC process account for? For that part of the market not covered by
ICHEIC, how much was covered by eastern European companies that were
nationalized and have no traceable successors? How much was covered by
companies or successor companies still in existence today?
Answer. I believe this is a mischaracterization of Mr. Kent's
comments, and the work of ICHEIC. First, I would direct you to the
appendix submitted by Ms. Anna Rubin with her written testimony in May.
She has an excellent pie chart with that material that shows that in
1936, ICHEIC companies represented approximately 21 percent of the
European insurance market. The German insurance association (a direct
partner with ICHEIC in its work) represented another 33 percent of the
market. So together, ICHEIC and its most immediate partner entity
represented a clear majority of the Holocaust-era European insurance
market. In addition, that pie-chart shows that other ICHEIC partner
entities--such as Sjoa, GSF, or Buysee--make up an additional 26.5
percent of the market, bringing us to well over 80 percent of the
market.
Additionally, in reflecting on the Eastern European market,
although outside the direct remit of ICHEIC companies, one must
consider ICHEIC's extraordinary humanitarian claims payment program for
liquidated, nationalized, or no known successor companies. Under this
program, ICHEIC evaluated according to ICHEIC standards and guidelines,
and paid from humanitarian funds, many Eastern European claims with
some form of documentation but no company in existence to hold
accountable. Moreover, one must also consider the work of companies
outside of ICHEIC or any of the other national associations, such as
Prudential plc, which established an independent reparations effort to
identify and compensate claimants from a Polish company it had acquired
prior to World War II.
Question. In her written testimony, Ms. Rubin indicates that as of
January 2008, Austria's General Settlement Fund (GSF) had issued
decisions on 83 out of 364 claims submitted to the Fund by New York
State Holocaust Claims Processing Office (HCPO). The claims were
submitted to the GSF before a November 2003 filing deadline. Why has it
taken the Fund close to five years to rule on less than half of the
claims submitted by HCPO? What assurances if any has the Austrian
government given to indicate that the remaining claims will be
processed in a timely manner?
Answer. This question is best submitted to Ms. Rubin at the New
York Holocaust Claims Processing Office, since it is her office that
has had all contact with the GSF since ICHEIC ceased operating
activities more than a year ago. I will say, however, that my
experiences with the Austrian GSF during the life of ICHEIC leave me
with a conviction that one should expect to be deeply disappointed with
the ability and willingness of that institution and the Government of
Austria to follow through on its commitments and responsibilities in
these areas.
Question. Please describe ICHEIC's research efforts. How did ICHEIC
use the data that was gathered?
What percentage of the relevant names were supplied to ICHEIC?
What percentage of each company's names of policy holders were
published on the ICHEIC website?
Critics of ICHEIC maintain that obvious sources of information were
ignored and the companies had free reign to decide what
information to produce and what information to withhold. How do
you respond?
Did the research look comprehensively at the Jewish property
declarations scattered throughout the state archives throughout
Germany?
Answer. ICHEIC launched its archival research project in 1999,
commissioning experts to investigate and record information from public
archives and repositories containing Holocaust-era records, in Central
and Eastern Europe, Israel and the United States. Through its
researchers, the Commission gained access to Holocaust-era record
groups previously closed to examination--an achievement that was the
result of perseverance and unprecedented international cooperation, all
with the very worthy objective of assisting Holocaust survivors, their
families and heirs in getting compensation for valid unpaid insurance
policies. From the outset, this project was intended to complement the
ICHEIC claims process; both the research results and the subsequent
mechanisms ICHEIC developed to maximize use of the information can be
considered a major success.
These efforts led to the creation of a database that provided a
critical tool used by companies and ICHEIC to further enhance
information provided by claimants and thus chances of identifying
policies on submitted claims.
ICHEIC's research spanned 15 countries and included over 80
archives. Researchers reviewed three types of records. The first,
representing the bulk of the material reviewed, consisted of Nazi-era
asset registration and confiscation records. Files pertaining to the
post-war registration of losses made up the second category. The third
category was comprised of insurance company records located in public
and regulatory archives.
While German archival records impose some access constraints, this
was not an obstacle for ICHEIC research. Under German data protection
laws documents are always available to the individuals or their heirs
or representatives who are the subject of the documentation--e.g.
postwar compensation, even while records containing personal
information are not accessible to the general public until 50 years
after the date of the documents. Moreover, since asset declarations
predate the war, they are actually fully accessible. In addition, in
February 2002 the German Parliament passed an amendment to the Archives
Law, allowing still broader access to personal records of victims of
Nazi persecution.
ICHEIC conducted research in German archives and repositories first
in 2000, and again from late 2002 through April 2003.\2\ Through this
research many asset declaration files were reviewed and a considerable
number of polices were identified. Overall research in German archives
contributed information on 41,540 insurance policies belonging to
27,886 policyholders.
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\2\ As part of ICHEIC's agreement with the German foundation
``Remembrance, Responsibility and Future.'
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ICHEIC's thorough audit processes, detailed in response to the
question below, ensured full and consistent compliance by all
companies.
Question. What was the nature of ICHEIC's audit processes?
How were they developed?
What did they accomplish?
Did ICHEIC have access to and review the documentation underlying
insurance company claim determinations?
Were claimants provided with the underlying documentation?
Answer. ICHEIC required all entities directly involved in claims
processing and decision making to be audited by an internationally
recognized accounting firm or, in the case of the German companies,
their government regulator accompanied by ICHEIC observers. While
audits varied in type, depending on the entities audited, audit
requirements were defined in such as way as to confirm that all
procedures were structured and decisions rendered appropriately.
Parameters were defined and agreed to by all participants at the outset
as part of the Audit Mandate Support Group's early work, and all
subsequent agreements with participating companies and partner entities
reflect the importance accorded to the performance standards and
appropriate measures.
By using outside auditors who reported back to a specific
committee, ICHEIC was able to secure access to previously inaccessible
records; the reports back to the committee resulted in thorough reviews
of the auditors' findings by a representative group of ICHEIC
stakeholders. As a result, the early audits helped to reduce the
historical suspicions and increased participants' trust in some of
their fellow stakeholders. Stage 1 audits were carried out in the first
instance by audit firms appointed by the insurers. These firms
submitted a Compliance Report, with an attached copy of the Management
Report, relating to each company or group. ICHEIC then appointed a
second audit firm to carry out a Peer Review audit of each Compliance
audit. The Peer Review auditors also carried out their own limited
additional testing of each insurer's records. All of the audit firms
involved in both Compliance and Peer Review audits had extensive
international experience and reputation.
All reports-Management, Compliance and Peer Review-were submitted
in final draft form to the Audit Mandate Support Group (AMSG) empowered
to oversee the audit process. This committee included representatives
of all stakeholders (regulators, Jewish organizations, and companies).
The group met to discuss and consider the auditors' findings at formal
debrief meetings, where the insurers and audit firms presented their
reports for discussion and review by the AMSG. Any additional work
requested by the AMSG was carried out by the companies and/or audit
firms prior to the finalization of their reports.
A subsequent Stage 2 audit was conducted to ensure that all
entities responsible for the various aspects of claims processing had
performed appropriately. Similarly, ICHEIC's own operations were
independently audited to ensure ICHEIC standards were met in the
humanitarian claims processes as well.
Stage 2 audits were carried out by firms appointed directly by
ICHEIC. Stage 2 examined member companies' handling of claims using the
systems and procedures covered in Stage 1. In keeping with the
procedures established during the Stage 1 audits, and building on the
subcommittee members' expertise, the AMSG reviewed the peer review
auditors' findings at debrief meetings, where all members had ample
opportunity to discuss the reports and request clarification and/or
additional follow-up work.
For each insurer, audits related either to the entire company or
group, or to individual subsidiaries or sub-groups. In totality, 15
entities were subject to Stage 1 audits and 12 entities subject to
Stage 2 audits. Fewer entities were subject to Stage 2 because (1)
Chairman Eagleburger agreed that a sub-set of Belgian companies would
not require a Stage 2 audit as their claims processing functions had
been taken on by the Buysse Commission, a government commission that
confirmed claims handling standards were appropriate; and (2) some
company groupings changed between Stages 1 and 2 as a result of mergers
and acquisitions over the course of ICHEIC's lifetime.
Finally, each individual company decision was reviewed and verified
by an ICHEIC claims team staff person, to ensure that it was made
according to ICHEIC rules and guidelines. Where and as the staff had
questions with respect to compliance, lack of underlying documentation
or the like, staff went back to the company until the query was
resolved. ICHEIC staff verified each company decision based on review
of the same information from the company received by the claimant.
Question. How were the ICHEIC lists developed, and what role did
the lists play in the ICHEIC process?
Are the lists still available?
Where are they available?
Would it be beneficial to make the lists more widely available and
publicize them again?
Answer. Please see responses above. As already noted, the list
remains public and widely available, as ICHEIC arranged long ago for it
to remain so and posted on Yad Vashem's website at www1.yadvashem.org/
pheip/.
Question. How do you respond to assertions made at the hearing that
the Holocaust-era insurance market with respect to likely victims might
be valued at $17 billion?
Answer. Please see earlier response about lack of reliability of
the far lower estimates of Holocaust-era insurance market. Given the
lack of reliability of those estimates, it goes without saying that the
$17 billion figure should carry no weight whatsoever, and has never had
any justification, to the best of my knowledge.
