Survivors Split Over Suits

For the first time, the largest group of Holocaust survivors in the United States has taken an official position against other major mainstream Jewish groups on the right of survivors to sue for Holocaust-era insurance claims.

On the day that six major Jewish groups reiterated their opposition to such suits last week, the executive committee of the American Gathering of Jewish Holocaust Survivors and Their Descendents voted unanimously in favor of survivors’ rights to “pursue all legitimate claims, including insurance claims, in every appropriate forum, in particular the courts of law.”

At the same time, the American Jewish Committee, the Anti-Defamation League and the Conference on Jewish Material Claims Against Germany and three other prominent Jewish organizations released letters to members of Congress opposing proposed legislation that would permit survivors’ suits. The organizations argued that permitting such suits would “raise false expectations for survivors” because they would “not ensure that a single Holocaust victim will benefit,” and would “jeopardize ongoing negotiations” for survivor benefits.

The Jewish groups also refer to the fact that in 1998 European insurance companies agreed to participate in the International Commission on Holocaust Era Insurance Claims (ICHEIC) to pay all pre-World War II insurance policies owned by Holocaust victims and their heirs. The companies set aside $500 million to handle all claims, and by the time it completed its work in March 2007, ICHEIC had offered or awarded a total of $306.2 million to 48,000 claimants. The balance of the money was given to the Claims Conference to help needy survivors.

Klaus Scharioth, German ambassador to the US, has called ICHEIC a “success,” noting that 52 percent of those who filed claims received some form of compensation. But survivors said only 17,000 claims were actually paid and that the other 31,000 claimants received $1,000 checks when the insurance companies said they were unable to find a record of their policies.

In an interview, Julius Berman, chairman of the Claims Conference, acknowledged that “there was no commitment that they would have [legal] peace if they participated [in ICHEIC], but there was a representation that we – the Jews – would not make a deal for ICHEIC and then go to Congress and suggest that we could still arrange for lawsuits against them.

“We recently negotiated for close to $600 million in home care over the next three years [for needy survivors]. Would we have been as successful if we had welched on an agreement that was made years ago when ICEIC was formed?”

Stuart Eizenstat, the Obama administration’s special envoy for Property Claims in Central and Eastern Europe and a special negotiator for the Claims Conference, said that although no promise of legal peace was made, “in all cases we said we will file a statement [with the court] saying it is in our national interest to dismiss the case. … There was a promise that we would do all we could to achieve legal peace and every court honored it.”

But Eizenstat said such survivor’s suits are not necessary because individuals with valid insurance claims can still seek payment by filing with the New York State Banking Department Holocaust Claims Processing Office.

“People who have actual policies should give them to the office and the State Department will oversee any claims filed,” he said. “The ICHEIC process used relaxed standards of proof [in validating claims], and all of the insurance companies have paid several million dollars since ICHEIC closed.”

David Schaecter, president of the Holocaust Survivors Foundation USA, called it “outrageous” to insist that survivors “give up our legal rights against Generali, Allianz, AXA, and other insurance companies to induce Germany to provide funding for the needs of impoverished survivors. What does one thing have to do with the other?

“Insurance companies should pay their debts and we should be able to sue them if they breach their contracts. This has nothing to do with Germany’s long overdue moral obligation to provide adequate funding for the needs of survivors.”

He also noted that in February 2009 when similar legislation was before Congress, German Ambassador Scharioth wrote to him saying that although his country opposed the bill it “has never threatened to respond by cutting existing benefits to poor survivors, and we have no intention to do so in the future.”

He added, however, that his country believed it had been promised “legal peace” when ICHEIC was created and that passage of the bill “after voluntary compensation has been paid would make it almost impossible … to convince the business community not only in Germany but anywhere in the world to enter into voluntary agreements that ensure compensation for Holocaust survivors.”

Menachem Rosensaft, a vice president of the American Gathering, said that while his group — an umbrella organization representing 80,000 survivors — is concerned about “raising false expectations among survivors … we support the right of survivors to pursue claims in any forum.”

But he added that his organization would like the proposed bill modified to place a cap on lawyers’ fees in any suits filed to prevent them from getting windfalls while survivors get little.

Sabia Schwarzer, a spokeswoman for the German insurance giant Allianz, has told The Jewish Week that her company is still accepting claims through the HCPO but “is not aware of any dormant policies.” Asked how many claims it has received since ICHEIC ended, she replied in an e-mail that the HCPO “would know exactly how many claims were processed. I know you are asking for the Allianz specific number; at this time we are not releasing that.”

Samuel Dubbin, a Florida attorney who represents many survivors, said one of his clients, Herbert Karliner of Miami Beach, claimed he has never received a satisfactory explanation about what happened to his father’s insurance policy with Allianz. He said Karliner and his brother, the only members of their family to survive the Holocaust, were told by Allianz after the war that their father’s policy had been paid.

Karliner applied again when ICHEIC was created and received the same response. But later, the German Embassy in Washington gave him a copy of the “supposed repayment document” that showed his father had cashed in the policy.

“It was dated Nov. 9, 1938 – Kristallnacht – the day his dad was taken to Buchenwald,” Dubbin said. “It was a fiction, and yet ICHEIC provided no protection because Allianz did not even produce that document when it denied the claim. This proves ICHEIC didn’t work. In court, Allianz would have to produce all of its records and the burden would be on Allianz to prove what happened to the policy. … ICHEIC’s claim that it used relaxed standards of proof is just a slogan that allowed the insurance companies to keep billions in unjust enrichment.”

Some individuals who were paid under the ICHEIC process complain that it was unfair to survivors and their heirs. One of them, Michael Lissner of Manhattan, said both sets of his grandparents had insurance policies with Allianz. When they fled Germany in 1939, they cashed in the policies but Allianz said they could not take the money with them and placed it in blocked accounts.

“After the war, both grandparents tried to collect on their policies but were refused,” Lissner said. “They were screwed out of their money by the Germans in 1939 and there was no way from them to get relief.”

When the ICHEIC process was created, Lissner said his family applied to Allianz and received about $7,000.

“We calculated that because the policies were taken out in the 1920 they would have been worth hundreds of thousands of dollars today,” he said. “But Allianz calculated what the policies were worth when my grandparents cashed them in in 1939 and said forget about the interest.”

“The U.S. government agreed to this arrangement and Allianz is free to walk away with someone else’s money,” Lissner said. “If I was allowed to go to court, I’d be there is a minute. This is a terrible chapter in our family’s history.”