[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]



 
HOLOCAUST ERA INSURANCE RESTITUTION AFTER AIA v. GARAMENDI: WHERE DO WE 
                             GO FROM HERE?

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 16, 2003

                               __________

                           Serial No. 108-79

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpo.gov/congress/house
                      http://www.house.gov/reform







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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana                  HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut       TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana              CAROLYN B. MALONEY, New York
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
DOUG OSE, California                 DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky                  DANNY K. DAVIS, Illinois
JO ANN DAVIS, Virginia               JOHN F. TIERNEY, Massachusetts
TODD RUSSELL PLATTS, Pennsylvania    WM. LACY CLAY, Missouri
CHRIS CANNON, Utah                   DIANE E. WATSON, California
ADAM H. PUTNAM, Florida              STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia          CHRIS VAN HOLLEN, Maryland
JOHN J. DUNCAN, Jr., Tennessee       LINDA T. SANCHEZ, California
JOHN SULLIVAN, Oklahoma              C.A. ``DUTCH'' RUPPERSBERGER, 
NATHAN DEAL, Georgia                     Maryland
CANDICE S. MILLER, Michigan          ELEANOR HOLMES NORTON, District of 
TIM MURPHY, Pennsylvania                 Columbia
MICHAEL R. TURNER, Ohio              JIM COOPER, Tennessee
JOHN R. CARTER, Texas                CHRIS BELL, Texas
WILLIAM J. JANKLOW, South Dakota                 ------
MARSHA BLACKBURN, Tennessee          BERNARD SANDERS, Vermont 
                                         (Independent)

                       Peter Sirh, Staff Director
                 Melissa Wojciak, Deputy Staff Director
                      Rob Borden, Parliamentarian
                       Teresa Austin, Chief Clerk
              Philip M. Schiliro, Minority Staff Director






                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on September 16, 2003...............................     1
Statement of:
    Arbeiter, Israel, president, American Association of Jewish 
      Holocaust Survivors of Greater Boston, Inc.; Daniel Kadden, 
      Ph.D., Holocaust Survivor Advocate; and Michael J. Bazyler, 
      professor of law, Whittier Law School......................   128
    Bell, Ambassador Randolph M., Special Envoy for Holocaust 
      Issues, U.S. Department of State...........................    30
    Eagleburger, Lawrence S., chairman, International Commission 
      on Holocaust Era Insurance Claims; Gregory V. Serio, 
      superintendent, New York State Insurance Department, 
      chairman, International Holocaust Commission Task Force of 
      the National Association of Insurance Commissioners; Gideon 
      Taylor, executive vice-president, Conference of Jewish 
      Material Claims Against Germany; and Roman Kent, chairman, 
      American Gathering of Holocaust Survivors..................    50
Letters, statements, etc., submitted for the record by:
    Arbeiter, Israel, president, American Association of Jewish 
      Holocaust Survivors of Greater Boston, Inc., prepared 
      statement of...............................................   132
    Bazyler, Michael J., professor of law, Whittier Law School, 
      prepared statement of......................................   151
    Bell, Ambassador Randolph M., Special Envoy for Holocaust 
      Issues, U.S. Department of State, prepared statement of....    33
    Davis, Chairman Tom, a Representative in Congress from the 
      State of Virginia, prepared statement of...................     4
    Eagleburger, Lawrence S., chairman, International Commission 
      on Holocaust Era Insurance Claims, prepared statement of...    54
    Foley, Hon. Mark, a Representative in Congress from the State 
      of Florida, State of California Attorney General's letter..    23
    Kadden, Daniel, Ph.D., Holocaust Survivor Advocate:
        International Commission on Holocaust Era Insurance 
          Claims Report..........................................   163
        Prepared statement of....................................   140
    Ros-Lehtinen, Hon. Ileana, a Representative in Congress from 
      the State of Florida, prepared statement of................    15
    Schakowsky, Hon. Janice D., a Representative in Congress from 
      the State of Illinois, prepared statement of...............    19
    Schiff, Hon. Adam B., a Representative in Congress from the 
      State of California, prepared statement of.................    27
    Shays, Hon. Christopher, a Representative in Congress from 
      the State of Connecticut, prepared statement of Mr. 
      Carnicelli.................................................   215
    Serio, Gregory V., superintendent, New York State Insurance 
      Department, chairman, International Holocaust Commission 
      Task Force of the National Association of Insurance 
      Commissioners, prepared statement of.......................    85
    Taylor, Gideon, executive vice-president, Conference of 
      Jewish Material Claims Against Germany, prepared statement 
      of.........................................................   102
    Towns, Hon. Edolphus, a Representative in Congress from the 
      State of New York, prepared statement of...................   215
    Waxman, Hon. Henry A., a Representative in Congress from the 
      State of California, prepared statement of.................    11


HOLOCAUST ERA INSURANCE RESTITUTION AFTER AIA v. GARAMENDI: WHERE DO WE 
                             GO FROM HERE?

                              ----------                              


                      TUESDAY, SEPTEMBER 16, 2003

                          House of Representatives,
                            Committee on Government Reform,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 2:03 p.m., in 
room 2154, Rayburn House Office Building, Hon. Tom Davis 
(chairman of the committee) presiding.
    Present: Representatives Tom Davis of Virginia, Shays, Ros-
Lehtinen, Waxman, Cummings, Van Hollen, Ruppersberger, Norton, 
and Bell.
    Also present: Representatives Foley, Schiff, and 
Schakowsky.
    Staff present: Peter Sirh, staff director; Melissa Wojciak, 
deputy staff director; Keith Ausbrook, chief counsel; Randall 
Kaplan, counsel; Robert Borden, counsel/parliamentarian; David 
Marin, director of communications; Drew Crockett, professional 
staff member; Teresa Austin, chief clerk; Brien Beattie, deputy 
clerk; Allyson Blandford, office manager; Corinne Zaccagnini, 
chief information officer; Phil Barnett, minority chief 
counsel; Kristin Amerling, minority deputy chief counsel; Karen 
Lightfoot, minority communications director/senior policy 
advisor; Anna Laitin, minority communications and policy 
assistant; Michelle Ash, minority counsel; Earley Green, 
minority chief clerk; and Jean Gosa, minority assistant clerk.
    Chairman Tom Davis. A quorum being present, the Committee 
on Government Reform will come to order. I want to welcome 
everyone to today's hearing on the status of Holocaust-era 
insurance restitution.
    During the Holocaust, the lives of 6 million Jewish people 
were systematically extinguished. Countless families lost all 
their properties and belongings. Assets were confiscated and 
personal and business documents including bank records, 
insurance policies and investment information were destroyed.
    Following the Holocaust, survivors and their families 
attempted to pick up the pieces of their shattered lives. When 
victims and their heirs attempted to collect on insurance 
policies, European insurance companies frequently denied their 
claims because records were missing. Holocaust victims and 
their heirs have been seeking to redeem these policies ever 
since.
    Finally, in the late 1990's, the threat of class action 
lawsuits forced five insurance companies with American 
subsidiaries to the negotiating table. This ultimately led to 
the creation of the International Commission on Holocaust-Era 
Insurance Claims [ICHEIC]. ICHEIC is a voluntary nonprofit 
organization comprised of five European insurance companies, 
the State of Israel, representatives of Holocaust survivors, 
and U.S. and European insurance regulators. The commission was 
formed in 1998 and established a process to address insurance 
claims of Holocaust victims and their heirs.
    While hopes were high for the success of ICHEIC, the 
initial results were disappointing. On November 8, 2001, the 
Committee on Government Reform held a hearing to examine some 
of the shortcomings on the ICHEIC process. At that time very 
few claims were being paid. Of the claims submitted, less than 
2 percent resulted in offers from insurance companies. Critics 
noted that missing information was a primary obstacle in the 
claims process. The majority of all applicants were unable to 
provide basic policy information, including policy numbers and 
the name of the insurance company holding their assets. Since 
the Holocaust ended almost 60 years ago, it shouldn't come as a 
big surprise that aging survivors and families of those that 
perished couldn't remember account numbers. Any claims process 
must account for this. Witnesses also complained that a 
comprehensive list of policyholders was not being developed and 
shared with the public by ICHEIC or anyone else. Many of the 
companies that issued Holocaust-era insurance policies were not 
cooperating in the process, with only five companies directly 
involved in the ICHEIC process.
    To address shortcomings with the ICHEIC process, a number 
of States have enacted laws designed to force insurance 
companies to supply information about Holocaust-era policies. 
For example, California passed the Holocaust Victims Insurance 
Relief Act, which authorized the suspension of the license of 
any insurance company operating in the State if it failed to 
publish information about Holocaust-era policies.
    The Supreme Court, however, struck down the California law 
in a narrow 5 to 4 decision on June 23, 2003. The court held 
that the State didn't have the right to interfere in the 
Federal Government's handling of foreign affairs. Since it is 
the policy of the U.S. Government that ICHEIC serves as the 
sole remedy for Holocaust-era insurance claims, the court 
reasoned that California's approach would undercut the 
President's diplomatic discretion, which in this case he has 
exercised to encourage insurance companies to participate in 
ICHEIC and voluntarily disclose information through ICHEIC.
    The court's opinion left open the possibility of 
congressional action, and two bills have been introduced in the 
108th Congress to address the issue. H.R. 1210, the Holocaust 
Victims Insurance Relief Act, introduced by Congressman Henry 
Waxman, would require insurance companies doing business in the 
United States to publish basic policyholder information for 
insurance policies in effect during the Holocaust era. Another 
bill, H.R. 1905, introduced by Congressman Mark Foley, would 
authorize States to pass laws requiring insurance companies to 
disclose Holocaust-era policyholder information.
    With the Supreme Court's recent decision, ICHEIC is pretty 
much the only game in town for resolving Holocaust-era 
insurance claims. And this brings us to today's hearing, where 
we will examine whether ICHEIC is fulfilling its mission or 
whether congressional action is warranted.
    Since the last hearing, there have been improvements. An 
increasing number of policyholder names have been published and 
agreements have been made with countries such as Germany, the 
Netherlands, and Belgium, to process insurance claims using 
ICHEIC standards. There is no doubt that progress has been 
made.
    However, we need to ask whether these improvements are 
enough and whether more can be done. At a minimum, we should 
make sure that a comprehensive list of policyholders is 
developed, and that insurance companies are fully cooperating 
in this effort. We also need to ask whether there is more the 
U.S. Government can do to urge European countries and insurance 
companies to get involved in this process. And, finally, we are 
left with the question of whether the ICHEIC process is 
working; is it fair, efficient, transparent, and, above all, 
accountable?
    It has been almost 60 years since the end of one of the 
most tragic episodes in human history. It amazes me this issue 
still has not been resolved. I realize that there are 
complicated issues, but all parties, including heads of State, 
ICHEIC, insurance regulators, and insurance companies need to 
work expeditiously and in good faith to solve this problem. 
There is a basic premise here, which is that every Holocaust 
victim who had insurance is entitled to restitution. Providing 
restitution for victims and their families on these policies is 
the very least we can do to help bring a small amount of 
closure to one of history's darkest hours.
    I want to thank all our witnesses for appearing before the 
committee, and I look forward to their testimony. I ask 
unanimous consent that the following members be permitted to 
serve on the committee for the purpose of today's hearings: 
Congressman Mark Foley, Congresswoman Jan Schakowsky, and 
Congressman Adam Schiff.
    Without objection, so ordered.
    I also want to particularly thank my colleague and ranking 
member, Henry Waxman, for his dedication to this issue, which 
is why we are holding this hearing, and I now yield to him for 
his opening statement.
    [The prepared statement of Chairman Tom Davis follows:]
    [GRAPHIC] [TIFF OMITTED] 90748.001
    