Question. There is an ongoing feeling on the part of some survivors
and their heirs that the insurance companies have not been entirely
forthcoming with the information in their files that would illuminate
the extent of Jewish policyholders or the extent of their cooperation
with the Nazi regime. This feeling is further heightened by the
inaccessibility of the ICHEIC records that have been turned over to the
Holocaust period for many years. In response to these concerns, it has
been suggested that if the companies and the countries that signed
executive agreements were more forthcoming with information and made
additional disclosure, such actions would provide reassurance to
critics and allay concerns that information has been hidden.
How do you respond?
Can you identify steps that could be taken now by companies to make
additional disclosures?
Why are the ICHEIC records at the U.S. Holocaust Memorial Museum
off limits for such a long period of time--unavailable to
researchers and others who might find the records valuable?
Answer. First, my response with respect to audits should address
the extent to which insurance companies within our process have
identified and made available any and all information relevant to
holocaust victims, survivors, and their heirs, and the extent of their
cooperation with the Nazi regime. This criteria was embedded within our
audits, conducted by established internationally recognized third party
auditing firms. The results were then affirmed by the Commission's
Audit Mandate Support Group, which included representatives of the
survivors' organizations and the regulators.
Next, there is evidently confusion with respect to ICHEIC records
that were provided to the U.S. Holocaust Memorial Museum and are
publicly available there, and personal files of individuals who filed
claims with ICHEIC, which were archived at the Museum. The terms of the
agreement between ICHEIC and the museum were proposed and explained
generally at ICHEIC's concluding meeting on March 20, 2007, and are
available on the ICHEIC website. Under this agreement, the museum
maintains and hosts the ICHEIC web site (www.icheic.org); it maintains
ICHEIC key documents and research database in its library and makes
them available to visitors to the library. These documents include key
policy decision memoranda as well as meeting minutes produced over the
lifetime of the organization, as well as the research information that
ICHEIC culled from its work in archives across Europe.
With respect to individual claimants' files, applications and
appeals, the museum maintains these in its archives. Given that these
documents contain personal and sensitive information, this material
must be archived for a period of fifty years. In reaching this
agreement, ICHEIC sought legal guidance from privacy law experts, who
reviewed the releases that individuals signed when they filed with
ICHEIC and recommended that based on the strong commitments made by
ICHEIC regarding data confidentiality and use of data only for the
limited purpose of investigation/claims processing, combined with
relevant data protection laws, ICHEIC would need to obtain specific
consent from claimants prior to sharing of any claimant data with a
third party. Given ICHEIC's 90,000+ claimants, the costs in March 2007
of obtaining such specific consent were estimated in the millions, and
the more prudent outcome was deemed to be archiving for the fifty-year
period (recommended given range of ages of individuals filing.) The
legal analysis provided in summary form is as follows:
ICHEIC explicitly indicated that the information would not be used
for any purpose other than claims purposes. Specifically, individuals
were informed through a fair collection notice posted at the Web site
that ``[n]o information will be given/sold to any private
organization.'' Further, in the Declaration of Consent, which is the
key document that individuals were required to sign in providing their
claim information, ICHEIC promised that data would be ``used only for
these investigations and otherwise remain confidential.'' In addition,
ICHEIC represented in its FAQ regarding the Declaration that other than
giving claimant information to insurance companies and relevant
organizations, including archives, ``we will not send your claim form
to any other person or organization without your permission,'' which
``is a requirement of European data protection laws.'' \3\
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\3\ As used in the FAQs, the term ``archive'' refers only to an
organization that would store the claimant data on behalf of ICHEIC and
not any organization that would use the data for its own purposes. The
reference to ``archives'' in the Declaration of Consent refers only to
organizations from which ICHEIC obtained additional information to
supplement claims data.
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__________
Responses to Additional Questions Submitted for the Record
by Senator Bill Nelson to Anna Rubin
Question. 1. Estimates on overall unpaid valuation of insurance
claims range from approximately $3 billion to $18 billion or $300
billion.
How do you account for the disparities in valuation?
Are there valid reasons to prefer one figure over another?
Are there standard statutory or common law methods applied to value
claims that are many years old?
Answer. Calculating the present-day value of historic financial
instruments is a complex undertaking under the best of circumstances,
as the final sum depends on a variety of factors, such as the base sum
(e.g. nominal value of insurance policies versus premium income), and
the methods used to calculate a present-day value (e.g. consumer-price
index; thirty-year Treasury bond yields). The valuation of pre-World
War II European financial instruments such as insurance policies, bank
accounts, and stocks, is additionally complicated by the economic
upheavals of the Great Depression and the post-World War II period,
which resulted in hyperinflation and currency devaluations.
Since 1997 the HCPO has been working on matters of restitution and
has seen first-hand the difficulties of trying to assign an overall
present-day value to the European insurance market. Given the ravages
of war and the passage of time it is difficult, if not impossible, to
assess how many Holocaust-era insurance policies remain unpaid: the
records of many companies' branch offices were either destroyed during
the war or confiscated by Soviet troops. Moreover, as companies did not
distinguish policyholders by religion, sexual orientation, or political
affiliation when issuing insurance policies, particularly in the pre-
Holocaust period when most of the insurance policies in question were
issued, it is hard to determine which policies were owned by
individuals subjected to Nazi persecution. Finally, even where records
are available, it is not always possible to know how many policies
lapsed because of non-payment of premiums during the straitened
financial circumstances faced by many people during the Depression
years, or were otherwise reduced (by loans, or by the conversion into
premium-free policies from the original insured sums).
The HCPO is unable to opine on the methods used by others to obtain
the proposed estimates on the valuation of unpaid insurance claims ($3,
$18, or $300 billion) and therefore cannot evaluate the accuracy of
these figures. However, using the direct premium income of insurance
companies in 1936, a representative prewar year, the HCPO can provide
both information about the market as a whole and a context for viewing
restitution efforts to date. (See, Appendix 1: HCPO Analysis of the
1936 European Life Insurance Market).
It should also be noted that the valuation of prewar claims for
financial instruments has been a matter of negotiation between numerous
parties and the method chosen has varied by country and claims process.
For example, claims for insurance polices issued in Germany are valued
in accordance with the German Federal Law for the Compensation of the
Victims of National Socialist Persecution (Bundesentschaedigungsgesetz
or BEG).
Alternatively, the Claims Resolution Tribunal (CRT) applies a
valuation method in compliance with the settlement agreement in the
Holocaust Victims Assets class action litigation. In re Holocaust
Victim Assets Litig., 105 F. Supp. 2d 139 (E.D.N.Y. 2000). Claims
submitted to the US Foreign Claims Settlement Commission of the
Department of Justice were valued using still another method. And this
just names a few possibilities.
Simply put, we believe there is no one way to calculate the
present-day value of Holocaust era assets; however, all valuation
methods employed by claims processes and organizations strive to
produce the current value of a given asset and when necessary apply
presumptions (e.g., average values when the actual value is unknown) to
obtain the most advantageous offers for claimants.
Question. In his written testimony, Roman Kent emphasized that
``the companies which participated in [ICHEIC] did not represent the
entire, not even the majority of the Holocaust-era European insurance
market.''
What percentage of the Holocaust-era insurance market did the
ICHEIC process account for?
For that part of the market not covered by ICHEIC, how much was
covered by eastern European companies that were nationalized
and have no traceable successors?
How much was covered by companies or successor companies still in
existence today?
Answer. The HCPO's research suggests that over 85% of the companies
doing business in Europe in 1936 were covered by the ICHEIC process.
For a more detailed breakdown, please refer to Appendix 2: HCPO
Analysis of ICHEIC Member Companies' and Partner Entities' Coverage of
the Relevant Insurance Market.
The market covered by the ICHEIC process includes Eastern European
companies that were nationalized or liquidated after World War II and
have no present-day successors. ICHEIC's humanitarian claims process
(the 8A2 process) covered claims for policies issued by such companies,
which comprised approximately 3% of the 1936 market.
A small number of companies (0.5%) present in the 1936 market which
are still in existence or have successors still in existence today did
not participate in the ICHEIC process. For example, Prudential plc
(based in the United Kingdom) covers policies written during the
relevant period by its Polish subsidiary Przerzornosc, and has
established its own claims process.
Question. My understanding is that the prewar insurance market is
an area that the HCPO continues to research and analyze. Can you please
provide any additional information you might have developed on the
prewar insurance market during the course of your research?
Can you explain the content and significance for this Committee of
the pie chart and table showing the 1936 Insurance Market for
Nazi Occupied Continental Europe and Switzerland?
Answer. The HCPO's research used historical data to generate
information on market share and on the relative sizes of different
domestic markets rather than to assign a current value to the
historical market. Determining present-day values for financial
instruments is a subjective exercise that is heavily dependent on the
method chosen for valuation. Market share, however, does not depend on
the choice of method used to calculate present-day values, as it
measures percentages, rather than absolute figures. Analyzing market
share provides a tool to determine the comprehensiveness of restitution
efforts both past and present, while studying the size of the market as
a whole provides a perspective on the number of potential unpaid
Holocaust-era policies, i.e. the smaller the market, the fewer policies
overall, and therefore, the fewer policies that potentially remain to
be paid today.
To take one example, Poland, the most populous country in Eastern
Europe other than the USSR, had one of the smallest markets, both in
terms of market share and per capita insurance. In 1936, the total
Polish life insurance market was comprised of 257,685 policies covering
a population of 32 million. It is, therefore, unlikely that there are
hundreds of thousands of still-unpaid Polish life insurance policies.
To provide a snapshot of the total pre-war European insurance
market, the HCPO compiled statistics on direct premium income (the
industry standard used to measure market share) in 1936. The resulting
chart illustrates that the domestic German market was by far the
largest in continental Europe, comprising nearly 50% of the whole. In
contrast, the domestic markets in other Central and Eastern European
countries, even in Czechoslovakia, the most industrialized of those
states, were significantly smaller, both in absolute terms and relative
to population. To provide a further contrast, the US, with a population
less than half the size of the continental European population, had an
insurance market four times as large. Please refer to Appendix 1: HCPO
Analysis of the 1936 European Life Insurance Market for additional
information.
