Pressure is mounting against Swiss banks to reach a global settlement of all claims related to Switzerland’s wartime financial dealings.
Until this week, Jewish groups were the primary players calling on the banks to reach a final settlement to resolve all Holocaust-era claims.
Such a settlement could involve a reported $2 billion to $3 billion.
But additional players entered the talks Sunday, when the United States began brokering discussions in Zurich in a presumed attempt to include a separate class-action lawsuit in the overall deal.
That lawsuit was brought in New York by Holocaust victims against the banks, which stand accused of refusing to pay out dormant bank accounts opened by Jews during the World War II era.
The banks have indicated a willingness to seek a constructive solution, but have insisted that a global settlement must resolve the issue once and for all, be endorsed by the U.S. and Israeli governments and put an end to the class- action suit.
The Swiss government, however, has rebuffed a call by World Jewish Congress President Edgar Bronfman to participate in any global settlement.
Stuart Eizenstat, U.S. undersecretary of state for economic affairs, brought together the chief executives of Switzerland’s three largest banks with attorneys representing plaintiffs in the class-action suit.
Eizenstat characterized the discussions as “exploratory,” but declined to elaborate.
Israel Singer, general-secretary of the WJC, met separately with bank officials for the second time in as many weeks, but Jewish officials were also tightlipped about the details of the discussions currently underway.
One of the lead attorneys representing Holocaust survivors in the more than $20 billion class-action lawsuit gave a boost to the prospect of a wider settlement this week by endorsing the WJC’s idea of a lump-sum payment.
“There should be a global settlement because it provides closure for everybody, and I think we would all agree the Holocaust victims get the money,” Edward Fagan, a New York attorney, told reporters in Zurich.
It was not clear, however, whether other attorneys involved in the lawsuit – – or the class-action plaintiffs themselves — shared that view.
Some Holocaust survivors pressing claims have criticized WJC in the past for “not representing us.”
Talk of a global settlement began in earnest this month after Bronfman said Switzerland needed to pay billions of dollars in order to bring closure to the entire range of material claims related to Switzerland’s wartime activities, including the issue of dormant bank accounts and Swiss purchases of Nazi gold.
The next few months are expected to determine whether such a settlement can be reached.
Last week, public financial officials from across the United States agreed to wait until March 31, 1998, before imposing further sanctions against Swiss banks for what they view as foot-dragging in paying off Holocaust victims’ claims.
“There’s a 90-day time bomb ticking under the chairs of the Swiss banks,” one source familiar with the situation said.
In another development that could increase pressure on the banks to settle quickly, the head of an independent panel auditing dormant bank accounts said this week that the process was going slower than he would like.
“I am as impatient and frustrated as other people, but this is the nature of the problem,” Paul Volcker, former chairman of the U.S. Federal Reserve, told a news conference.
He said two-thirds of the claims for the bank accounts filed so far have been confirmed as valid — 4,500 out of the 6,600.
He said he did not know how many of the accounts belonged to people killed by the Nazis, but added that many of the names appeared to be Jewish.
Five claims have been settled, Volcker said, but he declined to specify their value.
In the past year, Swiss banks have published the names of nearly 16,000 accounts opened before World War II, many of which may have belonged to Holocaust victims. The combined value of those accounts is about $54.4 million.
Volcker said experts attempting to resolve claims had encountered more difficulty than expected, and the target date for completing the task has been extended six months to December 1998.
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