    [GRAPHIC] [TIFF OMITTED] 90748.002
    
    [GRAPHIC] [TIFF OMITTED] 90748.003
    
    [GRAPHIC] [TIFF OMITTED] 90748.004
    
    [GRAPHIC] [TIFF OMITTED] 90748.005
    
    Mr. Waxman. Thank you, Mr. Chairman. I want to thank you 
for holding this hearing to examine the ongoing challenges in 
Holocaust insurance restitution, and I also want to acknowledge 
your leadership role in ensuring restitution for Holocaust 
survivors and their relatives.
    This committee held the first congressional hearing on the 
International Commission on Holocaust Era Insurance Claims 
[ICHEIC], in November 2001. That hearing examined a number of 
serious problems with the ICHEIC process, including the 
extraordinary backlog in unresolved claims. It is nearly 2 
years since that hearing and nearly 5 years since ICHEIC was 
established to facilitate and accelerate the payments of 
policies purchased by the victims of Nazi terror. Yet even 
today, approximately 80 percent of ICHEIC claims are still in 
limbo.
    There are two primary problems that prevent survivors from 
redeeming their insurance policies. One problem we cannot do 
anything about: The Nazis often destroyed the records held by 
persons imprisoned in the concentration camps. The other 
problem we can address: Many of the insurance companies who 
issued these policies will not disclose complete lists of their 
policyholders. The result is a catch-22. Survivors and their 
relatives cannot collect on insurance policies because they 
cannot prove who issued the policies.
    California tried to address this problem by passing the 
Holocaust Victims Insurance Relief Act. This law required 
insurance companies doing business in California to disclose 
the list of Holocaust-era policyholders. The chairman joined me 
in filing an amicus brief in support of the California law 
before the Supreme Court.
    Unfortunately, the Bush administration opposed this law, 
and the Supreme Court agreed, striking down the law this summer 
in AIA v. Garamendi. This decision removed critical leverage 
that State insurance regulators tried to use to pressure the 
insurance companies to fulfill their obligation to publish 
information about Holocaust-era policies. The Supreme Court's 
opinion, written by Justice Souter, concluded that California's 
``iron-hand'' approach would undercut the President's 
diplomatic discretion to use ``kid gloves'' to resolve 
Holocaust-era insurance cases. Well, it is time to take the 
gloves off.
    Look at a chart of Jewish population distribution in Europe 
before the Holocaust and also the chart of the names that have 
been published through ICHEIC for each country. Germany makes 
up most of the names released on ICHEIC's Web site, nearly 
400,000 policies identified in a country that had 585,000 Jews. 
Look at Poland, where 3 million Jews lived but a mere 11,225 
policyholders have been listed. Or Hungary, where barely 9,155 
policyholder names have been identified out of a prewar Jewish 
population exceeding 400,000. In Romania, where close to 1 
million Jews lived, only 79 policyholders have been identified. 
These countries were the cradle of Jewish civilization in 
Europe. Clearly, these numbers demonstrate that claimants are 
far from having a complete list.
    Congress must act to fix this terrible injustice. That is 
why I have introduced H.R. 1210 and Mr. Foley has introduced 
his legislation. My bill would require all insurance companies 
operating in the United States to publish basic information 
about Holocaust-era policies for public dissemination through 
the National Archives.
    At this hearing we will also need to address accountability 
at ICHEIC, the insurance companies, and the State Department. 
ICHEIC is supposed to be a public institution performing a 
public service, yet it has operated largely under a veil of 
secrecy without any accountability to its claimants or to the 
public. Even basic ICHEIC statistics have not been made 
available on a regular basis. And information about ICHEIC's 
administrative and operational expenses have been kept under 
lock and key. There is no evidence of systematic changes that 
will guarantee that claims are being handled by ICHEIC in a 
timely way with adequate followup.
    Even worse, many of the insurance companies remain 
recalcitrant and unaccountable. ICHEIC statistics show that the 
claims are being rejected at a rate of 5 to 1. German claims 
have been idled because of the slow pace of research into 
whether the claims are eligible for payment. The Generali Trust 
Fund, an Italian company, has frequently denied claims 
generated from the ICHEIC Web site or matched by ICHEIC 
internally, without even providing an explanation that would 
help claimants determine whether it would be appropriate to 
appeal.
    Likewise, the State Department should be doing more. As an 
observer to ICHEIC and the guarantor of the President's policy 
to rely upon a voluntary system of compliance, the 
administration must make clear to the companies that there are 
consequences if they fail to comply. The State Department 
should also play an activist role in resolving other obstacles, 
like the inaccessibility of state archives in Poland, Hungary 
and Romania that could help identify policyholders in those 
countries. Similarly, intervention with the French Government 
could help with privacy laws that have blocked the publication 
of French policyholder names.
    Mr. Chairman, whether through legislation, oversight, 
diplomatic efforts, or a combination of all three, I hope this 
hearing will help us identify steps that can be taken by 
ICHEIC, its members, the State Department, and Congress to make 
sure that this chapter of history will not close without 100 
percent effort and 100 percent accountability. Time is running 
out for survivors still living today.
    Chairman Tom Davis. Mr. Waxman, thank you very much.
    [The prepared statement of Hon. Henry A. Waxman follows:]
    [GRAPHIC] [TIFF OMITTED] 90748.006
    
    [GRAPHIC] [TIFF OMITTED] 90748.007
    
    Chairman Tom Davis. Other Members wishing to make a 
statement? Ms. Ros-Lehtinen, followed by Mr. Foley.
    Ms. Ros-Lehtinen. I want to thank you, Mr. Chairman, for 
holding this important meeting. After so many years, we want to 
finally correct this historic wrong and restore to the 
survivors the benefits which they were denied for so long.
    The subject of insurance benefits denied to Holocaust 
survivors is heart-wrenching. It involves the legacies of 
families torn apart by the Holocaust with bitter reminders that 
these injustices of half a century ago are unfortunately being 
perpetuated by insurance companies to this day. The full story 
of the fate of insurance policies from the Holocaust is one of 
utter betrayal.
    Past testimonies from survivors has provided chilling 
accounts of insurance agents in Europe cynically selling life 
insurance policies to families that they knew were doomed 
because of the tides of war. Policy payments were demanded up 
front, and the agents knew in many cases that there would never 
be anyone left to claim the benefits.
    According to documents found in the U.S. National Archives 
as well as those in Europe, insurance companies were found to 
have closed policies out and delivered the proceeds to the 
Nazis. These terrible events occurred during the war. The story 
of what happened after the war is just as bad. When the war 
ended, survivors struggled to rebuild their lives, trying to 
reacquire what little remained of their family's legacies. In 
some cases, survivors were told that there was no record of the 
policies they sought or that they needed a death certificate to 
prove their claim. Other survivors were told that the company 
had been nationalized by the Communists and there was nothing 
more that could be done to help them.
    No matter what the excuse, the end result was the same. 
Survivors were abandoned and betrayed. Countless numbers of 
survivors are still seeking information on their policies. What 
is absolutely necessary for their success is a comprehensive 
listing of all of these policies. In the past, with other forms 
of stolen assets from the Holocaust, this kind of information 
has proven to be invaluable for the prompt and accurate 
identification of the assets. This situation cannot be allowed 
to go on any longer. Survivors are entering their twilight 
years and they need these funds now.
    When I chaired the Subcommittee on International Economic 
Policy and Trade, I dealt with the issue of Holocaust-era 
assets and with these insurance companies. I found their 
practices to be cynical and deplorable. Nothing has changed. It 
is very unfortunate that the Supreme Court struck down the 
California law requiring these same disclosures by the 
insurance companies in return for doing business in the State. 
I firmly believe that each State must be allowed to establish 
requirements on insurance companies as a condition of doing 
business in that State. If States are allowed to obtain the 
information necessary to fulfill claims, survivors will 
certainly benefit, and, in the end, that is what we seek.
    Far too many claimants have been arbitrarily denied their 
benefits by these companies. This is simply unacceptable. 
Holocaust survivors deserve to be treated better.
    And I want to thank the constituents from my congressional 
district who are here today, very interested in this subject, 
Mr. Samuel Dubbin of Dubbin and Kravetz, and Mr. David 
Schaecter of World Industrial Products, and I welcome them here 
to this hearing.
    Thank you, Mr. Chairman.
    [The prepared statement of Hon. Ileana Ros-Lehtinen 
follows:]
[GRAPHIC] [TIFF OMITTED] 90748.008

