Allocating Justice Claims Conf. Grants Questioned As New Allocations Raise Eyebrows

When it comes to the question of who should get the money from the sale of Jewish property in East Germany seized by Nazis during World War II, most agree it should go to the rightful heirs.

But when no heirs for those properties can be found — usually because the rightful owners were killed by the Nazis – – the money goes to the Claims Conference in New York.

It then gets earmarked for distribution along a split where 80 percent goes to social-welfare organizations that benefit Holocaust survivors and 20 percent goes to “Shoah documentation, education and research.”

That has critics wondering where birthright israel, which is receiving nearly $1 million from that money to send youths from the former Soviet Union to Israel, fits in.

A new allocation of $150,000 to birthright is just one of the grants in the Claims Conference’s $74 million allocation package from unclaimed assets this season that is raising eyebrows, even among the conference’s own board members.

JTA obtained a draft list of the grants, which have been approved by the Claims Conference board but, as of early February, had not yet been publicized.

The allocations from East German properties represent only a fraction of the total restitution money the Claims Conference administers annually — about 12 percent of a total of $800 million in 2002 — and survivors and observers applaud most of the conference’s work.

Even within the allocations package, the bulk of the grants are not controversial, going to hundreds of programs in 37 countries on six continents. The programs feed survivors, provide them with medical help and sometimes give them a roof over their heads.

Yet the process of allocating funds from these unclaimed Jewish assets in East Germany has become a lightning rod for protest, with disgruntled activists questioning the Claims Conference’s priorities and the power the conference wields in deciding Holocaust-restitution issues.

“Some of the projects are not even Holocaust-related,” Leo Rechter, general secretary of the National Association of Jewish Child Holocaust Survivors, said of the new allocations package. “At a time when there are not sufficient funds to take care of social-service needs like home care, everything that is available should be spent helping Holocaust survivors in their final days.”

In the 80-percent category, critics are asking why money intended to benefit Holocaust survivors is being spent on things like capital improvements for Israeli hospitals, to the tune of some $6 million; the Hatzolah volunteer ambulance corps in Brooklyn; a “community improvement council” in Spring Valley, N.Y.; the installation of sprinkler systems in Israeli nursing homes; and a women’s organization in Bnei Brak, Israel.

“Supporting Israeli hospitals is a noble and worthy cause, but it takes a leap to argue that it’s related to direct assistance to Holocaust survivors,” said Elan Steinberg, executive vice president of the World Jewish Congress, which is on the Claims Conference board.

“Does that mean when a Holocaust survivor shows up to the hospital, he gets free treatment?” he asked. “Holocaust survivors ride the New York City subways; does that mean we give a subvention to the transit authority?”

Julius Berman, the chairman of the Claims Conference, said that when it comes to Israel, the conference decided to take a slightly more expansive view.

“There was the feeling that if we can accomplish two things at once we ought to be doing it: No. 1, the survivors, and if there can be infrastructure aid to Israel after the survivors are gone, all the more power to them,” Berman said. “At the same time, at the end of the road Israel has a facility that it can use for a variety of purposes in the future.”

A year ago, the president of the Claims Conference, Israel Singer, who also is chairman of the WJC, proposed that unclaimed assets and some other monies won from Germany in restitution settlements be used to create a “Fund for the Jewish people,” dedicated to supporting Jewish education and other underfunded Jewish causes unrelated to the Holocaust.

That idea was nixed by the Claims Conference board and survivor groups, which argued that Holocaust funds should be used exclusively to benefit survivors and for Holocaust education.

That, says Steinberg, who backed Singer’s proposal, is why he was so upset to learn that some of the $74 million in grants this season — another $15 million is expected later this year — is going to projects that don’t meet the criteria formally specified by the Claims Conference.

Steinberg pointed specifically to millions of dollars in capital-improvement projects in Israel, including grants to renovate internal-medicine departments in the country’s hospitals, outfit nursing homes with new patient beds, install sprinkler systems in senior-care homes, purchase medical equipment and build new sheltered-housing units.

