German firms and slave laborers battle over money

NEW YORK, June 1 (JTA) — The latest legal battle over compensation for Nazi-era slave labor all depends on the meaning of the phrase “at least.” In U.S. District Court in New Jersey last week, attorneys for U.S. Holocaust survivors and German corporations squared off over whether the firms owe more money in addition to the hundreds of millions of dollars already paid out to Jews and non-Jews forced into slave labor by Germany’s Nazi regime. The attorneys also were arguing over whether Germany or the United States should settle the dispute. The survivors are arguing that German companies such as Alliance, Bayer, Deutsche Bank and Daimler Chrysler owe the equivalent of 150 million to 300 million deutschmarks in interest accrued from a fund they and the German government created to compensate slave laborers. That amount roughly equals the money needed to make a second round of payments to slave and forced laborers, after the number of claimants that came forward exceeded estimates. Under a landmark 1999 pact signed in Berlin in 2000, the German government and hundreds of German companies agreed to share equally in the costs of establishing the German Foundation “Remembrance, Responsibility and the Future,” a 10 billion deutschmarks fund — about $5 billion — in return for the dropping of 49 class-action lawsuits by slave laborers in the United States against them. The dismissal of the lawsuits was expected to take six months, during which time “at least” 100 million additional deutschmarks was expected to accrue on the money held in the fund. Instead, the cases took 14 months to wrap up, and the fund earned even more interest. Now, the two sides are arguing over who should get that extra interest. “It all boils down to whether ‘at least’ is a ceiling or a floor,” Burt Neuborne, the lead attorney for the survivors and director of the Brennan Center for Justice at New York University, told JTA, referring to the extra interest. Last year, the foundation began making the first round of payments to the former slave laborers. Slave laborers in concentration camps received about $7,500; those uprooted and forced to work for the Germans received $3,000; and those forced to perform agricultural work received between $500 and $1,000. To date, more than 137,000 Jewish slave laborers in 56 countries have received $668 million, according to the Claims Conference, which is administering the payments under the 1999 agreement. More claimants have come forward than expected, making the additional interest crucial to covering the payments. Roger Witten, representing the German Foundation Initiative, a group of 17 leading German firms that collected compensation from 6,000 German companies, said his group bears no responsibility for the fact that far more slave laborers have submitted claims than expected. “That risk was there all along — everybody understood it,” he said in an interview. But Roman Kent, a survivor advocate and former slave laborer in Auschwitz, said it is a “disgrace” that German companies are using “gimmicks” to avoid relinquishing the extra money. The money amounted to “a token compensation, just to justify their conscience and our conscience that the new generation recognizes what their forefathers did not,” said Kent, who is the chairman of the American Gathering of Jewish Holocaust Survivors. “But by not living up to the agreement, they cannot blame their forefathers, they can only blame themselves.” Jews account for between 20 and 25 percent of all those who qualify for compensation under the agreement, and others — including Gypsies, Poles, Russians, Slavs and Ukrainians — also are receiving the payments. Gideon Taylor, executive vice president of the Claims Conference, said his group backs the attempts to gain control of the added interest. “We believe it is critical to get sufficient funds from the interest of both the German government and industries in order to make the largest possible payments to Jewish survivors. This is what we’re fighting very hard to do,” Taylor said in an interview. In a statement, the Claims Conference called the unexpected interest “an economic windfall earned at the expense of Holocaust survivors.” The interest has been accruing since 2001. The judge in the New Jersey court, William Bassler, agreed to dismiss the lawsuits pending before his court, as did U.S. District Court Judge Michael Mukasey, of the Southern District of New York. But Judge Shirley Kram, also of U.S. District Court in New York, refused. Eventually, she was forced to relinquish the cases under a rare court order. Also at issue before the courts is who has the authority to decide the matter of the extra money. Neuborne argues that a U.S. court should decide, because the original settlement said the matter would be decided in the United States. However, Witten says that the U.S. deputy secretary of state, Richard Armitage, told the German government that the issue should be settled in Germany and that German Finance Minister Hans Eichel told U.S. Secretary of State Colin Powell the same thing. “German institutions have, in fact, considered the question and determined German companies don’t owe more money,” Witten said. “And to the extent there are avenues of relief, they are, under the Berlin agreements and both according to the German and U.S. governments, in Germany and not in the United States.” Bassler could not be reached for comment. But a recent ruling Bassler made in another Holocaust reparations case may signal where the case is headed. In May, Bassler ruled that Barbara Principe, 71, of Newfield, N.J., could not use U.S. courts to pursue a $200 million property claim against one of Germany’s largest department store chains because the United States lacked jurisdiction.