[GRAPHIC] [TIFF OMITTED] 90748.009

    Chairman Tom Davis. I will go to Ms. Schakowsky, then get 
Mr. Foley. Ms. Schakowsky.
    Ms. Schakowsky. I thank you, Chairman Davis and Mr. Waxman 
for all the work that you and your staff have done to put this 
important hearing together, and I am particularly grateful to 
the chairman and the ranking member and the members of the 
committee for allowing me to participate as a former member of 
this committee.
    I represent the Ninth Congressional District of Illinois, 
which includes the village of Skokie, home to one of the 
largest survivor populations in the country. Actually, a 
shrinking survivor population, because as they wait for some 
semblance of justice, many have died. I have closely followed 
and been involved in efforts to seek some justice for Holocaust 
survivors and the era of victims since before coming to 
Congress. I have sat through numerous hearings in this 
committee and elsewhere over the last several years and I have 
kept in close touch with the survivors in my district. The 
process has been disappointing and there has been little 
progress compared to the amount of work that remains to be 
done.
    Today's hearing is timely because Congress has a duty to 
consider possible legislation or other actions in light of the 
June 2003 Supreme Court decision that struck down California's 
Holocaust-era insurance law. That law prompted significant 
action in other States and signified the great frustration many 
involved with the restitution process have experienced. 
California passed legislation because of the reprehensible 
behavior of insurance companies that refused to cooperate with 
efforts to secure the names of Holocaust-era policyholders. The 
law was necessary because ICHEIC was not successful enough in 
convincing many of those companies to own up to their 
responsibility in a timely manner.
    I believe one necessary and logical course of action for 
Congress to take is passage of H.R. 1210, the Holocaust Victims 
Insurance Relief Act, which was introduced by Mr. Waxman. I am 
proud to be an original cosponsor of that legislation because 
it is needed in order to require insurance companies that do 
business in this country and which held Holocaust-era policies 
to release the names of those policyholders to the U.S. 
Government so that they can be made available to the public. 
Without this law, and particularly in light of the Supreme 
Court ruling, insurance companies will continue their shameful 
practice of delay. H.R. 1210 is an appropriate mechanism to 
force real progress on this issue for those who have been 
denied justice for their suffering for over 50 years.
    Without access to names, survivors and victims' families 
have had no way to know if they qualify for compensation under 
the ICHEIC agreement. Numerous constituents contact me with 
questions, dismayed that the process has gone on for so long, 
depressed and angry that they are still without answers or 
justice. There are still some 10,000 survivors in Illinois. 
Over 1,000 of them have filed claims for insurance, and only a 
fraction of those individuals have received offers for payment. 
Many of my constituents lost their families, their properties, 
and their bank accounts during the Holocaust. Most were 
children at the time, and now, years later, they are elderly, 
often the sole representatives of their families, and reminders 
of our historic and moral imperative to provide the utmost 
measure of justice to those who suffered at the hands of the 
Nazi regime.
    There is no good excuse for the process to have gone on for 
this long. Last September, many of us participated in a similar 
hearing on the same subject, and I am sad to say that not much 
has changed since then. There are serious problems that need to 
be resolved and Congress has the responsibility to make sure 
that is done so that those who have lived to recall the 
Holocaust may also have some measure of dignity provided to 
them.
    The history of this process and the behavior of these 
companies have demonstrated that only with the threat of 
financial consequences can results be achieved. Instead of 
sitting back and relying on the actions of States to force 
companies to operate as good-faith partners in the struggle to 
provide justice to Holocaust survivors, Congress should take 
the lead. Pressure needs to come from all sides. But now 
Congress must take action because the States may now be limited 
in their ability to do so as a result of the Garamendi 
decision.
    The Bush administration should also reevaluate a policy 
that relies on a process, the ICHEIC process, that is riddled 
with flaws as the only mechanism for resolution of these 
issues. Too much time has passed, too many promises have been 
broken, and too many survivors have died without receiving what 
they deserve.
    Mr. Chairman, I want to welcome our witnesses today and I 
look forward to hearing their testimony, to a worthwhile 
discussion, and, hopefully, to be followed very soon by 
concrete action.
    Chairman Tom Davis. Thank you very much.
    [The prepared statement of Hon. Janice D. Schakowsky 
follows:]
[GRAPHIC] [TIFF OMITTED] 90748.010

[GRAPHIC] [TIFF OMITTED] 90748.011

    Chairman Tom Davis. Mr. Foley.
    Mr. Foley. Thank you, very much, Mr. Chairman, for agreeing 
to host this important committee hearing. I am almost 
embarrassed to be sitting up here still having this 
conversation. If these were September 11 claimants, they would 
be storming the doors of this Capitol to get relief.
    I had the utmost hope for ICHEIC when we talked about the 
foundation of this. Three percent of the claims have been 
answered. Three percent. Anyone ever miss their insurance 
premium payment by about a day? You get a notice within 3 days 
that they are going to cancel all your coverage. They are 
miraculous in coming up with records when it comes their way, 
when it is about their financial well-being. But when it is 
someone else's, you have to go to a litany of places in which 
to find proof you held a policy. I am outraged that people even 
demand this kind of verification of a policy. Insurance 
companies will not be forthcoming, so they are making the 
claimants find information they know is unavailable.
    The Nazis took fillings out of people's teeth to get the 
gold, they stole their clothes, and they killed them. Yet they 
are asking their loved ones for proof positive that they may 
have had a claim. It is disgusting. It is absolutely 
reprehensible.
    Enron, when we had that financial disaster in America, 
there was not a Member of Congress that did not want to get up 
on the floor and speak for hours about the corruption of the 
system in America. Where are the voices today on this issue? 
Maybe it is only because it is a few Jews that are maybe 
waiting to die in dignity, waiting for an answer. Maybe that is 
why we are not all outraged.
    I am sickened to the core of my being that we have not been 
more responsive as a Nation to the claims of these people. We 
teach our kids to never forget. We teach them about the 
Holocaust so they will not have to hopefully witness the same 
atrocity in their own lifetime. Yet they got a taste of it on 
September 11. They got a taste of what hatred does and how it 
destroys other lives that get in the way of that hateful 
feeling inside themselves, these terrorists.
    Hitler was a terrorist and he killed millions of Jews, and 
we are sitting here having this debate, almost perfunctory, 
just to satisfy some people in the audience. I don't want to 
just satisfy them here today, I want to satisfy their families. 
I want what is rightfully theirs. I want insurance companies to 
pay for that claim that is due those claimants, and I want 
these lists revealed and I want them revealed soon. I am tired 
of waiting.
    The Supreme Court did not close the door on Congress. The 
Supreme Court's opinion also clearly noted that Congress has 
not disapproved of the Executive's policy and that it is 
impossible to interpret congressional silence as approval or 
disapproval, thereby leaving open the possibility of 
congressional action.
    Two bills have been introduced in the 108th Congress to 
address this issue. Those bills can answer the Supreme Court's 
decision and we can empower the States to collect this data. 
Again, if this were about tracking terrorists, you can be sure 
we would give them the authority and the power to check the 
records to make certain
terrorists are not conspiring in States like California and 
Florida and Texas.
    Mr. Chairman, I'd like to enter into the record the State 
of California Attorney General's letter to myself on the 
insurance policies.
    [The information referred to follows:]
    [GRAPHIC] [TIFF OMITTED] 90748.012
    