Question. In your testimony you provided copies of correspondence
between you and the National Association of Insurance Commissioners
(NAIC) regarding the ongoing role of the New York Holocaust Claims
Processing Office in assisting survivors and their heirs with filing
claims that the ICHEIC companies have agreed to accept and consider
under relaxed standards now and forever. Since the hearing have there
been further developments with respect to the office undertaking this
role?
Does the office have the authority and resources necessary to
perform this role of facilitator and clearinghouse?
If a claimant wasn't satisfied with the results your office
achieved, would that claimant be able to pursue the claim in
State court?
Will there be a cost to the federal Treasury to this arrangement?
Is congressional action required or desirable in order for the
agreement to take effect?
Answer. The HCPO was created by Executive Order in 1997 to assist
individuals of all backgrounds obtain a measure of just resolution for
the theft of property during the reign of the Nazi regime. Since
inception, the HCPO has functioned as a liaison between Holocaust
victims and their heirs and companies, banks, claims organizations and
other entities to aid with the submission and management of claims. As
such the HCPO has the authority to continue to function as a
facilitator and monitor of Holocaust-era asset claims.
Discussions and negotiations are currently underway between the
HCPO, the Banking and Insurance Departments of the State of New York
and the NAIC to explore mechanisms to ensure that insurance claims
submitted to former ICHEIC member companies as well as members of the
German Insurance Association are being handled in accordance with
ICHEIC's relaxed standards of proof and to publicly report our
findings.
At present the HCPO is jointly funded by the Banking and Insurance
Departments of New York State. Under the proposed working arrangement
between with NAIC and the HCPO, the NAIC will provide additional
financial support for the HCPO's monitoring and reporting efforts with
respect to insurance claims. This will address any needs for additional
resources and funding. (The HCPO currently maintains a staff of eight
professionals who utilize their unique skills to advocate on behalf of
claimants. Additional staffing needs are unknown at this time.) The
federal Treasury would incur no costs for an agreement between the HCPO
and the NAIC to move forward. Neither is congressional action required
and in fact may complicate the approval process.
Filing a claim with the HCPO does not preclude a claimant from
simultaneously or subsequently pursuing alternative means of redress,
including legal.
Question. Of the Holocaust-era insurance claims your office has
already handled, do you know how many claimants were not satisfied with
the results your office achieved? Do you know of any unsatisfied HCPO
claimants who later brought action in court?
Answer. The HCPO has assisted thousands of Holocaust victims and
their heirs obtain resolution of their claims by: demonstrating that
the assets sought had been previously compensated via a postwar
restitution or compensation proceeding; showing that the claim has
otherwise been handled appropriately (i.e., in accordance with the
original owners' wishes); or obtaining a decision from a company or
claims agency.
Any discontent voiced by HCPO claimants has usually been directed
toward the agency assessing and deciding claims and not toward the
HCPO, which acts as a voice for Holocaust victims and their heirs.
Claimants know that the HCPO zealously advocates on their behalf and
does everything within its power to assist and obtain the most
advantageous result possible.
While several HCPO claimants have been involved in lawsuits related
to Holocaust-era asset losses, we can neither speak to the claimants'
motivation for participating in litigation nor as to when the suits
were filed, i.e. before or after submitting a claim to the HCPO.
Claimants seem to have been satisfied with the support and assistance
provided by HCPO staff. (See, Appendix 3: Letters from HCPO Claimants.)
Question. Your testimony indicates that all ICHEIC participants
have agreed to participate in an ongoing monitoring process like that
proposed by the NAIC. Do you know of any insurers doing business in the
New York (or elsewhere in the U.S.) that are not ICHEIC participants,
but are potentially liable for Holocaust era insurance claims?
Answer. As stated in my testimony, at ICHEIC's final meeting in
March 2007, all ICHEIC member companies as well as members of the
German Insurance Association, through its partnership agreement with
ICHEIC, reiterated their commitment to continue to review and process
claims sent directly to them in accordance with ICHEIC's relaxed
standards of proof.
It has been the HCPO's experience that all companies potentially
liable for Holocaust-era asset claims are at least willing to consider
such claims. The HCPO is unaware of any insurance companies doing
business in the United States that are unwilling to review possible
claims for Holocaust-era policies.
Question. Do you have any case studies (samples from the HCPO
claimant population) that include examples of anecdotal claims settled,
demonstrate the relaxed standards of proof, and HCPO archival research?
Answer. Please refer to Appendix 4: HCPO Case Studies, Group 1
where we have described 5 cases. [The case studies submitted with this
response have been maintained in the committee's permanent files.]
Question. Can you please provide some examples of both anecdotal
and documented cases that the HCPO has assisted to resolve either
directly, through the ICHEIC process, or one of the other organizations
currently handling insurance claims?
Can you please include a description of the valuation used to
calculate offers extended to claimants?
Answer. Please refer to Appendix 5: HCPO Case Studies, Group 2
where we have described 5 cases. [The case studies submitted with this
response have been maintained in the committee's permanent files.]
__________
Responses to Additional Questions Submitted for the Record
by Senator David Vitter to Hon. Lawrence Eagleburger
Question. Many of the insurance companies located in Central and
Eastern European countries were nationalized, went bankrupt, or have,
for other reasons, ceased to exist. Despite the fact that these
companies issued thousands of insurance policies during the Holocaust-
era, neither the governments which took over these companies nor their
successor governments have taken the steps necessary to implement a
restitution process to repay survivors for their insurance claims.
As former Secretary of State and Chairman of ICHEIC and former
Special Representative to the President and Secretary of State on
Holocaust-Era Issues, both of you have extensive experience in bringing
together governments and companies to work toward a fair and
appropriate process through which reparations could be made to
survivors. Given your respective backgrounds, as we look toward the
future and the next steps in the process, would you:
First highlight some of the difficulties in working with the
Central and Eastern European governments, if you had the
opportunity to do so while in your former positions, and then;
If litigation is not the best way to secure reparations from less
than forthcoming countries in Central and Eastern Europe, what
would you recommend as possible avenues toward bringing some of
these governments to the table and convincing them to develop
and implement into law a fair and effective reparations
process?
Answer. First, I would remind that through ICHEIC we sought to
address on the immediate level the needs of claimants, by setting up
the humanitarian claims payment effort. Through this program, we used
ICHEIC evaluation standards (and humanitarian funds from ICHEIC
companies and the German Foundation and German insurance association)
to pay claims on liquidated, nationalized, or no known successor
companies on which we had identified documents of one form or another.
A great number of these claims were necessarily for Eastern European
companies, given the history of that region. Should those governments
have provided some of the approximately $31 million in compensation
that ICHEIC companies and the German Foundation/insurance association
provided in their stead? Yes. Are there routes to go after it
retroactively? ICHEIC designated the Claims Conference to try to do so,
and to put whatever funds it succeeded in gaining toward broader
humanitarian purposes for Holocaust survivors and their heirs.
Why are so many of these companies from this part of Europe? In the
newly Communist states of Eastern and Central Europe (Poland,
Czechoslovakia, Romania, Hungary, Bulgaria) nationalization of private
enterprises, including insurance companies, began almost simultaneously
with liberation by the Red Army. As a result, insurance companies lost
control of their assets and claimants were largely precluded from
making claims on pre-war policies. The speed and mechanics of
nationalization varied by location, but the effect for claimants was
the same.
After Joseph Stalin's death in 1953, some East European governments
concluded agreements with the United States and other Western countries
to compensate for losses suffered by former nationals now living in the
West. These agreements provided for lump sum payments by the
governments of these countries to the Western government in question;
the former property-owners then applied to their own governments for
redress. Although some Jewish insurance policy holders received
payments through these plans, the lump sums provided by the East
European governments were often not large enough to compensate
adequately for the property lost.
Certainly, the only viable route toward achieving the result we all
desire is through negotiation at this point. Eastern Europe went
through a period of nationalization and liquidation post-World War II
not as a matter of choice for many of these governments or peoples.
Litigation here is not a promising route as I see it--there is no
company to sue because one no longer exists. Given conditions at the
time, and for these countries, it makes it a greater challenge for us
to argue this as a matter of black and white. So this is why I see a
negotiated outcome as the only one available.
Question. If litigation is not the best way to secure additional
reparations for those who did not receive sufficient compensation or
who were denied a claim through the ICHEIC process, what would you
recommend?
Answer. As ICHEIC member companies and members of the German
Insurance Association have agreed to continue to review claims for
Holocaust-era insurance policies, under ICHEIC's relaxed standards of
proof, individuals who believe they have a claim for an unpaid
insurance policy should submit a claim to the appropriate company for
review and assessment.
Question. Although ICHEIC has closed, some European insurers have
said that they will continue to accept and honor legitimate claims.
This implies to me that there are still survivors and families that
have outstanding claims.
In your opinion, why do you think these individuals were served
earlier through the ICHEIC process?
Answer. I assume you meant to inquire about why these individuals
who would apply now were not served through the ICHEIC process.
First though, I would note that European insurers said they would
continue to accept and honor legitimate claims as part of their
commitment to the ICHEIC process at ICHEIC's concluding meeting in
March 2007, a commitment they reaffirmed in writing for former ICHEIC
Vice Chairman Diane Koken before her February testimony to the House
Financial Services Committee. All ICHEIC members believed that through
our process we had captured the vast bulk of outstanding claims, given
our extensive global outreach efforts and the several years our process
had been open. That said, companies decided in the end to leave their
doors open to additional possible claimants to come to them directly,
after ICHEIC closed.
