Former Slave Laborers Say Germany is Reneging on Deal for Compensation

Although Germany agreed to create a $5.2 billion compensation fund for Holocaust-era slave laborers late last year, some difficult bargaining still lies ahead.

Representatives of the former slave laborers charge that the German government has reneged on an agreement that the laborers would still receive payments even if they had previously received other forms of compensation from Germany. The issue is certain to come up in the latest round of negotiations next week in Washington.

The first three drafts of German legislation that would enact the agreement state that “any prior compensation would count against any payment made out of this fund,” said Alissa Kaplan, spokeswoman for the Conference on Jewish Material Claims Against Germany, which was among the groups negotiating on behalf of the laborers.

Gideon Taylor, the group’s executive director, has said he is “very concerned about the implications if this draft goes forward.”

Supporting this view, New York City Comptroller Alan Hevesi sent a letter Monday to German Chancellor Gerhard Schroeder, expressing his concern about the proposed legislation.

Hevesi wrote that the pending German legislation “should both reflect the negotiations that led to the December 17 agreement and should be acceptable to all the major parties to those negotiations.

“Holocaust survivors deserve no less.”

Ratcheting up the pressure, the World Jewish Congress has reportedly sent letters to U.S. officials involved in the talks –Secretary of State Madeleine Albright and Deputy Treasury Secretary Stuart Eizenstat — saying that if the German legislation remains as it is, Jewish groups would call for sanctions against German companies.

U.S. Treasury Secretary Lawrence Summers, in Tokyo over the weekend for a G- 8 summit meeting, also brought up the subject in a meeting with his German counterpart, Hans Eichel.

Eichel reportedly told Summers that a final decision about the legislation would not come until after German mediator Otto Lambsdorff returns to Germany from the next round of negotiations.

Meanwhile, pressure has been building for more German companies to come forward and contribute to the fund. So far, about 130 companies have said they will help fund the $2.6 billion contribution from German industry. The other half of the fund is being paid by the German government.

The American Jewish Committee plans to release later this week a new list of German firms that have not contributed.

The names of Berlin firms will be featured, said Deidre Berger, managing director of the Berlin office of AJCommittee, which released its first list in December.

“There are still far too few companies in the fund, and we hope that by maintaining pressure we will encourage more to join.”

The list will be available on the group’s Web site, http://www.ajc.org.

Earlier this week, Germany’s largest labor union also increased the pressure by publishing a list of some 140 firms that have not pledged money so far.

“Instead of paying 1 or 2 percent of their turnover to compensate forced laborers, many firms are denying their complicity and are scorning victims a second time,” IG Metall said in a statement Sunday.

The head of the trade union, Klaus Zwickel, said at the time that recalcitrant firms should not be granted any legal protection against lawsuits from former slave laborers. Such protection was promised in the agreement worked out in December.

About $1 billion has been collected so far from German firms. In order to raise more funds, representatives of German industry plan to begin contacting some 200,000 companies nationwide next month to ask for their support.

In another development, a Swedish firm said it would contribute to the compensation fund. SKF, the world’s largest manufacturer of ball bearings, said Tuesday it was making the contribution because it had factories in Nazi Germany that used slave labor.