Holocaust survivors say Israel kept their assets

JERUSALEM, March 1 (JTA) — During the past few years, as Jewish organizations pressed Swiss banks to make good on dormant bank accounts that belonged to Holocaust victims, Rachel Schreiber, an 86-year-old Israeli, started feeling uneasy.

As the battle heated up, the Polish-born Schreiber was filled with memories from 1935 — just two years before she married, moved to Palestine and left behind her parents and sister, who later perished in the Holocaust.

During a summer vacation back home in Warsaw from her dental studies in France, Schreiber had a conversation with her father, Henoch Nutkewicz, a wealthy real estate businessman, about his partner’s success in getting a large sum of money out of Poland.

The money was not deposited in Switzerland, but in the Anglo-Palestine Bank, the precursor of Bank Leumi, Israel’s second largest bank today.

“My father told me it was our money, too,” says Schreiber. “Until the restitution issue came up, I never thought about it. It’s one thing if Switzerland tries to avoid responsibility, but my money is here in Israel.”

During the past few weeks, since the Knesset decided to launch a commission to investigate the issue of Holocaust-era assets in Israel, hundreds of Israelis have been coming forward with similar stories.

Schreiber’s case — which was submitted last November in the form of a lawsuit that prompted Bank Leumi to open its files on dormant accounts — is just one that many say illustrates how Israel’s record on restitution may be questionable.

Critics say Israel has waited too long to investigate what happened to financial and real estate assets that Holocaust victims deposited or purchased in pre-state Israel.

“It is a moral outrage that the state of Israel and Jewish organizations are campaigning against European companies, Swiss banks and foreign governments at a time when the State of Israel has not even bothered to look at the issue,” says Gil Raveh, an Israeli lawyer who is Schreiber’s grandson.

The issue was first raised in 1997 by Yossi Katz, a geography professor at Bar-Ilan University.

While conducting a study on the history of the Jewish National Fund, Katz discovered a document from 1947 in which the JNF asked Bank Leumi for information about financial assets it held that may have belonged to Holocaust victims.

Leumi responded that it could not provide information for reasons of banking secrecy.

“I nearly fell off my chair,” says Katz. “I said to myself — this is exactly what happened with the Swiss banks.”

In January, Bank Leumi posted 13,000 dormant accounts on its Internet site — www.bankleumi.co.il — dating from the bank’s establishment in 1902 through 1955. The bank will accept queries on the accounts until July 31.

Bank Leumi denies that it ever tried to hide the fact that it had dormant accounts.

“There were all sorts of reports in the press accusing us of saying that we had no dormant accounts,” says Riki Carmi, Bank Leumi’s spokeswoman. “We always said that we do have dormant accounts and there may be some that date back to the Holocaust.”

But Leumi — believed to hold the most Holocaust-era accounts of all Israeli banks — says it is not to blame. Many were confiscated by the British Mandate in Palestine, which seized all property belonging to citizens of enemy states during World War II.

In addition, the bank said, any accounts it did have were transferred to Israel’s administrator general many years ago.

“This is why there is not much money in them,” Carmi says. “We are talking about very low sums.”

Meanwhile, since Katz first discovered the problem, he has delved into archives in Israel and Britain to produce a book, soon to be published in Hebrew, “Forgotten Property: What Became of the Assets in Israel of Holocaust Victims.”

Katz estimates that Israeli banks and the government’s administrator general, who manages abandoned property, may hold $64 million worth of financial assets belonging to Holocaust victims.

Furthermore, he believes that many parcels of land — perhaps worth even more than the financial assets — were purchased in pre-state Israel by European Jews who died in the Holocaust.

“The question now is how will the committee work,” says Katz. “This committee must consult with experts from various fields. If it misses the point and remains a political forum, it will not be worth anything.”

Colette Avital, a former consul general in New York and now the Knesset member heading the committee, insists its work will be serious.

Since announcing the formation of the committee in mid-February, she has received about 40 letters a day from heirs of victims who claim they have assets in Israel.

“Many of these people have been corresponding extensively with some of these institutions and have been given a runaround,” she says.

Avital thinks the issue has not been seriously addressed until now because survivor groups feared that launching a campaign in Israel would undermine efforts to secure a deal with Swiss banks and European companies.

“I think the contrary,” she says. “We can come up with a clearer bill of conscience by saying that we are investigating.”

Judging by the initial response, there will be plenty to investigate.

Avital pulls out a particularly startling letter from the stack and reads aloud a man who says his family deposited 1,000 pounds sterling in Bank Leumi during 1937.

She said that even when the account was located and identified, the bank refused to pay interest or link the money to inflation. It deducted management fees and paid the family a pittance, Avital said.

“This is robbery,” she says. “The attitude of the banks is something I cannot accept, and what I find really revolting is that some state institutions have operated with the same norms.”

Bank Leumi, for its part, denies that any payments made to claimants over the years were not adjusted for inflation.

Avital’s finger appeared to be pointed at Israel’s Administrator General’s Office.

During World War II, the British Mandate in Palestine confiscated all “enemy property,” including assets belonging to Jews who were citizens of European countries under Nazi control.

But according to a report published by Britain’s department of trade and industry last month, Britain is not liable for any claims since it settled all accounts in a deal with Israel in 1950.

Shmuel Tsur, Israel’s administrator general, insists that his office has a clean record since it published all records of property in its possession two years ago, including 1,000 homes and 4,000 plots of land worth an estimated $50 million.

His office received “hundreds” of queries since then, but has never sifted through the files to determine what property may have belonged to Holocaust victims.

“I know that some of the property belonged to people who perished in the Holocaust,” says Tsur. “To determine this, I must make a more thorough investigation and I intend to do so.”

Tsur welcomes the establishment of the committee, since he thinks it may prove that much of the public uproar has been unjustified.

“Whoever says the state of Israel is not handling the issue properly is slandering the country for no reason,” he says.

Yet even if Israel does hold assets that belonged to Holocaust victims, the question remains whether its record is comparable to that of the Swiss.

Bobby Brown, adviser to Sallai Meridor, co-chairman of the World Jewish Restitution Organization, says that at least regarding heirless property there is a fundamental difference.

Israel, he says, had to absorb hundreds of thousands of Holocaust survivors after World War II, so any use it made of heirless property is morally justified.

Nevertheless, he adds, when it comes to property that can be identified and claimed by heirs, Israeli institutions and banks must live up to the same standards as Jewish organizations expect from any government or country around the world — namely that claimants must be compensated with a reasonable reassessment of the assets’ value today.

“I think this committee is not going to find a lot of money, but it will find a few outrageous stories that must be addressed,” says Brown. “If we have demanded justice in so many countries it should be done in Israel, too.”