Bureaucratic battles kept money from survivors


JERUSALEM, Feb. 17 (JTA) — Israeli survivor groups and the government are close to sealing a deal for the long-overdue disbursement of $59 million from a Swiss humanitarian fund for needy Holocaust survivors.

But even though Israeli survivors may soon receive the money, many months of infighting between Israeli bureaucrats and survivors groups have slowed the process.

Speed is crucial, since many survivors are very old.

Moreover, the delay raises questions about the ability of Israel to handle the distribution of a $1.25 billion settlement that Switzerland’s leading banks agreed to in 1998.

Payments from the Swiss humanitarian fund “must not be delayed any longer,” said Sallai Meridor, chairman of the Jewish Agency for Israel and a co-chairman of the World Jewish Restitution Organization.

“I hope that we can immediately start distributing the money, and I hope that our experience will allow us to avoid delays in the future.”

Totaling nearly $200 million, the Holocaust Memorial Fund was established in February 1997 by Switzerland’s three largest banks amid allegations that the banks were hoarding the wealth of Holocaust victims.

Distributions from that fund have already been paid in Russia, Eastern Europe and the United States, where some 60,000 people received one-time payments of between $500 and $1,000 each.

In Israel the process has been mired in a dispute over whether and how the government should be involved.

Holocaust survivors charge that the government of former Prime Minister Benjamin Netanyahu thought it could reap some political capital by distributing the funds.

Survivors’ representatives had warned that government involvement could slow down the entire process.

In addition they said it could create a legal quagmire since applicants who were rejected could sue the government.

If the distribution committee was not governmental, it would not be liable to any lawsuits since the fund is an ex gratia body, meaning it has no legal obligation to pay anyone.

“We knew that if the government got involved there would be trouble,” said Noah Flug, secretary-general of the Umbrella Organization of Holocaust Survivors in Israel.

Representatives of the WJRO, Holocaust survivors groups and the Finance ministry all expect to sign a final agreement on the distribution process within days.

After officials in Switzerland overseeing the fund approve the distribution process, payments will begin.

“I can finally make a positive statement,” said Flug, head of the survivors group. “The vast majority of applicants should receive payment before Passover.”

The previous government said the Jewish state had a moral obligation to be involved in the restitution process.

In addition the government said it felt that leaving the process open to the scrutiny of the state comptroller and the Supreme Court was the right thing to do.

“The general feeling was that this was an honest attempt to build in the kind of protection that would make the system transparent and make it work,” said Bobby Brown, the former adviser to Netanyahu on Diaspora affairs who is now serving as an adviser to Meridor on Holocaust restitution issues.

“Nobody ever thought that the government should do it alone,” Brown said. “The idea was that the survivors would act as a watchdog on the government and the government would act as a watchdog on the survivors.”

The problem was that once the government decided to get involved, they had to choose an office to handle the issue.

Israel’s National Insurance Institute, the equivalent of the United States’ Social Security Administration, seemed like the right place — but officials there wanted nothing to do with it.

Next came the Ministry of Finance, but the powerful budget division insisted on keeping away from the matter.

“The Finance Ministry is made up of many fiefdoms, and everybody knows that the budget division has excessive power,” said one source close to the Swiss fund negotiations. “Why should it be any different in this case?”

Last April after months of haggling, and with mediation by the WJRO, the issue was handed over to a Finance Ministry department known as the Office for Rehabilitation of Disabled Survivors of Nazi Persecution.

“Since then, we have not stopped pushing the process forward even though there is no agreement between the organizations,” said Rafi Pinto, director of the office.

By the middle of last October, Pinto’s department had received nearly 150,000 applications for compensation. About 70,000 were missing information and had to be checked. Of the total, about 15,000 will be immediately disqualified and 35,000 will be examined more closely.

Survivors will be eligible only if they can prove they earn less than $875 a month. In the United States, survivors only had to declare themselves to be needy.

“This was a very long and complicated process,” said Pinto. “But I estimate that there are nearly 100,000 people who we can pay as soon as tomorrow.”

However, even though problems have been solved regarding the Swiss fund, the big question is whether the government and survivors groups will have to go through months of negotiations again to set up yet another mechanism for distributing future funds from Swiss banks.

“Now that all of these problems have been solved, I think it will be much easier to distribute future funds,” said Avraham Hirchson, a Likud Knesset member and chairman of a parliamentary subcommittee on restitution.

Brown takes a more sober view, saying the jury is still out on whether things will move more quickly next time around.

“There should be some type of understanding that it will work in exactly the same way and that we will not have to reinvent the wheel,” said Brown. “If that can happen, perhaps we will be able to say this was a positive experience.”

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