    [GRAPHIC] [TIFF OMITTED] 90748.013
    
    Mr. Foley. Senator Coleman in the Senate, myself, and 
Congressman Israel have introduced H.R. 1905. Mr. Waxman, who I 
commend for his leadership on this issue, we both have similar 
bills, we both have similar destinies, they may be somewhat 
different, but they are both bills that will address the 
underlying problems we hear of today.
    I can assure you of one thing, the time for talk is over. 
The time for tears and mourning is long since over. We must, in 
this Congress, put an end to this terrible time in our history 
once and for all. And I pray that as we continue to debate--and 
again, Mr. Davis, I do thank you for keeping the dream of those 
who are in the audience alive that someday we may find 
legislation that will force these companies to come clean, to 
pay the claims, to do what is right, and to do it soon. Thank 
you.
    Chairman Tom Davis. Thank you.
    Mr. Schiff. Thanks for being with us.
    Mr. Schiff. Mr. Chairman and ranking member I want to thank 
you very much for allowing me to participate in today's hearing 
before this committee.
    In 1998, the California legislature enacted the Holocaust 
Victim Insurance Relief Act in order to facilitate Holocaust-
era claims by California residents. As a California State 
senator at the time, I was proud to be involved in this process 
as a principal coauthor of the legislation that provided 
victims with the right to bring legal actions to recover on 
outstanding insurance claims.
    Prior to World War II, millions of European Jews purchased 
life insurance policies with various European insurance 
companies as a form of savings and investment in the future. 
Insurance companies, however, have rejected many claims 
submitted by Holocaust survivors or heirs of the victims 
because the claimants lacked the requisite documentation, such 
as death certificates that had been confiscated by the Nazi 
regime. Some families have tried for years to obtain promised 
benefits, but insurance companies continue to demand that 
survivors produce nonexistent documents.
    In 1998, the International Commission on Holocaust Era 
Insurance Claims was established to address the issue of unpaid 
insurance policies and to expedite payouts to Holocaust 
victims, but its record has been dismal at best. The commission 
has received over 900,000 claims, but has only made a few 
thousand settlement offers. In fact, only 35.5 percent of the 
pre-war insurance market participate in the commission's work.
    Reports also indicate that the commission has resolved only 
797 of 77,000 claims against a major Italian insurance company, 
and, as of a year ago, offered survivors $38 million in 
restitution but ran up a $40 million bill in overhead costs. 
Even the economists recently reported on the commission's 
insignificant number of settled claims, charging the commission 
has a strikingly poor record.
    These shortfalls have forced disillusioned claimants to 
turn to the States for assistance in obtaining the swift 
justice they deserve. To continue to deny these claims would be 
a further injustice to these survivors and would only serve to 
perpetuate the acts that occurred years ago.
    As we all know, the Supreme Court recently visited the 
issue, and I was proud to join Mr. Waxman in filing an amicus 
brief in support of the California law. The court narrowly 
rejected the rights of States like California to require 
insurance companies doing business in their State to disclose 
information about Holocaust survivor insurance policies. The 
court maintained the President's preferences for Holocaust-era 
insurance claims to be handled by the commission, an approach 
that has wholly failed Holocaust victims. But as Mr. Foley 
points out, and I quite agree, the court also pointed out that 
Congress has done nothing to express disapproval of the 
President's policy, and in light of congressional silence, the 
issue of the authorization of preemption is far from clear.
    I believe we ought to make it clear that Congress approves 
of the State's offering this opportunity to Holocaust 
survivors, and am proud to be a cosponsor of both Mr. Waxman's 
and Mr. Foley's bills, and have also drafted a bill that 
narrowly addresses the court's decision that speaks to the 
silence that the court pointed to and explicitly authorizes 
States to pass laws much like California's.
    I want to thank again the chairman and the ranking member 
for all of their work on this issue and for allowing me to 
participate in this hearing today.
    Chairman Tom Davis. Thank you. Thank you very much.
    [The prepared statement of Hon. Adam B. Schiff follows:]
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    Chairman Tom Davis. Mr. Van Hollen.
    Mr. Van Hollen. I want to thank you, Mr. Chairman and Mr. 
Waxman, for holding this hearing, and both of you and Mr. Foley 
for your efforts in this area.
    I just want to say at the outset--because I don't want to 
take much time, I would like to get to the witnesses' 
testimony--that I look forward to all the witnesses' testimony 
and look forward to your answers to the question after this 
hearing entitled, ``Holocaust Era Insurance Restitution After 
AIA v. Garamendi: Where Do We Go From Here?'' I think you hear 
a lot of frustration, and I share the frustration expressed by 
my colleagues on this panel with the pace of developments.
    I am interested in any concrete suggestions that you may 
have that can move the process forward and I thank you for 
being here. And I thank you, Mr. Chairman, for holding the 
hearing.
    Chairman Tom Davis. Mr. Bell.
    Mr. Bell. Mr. Chairman, I would like to thank you for 
calling this hearing on such an important issue facing 
thousands still waiting to collect what is owed to them from 
Holocaust-era insurance policies. I would also like to commend 
the ranking member for his efforts to continue the fight for 
justice for survivors and their families.
    On June 23 of this year, the U.S. Supreme Court struck down 
the California law, as we have heard, the Holocaust Victims 
Insurance Relief Act. The decision was rightfully met with 
anger and disappointment from Jewish organizations and 
activists all across the Nation. The court opinion determined 
that California did not have the right to interfere in the 
Federal Government's handling of foreign affairs.
    In 1998, it became the policy of the U.S. Government that 
the International Commission on Holocaust Era Insurance Claims 
would serve as the sole remedy for Holocaust-era insurance 
policies. Although the commission is charged with establishing 
a just process that will expeditiously address the issue of 
unpaid insurance policies issued to victims of the Holocaust, 
it was revealed in a November 2001 Government Reform Committee 
oversight hearing that the Commission's claims approval rate 
was barely 1 percent.
    In all fairness, the Commission has been given a monumental 
task. The international commission has cited the large volume 
of claims, difficulty of investigations, and lack of evidence 
as reasons for the delayed processing. This evidence is almost 
impossible to produce for most survivors or heirs of 
concentration camps or others who fled persecution, which leads 
many to turn to insurance companies, because only insurance 
companies would have that information now.
    But it is appalling to think that after more than 4 years 
of stonewalling, delays and obstruction, German insurance 
companies only released 360,000 names out of a total of 8 
million policies that were matched, and many continue to fail 
to provide a comprehensive list of policy names. These lists 
are critical because over 80 percent of Holocaust survivors and 
their heirs recall their families held policies but do not know 
the names of companies that issued them.
    The United States has played a leading role in the 
international effort to right injustices of the Holocaust era, 
and much has been accomplished, but there is much more to be 
done. The administration's policy of allowing companies to 
voluntarily release information about insurance policies has 
failed miserably. It is time we act to remedy this.
    Mr. Chairman, that is why I believe Congress must act 
swiftly to pass H.R. 1210, the Holocaust Victims Insurance 
Relief Act, legislation introduced by the ranking member, Mr. 
Waxman. This legislation would apply pressure on these 
companies to end their tactics of deliberately stonewalling and 
ensure that survivors have the necessary information to file 
their rightful claims. Thank you, Mr. Chairman.
    Chairman Tom Davis. Thank you very much.
    The gentleman from Connecticut.
    Mr. Shays. Thank you, Mr. Chairman. Mr. Chairman, I would 
like to align my words with all those that have been already 
spoken and to say to you that I am very grateful you are 
holding this hearing, and, Mr. Waxman, for your pursuit of this 
as well. I am grateful this is bipartisan.
    When I was a Peace Corps volunteer, I developed a favorite 
author in Leon Uris. And when you read Mila 18 and Armageddon 
and Exodus, you think no one could do the horrible things that 
were done, and yet they still continue. In listening to Mr. 
Foley, I know his outrage. What we have to be willing to do is 
to offend those that don't want to be offended. We have to be 
willing to confront those that don't want to be confronted; for 
example, our friends in Europe, who seem to be very quick at 
criticizing the United States over trying to end the regime of 
Saddam Hussein, but don't want to right a wrong that has 
existed for over 50 years.
    I would particularly like to say that I have a deep 
affection for Roman Kent, who is going to be testifying, so 
proud he is a constituent of mine, and grateful that he has 
held this banner high and long for so many years. And if for no 
other reason than to do him right, I would like to see this 
happen.
    Chairman Tom Davis. Thank you very much.
    Mr. Ruppersburger.
    Mr. Ruppersberger. Yes, Mr. Chairman, again, thank you for 
the hearing and to all of our Members here who are stating 
their positions here today.
    It is important to keep close checks on the insurance 
industry with respect to this issue as it relates to all the 
Holocaust victims. It is time, though, to be critical of the 
effects of the Supreme Court decision. We need to guarantee to 
our constituents that there are no loopholes for the insurance 
industry. Our goal is to guarantee that all victims of the 
Jewish Holocaust have fair and equal treatment with respect to 
their insurance claims.
    Thank you.
    Chairman Tom Davis. Thank you very much.
    I think this concludes our opening statements, and we are 
happy to get to our first panel.
    [Disruption in hearing room.]
    Chairman Tom Davis. Excuse me.
    [Disruption in hearing room.]
    Chairman Tom Davis. Excuse me. We will move to our first 
witness here, Ambassador Randolph Bell, who is the special 
envoy for Holocaust issues.
    [Disruption in hearing room.]
    Chairman Tom Davis. Sir, we are going to ask you to sit 
down.
    [Disruption in hearing room.]
    Chairman Tom Davis. Ambassador Bell, I'm going to have to 
have him removed, I'm afraid. But, look, it is the policy of 
this committee that all witnesses be sworn before they give 
testimony. If you would rise and raise your right hand.
    [Witness sworn.]
    Chairman Tom Davis. We have a light in front of you. It 
will turn orange after 4 minutes and red at the end of 5 
minutes. If you can sum up, your entire statement will be in 
the record.
    Let me just remind the audience that you are guests of the 
committee. We are happy to have you here, but we expect you to 
obey the rules of the committee. If you do not observe the 
proper decorum, we can't have you disrupt the meeting. We will 
have to have you escorted out.
    [Disruption in hearing room.]
    Chairman Tom Davis. I'm afraid it is, sir.
    [Disruption in hearing room.]
    Chairman Tom Davis. Ambassador Bell, go ahead.

