NEW YORK (Aug. 13)
Estelle Sapir had mixed emotions. “My heart is very happy,” the 73-year-old Holocaust survivor said in a slight voice outside the Brooklyn federal courthouse where Switzerland’s leading commercial banks had just agreed to a $1.25 billion settlement of Holocaust-era claims.
But at the same time, Sapir, who fled a Nazi death camp as a teen-ager, was concerned about the advanced age of survivors who have waited decades for the return of assets they claimed were rightfully theirs.
“I think this should have happened long ago. There are many old people who need help. I am among the youngest, so you know how old the others must be.”
In May, Sapir reached a settlement with Credit Suisse, one of the banks involved in Wednesday’s landmark agreement.
But there remain tens of thousands of survivors who seek payment from the banks in a more than $20 billion class-action lawsuit.
The settlement announced Wednesday outside the courthouse came after a series of negotiations in recent weeks involving representatives of Switzerland’s two leading commercial banks — United Bank of Switzerland and Credit Suisse — as well as World Jewish Congress officials and the plaintiffs’ lawyers.
According to a source familiar with the discussions, the talks reached a turning point Monday night, when Judge Edward Korman — the federal judge who was considering whether to hear the lawsuit — invited the participants for dinner at a steakhouse.
The evidence against the banks presented during that dinner was “not just a smoking gun. It was a smoking machine gun,” the source said.
When he saw the evidence, the source added, Korman ordered both sides to reach a settlement — a clear indication to the banks that they would not fare well if the suit went before him.
More talks followed on Tuesday and Wednesday before the sides reached the settlement, under which the plaintiffs will release all claims against the two banks — as well as against the Swiss National Bank, which bought gold from the Nazis worth tens of billions of dollars in today’s currency, the Swiss government, other Swiss banks and Swiss industry.
The only group not affected by the settlement are Swiss insurance companies, which are likely to face additional pressures in the coming weeks to pay Holocaust victims and their heirs the unpaid proceeds of policies dating back to the war years.
The settlement also ends the threat of potentially harmful sanctions against Swiss banks that financial officials representing some 20 states and 30 cities in the United States had said they would impose if no settlement were reached.
On Thursday, New York City Comptroller Alan Hevesi and New York State Comptroller H. Carl McCall announced that they were lifting their threats of sanctions, which were slated to begin Sept. 1. They also recommended that other states and cities not proceed with boycotts — a recommendation that will likely be followed.
Meanwhile, the exact timetable for Holocaust survivors to receive payments from the $1.25 billion settlement remains unclear.
Korman is expected to give his initial approval to the settlement agreement in the coming days, according to Elan Steinberg, executive director of the WJC, which has spearheaded international efforts to get the Swiss to confront their wartime past.
The banks’ initial disbursement of $250 million should come within 30 days after Korman gives his approval to Wednesday’s agreement in principle, Steinberg added. But it could take far longer before any survivors see those funds.
In the coming weeks, the World Jewish Restitution Organization — which is headed by WJC President Edgar Bronfman and includes the Jewish Agency for Israel and other international Jewish groups — will work with the American Jewish Joint Distribution Committee to come up with a distribution plan, Steinberg said.
He said that the WJRO will seek to have all proceeds of the settlement go to survivors. “We are opposing any payment of contingency fees to lawyers from these funds.”
He added that he hopes a final agreement can be reached with the banks within 90 days. Once all the parties sign on to that agreement, Korman will put his signature on the court order mandating payments from the settlement fund.
The banks will also pay $333 million each year during the next three years.
“The funds will be used for the benefit of tens of thousands of Holocaust survivors worldwide,” said Steinberg, who estimated the total worldwide survivor population at between 500,000 to 600,000.
The settlement covers “all material assets” — including dormant accounts, looted Nazi gold and securities the Nazis stole from Jewish victims — “stolen from the Jewish people that wound up in Switzerland,” he said.
The settlement is separate from the payments being made from a $170 million Swiss humanitarian fund that was set up last year by Swiss banks for the benefit of Holocaust survivors.
Survivors in Eastern Europe — Jews and non-Jews — have already begun receiving distributions from that fund.
How Holocaust survivors in the United States can apply for payments from the fund is to be announced next week. Some $32 million of the $170 million in the fund is slated to be distributed in the United States.
Steinberg said that anyone seeking to apply for payments from the humanitarian fund should not be concerned that they will be ineligible to participate in the proceeds from this week’s settlement.
“It is not our intention that the two funds will conflict,” he said.
A large portion of the settlement will be used to satisfy the claims of survivors seeking the return of dormant accounts held by Swiss banks.
Those claims are being processed by the Volcker Commission, a panel led by former U.S. Federal Reserve Chairman Paul Volcker investigating the extent of the dormant accounts.
The commission could produce unclaimed assets estimated to be currently worth more than $700 million, one source said recently.
For their part, the Swiss banks said in a statement that they “look forward to continuing their cooperation with the Volcker Commission’s efforts to identify dormant accounts.”
While the banks also described the settlement as a “major milestone in our efforts to insure that justice is served,” it remains unclear whether UBS and Credit Suisse will be alone in shouldering the $1.25 billion payment.
A spokesman for UBS told Swiss radio on Thursday that while the Swiss National Bank and other members of Swiss industry had not participated in the settlement negotiations, they might want to “show their appreciation” for an agreement that exempts them from any further lawsuits.
Steinberg of the WJC recalled how his group’s efforts to get the Swiss banks to confront their wartime past began almost exactly three years ago, when Bronfman first negotiated with the bankers.
The bankers never bothered to offer Bronfman a chair during those first talks, which soon concluded with their offering $32 million to settle all claims.
“That chair has cost them $2 billion,” Steinberg said, referring to all the costs, in addition to the settlement, that the banks have incurred in the succeeding years.
Steinberg, who was as clearly pleased with the settlement as other Jewish officials in the United States and abroad, called it “a triumph for justice and the cause of memory.”
But, he added, “This was not about the mass slaughter of the Jewish people. We do not put a price tag on that. This was about the goods that were stolen from them.”
A similar point was made by Stuart Eizenstat, the U.S. undersecretary of state for economic affairs who has served as President Clinton’s point man on Holocaust restitution issues.
While applauding the settlement as a “historic and very positive development,” he said the “legacy of the Holocaust should not be just gold and money.”
“It should be truth and facts,” he added, citing the importance of Holocaust education, which “will outlive the survivors and all of us.”