The additional claimants who have filed since might be those
individuals who for one reason or another was out of reach of all
previous communications and so failed to timely file. We also have
situations, particularly with elderly claimants, because the ICHEIC
process went on for several years, because some of the ICHEIC companies
have been involved in litigation, and now, with this new legislation as
well, where individuals who already have filed and been processed
through ICHEIC may file a duplicate claim, not realizing that in fact
they are likely to get the same answers they have received at an
earlier time.
Question. If some people did not receive notice of the ICHEIC
process, why do you believe that happened?
Answer. I cannot answer hypotheticals. I can only describe, again,
the comprehensive nature of ICHEIC's outreach. From its inception,
ICHEIC devoted great effort and significant resources to identifying as
many potential claimants as possible and having them file a claim, even
when these potential claimants lacked detailed information regarding
their family's insurance coverage.
To do this effectively, ICHEIC sought to define the target
audience. The challenge was that potential claimants could be found in
all parts of the world. Working closely with the same experts who had
conducted outreach for the Swiss Bank Settlement's Claims Resolution
Tribunal, ICHEIC made extensive use of free and paid media. These
outreach initiatives included a call center and grassroots efforts
through global Jewish communal and survivor organizations and
representatives of other victim groups (e.g. the Jehovah's Witnesses
and the Roma and Sinti communities in Central Europe).
ICHEIC distributed packets to survivor communities and Jewish
organizations that included press releases, posters, and guidance on
how to request a claim form (through the 24-hour ICHEIC call center),
and how best to complete the claim form. In addition to working with
grassroots organizations, ICHEIC supported the U.S. insurance
regulators' efforts to reach out to claimants and assisted claimants in
filling out ICHEIC claim forms and understanding how their claim or
claims would be handled.
To supplement its work with survivor and Jewish groups and the
regulatory community, ICHEIC launched a global press and media campaign
to publicize the process. ICHEIC ran ads in major and parochial media
markets and capitalized on as much free media as outside institutions
were willing to provide. It did this not only at the launch, but also
when announcing the last deadline extension, alerting potential
claimants via all means available including a live webcast with
Chairman Eagleburger.
Thanks to the success of its outreach, ICHEIC received more than
100,000 claim forms from more than 30 countries in more than 20
languages in the five years that it accepted claims.
Question. What could be done in the future to help make certain
that people do receive notice of a restitution process?
Answer. I would not add to ICHEIC's extensive efforts. We did
everything we could have done.
__________
Appendix II.--Additional Material Submitted for the Record
Prepared Statement of Hon. David Vitter, U.S. Senator From Louisiana
First, I would like to take a moment to thank the chairman and
Senator Coleman for their work on this important issue. While I am
normally ranking member on this subcommittee, given Senator Coleman's
long time involvement and great work on this important issue, it is
appropriate that he take the lead with Senator Nelson for this hearing.
I am particularly interested in what the experienced and
knowledgeable witnesses that are testifying today may have to suggest
to us as we look at ways to ensure that all Holocaust survivors and
their families are provided fair compensation and a measure of justice
for the atrocities visited upon so many innocents during the Holocaust
era in the post-ICHEIC period.
There has been a great deal of work done by many dedicated people
to get us to the point where we find ourselves today. Holocaust
reparations, including compensation for unlawfully seized insurance
policies, has transcended politics and national boundaries, bringing
together governments, private companies, lawyers, and the organizations
representing survivors of the Holocaust, and the families of those who
no longer had a voice to speak out against the horrors committed
against them. Their tireless work has helped restore millions in stolen
and lost insurance funds to thousands of claimants.
But past successes do not necessarily imply that all of the work is
finished. Each effort to obtain compensation for survivors and their
families--actions taken by Western European governments in the
immediate aftermath of the war; renewed efforts after the fall of
communism in Eastern Europe; the ICHEIC process--has resulted in new
information, new names, new leads, even as any outstanding claims are
settled. And, while the ICHEIC process has been very helpful, we cannot
allow ourselves to become complacent. We must be certain that everyone
is given a voice and that as many claims as possible are settled.
As with all difficult issues, there are many views and opinions and
proposals on how best to move forward. Working through archived policy
records, particularly in light of destroyed and incomplete records and
policies surrendered at the demand of the Nazis or cashed in as a last
desperate measure, is a complicated matter that demands deliberate,
careful consideration. We must be careful of unintended consequences,
and we must ensure that any action taken here in Washington does not
inadvertently limit progress or shut some individuals out of the
reparations process at the expense of others.
And finally, through all of this, it is most important that we not
lose sight of the reason we are here today--the survivors of the
Holocaust, the victims, and their families. This is not a discussion
just about numbers, cash values, or meeting some legal standard of
proof of ownership. This is about ensuring that justice is served. The
survivors of the Holocaust must not only receive fair compensation for
seized insurance claims, but it is also our responsibility to make
certain that they are treated with the dignity, respect, and
sensitivity that they deserve. Just as it is our duty to ensure that
the restitution process preserves and honors the memory of those who
are no longer with us.
Material Submitted by Organizations and Individuals
in Support of HR 1746
Letter From Members of the Florida Congressional Delegation to Attorney
General Janet Reno
Congress of the United States,
Washington, DC, October 25, 2000.
Hon. Janet Reno,
U.S. Attorney General,
Department of Justice, Washington, DC.
Dear Madame Attorney General: We understand that the Department of
Justice has filed a brief in the Ninth Circuit Court of Appeals arguing
that the California Holocaust Victims Recovery Act (HVIRA) would
interfere with the Federal Government's role in dealing with
outstanding insurance policies held by European insurance companies
doing business in the United States. We are concerned about the serious
implications this action has for the interests of Holocaust survivors
and their heirs under Florida's Holocaust Victims Insurance Act. We
believe that congressional action will be required to ensure meaningful
recovery of insurance policies for Holocaust victims and heirs if the
Courts agree with the Department's position. Therefore, we are seeking
your views on our legislative proposals to protect and advance
Holocaust victims' insurance claims.
We are concerned about the Department's position for several
reasons. First, the U.S. Holocaust Asset Commission Act of 1998, Public
Law 105-186, 112 Stat. 611 (1998), calls for the Commission to ``take
note of the work of the National Association of Insurance Commissioners
(NAIC) with regard to Holocaust-era insurance issues, and to report on
precisely the kinds of information the California legislation asked to
be reported by the insurers. If the Justice Department is correct that
the states cannot elicit the information we have sought through the
NAIC, then the United States has effectively lost all leverage in its
efforts to account for one of the largest categories of theft from
Holocaust victims.
We are also concerned because, under present circumstances, various
international efforts have not effectively advanced holocaust
survivors' claims to unpaid insurance policies. Recent reports from
NAIC members concerning the International Commission for Holocaust Era
Insurance Claims (ICHEIC) reveal a very disturbing situation. Companies
that are members of ICHEIC have approved fewer than 10% of the
``strongest'' claims submitted by State Insurance Commissioners under
the ``Fast Track'' process. Instead of applying ``relaxed'' standards
of proof as called for in the founding Memorandum of Understanding
(MOU) that established the commission, the companies (who, we are
surprised to learn, make the initial decision themselves), are in fact,
applying very stringent standards.
Under the ``regular track,'' the ICHEIC has received approximately
47,000 claims. As of August 31, only 10,700 of these had been
distributed to the companies. The companies have made a total of 38
offers under the regular track program so far, and have rejected over
500 of these claims. Companies have paid out between $2 million and $3
million in claims so far, a minuscule fraction of the billions owed.
This figure is low even in comparison to the amount of money the
companies and the ICHEIC have spent on staff, travel, and the like.
The ICHEIC has also apparently failed to deliver so far on basic
elements of a valid process. After 20 months and the expenditure of
untold millions of dollars in administrative expenses, there is no
appellate process in place and no information on how the ICHEIC
auditing process is being used to insure a thorough and neutral review
of the sweeping denials. Furthermore, the U.S.-German Executive
Agreement establishing the German Foundation Fund has further
endangered the viability of these claims by calling for the dismissal
of class action insurance lawsuits before credible auditing and appeals
processes are in effect.
If States are limited in enforcing their own legislative acts
requiring insurers doing business in their states to disclose
information about Holocaust-era policies, and providing various avenues
of relief for claimants in their courts, then tens of thousands of
American Holocaust survivors and their heirs will not be able to obtain
meaningful information about family policies, much less recover the
funds improperly withheld by these companies for so many decades.
ICHEIC does its work in secret so the public and even Congress are
not aware of the status of its activities. We have also been very
disturbed to learn that even the State Insurance commissioners who
serve on the ICHEIC believe they do not participate in important ICHEIC
decisions. We are concerned that the Justice Department is enabling a
nontransparent process controlled by insurance conglomerates with huge
exposure and influence to become the de facto substitute for effective
state regulation of insurance claims, in the tradition of the McCarran-
Ferguson Act.
Perhaps of greatest concern is that the disclosures of policyholder
information, which was to be the central mission of the ICHEIC, and
which the California and other state laws are designed to facilitate,
has not occurred in a significant way. After nearly 2 years, an
unacceptably small number of insurance policyholder names have been
disclosed to facilitate the filing of claims. Yet the Department of
Justice says, and we must face the possibility that the Courts may
agree that States cannot require companies with business links in their
states to disclose such crucial information which Holocaust victims and
their heirs have virtually no other means to obtain.