  STATEMENT OF AMBASSADOR RANDOLPH M. BELL, SPECIAL ENVOY FOR 
           HOLOCAUST ISSUES, U.S. DEPARTMENT OF STATE

    Ambassador Bell. Thank you, Mr. Chairman. Very quickly if I 
may, I want to, before turning to my prepared statement, to 
note that today we are observing at the State Department the 
near end of my own 31 years working in the Foreign Service, 
much of which has been devoted to working on Holocaust issues. 
And I mention that only for one purpose, and that is to stress 
that our efforts have always been bipartisan I think in both 
branches of the government. And that is just by way of saying I 
worked on these issues under the previous administration also. 
And I would just like to note for the record that the policies 
I am going to explain to you today are identical to those which 
we pursued under the previous administration.
    Mr. Chairman, ladies and gentlemen, I am honored to have 
been invited here to testify on a subject which so deeply 
concerns us all. It is my understanding that our concentration 
today will be on ``next steps'' following the recent Supreme 
Court decision.
    As you know, I am a diplomat, not a lawyer. Though I work 
on legal issues quite a lot, our lawyers would certainly not 
want me to address Constitutional issues, and I will refrain 
from doing so.
    If I may take the liberty, I would like to restate for my 
own purposes what I think we are looking at here today, which 
is next steps in getting as many Holocaust survivors and heirs 
of Holocaust victims as possible paid as quickly and as fully 
as possible on the basis of Holocaust-era insurance claims. I 
think that sums up what it is we all want to see.
    Last year, when I was here, I testified on the history of 
our efforts to date, and made some points I would like to 
recall this afternoon. Following the 1998 Washington Conference 
on Holocaust Assets, the United States expressed its support 
for ICHEIC. I noted that at the request of the parties that 
signed the ICHEIC memorandum, the United States became formally 
an observer to the negotiating process, as we have made clear 
again today in your discussions. I explained how we, as 
observers, and many of the ICHEIC negotiating parties shared 
the widespread frustration of the pace of payments.
    Part of the problem was that it took so long to establish a 
climate of trust and confidence among the negotiating parties, 
and that should come as no surprise, given the history and the 
disparate roles of the people around the negotiating table. I 
am pleased to note that the ICHEIC process today enjoys the 
full support of survivors groups, of major Jewish-American 
NGO's, of the Government of Israel, as well as this 
administration, like the previous one.
    With regard to the specifics of the process for paying 
Holocaust survivors and heirs, I will leave these in the able 
hands of Chairman Eagleburger, who is scheduled to testify. Let 
me, however, cite at least one important achievement of recent 
months. On April 30, the ICHEIC parties resolved one of the key 
issues in the process by reaching agreement on a name-matching 
mechanism devised as a means of assuring that all prospective 
Holocaust-era insurance claims can be found and processed. This 
mechanism significantly augments the lists that were previously 
available for matching names against policies, adding to the 
published dissemination of names some 360,000 new entries.
    Now, you combine those with the 40,000 names that the 
companies and archives had previously provided, and the 150,000 
names that were already in the ICHEIC reservoir, and the total 
is 550,000. But we should recall, of course, that a name may 
match more than one actual insurance policy, since many people 
had more than one.
    The names available represent the very best efforts of all 
the ICHEIC participants, including Yad Vashem, and of the 
international community generally to produce an exhaustive list 
of potential Jewish German insurance policyholders. The new 
360,000-name list draws on many archival sources, including the 
1938 German census data, which carefully listed all Jewish-
German citizens, emigration statistics and local archives as 
well. All the available names are matched carefully against the 
total of more than 8 million names contained in the companies' 
internal files for the years 1920 through 1945. And in an 
earlier version of this statement there was a typographical 
error in that passage in my statement. The years should read 
1920 through 1945.
    Here I think we reach a crucial point of our inquiry. The 
central question we have all been looking at is, ``shouldn't 
the companies publish all the 8 million names of its 
policyholders?'' A variant of that has been, ``shouldn't we 
require that, as a condition for doing business in the United 
States, the companies should publish all these names?'' And to 
this question I think our answer remains ``no,'' because 
requiring such an extensive publication of names will probably 
not get any additional claims paid. It would almost certainly 
stop the current mechanism for making payments.
    The matching mechanism really will help identify claims. 
You need only enter the ICHEIC Web site, enter your 
grandmother's or your great aunt's name and the process begins. 
There is little if anything to be gained by requiring far 
broader disclosure of millions of names, the vast majority of 
which in no way relate to the Holocaust. Through ICHEIC, 
insurance companies are making records available in a way that 
companies and governments agree will not violate European 
privacy laws, as other procedures would. I defer to my written 
statement for other technical points and statistical data on 
this matter.
    I sum up simply by noting that we have a system which now 
is working much better than previously it did. Litigation is 
not an alternative. It would provide a very slow process which 
might in the end result in no payments at all. We should 
perfect the system that we have available. It is the only one 
at our disposal. Thank you.
    Chairman Tom Davis. Well, thank you very much, Mr. 
Ambassador.
    [The prepared statement of Ambassador Bell follows:]
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    Chairman Tom Davis. Let me start the questioning.
    Some of the witnesses today will testify that the 
publication of policyholder names is the most important 
resource enabling the public to participate in the Holocaust 
insurance claims process. My understanding is that while ICHEIC 
has done a good job of getting policyholder names from German 
insurance companies, cooperation from non-German companies and 
governments has not been as great. For example, one witness 
will testify that France has persistently refused to release 
hundreds of thousands of insurance records that are well over 
60 years old. Would you agree we are not getting full 
cooperation from non-German companies and other European 
countries, such as Austria and France, in developing a complete 
list of policyholder names?
    Ambassador Bell. Not at this point, Mr. Chairman, I would 
not. I would note that--and again you may wish to talk to 
Chairman Eagleburger about this--just recently there was a 
successful round of negotiations involving precisely French as 
well as Swiss companies. You must recall that the Dutch 
companies participate directly in the ICHEIC process, as do the 
Austrian companies, as does the Italian company Generali.
    We could go into the very technical explanation of how a 
great many East European policies will be subsumed under the 
ICHEIC mechanism--again I defer to Chairman Eagleburger to give 
you technical data on that--but, no, it would not be accurate 
to characterize the matter as I believe you just did.
    Chairman Tom Davis. Are you comfortable with the French 
cooperation at this point?
    Ambassador Bell. I am comfortable that any company brought 
into the ICHEIC system will have to cooperate according to 
ICHEIC standards, and those standards involve documentary and 
claim settlement procedures which have been agreed to by the 
victims' representatives themselves. And if they have 
confidence in this matter, and you can turn to some of their 
representatives today, then those procedures, I think, merit 
our support.
    Chairman Tom Davis. What can our government do to 
facilitate cooperation from these other companies and 
countries? Can we do more from a governmental point of view?
    Ambassador Bell. Well, there are general means outside this 
as well, which I might mention. I, as the Special Envoy for 
Holocaust Issues, along with my colleagues from the Holocaust 
Museum, from a great many other walks of life, place major 
emphasis on archival openness in all aspects of Holocaust 
research, education and the diplomatic activities surrounding 
it; historical commissions, etc. So we are already doing a 
great deal in that regard. There is a great deal more we have 
to do.
    Chairman Tom Davis. Let me ask this. Secretary Eagleburger 
is going to claim that ICHEIC researchers are unable to gain 
access to archives in Hungary and Romania, and that Poland may 
possess insurance files for several ICHEIC companies. Can the 
State Department play a role to help ICHEIC gain access to 
these files; and is there a way to bring Eastern European 
companies into the process?
    Ambassador Bell. With regard to the first question, I 
personally have traveled to Budapest to urge that archival 
openness be improved. It emanates from a law passed after the 
fall of the Communist regime which sought to protect all files, 
particularly secret police files, but a consequence of that has 
been to close off to Holocaust research and Holocaust claims 
processes that data. We have strongly urged the Hungarian 
Government to find a way around that. They assure us that they 
may well succeed in doing so.
    Romania--last week, when I appeared before the Helsinki 
Commission to talk about property restitution issues in 
Romania, I made it a matter of public record that there is a 
great deal to be accomplished in that country, least of all--
most of all, not least of all, excuse me, the opening of 
archives.
    So I would agree that we must keep the pressure on for 
better archival openness there. Yes, there is more to be done, 
and, yes, I agree the State Department and the administration 
can and must and is helping.
    Chairman Tom Davis. Mr. Waxman.
    Mr. Waxman. Thank you, Ambassador Bell, for your testimony. 
Just a followup on what you just conclude here in your answers 
to Mr. Davis' questions. What can we do to pressure these 
countries to open up their archives?
    Ambassador Bell. Well, there is a great deal already in 
place with regard to the way we conduct Holocaust diplomacy 
with them. The United States currently, this year, is chair of 
an international organization called the Task Force for 
Holocaust Education Remembrance and Research, and the research 
part of that touches directly on archives. We just chaired a 
meeting of that task force and we urged them----
    Mr. Waxman. Well--excuse me.
