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German Slave Fund Payments Closer After Court Case Dismissed

The latest U.S. court ruling on a German fund for slave and forced laborers increases the chances that payments will begin as early as mid-July.

The optimism comes as German politicians and survivor representatives alike hailed a U.S. appeals court decision last Thursday that removed all conditions from a previous judge’s dismissal of lawsuits against German banks.

As a result, German Chancellor Gerhard Schroeder said it is possible for the German Parliament to certify that the ruling ensures that no more Nazi-era lawsuits will be filed.

In the May 17 decision, the appeals court ruled that Judge Shirley Wohl Kram had overstepped her authority in trying to force the German compensation fund to cover claims out of Austria.

Otto Graf Lambsdorff, the German government’s chief negotiator for the fund, called the appeals court decision “superb.” But he asked the Parliament to hold off on its decision about legal security until they had heard from the German industry group.

Schroeder has offered to mediate in case of difficulties.

Individuals and groups representing the laborers called for the money to be distributed quickly. However, German industry representatives were only reservedly optimistic.

Wolfgang Gibowski, spokesman for the German firms that contributed to the fund, the German Industry Foundation, welcomed the appeals court decision.

However, he said it was “unfortunately” not enough to ensure protection from future lawsuits. Gibowski still is awaiting the outcome of other cases, including one in California.

On Monday, Kram dismissed one of the last few remaining lawsuits.

“It is my hope that payments begin immediately,” she said.

For their part, a group of German companies that contributed to the fund distanced themselves from Gibowski, urging Schroeder to pay the aging survivors before they die.

Forty-three of the 6,000 German firms that gave to the fund said in the letter that 200 victims die each day.

The German government and a group of German businesses agreed in February 1999 to create the $5.2 billion fund to compensate the laborers.

Under the terms of an agreement reached in March 2000, some 240,000 slave laborers – about 140,000 of whom are Jewish – would receive up to $7,500 each. More than 1 million forced laborers would get up to $2,500 each.

People whose property was looted by the Nazis, who were victims of Nazi medical experiments or who hold unpaid Holocaust-era insurance policies also may claim payments.

In addition, the letter from the 43 companies blasted the compensation fund’s directors, accusing them of evading their historical responsibility. There has been no official response to this charge.

In a separate matter, the board of the industry foundation has been threatened with a lawsuit from one of its members, who has not received an answer on what will be done with the interest accruing on the money in the fund, according to Der Spiegel news magazine.

Politicians last week noted that the fund earns six figures in interest daily. Gibowski said he would not release any information on the matter.

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