Consequently, we are planning to move ahead with legislation to
ensure that insurers are held accountable, and that survivors and heirs
are compensated for policies sold to individuals who became victims of
the Holocaust. Enclosed are early versions of two bills many of us
sponsored or supported, the Holocaust Victims Insurance Act (H.R. 126),
and the Justice for Holocaust Survivor Act (H.R. 271), for which we
would like your comments in light of current developments.
Sincerely,
Signed by the following Members of Congress: Peter Deutsch, Ileana Ros-
Lehtinen, Robert Wexler, Lincoln Diaz-Balart, Carrie Meek, Mark Foley,
Alcee Hastings, Clay Shaw.
Statement Submitted by Sidney Zabludoff
Thank you for allowing me to present this written testimony on
Holocaust era insurance restitution after the International Commission
of Holocaust Era Insurance Claims (ICHEIC). My basic conclusion after
examining the issue for more than 10 years is that extraordinary events
require extraordinary resolutions. Clearly, the murder of two-thirds of
continental European Jewry and the confiscation of nearly all Jewish
assets by the Nazis and their collaborators was such an event. Despite
such extraordinary circumstances only about 20 of the stolen property
and other assets has been returned through 2007.\1\
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\1\ For more details please see my articles from the Jewish
Political Studies Review; ICHEIC: Excellent Concept but Inept
Implementation (Spring 2005); Restitution of Holocaust-Era Assets:
Promises and Reality (Spring 2007). Both articles can be found at the
website of JCPA.org. On the home page and JCPA projects click on
``Jewish Political Studies'' and look for the date and title of the
article.
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In case of life insurance held by Holocaust victims the results are
similar. Up to the start of ICHEIC in 1998 some 20 percent of the
minimum fair value of policies was paid. During ICHEIC's 10 year effort
only 3 percent was added. Shown below are the percentages of
outstanding amount paid during the ICHEIC years by participating
insurance companies and countries:
Allianz 1
AXA 2
Generali 6
Winterthur 1
Zurich 3
Austria 3
Germany 5
Two bold actions could be taken to help rectify this sizable and
unconscionable shortfall. They are passing HR 1746 and ensuring that
the remaining unpaid stolen assets are used to assist needy Holocaust
survivors.
HR 1746 would help restore to Holocaust victims or their heirs the
value of policies never paid by insurance companies or countries.
Conservatively estimated, this amounts to $18 billion in 2007 values.
It is conservative because it uses the 30 year U.S. Government bond
yield to move from the pre-Holocaust dollar value to the 2007 value,
whereas insurance company portfolios earn a much higher yield because
they contain stocks, corporate bond, and real estate. It also should be
noted that my estimates of pre-Holocaust policy values are consistent
with the Pomeroy-Ferras Report published by ICHEIC. That report makes
no attempt to determine the current value of unpaid life insurance.
HR 1746's important first step is to ensure that the names of
policyholders are published. ICHEIC started this process and some
500,000 names of policyholders were placed on its website (now
available on the Yad Vashem website). Germany provided about 80 percent
of these policyholder names. Some 360,000 resulted from an ICHEIC
agreement with the German Foundation and 42,000 were developed via
ICHEIC archival research. In the ICHEIC context the published German
Foundation list was of little use, since it was made public only a few
months before ICHEIC's filing deadline. Even so, Germany has largely
met its obligation to provide policyholder names under HR 1746.
For the other countries, the number of Jewish policyholders
published is minimal. The most notable shortcomings are in Hungary,
Poland, and Rumania, all of which had large pre-Holocaust Jewish
populations. Even in most west European countries the number of
published names is extraordinarily small. To deal with this
shortcoming, non-German archives need to be further examined and, most
importantly, companies doing business outside of Germany should publish
the names of their Holocaust era policyholders. HR 1746 has provisions
to do both.
The proposed legislation also provides victims and their heirs a
means to receive a minimum fair value for policies taken out in the
pre-Holocaust period. This recognizes that there is still a long way to
go for life insurance companies to meet their Holocaust era
obligations. Indeed, less than a quarter of the minimum fair value of
outstanding policies was paid during the post-war and ICHEIC years.
A welcomed first step toward increasing that percentage has been
proposed. That is all ICHEIC companies and the German insurance
association (GDV) presumably have agreed to accept further claims using
the ICHEIC valuation undertaken by a NY State office. But as discussed
on page 4 there remain many questions about the effectiveness and
fairness of ICHEIC rules, valuation calculations, and its claims
process. Given these shortfalls, why shouldn't claimants who have not
signed a release when they settled their claims be able to take their
cases to court? this is not a class action suit in which all claimants
are paid a specified amount. Even in these cases, individuals are
allowed to choose whether they join the class action suit or take
separate actions. Most lawyers will not take cases in which the
claimant lacks evidence. Even for those tat do so, the judge would
dismiss the case as frivolous. The bottom line is why shouldn't
claimants trying to recover Holocaust era insurance policies have the
same judicial rights as most others. That's what HR 1746 provides.
A number of key issues also remain:
Germany insisted upon a method to determine a policy's current
value that produces an amount that is only about 15 percent of
similar valued policies paid under ICHEIC guidelines for all
other west European countries. The extraordinarily low German
payments are caused mainly by the inclusion of the 1948 German
monetary reform in their asset restitution systems. At that
time, the Allied powers insisted on a monetary change in which
10 Reichsmarks were made equivalent to one Deutschmark. This
was done in order to save the post-war German economy from the
vast deluge of Reichsmarks the Nazi regime had dumped on the
market to pay for the war effort. Indeed, without this Allied
action, the German economic miracle that followed would not
have taken place or would have been much delayed. The problem
is that the Jews, who were not responsible for the Nazi war
effort, along with many non-Jewish Germans, had to suffer in
terms of reduced values of assets for the war-time economic
policies of the Nazi regime. The non-Jewish Germans, however,
benefited from the economic miracle while few Jews were left.
If the German companies were paying at the rate every other
European country was paying, it would have paid ICHEIC
claimants about $500 million rather than the $74 million it
actually paid.
Calculating the current value of Holocaust era policies in
dollars is necessary since the dollar (along with Swiss franc)
is the only major currency that did not undergo substantial
turmoil in the post World War II years. Indeed, the Foreign
Claims Commission of the United States provides a strong
precedent to convert foreign currencies into dollars at the
time of confiscation. As such, it excludes currency changes
that occurred between the time of confiscation and claim
payment, such as the 1948 German monetary reform. An example is
Commission claim #CZ-2,832, which was decided during the year
ending June 1961. It involved a Jewish family who owned
property and financial assets (including life insurance
policies) in Czech Sudetenland which was occupied the Nazis in
1938. The assets were soon taken over by the Nazis. The
decision calls for paying the claims at a ``sum converted into
United States Dollars at the 1939 exchange rate of 2.4
Reichsmarks for 1 United States Dollar . . .'' \2\
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\2\ Foreign Claims Settlement Commission of the United States:
Report to Congress for the period ending June 30, 1961; page 168.
The east European valuation rate set by ICHEIC amounts to only
about one-third of the conservative realistic current value.
This rate reflects the companies' argument that they were
nationalized. They did, however, receive partial repayment from
east European governments. More importantly, many insurance
contracts indicated that payments to policyholders were backed
by company funds outside the country in which the policy was
---------------------------------------------------------------------------
written.
Austria, which had by far the poorest post-war insurance
restitution record in western Europe, allocated $25 million in
2001 for repaying outstanding policies. The result is that it
reimbursed claimants only about 15 percent of the ICHEIC
valuation. ICHEIC discussed paying the difference but nothing
was resolved.
Holland never paid for small-valued burial policies, a form of life
insurance. There were some 8.5 million such policies in a
country with a pre-war population of 10 million. In current
prices, the Jewish portion of these burial policies would be
valued at some $300 million.
Switzerland has paid only 17 claims other than those from Germany
and Austria for some $90,000, according to ICHEIC statistics.
Swiss company sales of life insurance elsewhere to Jews in Nazi
occupied Europe amounted to some $440 million in 2007 prices.
In addition, Swiss companies played a major role in the
European reinsurance market and thus had a portfolio of Jewish
policies likely amount to $2 billion in 2007 prices.
Belgium paid one policy worth $15,000 according to ICHEIC
statistics even though it had some $120 million (2007 prices)
still unpaid in the case of Jewish life insurance.
AXA France--an ICHEIC company--paid 131 policies worth some $5
million according to ICHEIC statistics. Non-ICHEIC companies
operating in France were supposed to pay claims via the Drai
Commission. It is not known how much of the $172 million (2007
prices) still owed by non-ICHEIC French companies to Jewish
life insurance policyholders were paid by the Commission.
In all, for Belgium, France, Holland and Switzerland there is a
lack of information of how much was paid in life insurance
claims between 1945 and 1997 and during the ICHEIC years.
Generali states in court it had a total of 89,000 life insurance
policies held by both Jews and non-Jews in 1936. But based on
hard historical evidence, it had several hundred thousand and
more likely several million. this enormous undercounting raises
serious doubt about Generali's denying claims because it had a
full list of policyholders.
The ICHEIC system rejected claims or paid too little because it
failed to deal with the many unforeseen issues that naturally
arise in any complex restitution process. For example, the only
known original value of numerous policies was at the cast
surrender value which is roughly 25 percent of the face or pay
off value. ICHEIC refused to develop a reasonable methodology
to get from the cash surrender value to the face value. Thus,
the lower cash surrender value was used. In addition, ICHEIC
never dealt with the vast number of non-life insurance policies
although it had pledged to do so in its charter.