    Ambassador Bell. There is, with regard then to the conduct 
of our relations with that country, the embedding of that issue 
directly in our bilateral relationship. And we make it clear to 
all those countries that this matters. Obviously, there is a 
give-and-take in the bilateral relationship, then, which is an 
asset.
    Mr. Waxman. Why wouldn't it matter if some of the German 
and Austrian insurance companies issued policies in those 
nations whose archives are not open? Are we taking the position 
that we are going to give them legal peace, an end to 
liability, for policies they may have issued in these countries 
when we have no knowledge whether those policies were ever 
paid?
    You said in your testimony, and I thought it was very 
interesting, if we try to force the listing of the policies, 
you think we would get fewer claims paid rather than more 
claims paid. I cannot see the reasoning of that. You also said 
the ICHEIC process, in effect, is sufficient and is working. 
But so few of the claims are actually being paid. So I don't 
think we have a very good system, certainly not anything that 
has reached the result that we would want.
    What can the U.S. Government say to these countries that we 
want to open up the archives so that we will get the names of 
those who are entitled to payment on those policies?
    Ambassador Bell. Well, if I may address some of that very 
quickly, again deferring to Chairman Eagleburger. But let me 
very broadly note that of the 60,000 claims ICHEIC has 
received, I think one needs to recall 48,000 are from the 
Soviet Union. Of the claims that ICHEIC is processing, 80 
percent are so-called unnamed claims; that is to say, where 
someone simply signals that I think a relative of mine may have 
had a policy, and there is nothing more than that in 
substantiation of that assertion. So when we talk about 
percentages and rates of payment, we need to bear that in mind.
    The reason, Congressman, that I think that forcing the 
publication of all the insurance company holdings from 1920 
through 1945 would undercut if not completely end the current 
system is the same reason I alluded to last year. It would 
directly violate the privacy laws of those countries, and the 
companies and the countries have told us they would not be able 
to do that and would not do that. And that's just a mechanical 
point.
    Mr. Waxman. Well, let me ask you a question about that. Has 
the State Department ever done a review of these privacy laws 
to make certain that the interpretation of the companies is 
accurate? And has the State Department ever spoken to these 
countries about making exception to their privacy laws for the 
purposes of Holocaust-era restitution?
    Ambassador Bell. I can comment on that to the extent that 
our Foreign Service posts, when confronted with this issue, 
have indeed reported back to us concerning privacy laws in 
those countries. I do not have those reports with me, and some 
of the reporting has also been oral reporting. But the 
universal tenor of it is that if indeed you attempted to 
mandate the violation of those laws, the answer would be no.
    Mr. Waxman. I didn't say ``mandate.'' I would like to know 
whether our government ever tried to see whether the insurance 
companies' interpretations were valid.
    Ambassador Bell. I am not aware of any instance in which, 
Congressman, for instance, whether on the basis of your bill 
anyone has gone to a European government and asked, would this 
be a basis on which you could make exemptions from your privacy 
law?
    Mr. Waxman. You are talking about my bill, and I am talking 
about the responsibility of the U.S. Government. You seem to 
say that ICHEIC is a sufficient mechanism, but I don't think 
it----
    Ambassador Bell. I have haven't said----
    Mr. Waxman. Well, let me finish my question. I don't think 
it has produced a sufficient result.
    Now, one of the reasons you and others have cited that they 
haven't gotten good results is because you can't violate these 
countries' privacy laws, according to the companies. Now, did 
my government, the United States of America, through its 
Foreign Service, do something to check whether that was 
accurate? Or have we pretty much accepted the statement and 
decided that basically what we want to do from a foreign policy 
point of view is end all of this ugly chapter and give legal 
peace to the insurance companies in Austria and Germany, so 
that for foreign policy goals and objectives we can just say 
the end is the end, even though many people, obviously, are 
going to go without getting justice done for them?
    Ambassador Bell. Well, point one, it is not just what the 
companies have said, it is what the governments have said. 
Point two, I cannot, sitting here today, give you any detail 
about what our government has and knows about all these privacy 
laws. But I can tell you we looked into them very carefully, 
not simply because of this connection but also because they 
touch on the doing of business by the United States in a great 
many other areas of trade and commerce.
    We certainly have a very active dialog with the European 
Commission and European governments on this issue, and, 
consequently, yes, we know a lot about it.
    I believe, if I understood you correctly, sir, you just 
implied--and if I am wrong please tell me so--that we would 
have sought a means to proclaim that we believed them, so that 
as a matter of foreign policy we can proclaim the chapter to be 
closed. Let me assure you that neither under the Clinton 
administration nor under the Bush administration has anyone 
that I know ever taken that perspective in this matter.
    The emphasis which we have all held dear--Stuart Eizenstat 
and all of us who worked with him during the Clinton years, all 
of us working on the issue now--has been, ``How can we get the 
greatest number of claims paid as soon as we possibly can while 
the victims are still alive.''
    Mr. Waxman. Well, that is certainly the objective all of us 
share.
    Mr. Chairman, I just want to tell the Ambassador, I 
understand this is your retirement day.
    Ambassador Bell. Yes, sir.
    Mr. Waxman. And I want to thank you for your service. It is 
unfortunate that you had to come today to testify.
    Ambassador Bell. It's all right.
    Mr. Waxman. We very much appreciate your being here.
    Ambassador Bell. Thank you, Congressman.
    Mr. Waxman. Even though I must say, as you will hear from 
some of my colleagues, I still have some issues where you and I 
seem to disagree.
    Ambassador Bell. Thank you, sir.
    Chairman Tom Davis. Thank you. Mr. Foley.
    Mr. Foley. Just briefly, if I could. You state in your 
opening statement that you consider this an important 
achievement of recent months, and that is April 30, because 
ICHEIC has resolved one of the key issues in the process by 
reaching agreement on a name-matching mechanism.
    Do you really believe after 5 years that's significant?
    Ambassador Bell. Yes, sir, I do, for the reason that it 
gets down again simply to the field of numbers. This is a set 
theory--I am old enough that they only invented set theory it 
seems to me when I was in high school and not earlier in my 
arithmetic courses, but I have something of a grasp of it.
    It depends on how broadly you define the set of numbers. We 
could be talking about the set of numbers which is all the 
company archives between 1920 and 1945, the great preponderance 
of which have nothing whatever to do with the Holocaust and 
Holocaust victims, or we could be talking about the set of 
numbers which, after a great deal of careful and hard work on 
the part of a lot of people from very differing perspectives, 
constructs a mechanism in which they have confidence in which 
we will find the nth degree of completeness, 99 percent or 
whatever the degree of completeness as to the perspective 
claimants. It's that set that all the participants in the 
ICHEIC process have been working on, and it is that set which 
that matching mechanism very directly addresses. It's not the 
wider one.
    Mr. Foley. The State Department's position--obviously, we 
believe in Congress we have given authority to the States to 
regulate insurance for the purposes of insuring business 
conduct and other things within those jurisdictions. Based on 
the foreign nature of these companies, that is where the rub 
lies. How should we proceed, though, as a Congress considering 
now with DaimlerChrysler and other foreign corporations now 
doing business in the United States? Should we have any 
prerogative over----
    Ambassador Bell. If you're asking me that as a 
Constitutional question, I am obviously not going to give you 
profound Constitutional law.
    I would note that in the last two administrations, this one 
and the one previously, there has been a consensus that State 
sanctions and sanctions taken up at the State level frequently 
undercut the policies which administrations are pursuing, and 
this has arisen in areas as divergent as human rights and the 
conduct of various kinds of commerce as well as in this 
instance. I think there is a common thread there. In the ICHEIC 
process the State insurance commissioners participated directly 
and noted themselves that they accepted the obligation not to 
undercut the results of this process, and that's a matter of 
record.
    I believe the chairman can address that issue, too. He has 
personal experience with it. It follows from the same consensus 
and precept.
    Chairman Tom Davis. Mr. Van Hollen.
    Mr. Van Hollen. I have no questions.
    Chairman Tom Davis. Mr. Ruppersberger.
    Mr. Ruppersberger. No questions.
    Chairman Tom Davis. Ms. Schakowsky.
    Ms. Schakowsky. When the State Department's analysis of the 
foreign relations authorization bill was submitted by the State 
Department to the Senate, I was really surprised to see that 
Section 802 of the bill would repeal a semiannual report 
required by Congress concerning the German Foundation and the 
requirement in the U.S.-German executive agreement that German 
insurance companies process claims by ICHEIC guidelines. I was 
very disturbed to see this recommendation, because I had worked 
with Mr. Waxman to get that reporting requirement passed, and 
I'm not pleased that it was struck from the bill.
    But I was more shocked, however, to see that one of the 
justifications for this decision the State Department gave in 
its section-by-section analysis was that the administration 
does not have the authority to require ICHEIC or the claims 
conference to supply data needed for the report; and what I'm 
asking is, if you're saying that this administration, which has 
gone to court to defend the voluntary nature of the ICHEIC 
system, does not have the ability to determine whether the 
companies are actually complying.
    Ambassador Bell. Well, Congresswoman, my office actually 
endeavors to provide that report. We are drafting at this 
juncture the next edition of it because, while that requirement 
exists we will do our utmost to comply with it.
