August 13, 1998
Swiss banks have agreed to pay $1.25 billion in restitution to survivors of the Holocaust. The deal settles a class-action lawsuit claiming banks failed to return funds to survivors and relatives after the war.
PHIL PONCE: The historic out of court settlement was announced in the shadow of the federal courthouse in Brooklyn, New York. The key point: Holocaust victims and their heirs will receive more than one billion dollars. New York Senator Alfonse D'Amato announced the agreement.
A RealAudio version of this segment is available.
June 2, 1998:
A group headed by Sec. Eizenstat reports on the Nazis' use of stolen gold during World War II.
May 7, 1997:
The US releases a preliminary report on the handling of Holocaust victim's assets.
February 28, 1997:
The Swiss government establishes a compensation fund for Holocaust victims.
February 4, 1997:
Secretary Eizenstat and Former Federal Reserve Chairman Paul Volcker discuss Nazi war assets .
December 11, 1996:
Congress holds hearings on Holocaust victim's assets.
Frontline's documentary on Nazi gold.
Sec. Eizenstat's closing statement at the London Conference on Nazi Gold.
A meaningful step.
SEN. ALFONSE D'AMATO: It doesn't give back all that people lost for so many years, but it certainly is a meaningful step, and I hope we can get about the business now of bringing people together.
PHIL PONCE: The two largest Swiss banks, UBS and Credit Suisse, agreed to four payments spread over three years. The first payment of $250 million will be made 90 days after the deal is approved by a federal judge. The total will come to $1 1/4 billion. In return, the 18,000 Holocaust survivors and heirs will drop a $20 billion dollar class action lawsuit against the two private banks and also drop a separate lawsuit filed against the Swiss Central Swiss Bank. Additionally, the agreement calls for an end to threat of sanctions against the Swiss by numerous American states and cities. It's been more than two years since the United States Government and Jewish groups discovered documents showing that Swiss banks kept unclaimed assets deposited by European Jews before and during the Holocaust. Since then, the Swiss government, itself, started an independent investigation, one headed by former Fed Chairman Paul Volcker. Congress held a number of hearings on the issue and last year the Swiss government and banks created a $200 million fund to compensate victims. But some Jewish groups felt the size of that fund fell far short of the amount involved and continued their legal fight. They rejected an offer of $600 million earlier this summer, before agreeing to the amount announced yesterday. For one Holocaust survivor it's the end of a long fight.
ESTELLE SAPIR, Holocaust Survivor: This took too long, from this should've been long time finished. I've spent two years on this, more than two years.
PHIL PONCE: More now from Abraham Foxman, national director of the Anti-Defamation League. He's a member of the panel that advised lawyers for the plaintiffs. And Robert O'Brien, managing director at Credit Suisse First Boston, he's been involved in the negotiations for two years and is spokesperson in the United States for the two Swiss banks in this case. Gentlemen, welcome.
Mr. Foxman, how would you describe the significance of the settlement?
"A symbolic measure of justice."
ABRAHAM FOXMAN, Anti-Defamation League: I think it's historic. I think it's important. I think it is a symbolic measure of justice. I believe that it sends a message for future generations that deeds and misdeeds need accountability, and I think it opens up a new chapter between the Swiss people and the Jewish people worldwide.
PHIL PONCE: Mr. Foxman, you've been quoted as saying that you were becoming increasingly concerned that the last sound bite of the century relating to the Holocaust not be about the Jews and their gold. What do you mean by that?
ABRAHAM FOXMAN: Six million Jews died because they were Jews, not because they had money or bank accounts. Six million Jews, 99.9 percent, didn't have Swiss bank accounts, didn't have gold, didn't have jewelry, or art. They perished because of who they were. This debate, this discussion, as important as it is, because one needs to have a measure of justice, even if it's symbolic, skewed the whole message, the lesson, the truth of the Holocaust. And I was concerned that it not be the last sound bite. And so closure to this issue of a debate on how much money was or wasn't lost or stolen I think is important, so now we can go back to the moral lessons, to the true lessons of the Holocaust, which is how people relate to people, and how we can find ways to make sure that it never happens again.
PHIL PONCE: Mr. O'Brien, why did the Swiss banks decide to settle the case?
ROBERT O'BRIEN, Credit Suisse: Well, once again, I agree almost totally with Abe Foxman, who has been a very strong and balanced spokesman for this issue over a number of years, and I thank him once again for his comments. The answer to your question, I believe, is that this is a very complex issue, trying to recreate records over a 50-year period of time and to deal with all factual issues and emotional issues. It's very difficult and it's very complex. That's, quite frankly, one of the reasons that early on in this process some two years ago the two banking organizations, Credit Suisse and UBS, realized that the inquiry would take a considerable amount of time and basically at that point started a fund, which is now some $200 million, to deal with the immediate needs of Holocaust survivors, while we went through a rational process to try and put together enough factual information to deal with this in some way that you could quantify. I would have hoped that it would have been a faster process. We certainly-and I give everyone the benefit of the doubt-have made a concerted effort to achieve that objective. I just think it was a tough and a complex issue.
PHIL PONCE: Mr. O'Brien, is this an admission on the part of the banks that they did something wrong in the past?
ROBERT O'BRIEN: I think if you look back over a 50-year period of time-and I will include a very wide group-I will include our two banks. I will include Switzerland. But I will include numerous institutions around the world and numerous countries, including our own, that basically as they look back on that period of time, if they're honest with themselves, will see things that they should have done and things that they should not have done, and I think that we fall within that general category.