The chief reason for such ICHEIC problems were inept governance and
poor management. Governance became akin to secret diplomacy, in which
those who ran ICHEIC relied heavily on dealing only with those who
favored their views while making promises to others that were never
fulfilled or too long delayed. ICHEIC management mainly ignored the
numerous studies pinpointing the serious problem with the claims
process. Judge Michael Mukasey succinctly summed up the problem when he
described ICHEIC as ``in a sense, the company store.'' \3\
---------------------------------------------------------------------------
\3\ In re Assicurazioni Generali S.p.A. Holocaust Ins. Litigation,
228 F. Supp. 2d 348, 356-57 (S.D.N.Y. 2002).
---------------------------------------------------------------------------
But no matter what steps are taken to find claimants, many policies
will remain unpaid. those working on ICHEIC and other restitution
efforts recognized this outcome from the start. This is because whole
families were wiped out by the horrific events of the Holocaust,
leaving only distant relatives with little knowledge of the
policyholders, especially when dealing with events that occurred more
than a half century ago. It was also understood that many records no
longer exist. An example is the extensive search for life insurance
records in Germany. Only about 8 million or a quarter of the 31 million
policies outstanding in the late 1930s was found.
Recognizing this fact, ICHEIC attempted at one time to calculate
the overall value of policies--called the ``top down approach.'' The
companies would then pay the difference between this overall estimate
and the amount actually paid to claimants to a fund that would support
needy survivors and other causes. This approach, however, was forgotten
as ICHEIC proceeded, and only relatively small amounts were provided
for such a humanitarian fund, mostly under the accord with Germany.
Insurance companies failed completely to deal with this issue.
This brings me to my second point. Besides pressing individual
claims, I would suggest an International Remembrance Fund to support
needy Holocaust survivors who are in their autumn years. Currently
there are approximately 600,000 Holocaust survivors worldwide and
actuarial date indicate their number will diminish sharply during the
next 10 years. A review of the available studies indicates that there
are numerous survivors who lack adequate income to meet their daily
living expenses and health requirements. For example, one study of the
United States indicates that the income of more than half the survivors
falls within the poverty or near poverty bracket. My first rough
approximation is that between $20 and $40 billion will be required
during the next 10 years to sustain needy survivors.
Clearly, what is urgently required is an in-depth study to
determine more precisely the likely financial requirements of needy
survivors. This would take into consideration funds they are already
receiving through various governments as well as private assistance.
simultaneously, we must reach a global accord to establish an
International Remembrance Fund. This will require an innovative
financial structure. But again extraordinary measures are essential in
dealing with and extraordinary event such as the Holocaust.
Statement Submitted by The Organization of Forced Laborers Under the
Nazi Occupation, Tel-Aviv, Israel
Our organization unites and represents Holocaust survivors,
children and grandchildren of survivors living in Israel. Wee have
learned from our American peers and relatives about the initiative
undertaken by the U.S. Congress to provide the help, which is
desperately needed by our community 60 years after the end of WWII.
The members of the U.S. Senate Foreign Relations Subcommittee on
Democracy and Human Rights will take up shortly the issue of insurance
policies that were sold to our families prior to WWII but which remain
unpaid. Today, over $17 billion remains in the hands of global
insurance companies who never paid our parents, grandparents, aunts,
and uncles for policies they purchased in good faith at the time of
terror in Europe.
We are signing this petition because we believe that the U.S.
Congress will rectify this injustice. Although we are not American
citizens, we understand that the U.S.A. has always been the leading
force to rely upon for the implementation of justice through all the
years from the victory over the Nazis in WWII until today. It is our
belief that the esteemed Senators and Representatives of the U.S.
Congress will continue this course and support the case of the
Holocaust survivors in time of need.
HR 1746 would require insures who sold policies to European Jews
before WWII that do business in the U.S. to open their records to
survivors and heirs. It would also ensure that Holocaust survivors and
heirs have the access to the United States courts to vindicate their
insurance claims if the companies refuse to settle. The Holocaust
survivor leaders who have testified in Congress have made a compelling
case for this law.
The time has come for us, the survivors and the next generations,
to be heard.
We know there is much discussion about ICHEIC in Congress. To us,
this is irrelevant. ICHEIC helped some but was a bitter disappointment
for thousands here in Israel. There is much sadness and even anger here
among survivors because of the way the ICHEIC treated so many of us. We
were in most cases blocked from information, given broken promises, and
few of us had confidence we received the truth. We believe Congress
should focus on the insurance companies and on the survivors and legal
heirs.
We respectfully request that the United States Congress side with
us, the victims, and our families. We, and our children and
grandchildren, as legal heirs, are entitled to a full accounting and
compensation for the companies' financial crimes. No one who profited
from the Holocaust should be allowed to be the heirs of our loved ones.
Time is very much against us. Far too much time has elapsed
already. Too many survivors have already passed away in frustration and
anger.
Please support the survivors and second generation in of search for
justice. Please ask the Senate leadership to pass a counterpart to HR
1746 so that this law will be obeyed by the insurance companies who are
reluctant to part with the victims' monies. We are counting on you.
David Grinstein,
Chairman.
Shochet Moshe,
Member.
Mordechai Hareli,
Member.
Hanna Hareli,
Member.
Zigmond Brill,
Member.
Mather Dagan,
Member.
Statement Submitted by Generations of the Shoah International (GSI)
petition: holocaust era insurance claims
Please support Holocaust survivors and their descendants search for
justice.
Soon members of the U.S. Senate Foreign Relations Subcommittee on
Democracy and Human Rights will take up the issue of insurance policies
that were sold to our families prior to WWII but which remain unpaid.
Today, over $17 million remains in the hands of global insurance
companies who never paid our parents, grandparents, aunts, and uncles
for policies purchased in good faith at a time of terror in Europe.
HR 1746 would require insurers who sold policies to European Jews
before WWII that do business in the U.S. to open their records to
Holocaust survivors and heirs and ensure access to United States courts
should settlements not be achieved. The Holocaust survivor leaders who
have testified in Congress have made a compelling case for this law.
The International Commission for Holocaust Era Insurance Claims, or
ICHEIC, was created by the insurance industry in 1998 to sidetrack
legislation similar to HR 1746. When ICHEIC closed its doors in March
of 2007, it had paid less than three percent (3%) of more than $17
billion owed to Holocaust victims' families. this result cannot be
acceptable.
The time has come for the survivors and the next generations to be
heard. We ask only for a full accounting of what was stolen from loved
ones and are signing this petition because we believe it is now up to
Congress to rectify this injustice. We implore you, our elected Senator
and Representatives, to support survivors in their time of need.
We ask that Congress require the companies to disclose their
records to survivors and/or their legal heirs, and to disgorge their
ill-gotten profits. Those who profited from the Holocaust should not be
allowed to be the heirs of murdered loved ones.
Time is very much against us; far too much time has elapsed
already. Too many survivors have passed away while awaiting resolution.
Please support survivors and their descendants in the search for
justice. Please ask the Senate leadership to introduce and pass a
counterpart to HR 1746 so we can make this the law of the land with no
further delays. We are counting on you.
[This petition was signed by 72 individuals from the New Jersey/New
York area. The original signature pages have been retained in the
committee's permanent files.]
Statement Submitted on Behalf of The David Family, Milwaukee, WI
Flanner, Stack, Fahl & Bagley, llp,
Attorneys and Counselors at Law,
Brookfield, WI.
May 1, 2008.
Hon. Russell Feingold,
506 Hart Senate Office Building,
Washington, DC 20510-4904.
Dear Senator Feingold: I represent the Estate of David David whose
family includes Holocaust survivors. Mr. David's widow and children are
your constituents. Mr. David passed away in 2004. His great uncle, Aron
Sanel Schapira, was his maternal grandmother's brother. Mr. Schapira
lived in what at the time was Poland but is now a part of the Ukraine
Republic. Mr. Schapira ran a business and so had purchased insurance to
protect both his business and his family. The insurance was purchased
from the Italian insurance company Assicurazioni Generali S.p.A.
(``Generali''). Mr. David's children are the only known surviving
members of this family. Many of the others perished in the Holocaust.
In the mid 1990s, when the area where he grew up became safe for
travel by Jews, Mr. David travelled to the area of his birth and the
place where Mr. Schapira had lived. Through a person he knew in that
area, Mr. David learned that his great uncle kept several valuables
stored in the walls of the house where he had lived. Storage in this
fashion was common at that time and place. The house was still standing
and occupied when Mr. David visited and so, Mr. David asked his
acquaintance to retrieve his great uncle's items. The items retrieved
included a life insurance policy that Mr. Schapira had purchased in
1920. The terms of the policy provide for the payment of benefits to
the bearer of the policy and Mr. David and his family are in possession
if it.
Mr. David knows that his great uncle was alive at the outbreak of
World War II.
Efforts by Mr. David to file a claim for benefits proved futile
even though every effort was made to collect what was due after the
catastrophe suffered by his family. His contacts with Generali proved
futile.
Mr. David then filed a claim with the International Commission for
Holocaust Era Insurance Claims (ICHEIC) on March 20, 2001.
Notwithstanding ICHEIC's rules to respond within ninety (90) days,
ICHEIC response was dated December 22, 2006 offering him $1,000.00.
Generali also responded to him by letter dated May 25, 2005 and denied
the claim because it claimed the policy left its portfolio prior to
1936.
Mr. David then decided to pursue his rights in court but the courts
have said that non-official executive branch statement of interest
revoked his access to U.S. Courts. As one who was personally touched by
the Holocaust, he was mystified and hurt to witness how the American
justice system came to such a confusing and illogical result. It is a
sad day for American justice for Mr. David to have passed away during
this fight of his for simple justice. We believe the District Court is
wrong and are pursuing the claim of the David family in the Second
Circuit Court of Appeals.