    Let us recall that ICHEIC is, indeed, an independent 
commission, and that is by design, and the American 
nongovernmental organizations representing victim interests 
wanted it to be that way as did all the other participants. And 
as long as it is that way, an independent commission, not an 
arm of the U.S. Government, it will be the case that we cannot 
``de jure'' require that all the records and internal files of 
that institution be turned over to us any more than we can 
require that the Conference on Jewish Material Claims hand over 
to us its documentation.
    What we must do and can do is remain as informed as we 
possibly can, and we must also be in touch with all of the 
participants continually to determine what their level of 
confidence and/or dissatisfaction is. And on the basis of that 
latter endeavor, we remain, as we were over the last few years, 
convinced that this is the only available course. But it is 
incumbent on us, the U.S. Government, to enforce the greatest 
degree of efficiency and the greatest degree of speed in this 
process as possibly we can.
    Ms. Schakowsky. You know, your statement says that the 
ICHEIC process, the one that is in your testimony, ``enjoys the 
full support of survivors' groups and major Jewish-American 
NGO's.''
    Ambassador Bell. Those who participated in the 
negotiations, yes, ma'am.
    Ms. Schakowsky. When the Garamendi case was being 
considered at the Supreme Court, two survivor applicant 
organizations, the Simon Wiesenthal Center and the B'eth Settak 
Legal Aid Service, gave scathing assessments of ICHEIC 
failures.
    Ambassador Bell. I'm sure they did. I didn't say ``all.'' 
The adjective ``all'' is not in the sentence. I said that it 
enjoys the confidence of survivor organizations.
    Ms. Schakowsky. I wanted to be clear, because I think the 
statement was meant to show that there is a broad consensus 
that everybody agrees. I think it's important to note.
    Beyond all that, when you look at the actual outcomes, the 
actual results--you know, we may talk about faith in a process 
and everybody agrees and we are doing all we can, bottom line 
is so few of the survivors are getting the money. What I want 
to hear is a sense of urgency, and maybe you do feel that, but 
I want to know what we are actually going to do other than say, 
``you know, we have done all we can, this is the process, 
everybody is on-line.'' In the meantime, people are dying every 
single day, and those of us who have been to these hearings one 
after another are just feeling the frustration of ``deja vu'' 
all over again. As Representative Foley said, you know, we're 
not talking about September 11, 2001. We're talking about 50 
plus years.
    I'm venting here, you know, but how do we move from these 
hearings, from this process, to checks in the hands of the 
people that need them?
    Ambassador Bell. Point one--if I could just go back to 
parts of what you addressed, ma'am--I did not wish in my 
statement or otherwise to imply that there's universality and 
support among every survivor organization. I would note, 
though, if you look at the major Jewish-American organizations 
which have expressed strong support for ICHEIC, including the 
American Jewish Committee--you can talk to representatives at 
the Conference on Jewish Material Claims, which is a 
participant, World Jewish Congress and others--major 
organizations have expressed support for this. The survivors' 
organizations directly involved in the process can speak for 
themselves, but there was certainly more than one.
    With regard to what specifically needs to and can be done, 
I attempted to state as clearly as I could the precept that we 
have to take what history has now given us as the means, it 
would appear to all who look at this, the sole means of getting 
payments out during people's lifetimes and not just perfect it 
but truly invest in it the energy and the resources required to 
make it pay.
    I believe we are in a very different circumstance this year 
than when I sat before many of you last year. I would like all 
of us to listen to the statistical and other information ICHEIC 
representatives themselves will provide and test that thesis. 
But to the extent that there is unexploited opportunity, all of 
us are committed to doing that. All of us have the same sense 
of urgency that you do.
    If I could just say, it's just a practical matter; if you 
take this away, you're going to go back to the courts. That's 
all you are going to be able to do. And as a matter, I think, 
of just ordinary legal analysis or political legal analysis, I 
would observe litigation benefits as the few rather than as the 
many. For those who can afford lawyers, it takes years; it may 
never succeed. We simply want to get the very best deal we can 
out of the non-litigious approach which both the Clinton and 
Bush administrations have espoused.
    Ms. Ros-Lehtinen [presiding]. Thank you very much, and we 
appreciate your testimony here today and--oh, Mr. Shays.
    Mr. Shays. Thank you. We will see how long it takes.
    I want to know what European country has been the most 
cooperative and what European country has been the least 
cooperative.
    Ambassador Bell. On what aspect?
    Mr. Shays. I would like to know what European country has 
been the most cooperative in trying to help us solve this 
problem and what European country has been the least 
cooperative.
    Ambassador Bell. You're talking about those who are 
directly engaged in the ICHEIC process or beyond the ICHEIC 
process or what?
    Mr. Shays. Beyond the ICHEIC process. Bottom line for me, 
you have countries that have the ability to tell their 
companies to solve this problem, which is simply to help 
disseminate information that would enable people to know if, in 
fact, they are covered or their loved ones were covered. What 
countries have been the most willing and the most eager to 
solve this problem so it goes away and what country has been 
the most reluctant and most stubborn and the most 
uncooperative? It's not a hard question.
    Ambassador Bell. The one thing that makes it difficult, 
sir, and that is, as an American and I dare say even you as an 
American legislator, would be unable to tell us today what 
legal hold we have on American companies in every instance.
    Mr. Shays. That's not even the point.
    Ambassador Bell. You just said they have the ability to 
make them comply.
    Mr. Shays. They have the ability to encourage, to use the 
bully pulpit. I mean, there are vibrations you get from people 
who, when you sit down and talk with them, they say, ``this 
person wants me to solve the problem.''
    Ambassador Bell. I can give you then the examples of the 
countries that have decided to negotiate; and those countries 
where governments directly were involved are, of course, 
Germany and Austria, where we ended up with an agreement with a 
$25 million carve-out to settle insurance claims. Certainly we 
had the good offices of the Dutch government when it came to 
folding the Dutch insurers into the process. Now that we have 
the French companies engaged, the French government has taken a 
positive approach, as it did to other Holocaust negotiations in 
which we engaged.
    The other side of your question is where have there been 
instances where governments wouldn't engage themselves. One 
was, of course, Switzerland where the government did not become 
engaged.
    Mr. Shays. And where they had an individual who stepped 
forward saying records are being destroyed and he's being 
ostracized.
    Ambassador Bell. The positive stories are those where the 
governments have become directly engaged in negotiations, and 
the ones where governments have not chosen to become directly 
engaged are the other side of the ledger.
    Mr. Shays. And the last question, we're talking about not 
large awards, correct?
    Ambassador Bell. There are minima, my Latin teacher would 
have said, on the payments, which are, if I remember correctly, 
$4,000 for a Holocaust victim, $3,000 for another claimant. 
Those are minimum payments; there's no maximum. The claims, 
through the agreed adjudication process----
    Mr. Shays. What have the average awards been?
    Ambassador Bell. I defer to Chairman Eagleburger on that. 
He can give you fresh data.
    My knowledge of it is that you can find an average along 
the level of about $1,200 at this juncture, but that's because 
the process has taken into account even all the little marriage 
dowry policies, the really small ones that people even under 
the relaxed standards of proof have put forward. So that's 
brought the average down.
    Mr. Shays. Is it your sense that the companies think in the 
end they are going to have to pay out a fortune or are they 
fighting this for other reasons?
    Ambassador Bell. My honest opinion, sir, is there are these 
amounts that have been devised for the settlement of claims; 
and they are fully at peace with all of those amounts being 
exhausted, including up through the humanitarian fund which 
ultimately would be devoted to insurance purposes. And the 
total for the claims process under ICHEIC is $217.5 million.
    Mr. Shays. I know we don't have the ability to make anybody 
do anything, but we do have the ability to push the envelope 
and we do have the ability to offend people and risk offending 
them, and I just hope that we are pushing real hard.
    Ambassador Bell. Of course.
    Mr. Shays. Thank you.
    Ms. Ros-Lehtinen. Thank you.
    I'd like to note that anyone who has further questions 
would be advised to send them in writing, and I hope that you 
could respond as quickly as possible.
    Ambassador Bell. As rapidly and quickly as I can.
    Ms. Ros-Lehtinen. Thank you, Ambassador.
    We now move to our second panel of witnesses.
    Our second panel includes the Honorable Lawrence 
Eagleburger, the former Secretary of State, who is the chairman 
of the International Commission on Holocaust Era Insurance 
Claims.
    Next, we will hear from Gregory Serio, Superintendent of 
the New York State Insurance Department. Mr. Serio also serves 
as the chairman of the International Holocaust Commission Task 
Force of the National Association of Insurance Commissioners.
    After Mr. Serio, we have Gideon Taylor, who is the 
executive vice-president of the Conference of Jewish Material 
Claims Against Germany.
    Rounding out this panel, Mr. Roman Kent, who is a Holocaust 
survivor and serves as chairman of the American Gathering of 
Holocaust Survivors.
    We thank all of you for being here today, and once we get 
settled we will recognize the Honorable Secretary of State, 
Lawrence Eagleburger.
    As you know, gentlemen, it is the policy of this committee 
that all witnesses be sworn in before they testify. Please rise 
and raise your right hands.
    [Witnesses sworn.]
    Ms. Ros-Lehtinen. In order to allow more time for questions 
and discussions, please limit your testimony to 5 minutes. All 
written statements will be made a part of the record. Thank you 
very much.
    Secretary Eagleburger.