PHIL PONCE: Mr. Foxman, is that how you see the motivation for the settlement?
ABRAHAM FOXMAN: I do, and I will say to Mr. O'Brien here that the two banks have always been ahead of the effort to resolve it as quickly as possible and as justly as possible. I think there's another need at this point, and that is to both of us, both sides, the Jewish community and the Swiss community, the banks, and their various organizations, to educate the Swiss public for today and for the future. There is an image out there that this was done because of bludgeoning or blackmail or pressure. I think some of the pressures move the process closer to conclusion, but the fact is there's a need to educate the Swiss public that this is a moral debt, that this was done for the name and the history and for the moral name and good name of Switzerland.
PHIL PONCE: Mr. O'Brien, is there a need for education? Is there anger back in Switzerland?
Did discussions of sanctions change Switzerland's attitude towards the process?
ROBERT O'BRIEN: Well, to address Abe's point, there is a lot of emotion on both sides of the Atlantic. I'd like to take a step back and just-and it's not my job here to defend the Swiss. I am an American, which is obvious to everyone. But I have traveled frequently and deal frequently with the Swiss. And if you go back two years ago in terms of what the Swiss and the Swiss government did, what they did was absolutely unprecedented. They opened up all of their books and records; they opened up all of their accounts. They took away-they changed all of the secrecy laws, relative to private accounts. They set up a commission, the Bergier Commission, to objectively evaluate the role of Switzerland during that-during that period of time. The Swiss National Bank contributed $70 million at that point into a humanitarian fund, and there are numerous cases where Swiss officials admitted and accepted responsibility. And that was the path that they pursued. So I think-I ask myself the question, well, what stopped that, what changed the sentiment, and I think a lot of that had to do with the U.S. political situation and discussions of sanctions. And I think, in many ways, those sanctions probably did serve some constructive purpose, but there was also a negative associated with that. Those sanctions politicized and polarized the process, and now, as Abe said, I think we all have to work to try, now that we have a comprehensive settlement, to begin to try and put some rational pieces back together again.
PHIL PONCE: So Mr. O'Brien, are you saying that the sanctions may have helped move the settlement along, but at the same time, it created some resentment in Switzerland?
ROBERT O'BRIEN: I think that's exactly the case. I think there was positive, and there was a negative outcome associated with that. I'd like just from my own point of view to put all of that behind me at this point in time and focus on a primary objective as to how quickly can we get those funds in the hands of Holocaust survivors and secondarily, how can we begin to bridge the gap that's been created by this process?
PHIL PONCE: Mr. Foxman, how about the nuts and bolts? Who qualifies and if somebody might qualify, how do they go about making a claim?
ABRAHAM FOXMAN: Well, first and foremost, the class are survivors, those who brought claims, survivors of those who could have had claims, heirs, and well as a survivor class worldwide. Classes will be set up. There already is a process the money that Mr. O'Brien talked about that the Swiss banks set up have already, for example, been distributed to Latvian Jewish survivors. And so that it will take several months for the process to actually be implemented. First and foremost, survivors in need; then survivors in general. And if there are funds leftover, there are certainly enough good things that one can apply the funds to so that the legacy of those who perished and whose funds were stolen, at least the legacy will go to do good, to help ameliorate suffering and pain and certainly to fight hatred and bigotry.
PHIL PONCE: So, Mr. Foxman-
ROBERT O'BRIEN: If I may, I'd like to add one other category, and that really is I think the most constructive process that's been in place for a very long period of time, is that process headed by Paul Volcker, the Volcker committee, and to just educate those who might not be familiar with that, the Volcker Committee is a committee consisting of representatives from various Jewish organizations and a very wide constituency that now has spent the last two-year period of time systematically going through all of the accounts in Switzerland. Last count they had something like 500 accountants working for them. And the overall expense, by the way, that's been borne by the banks is probably somewhere in the area of $200 million. It is the process that will, I trust, identify those individuals and their heirs who might have had assets in the banks over that period of time and certainly one of the primary objectives is to identify those assets, identify those individuals, and see that those funds are returned. And, as the bank said, two years ago, not one penny of Holocaust funds will ever remain in our institutions.
PHIL PONCE: So, Mr. O'Brien, are you saying that there still might be some people in the United States or throughout the world who may not know that he or she might qualify for this restitution?
ROBERT O'BRIEN: I think that's possible. We published lists around the world, you know, with thousands of names on them, but the inquiry continues, and that possibility certainly is there.
PHIL PONCE: Mr. Foxman, as you look at this entire experience, what are the big lessons to be drawn from this?
The lesson: accountability.
ABRAHAM FOXMAN: Well, first, I wish I could agree with Mr. O'Brien totally, and that is the sad part is it took 50 years, it took 50 years of denial. It is true that there are a lot of good people in the last several years who wanted to face up to history, who realized that it's history that was an enemy of Switzerland and not the Jewish people. It was a painful process for the Swiss. Again, I believe a lesson for the future is accountability, responsibility, that if you do evil, if you do wrong, if you engage in improper activities, as that which was engaged in during the war years by some members of the Swiss establishment, there is a price to pay, regardless whether it takes 50 years, regardless whether it needs to be prodded, but there is accountability. I think that's a very important lesson for us today and in the future, whether we're talking about Bosnia, whether we're talking about Albania, whether we're talking about Africa, that this society will not tolerate evil activity, and there's a price to be paid.
PHIL PONCE: Mr. Foxman, Mr. O'Brien, I thank you both very much.
ROBERT O'BRIEN: Thank you.
ABRAHAM FOXMAN: Thank you.