Jewish Council, German Officials Blame Each Other for Embezzlement

The scandal over some $12 million missing from a reparations fund intended for Nazi victims continued to fester here over the weekend, with mutual recriminations between the Central Council of Jews, which administered the fund, and the Bonn Finance Ministry, which provided the money.

The Jewish community was stunned when Heinz Galinski, chairman of the Central Council, announced May 17 that the $12 million apparently was misappropriated by his predecessor, the late Werner Nachmann.

The money was interest accrued on nearly a quarter billion dollars the government made available from 1980 to 1987 to compensate Jewish persecutes from Eastern Europe who arrived in the Federal Republic after the 1965 deadline for filing reparations claims.

Nachmann, a wealthy industrialist who headed the West German Jewish community for 22 years, until his death on Jan. 21, established an account at a Karlsruhe bank from which claimants were to receive a one-time payment of about $3,000. All claims had to be approved by the New York-based Conference on Jewish Material Claims Against Germany.

But the money was in Karlsruhe, in the local branch of a French bank, Societe Generale Alsacienne, where Nachmann had his personal and business accounts. Only Nachmann and Alexander Ginsburg, secretary of the Central Council, had access to the reparations account.

Ginsburg, who has been suspended from his job, denies that he had any knowledge of Nachmann’s alleged wrongdoing and specifically that he was told about the malfeasance in January, but failed to inform the Central Council.

‘MORAL RESPONSIBILITY’

Galinski said in Frankfurt on Friday that he and the other Central Council members are ready to share certain “moral responsibility” for the scandal, even though they were the injured parties.

But in an editorial in the council’s weekly, Allgemeine Juedische Wochenzeitung, Galinski was sharply critical of the government. How was it possible that the Finance Ministry transferred the reparations monies to an account not under the direct authority of the Central Council? he asked.

The ministry retorted that its employees behaved correctly and that none of them shared responsibility for the heavy losses of the reparations fund.

Ministry officials also charged that the Central Council as a whole was responsible for managing and disbursing the money from the fund. The ministry received regular reports from the Claims Conference in New York on payments made to persecutees and had no reason to assume that the money kept by the Central Council was used in any ways other than agreed upon with the government, officials here said.

They recalled that in November 1987, Finance Ministry representatives met with Nachmann, Ginsburg and the secretary general of the Claims Conference. They told Nachmann and Ginsburg that any further payments to the reparations fund depended upon a full report on how the original $238 million and the interest earned on it were used.

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