There is now legislation pending in Congress that will remove all
doubt and require that insurers who sold policies to Jews before WWII
open their records and be accountable in U.S. Courts for failing to
honor the policies of Holocaust victims. This is no small problem. Over
800,000 life insurance policies of European Jews were in force at the
beginning of WWII with an unpaid value today of $17 billion. In fact
after nine years ICHEIC has only succeeded in paying a tiny fraction of
the total. It paid fewer than 15,000 policies, and less than 3% of the
value ($260 million). However well-intended the process, it failed.
Next week the Senate Subcommittee on International Operations and
Organizations, Democracy and Human Rights of the Senate Foreign
Relations Committee will hold a hearing on the Holocaust insurance
situation. I am writing to ask that you take an active role in
assisting Holocaust survivors recover what the courts have inexplicably
denied them - the basic right to sue an insurance company doing
business in this country that failed to honor an insurance policy it
indisputably sold to the victims of the Holocaust. Although Mr. David
does not know when Aron Schapira died or the circumstances of his
death, he does know that he was alive at the outbreak of World War II.
This is when Mr. David left his home and began his journey to America.
I also am asking that you sponsor and seek immediate passage of
Senate legislation mirroring HR 1746, the Holocaust Insurance
Accountability Act of 2007, introduced by Congresswoman Ileana Ros-
Lehtinen and Congressman Robert Wexler. There are several dozen co-
sponsors in the House, and it passed the House Foreign Affairs
Committee on unanimous consent at the behest of the late Chairman Tom
Lantos.
The bill would allow survivors and heirs to bring an action in the
U.S. Courts against insurers who fail to honor a policy issued before
the Holocaust. The courts so far have held that Executive Branch
statements supporting ICHEIC preclude U.S. citizens such as Mr. David
from being able to sue an insurance company that took advantage of the
Holocaust to keep money paid by Mr. David's family member in good faith
prior to WWII. This is shocking enough, but the courts have also sited
the fact that so far Congress has been silent on the question. So this
is Congress's chance to define Holocaust survivors' rights to make
claims in court against the insurers in question. We cannot believe
that our elected representatives would accept such a denial of rights
to a class of citizens--any citizens but certainly not Holocaust
survivors - who only want the companies to pay what they owe.
HR 1746 will also require insurers doing business in the U.S. who
sold policies in pre-war Europe to publish its policyholders' names
from that period. Unfortunately, ICHEIC's publication of names was
voluntary, and woefully incomplete. As an example the name of Aron
Sanel Shapira does not appear on any list of policy holders supplied by
Generali. Only the name ``A Schapira'' appears notwithstanding that
Generali has this man's full name. Less than 20% of the names of policy
owners from Eastern Europe were published. Full disclosure, under a
legal requirement, is a must so all families can learn about their
families' rights.
How can Congress stand by silently in the face of this result when
we hear so much rhetoric about learning the lessons of the Holocaust?
Why should the corporations who profited from that great crime, who do
business in the U.S. today, be allowed to retain this unjust
enrichment? It is time for all institutions including Congress to hold
the insurers accountable for their profiteering in the Holocaust.
The David family and I look forward to working with you and your
office on this issue.
Sincerely,
Thomas R. Fahl.
Material Submitted by Organizations and Individuals
in Opposition to HR 1746
Statement Submitted by the Anti-Defamation League, B'nai B'rith, and
Others
May 2, 2008.
Hon. Bill Nelson, Chairman,
Committee on Foreign Relations,
Subcommittee on International Operations and
Organizations, Democracy and Human Rights,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The undersigned organizations have been active
in efforts to secure a measure of justice for survivors of the
Holocaust and appreciate the ongoing work of the United States Congress
to highlight and defend the interests of Holocaust survivors.
In advance of the May 6th Subcommittee on International Operations
hearing on Holocaust-era insurance restitution, we write to express the
opinion that House Resolution 1746, the Holocaust Insurance Claims
Accountability Act, would not be helpful to these efforts. Passage of
H.R. 1746 would also undermine the credibility of the broader effort by
the U.S. Government and others to resolve these problems.
The process established by the International Commission on
Holocaust Era Insurance Claims (ICHEIC) identified and paid over $300
million in insurance claims to tens of thousands of claimants and
recovered additional funds for home care and other social services
benefits for survivors worldwide.
In addition to all the claims that have already been recognized and
paid, the companies which participated in ICHEIC have made it clear
that they will continue to process Holocaust-era claims received after
the close of ICHEIC and they are currently doing so.
Passage of the legislation would jeopardize critical ongoing
negotiations that are of tremendous importance to thousands of needy
Holocaust survivors in the U.S. and around the world.
We welcome the commitment that Congress has demonstrated to this
issue and we will be glad to work with the Congress on constructive
ways to continue to help survivors and their families.
Sincerely,
Anti-Defamation League,
B'nai B'rith International
Conference on Jewish Material Claims
Against Germany,
Religious Action Center of Reform
Judaism,
World Jewish Congress.
Statement Submitted by Rabbi Andrew Baker of the American Jewish
Committee, Department of International Jewish Affairs
Rabbi Andrew Baker, Director,
American Jewish Committee, Department
of International Jewish Affairs,
Washington, DC.
May 1, 2008.
Hon. Bill Nelson,
U.S. Senate, Washington, DC.
Dear Senator Nelson: As an official observer of the International
Commission for Holocaust Era Insurance claims, the American Jewish
Committee is quite familiar with its efforts to identify policies and
match them with claimants. The ICHEIC process was complicated and
prolonged. It sought the records of participating insurance companies
as well as other archival information and relied on victims' lists
prepared by Yad Vashem in order to identify a large but likely list of
policy holders that could then be shared via the internet. In the end,
thousands of claims were found and paid by participating insurers. Many
other claims against now defunct companies were also paid by ICHEIC.
Its additional humanitarian funds have been used to make small payments
to those with only anecdotal evidence of insurance policies and to
support welfare projects designed to assist needy Holocaust survivors.
No doubt some people believe that ICHEIC did not do everything it
could to identify Holocaust-era policies, and a few even thing that
some insurance companies willfully sought to hide documentation. But
such views cannot be supported by our own observation of ICHEIC's
operations.
H.R. 1746 would require insurance companies to provide extensive
lists of pre-war policies without any prior vetting to determine if
they were held by Holocaust victims. It would also open the door to a
new set of legal battles in American courts. As the American Gathering
and the Claims Conference have noted, both these steps would actually
be detrimental to the concerns of Holocaust survivors and their heirs.
Such unvetted lists would only create false expectations among
claimants. The new burdens imposed on the companies would effectively
renege on the promise of ``legal peace'' that was instrumental in
securing their participation in the first place. Such promises have
also been a key to settling other Holocaust-era claims, and H.R. 1746
could adversely affect similar negotiations in the future.
Despite the fact that ICHEIC has closed its doors, participating
insurance companies have agreed to continue to receive new claims.
State insurance regulators should be vigilant to make sure that they
live up to these promises. We understand that the State Department
Office for Holocaust Issue is also prepared to intervene on behalf of
individual claimants should that become necessary. Although not
perfect, we believe these measures should be sufficient to address the
concerns of individual survivors who may still have insurance claims to
pursue.
Respectfully,
Andrew Baker,
Director.
Statement Submitted by Rabbi Abba Cohen of Agudath Israel of America
Rabbi Abba Cohen, Director and Counsel,
Agudath Israel of America,
Washington, DC.
May 2, 2008.
Hon. Bill Nelson, Chairman,
Subcommittee on International Operations,
U.S. Senate, Washington, DC.
Dear Chairman Nelson: We write on behalf of Agudath Israel of
America to express our views on H.R. 1746, the ``Holocaust Insurance
Accountability Act of 2007.'' The Subcommittee on International
Operations is expected to take up the measure early next week.
Founded 86 years ago, Agudath Israel is the national Orthodox
Jewish organization affiliated with Agudath Israel World Organization
(AIWO). Among our activities--both here and on the international
scene--is to protect the rights of those who survived the Nazi horror
and to promote efforts to obtain a measure of justice on their behalf.
AIWO has been an active member of the Conference of Jewish Material
Claims Against Germany and the World Jewish Restitution Organization,
umbrella organizations that for decades have been in the forefront of
advocacy for Holocaust survivors.
Agudath Israel takes note of the steps already taken to address the
matter of unpaid Holocaust era insurance policies. We are concerned
that, while some claimants may benefit from the proposed legislation,
many others will be hurt. The original agreements yielded commitments--
including by the U.S. Government--that subsequent, related lawsuits
against the participating countries and companies would be discouraged.
H.R. 1746, in effect, would reopen these previous agreements, putting
at risk substantial funding which is critical for survivors in need
around the world.
We applaud Congress for its well-intentioned efforts. However,
those efforts might be more productively channeled to areas which to
date have not been adequately addressed--particularly regarding
property restitution in Central and Eastern Europe--rather than risk
undermining agreements that have benefited so many.
Thank you for considering our views.
Sincerely yours,
Rabbi Abba Cohen.
Statement Submitted by Robert A. Swift, Attorney, Kohn, Swift & Graf,
P.C.
Kohn, Swift & Graf, P.C.,
Philadelphia, PA.
April 24, 2008.
Hon. Bill Nelson, Chairman,
Subcommittee on International Operations,
U.S. Senate, Washington, DC.
Hon. Barney Frank, Chairman,
Committee on Financial Services,
U.S. House of Representatives, Washington, DC.