“I lost the debate on the fund for the Jewish people,” Steinberg said. “If you have agreed to this particular policy, then don’t turn it into something else without saying you’re doing so. I think that goes to the heart not only of integrity, but also to self-respect. What kind of precedent is that to establish? It is contrary to the very principles of democracy, accountability and transparency.”

Gideon Taylor, executive vice president of the Claims Conference, says that every allocation in the $74 million package from unclaimed assets is intensively reviewed and that they go only to appropriate programs.

“A huge amount of thought and consultation and research and analysis goes into these,” Taylor said.

For example, Taylor explained, the Claims Conference decided to fund birthright israel after learning that birthright — which provides free trips to Israel for Diaspora youth who never before have been on a peer trip to the Jewish state — was sorely in need of better Holocaust-education programming.

“We felt this was an opportunity to bring Holocaust education to these kids,” Taylor said.

In exchange for grant money, the Claims Conference extracted a promise from birthright that every participant visiting Israel would undergo a four-hour Holocaust education program.

Part of the dispute about the allocations, which come from a fund formally called the Successor Organization, is about the 80/20 split that applies to the unclaimed East German assets.

The Successor Organization has collected more than $1 billion from the sale of Jewish assets in the former East Germany. About a quarter of that money has been distributed to actual claimants of specific assets, and about half of the total — proceeds from the sale of unclaimed assets — has been distributed to groups along the 80/20 split.

Some survivor advocates contend that more of the unclaimed money should go to benefit survivors, with some saying it should be used for direct cash payments to survivors rather than to supporting social-welfare institutions that help them.

Others point out that because the money comes from the sale of unclaimed Jewish property, it belongs to the Jewish community as a whole and all Jews share the right to decide how it is used. That justifies using 20 percent for Holocaust education, they say.

For their part, conference officials say survivors already get direct payments from other funds set up by the German government. The Claims Conference administers those funds — which represent three-fourths of the total $800 million the conference handles annually — and distributes payments in a process that is relatively free of controversy.

Conference officials say that giving survivors money from the restituted Jewish property would only ease Germany’s burden.

“This is now a question of how you allocate resources among a variety of worthy claimants,” said Michael Berenbaum, director of the University of Judaism’s Sigi Ziering Institute: Exploring the Ethical and Religious Implications of the Holocaust, in Los Angeles. “The problem in some of the instances is that you have some people for whom the sum of money makes all the difference in the world, and other people for whom the sum of money makes no difference whatsoever.”

Experts estimate the total living population of Jewish victims of Nazism at between 700,000 and 1.1 million.

Roman Kent, chairman of the American Gathering of Jewish Holocaust Survivors and the treasurer of the Claims Conference, said, “My fundamental disagreement is about the proportion of 80/20.”

Kent argues that financial support for Holocaust education should come from the general Jewish population, not from restitution funds.

But the 80/20 policy, decided upon in 1994, was upheld last July by a unanimous vote of the Claims Conference board. With the first major batch of allocations since that meeting about to be announced, critics are focusing on the substance of the grants.

“Inasmuch as the Claims Conference overwrote my sentiments,” Kent said, “the question is for what.”

Among the grants raising eyebrows in the Holocaust documentation, education and research category is $175,000 to Yiddishpiel, a theater group in Tel Aviv that has received about $1.5 million from the Claims Conference since 1995.

“It’s sad, because we do not dispute that all those causes are worthwhile causes, but they must finance that from the general Jewish population, not from restitution that came from the looted assets of survivors,” Rechter said.

Berman, the Claims Conference chairman, said he, too, was perturbed when he first saw the allocation for Yiddishpiel.

But after visiting Israel and seeing the program in action — the troupe visits Israeli nursing homes to perform in Yiddish for aging survivors — he decided that the group deserved even more support than the conference offers.

“An overwhelming need for elderly survivors is not only food and medical aid, but also the social thing,” Berman said, explaining that the Yiddish shows give the survivors something they can relate to and make them feel alive.

