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Report on Holocaust-era Accounts in Israel is a Small Step for Activist

January 25, 2005
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Emmanuel Zusevich spreads copies of archival documents, official correspondence and black-and-white family photographs across the coffee table of his living room, evidence of a decades-long struggle to reclaim Holocaust-era assets from Israeli banks and other authorities. Zusevich’s family is one of thousands of Jewish families in Europe that invested in Palestine by opening bank accounts and buying land here before World War II, but whose heirs never saw the money again.

“There were manipulations to ensure people did not get back their money. It’s immoral,” said Zusevich, 45, who together with a cousin has been working to reclaim the family’s investments.

A Knesset report released this month found that the Israeli government and several banks hold tens of millions of dollars in assets that belonged to 9,000 Holocaust victims or their heirs. Many of the account owners were killed by the Nazis but, as the report found, neither the government nor the banks tried to maintain the value of the money or track down heirs — who are trying now to get their due.

“It’s enough that people lost all life and property in Europe, but if you invest here you are entitled to get the money back,” Colette Avital, chairwoman of the Knesset committee that investigated the lost assets, told JTA. “We cannot ask banks abroad to do what we are ourselves are not doing.”

In 1998, Switzerland agreed to pay $1.25 billion in compensation to heirs of holders of dormant accounts that belonged to Holocaust victims or survivors after intense pressure from the United States, Israel and international Jewish groups, which accused the banks of hiding Jews’ wartime assets.

Bank Leumi, which holds the lion’s share of the banks’ responsibilities, according to the report, issued a statement saying it had no assets belonging to Holocaust victims.

Zusevich, whose family did not appear on the list of 9,000 accounts cited by the Knesset committee, is disappointed that this month’s report will not help his family recover anything.

But he hopes that an upcoming investigation into real estate assets will reveal details about property he says his family bought in prestate Israel more than 70 years ago.

Avital said she felt compelled to open the investigation, which took four years to complete, “because everyone was hiding behind somebody else. It is possible people did not know the magnitude, but now that they have the facts they cannot ignore the facts anymore and say there was nothing.”

Yehuda Barlev, one of the chief auditors in the investigation, said inaction on the part of government and banks could be attributed to bureaucracy, obtuseness and a general lack of sensitivity to the claims of survivors and heirs.

Members of Zusevich’s family were wealthy grain merchants in Bessarabia, which before the war was in Romania and later became part of Ukraine. His grandfather and great-uncles opened an account at the Anglo-Palestine Bank — which later became Bank Leumi — in the 1930s and also bought large tracts of land in Palestine. The investments were meant to pave the way for the family’s eventual immigration to Palestine, plans to which the war put an end.

Today the manager of a start-up company that sells medical devices, Zusevich immigrated to Israel as a teenager from Ukraine with his family in 1974. Soon afterward, he found out about the missing family bank account and property.

Documentation of family assets lost during their deportation in 1940 — and subsequent requests that Bank Leumi acknowledge the account — have been met with letters that no such account exists.

However, the family name was on a list published by the Israeli state custodian in 1997 and the money was later said to amount to 650 British pounds.

But Zusevich claims that the family deposited at least 1,000 British pounds in the bank account in 1939 — a large sum of money at the time, enough to buy several acres of land.

Zionist organizations encouraged Jews in Europe and elsewhere before the war to invest their money in the burgeoning Jewish community in British Mandate Palestine as a way to play an active role in the building of a Jewish national homeland, provide future financial security for their families in case they immigrated and get capital out of Europe.

In the early 1940s, such bank deposits constituted between 30 percent to 50 percent of the capital of banks in Palestine.

Once World War II began, however, the British authorities ruling Palestine seized property and accounts held by Jews living under Nazi rule as “enemy property.” Most of the assets were then transferred to England.

In 1950, following both the war and the establishment of the State of Israel, the British paid compensation of $1.4 million, which in turn was handed over to Israel’s newly established State Custodian’s Office.

A small number of the accounts were returned to their owners or heirs, but at a much reduced value. The Knesset report found the accounts were mismanaged by both the state custodian and the banks themselves, which secretly had retained some accounts all along.

In some cases, the banks reduced the interest paid to dormant accounts but continued charging fees. As a result, the value of the accounts dwindled, in some cases to nothing.

There also are stories of heirs approaching banks for information about family accounts and being turned away because they had no death certificates to prove that the relative who opened the account was killed by the Nazis. Similar responses were given at first to heirs seeking money in Swiss accounts.

Exactly how much money is owed to survivors remains unclear. The committee valued the accounts in two different ways: the initial assets, indexed to inflation since World War II, plus either 3 percent interest or 4 percent interest through Sept. 30, 2004.

With 3 percent interest, the committee found the state liable for $23 million and the banks responsible for $8.5 million.

At 4 percent interest, the state’s liability is about $133 million and the banks’ liability some $73 million.

Bank Leumi said it would cooperate with authorities regarding the report but took issues with claims that it still owes money to heirs.

“The bank argues that this retroactive reassessment has no factual, economic or legal basis. However, Bank Leumi wishes to emphasize that this specific disagreement with the commission on the principles of reassessing the value of accounts and with the findings of the advisory board on this matter will in no way affect the bank’s moral obligation to continue to assist in the identification and restitution of assets belonging to Holocaust victims and to cooperate with those bodies designated by the Knesset to implement the commission’s report,” bank representatives said.

A lawyer for Bank Leumi was quoted in Ha’aretz on Sunday saying that without a law enforcing the report’s findings, the bank did not intend to make any payments.

The Knesset committee has recommended that legislation be approved to return the assets owed to heirs at a fair value. If heirs cannot be found, it was suggested that the money go to assist Holocaust survivors or Holocaust commemoration projects.

The next phase of the committee’s work will be to investigate land holdings Holocaust victims or survivors bought before the war.

“It’s too early to say” how much such real estate could be worth, Barlev said. “There has been lots of speculation, but none of it based on concrete facts.”

For his part, Zusevich urged other families with unpaid assets in Israel not to give up, noting that their families once helped establish the State of Israel through their investments and purchases of land. He urged them to unite to help ensure the government and banks fulfill their obligations.

“Even if you are not on the lists, do not despair. Our example shows there is a lot of material out there to research,” he said. “It’s worth joining together in our search because going it alone is a harder road.”

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