Dear Senator Nelson and Congressman Frank: In connection with the
upcoming May 6, 2008 hearing in the Senate on Holocaust Insurance
Claims, I would like to offer my opinions regarding the efficacy of
legislation. But for a previously scheduled business trip to Asia from
May 2 through May 15, I would be willing to state my views at the
hearing.
Let me mention my background that qualifies me to state the views
herein. I was a lead litigator of Holocaust claims beginning in 1996,
and a principal negotiator of settlements with the Swiss banks, Germany
and Austria, as well as several other settlements. I am a lead counsel
in the Assicurazioni Generali S.p.A. Holocaust Insurance Litigation,
MDL No. 1374 (SDNY) in which a global class of Holocaust claimants has
settled with Generali. I have been practicing law for 35 years and am
regarded by my peers as a significant contributor to the development of
modern human rights jurisprudence. Last month I argued the first human
rights case to be heard by the Supreme Court.
I believe the proposed legislation will be detrimental, if not
fatal, to the August 25, 2006 Settlement between the Class and
Generali. That Settlement has been approved by the Federal Court
although processing of the over 40,000 claims has been delayed by an
appeal by six (6) claimants. On a daily basis I receive letters and e-
mails from claimants anxious to have their claims processed, including
many elderly claimants. Attached is an e-mail from a Maryland claimant
who mentioned that the prompt processing of his claim was critical to
him since he may be unable to pay the mortgage on his farm. See,
attached.
The proposed legislation will vitiate the closure which is the quid
pro quo for the compensation promised to the Class under the
Settlement. To receive compensation, a victim of Nazi persecution (or
heir) must be matched with an unpaid Holocaust era insurance policy
that was in force after was started. The Class is defined as:
All persons worldwide who (1) were (i) Holocaust Victims as
defined, infra, and (ii) during the Class Period were (a) named
in or were parties to any Insurance Policies as defined infra,
including, but not limited to, the insured, beneficiaries and
owners under such Insurance Policies, or (b) persons who
succeeded to their right by operation of law or otherwise,
including but not limited to heirs, distributees, legatees, and
the like, or (2) persons claiming by, through, or in the right
of any one or more of the foregoing persons (including but not
limited to heirs, distributees, legatees, and the like),
whether or not such claimants in this clause (2) are Holocaust
victims; provided however, that ``Generali Settlement Class''
and ``Releasors'' shall not include persons (i) who have timely
elected to be excluded from the ``Generali Settlement Class,''
or (ii) who for any reason previously released any one or more
of the Generali Group from liability in respect to the claims
being compromised (whether such previous release was provided
in connection with receiving compensation in respect of an
Insurance Policy or for any other reason). The Class Period is
January 1, 1920 through December 31, 1945. A ``Holocaust
Victim'' means any person who was persecuted by the Nazis (or
their allies or by persons acting in concert with them or
pursuant to their direction) at any time on account of
religion, sexual orientation, racial background, or political
views, including but not limited Jews, Romani, homosexuals, and
Jehovah's Witnesses.
The Settlement with Generali allows anyone coming within the broad
definition of a class member to file a claim even if a prior claim
submitted to ICHEIC was rejected. Worldwide notice was given to the
Class, and the response was resoundingly supportive of the Settlement.
The claims will be processed by Generali under U.S. Court supervision
using databases created by Generali from the totality of its archival
records. I have personally inspected Generali's archival records, its
databases and the office where claims will be processed. Generali's
personnel have considerable experience in matching Holocaust Era
policies gained from processing claims for ICHEIC.
In consideration for the compensation, Generali expects, and is
entitled to receive, a release from the entire Class for Holocaust
Insurance Claims. In this respect, the Settlement is no different from
other class actions. However, the proposed legislation would eliminate
a release for anyone not receiving compensation even though the claim
was reviewed and no matching policy or other reason for nonpayment
found. A reason for nonpayment would include that the policy was paid,
was cancelled, or was not in force at the time war broke out. Generali
retains a right to rescind the Settlement if the terms of the
Settlement are materially altered. One could understand Generali
exercising this right if the legislation forces it to litigate
meritless claims for a decade or longer. the impact of rescission would
be devastating for the international Class of over 40,000 who pinned
their hopes on a prompt claims review process. Most lack the ability to
litigate in the United States, the evidence to satisfy a court, or the
fortitude to endure a decade or more of litigation.
The very elimination of releases for persons not receiving
compensation from Generali is a central issue on appeal. Not
surprisingly, the proponents of the legislation are also among the
appellants. Congress should not intervene to resolve an issue which is
pending in a federal appeals court. A decision on that issue is
expected very soon since the Second Circuit Court of Appeals granted
expedited status to the appeal, and briefing and oral argument are
complete.
On a broader level, I do not believe that legislation to require
foreign insurance carriers to disclose archival information and to
create a federal cause of action is necessary or appropriate at this
time. During the Clinton Administration, the Executive Branch played a
major role in fostering settlements of Holocaust era claims with Swiss
Banks, Germany and Austria which resulted in $7.5 billion being
distributed to over 2 million persons. Insurance claims were prominent
among them. ICHEIC, whatever its flaws, played a role in establishing
standards for payment of Holocaust era insurance claims and a practical
process for reviewing claims. Under its authority hundreds of millions
of dollars was distributed to claimants from settlements reached with
Germany and Austria. The European community will be offended by
Congress revisiting Holocaust era insurance claims and creating a new
remedy with a new statute of limitations regulating European insurance
carriers. It expected that the settlement concluded would bring closure
and the end of litigation against European companies.
Should you need me to elaborate on the opinions expressed herein I
would be happy to do so.
Respectfully yours,
Robert A. Swift.
Enc:
E-mail from Holocaust Insurance Claimant (addresses removed prior to
publication).
Statement Submitted by Waite, Schneider, Bayless & Chesley Co., L.P.A.
Waite, Schneider, Bayless & Chesley Co., L.P.A.
Attorneys & Counsellors at Law,
Cincinnati, OH.
May 1, 2008.
Hon. Bill Nelson, Chairman,
Subcommittee on International Operations,
U.S. Senate, Washington, DC.
Dear Senator Nelson: I am writing to express my serious reservation
with H.R. 1746, the Holocaust Insurance Claims Accountability Act,
which is presently pending before the Senate Subcommittee on
International Operation and Organization, Democracy and Human Rights.
Since 1998, I and my law firm, Waite, Schneider, Bayless & Chesley,
have worked with and represented (pro bono) the organized Jewish
world--the Conference on Jewish Material Claims Against Germany, the
World Jewish Congress and the World Jewish Restitution Organization--
with respect to their unceasing efforts to obtain a measure of justice
for Jewish victims of Nazi persecution. It has been our honor to
represent those organizations, and to work with and on behalf of
Holocaust survivors worldwide, in the In re: Holocaust Victims' Assets
(Swiss Banks) Litigation, in the In re: German and Austrian Banks
Holocaust Litigation, in Rosner v. United States (Hungarian Gold Train
Litigation), in conjunction with the DM 10 billion German Economic
Foundation Initiative--``Remembrance, Responsibility and the Future,''
and in conjunction with the Austrian Funds--``Reconciliation, Peace and
Cooperation'' and the General Settlement Fund. We have additionally
served as a advisor to our clients with respect to the International
Commission on Holocaust Era Insurance Claims (ICHEIC).
Having carefully considered H.R. 1746, it is my considered opinion
that the proposed legislation would not only jeopardize the many
agreements that we worked so very hard to achieve, but would also
impair ongoing and future negotiations for funding for Holocaust
survivors around the world. The legislation is extremely problematic
for several reasons.
First, and perhaps most importantly, H.R. 1746 will generate
unrealistic expectations among survivors that will not be met. In
short, the expectation of survivors will be that creation of a legal
``cause of action'' will guarantee a payment--a payment that will not
be forthcoming, at least not without protracted and expensive
litigation, rife with incomprehensible legal obstacles, and certainly
not within their lifetimes. In short, while tens of thousands of
survivors' expectations of a meaningful benefit will be raised, only a
handful, if any, would actually benefit.
Second, the legislation will undermine certain undertakings in
previous agreements, particularly regarding the ``legal peace''
afforded those countries and companies participating in the process.
The legislation would have the effect of reopening previous agreements,
which will seriously jeopardize ongoing negotiations with Germany,
among others, thereby putting at risk hundreds of millions of dollars
in crucial funding that is required now for the neediest Holocaust
survivors in their waning years.
Third, the legislation will interfere with the continued processing
of claims by ICHEIC, under which participating companies have already
acknowledged their willingness to continue to process claims that they
continue to receive.
Finally, the legislation is overbroad in calling for the
publication of all policies, paid and unpaid, without any system to
determine if the policyholders are Holocaust victims. Such publication
will likely produce lists of many millions of policies, including those
belonging to non-Jewish policyholders in Europe during the relevant
period. Needless to say, this too will create unrealistic expectations,
in addition to yielding little new information beyond that which has
already been developed and published by ICHEIC regarding Jewish
policyholders who were victims of Nazi persecution.
In light to the foregoing, I strongly urge you and your Committee
to give serious consideration to and weigh the many adverse
consequences of H.R. 1746.
Very truly yours,
Stanley M. Chesley,
Waite, Schneider, Bayless & Chesley Co., L.P.A.
Appendix III.--Material Submitted by Anna B. Rubin, Director, Holocaust
Claims Processing Office, New York State Banking Department
Section 1.--New York State Banking Department
HPCO Annual Report
Section 2.--Overview of the Interwar Economy
and the European Insurance Industry
Section 3.--Correspondence Between NAIC and New York
Section 4.--Additional Material Submitted by Ms. Rubin