In fact, many of the programs included in the $74 million package may raise eyebrows at first glance, but closer scrutiny shows they are worthwhile and relevant to the Claims Conference’s mission, conference officials said. Even the seemingly questionable allocations that critics cite constitute no more than one-fifth or one-sixth of the total $74 million.

But critics focusing on that slice point to projects that don’t fit into either of the allocation categories from unclaimed Jewish property: essential services for survivors or Holocaust education.

Berman defended the allocations for capital-improvement projects in Israel, saying the money allocated for such projects corresponds to the proportion of survivors served by each facility.

Taylor says the capital-improvement allocations, which generally are limited to Israel, are undertaken only when a substantial number of victims of Nazism will benefit.

“These capital projects have transformed the life of elderly Holocaust survivors in Israel,” Taylor said.

“I have been in wards that are so crowded that people are lying in the hallways,” he said. “We will fund projects that make places where survivors are living habitable.”

With many of the programs, particularly in the category of grants to social-welfare groups that benefit survivors, critics question how the Claims Conference ensures that grant money actually goes to survivors.

At some institutions receiving funds from the Claims Conference, survivors represent as little as a quarter of the population served.

For example, the Claims Conference is allocating $29,000 toward the installation of a $115,000 sprinkler system at the Beit Kassif nursing home in Kibbutz Kfar Blum, in northern Israel. The nursing home says 21 of its 80 residents are victims of Nazism.

At other projects, it’s not clear what portion Holocaust survivors are of the population served. For example, Jerusalem’s Hadassah Ein Kerem hospital — which was allocated $1.1 million by the Claims Conference for a $2.2 million project to upgrade its internal-medicine departments and purchase some new equipment — says only that it serves some 900 victims of Nazism.

“The percent we’re contributing is lower than the percent of Nazi victims,” said Greg Schneider, chief operating officer of the Claims Conference.

In cases where the Claims Conference does fund more of a project’s cost than the proportion of survivors served, it’s because Holocaust survivors use up a disproportionate amount of the money, Schneider said.

For example, Rofeh International, which provides medical referrals and assistance to patients and their relatives who come to Boston for medical treatment, spends $456,000 on survivors out of a budget of about $1.2 million. That’s about 38 percent of the budget, although survivors constitute only 18 percent of the group’s clientele, according to Schneider. Rofeh is receiving a $100,000 grant in this season’s allocations package.

Similarly, the conference is allocating $400,000 to the Hatzolah ambulance service in Brooklyn because a “shockingly high percentage” of its patients are survivors, Schneider said.

Other apparent inconsistencies in this year’s allocations package don’t tell the whole story, Schneider added.

For example, the package includes a $335,000 grant to fund a $1.2 million project to upgrade 55 patient beds at the Association for the Home for Senior Citizens by the Union of Bulgarian Olim, in Israel. That comes to slightly more than $21,800 per bed.

That may seem like a high per-bed cost, but it’s far less than the cost at the Shirley Nursing Home in Dimona, Israel — which is getting $341,730 toward a $1.37 million bed-upgrading program — or roughly $57,000 per bed.

Schneider said a variety of reasons account for the discrepancy. The Dimona nursing home project actually is broader: The allocation will help add new rooms and renovate the facility so that patients can live two to a room instead of four or five per room, as they do now. The grant also will help renovate public spaces in the facility, such as dining halls.

Even if allocation descriptions are sometimes incomplete, conference officials say every program is carefully screened — and then scrutinized once the grant is awarded to ensure that the funds are properly used.

For one thing, the Claims Conference does not advance money to awardees; funds are released to recipients only after they have begun paying for projects.

The conference also employs an audit firm, Ernst & Young, to vet grant applicants and awardees when necessary. The same firm audits the Claims Conference annually.

“We feel we’re guardians of holy money,” Taylor said. “We’re very scrupulous and careful in how we allocate funds, how we transfer funds and monitor the implementation of the grants.”