STATEMENTS OF LAWRENCE S. EAGLEBURGER, CHAIRMAN, INTERNATIONAL 
COMMISSION ON HOLOCAUST ERA INSURANCE CLAIMS; GREGORY V. SERIO, 
SUPERINTENDENT, NEW YORK STATE INSURANCE DEPARTMENT, CHAIRMAN, 
 INTERNATIONAL HOLOCAUST COMMISSION TASK FORCE OF THE NATIONAL 
    ASSOCIATION OF INSURANCE COMMISSIONERS; GIDEON TAYLOR, 
EXECUTIVE VICE-PRESIDENT, CONFERENCE OF JEWISH MATERIAL CLAIMS 
 AGAINST GERMANY; AND ROMAN KENT, CHAIRMAN, AMERICAN GATHERING 
                     OF HOLOCAUST SURVIVORS

    Mr. Eagleburger. It is the normal practice, I know, to say 
when you testify like this how pleased you are to appear before 
a committee. I never did that when I was in government because 
I didn't feel it was wise to lie to a committee when I started 
out. So I hope you will understand if I don't do it now.
    I thought what I would do is, I will try to do this as 
briefly as I can, and I will try to do it in 5 minutes. And do 
I assume we're going to go through the whole list before we go 
to the questions?
    As chairman of the International Commission on Holocaust 
Era Insurance Claims, I have been entrusted to help establish 
and run an organization capable of resolving unpaid Holocaust 
era insurance claims. This attempt to bring a measure of 
justice to Holocaust victims decades after the events--on the 
basis of incomplete and nonexistent records and in the face of 
hostility and resistance--has no precedent. I undertook this 
job because I believe profoundly in the mission of this 
organization, to help those who have for so long been denied 
recourse to address their claims and who have for much too long 
been denied justice.
    What I would do, Madam Chairman, is try very briefly to 
address the questions posed by a letter that was written to me 
by the committee chairman, that is, the status of ICHEIC 
administration of claims, progress there on the number of 
claims processed, the status of ICHEIC success in acquiring 
lists of policyholders from participating insurance companies, 
the extent to which insurance companies have cooperated with 
ICHEIC, and benefits of using the ICHEIC process to administer 
the claims.
    I'm not going to spend any time on our history and things 
of that sort. We can go into those in the questions and so 
forth.
    In brief, with regard to the benefits of using the ICHEIC 
process to administer claims, let me try to make these points 
very quickly.
    First of all, in using ICHEIC, it is of no cost to the 
claimants. Unlike litigation, there's no cost--there are no 
lawyers and there's no proceeds of policy payments. There's 
nothing paid to the lawyers.
    There is an independent appeals process for most ICHEIC 
entities. And where that is not possible, and there are a few 
cases, there is a secondary review where there's not an 
independent appeal process. And I will explain that more as we 
go into the discussion.
    There are very relaxed standards of proof. They 
substantially reduce the amount and quality of the evidence 
required to support a claim. And claims can be submitted that 
do not name a particular insurance company. ICHEIC companies 
will check and in a separate system, ICHEIC may provide 
humanitarian payments. There's an opportunity for where we 
cannot identify a company at the end of the day.
    Finally, archival research projects used to provide ICHEIC 
claimants with additional evidence to support their claim are 
very much a part of the ICHEIC process. An effort to pair 
ICHEIC claims with additional supporting documentation for 
submission to the ICHEIC member companies and organizations, 
that is the matching process, also is a part of the ICHEIC 
system.
    Second question, the extent to which insurance companies 
have cooperated: Generally speaking, they have become much more 
cooperative than was the case in the early days. We still have 
contentious issues and there are contentious times with each of 
the companies and with all member groups as we're negotiating 
settlement agreements. But, nevertheless, we focus very much 
more on getting claims processed as quickly, effectively and 
fairly as possible. The difficult times in the past are, to a 
great degree now, behind us. We have learned through sometimes 
difficult negotiations how best to gain cooperation as 
necessary from all parties to keep the process moving forward 
to completion.
    Now as to the status of claims administration and progress 
on the number of claims processed and so forth, some progress 
has been made since we last met. But the number of claims 
processed and decided is nowhere near where we need to be, 
given the age and the need of the claimant population. We have 
worked hard over the past year to revise the system of claims 
administration so that I can now promise you that we have 
turned the corner and in the coming year we will see 
significant improvement in the number of claims decided. As of 
now, we have received and we have heard any number of 
statistics today so far. Let me try to give you ours, and I 
think they are correct.
    ICHEIC has received 61,336 claims which fall within our 
jurisdiction. And I'll try to explain the jurisdiction if it is 
necessary, but we have received 61,336 claims. Total offers 
made using ICHEIC valuation guidelines is 3,268, for a total 
value of $46,950,000. Let me repeat those statistics: 61,336 
claims. Offers made through using the ICHEIC guidelines, 3,268, 
for a total of $46,950,000.
    I cannot tell you exactly how many of those offers have 
been accepted. There is no way at this point to tell you that 
because there is such a lag time between the time of the offer 
and the time when we will be told the offer has been accepted. 
The reason for this being that, from the time the offer is made 
until the time it is received by the claimant--and in some 
cases there will be an appeal so that by the time we know that 
the offer has been accepted--there is often a fairly 
substantial lag time. And at this stage I cannot tell you 
precisely how many have been done.
    Ms. Ros-Lehtinen. Mr. Secretary, I apologize, but we are 
sticking to our 5 minute rule, so if you could wrap it up.
    Mr. Eagleburger. May I have 1 more minute?
    Ms. Ros-Lehtinen. Yes, sir.
    Mr. Eagleburger. And it is the minute you will love the 
least because I will comment briefly on why I think--and I know 
this will not be agreed upon by anybody up there--but why I 
think the two bills before you, though I understand the 
purposes for them are clearly to help the survivors, I think 
that they in fact will work in precisely the opposite 
direction. Because the difference between those bills and the 
ICHEIC approach is, we have tried to approach it from the 
bottom up, that is, to identify where the Jewish Holocaust 
victims are and to work in that direction, where these bills 
will simply produce--I won't say millions of names--names with 
no identification as to whether they are Jewish Holocaust 
victims or not. And I simply cannot understand in that process 
how you will then identify Jewish Holocaust victims from that 
process without some system that you will have to impose with 
checks to see whether the companies who have provided these 
names ``in toto'' and then begin to figure out which ones are 
Jewish and which ones are not.
    And I could go on, but, obviously, since I don't have time, 
I will stop there except to say to you, much as I understand 
the purpose of these bills, and they may have been important at 
some earlier time, I do not now understand how they solve the 
problem. All they do is produce some millions of names without 
any identification as to whether they are Jewish Holocaust 
victims or not. I don't know what kind of policing system you 
have thereafter and where in fact
the claimant goes to make his claim and then how you force the 
company to pay the claim if they deny it.
    And I'll end at that, Madam Chair.
    Ms. Ros-Lehtinen. Thank you so much, Mr. Secretary.
    [The prepared statement of Mr. Eagleburger follows:]
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    Ms. Ros-Lehtinen. Mr. Gregory Serio, superintendent of the 
New York State Insurance Department.
    Mr. Serio. Good afternoon, Madam Chairman, Mr. Waxman and 
members of the committee. My name is Greg Serio, the 
Superintendent of Insurance for the State of New York and Chair 
of the National Association of Insurance Commissioners' 
International Holocaust Commission Task Force.
    I come before you today not just as a representative of my 
fellow commissioners who have taken the issue of settling 
Holocaust era insurance claims as a most important and time-
sensitive priority, but also as a successor to the visionary 
Glenn Pomeroy and Neil Levin who, as insurance regulators in 
the late 1990's, recognized the injustice of justice delayed 
and did something about it.
    The matter of Holocaust survivors and their heirs being 
ignored or worse goes beyond party lines, religious lines and 
geographic lines as an issue that should be and is a national 
priority, aided much by the cornerstones laid by Commissioners 
Levin and Pomeroy. In fact, if we look back to the early 
working groups and the task forces of the NAIC to the formation 
of ICHEIC, the six criteria spelled out in the initial 
memorandum of understanding provides the basis for review of 
the work of ICHEIC now several years later.
    The initiative culminating in the creation of ICHEIC and 
the various international agreements framing the Holocaust 
claims process had as its objectives: establishing the process 
to investigate claims, consulting with European government 
officials and insurance industry representatives, establishing 
an international commission to manage a claims process, 
establishing a just mechanism for compensation for the 
restitution of claims, exempting from State regulatory action 
those insurers who participate in the process, and establishing 
a fund to provide humanitarian relief.
    To measure progress against these targeted objectives it is 
indisputable that much has been accomplished already. The point 
of analysis then should be to evaluate how well each has been 
achieved and whether our mutual constituencies, the Holocaust 
survivors and their heirs worldwide, how well they have been 
served.
    One thing is certain, though, regardless of the outcome of 
this analysis: the foundation, structure and essential working 
elements of the claims restitution program is sound, and any 
effort to reinvent the program or process could well lead to a 
further delay in our ultimate and just cause which is 
compensating the Holocaust victims and returning to them what 
is rightly theirs.
    There's no question that for various reasons the ICHEIC 
mechanism stumbled out of the gate in the early going. The 
enormity of the task, the uniqueness of the construct, the 
unknown dimension of the challenges, and other internal and 
external forces at work all contributed to some rough going 
and, in turn, some well-deserved criticism directed at ICHEIC. 
To belabor these points, however, would be to distract from the 
improvements made in the internal staff structure, the addition 
of significant outside resources, the resolution of certain 
outstanding negotiations to where ICHEIC has agreements with 
all the companies, and, perhaps for the first time, the 
appreciation for the reality that evidence of insurance 
policies and other assets are quite literally tucked away in 
virtually every nook and cranny in Western and Eastern Europe 
and that the claims process from investigation to adjudication 
has to be built to reflect that reality.
    Many of the improvements have come at the behest of the 
five insurance commissioners from New York, Pennsylvania, 
California, Illinois, and Florida who sit as members of ICHEIC, 
joined with the two dozen other commissioners from Washington 
State, Texas and other States where there are Holocaust 
survivors. Insurance commissioners are on the front lines in 
managing the claims and expectations of the Holocaust survivors 
and their families and so have a significant stake in making 
certain that the structures and processes deliver the only 
acceptable and prudent deliverable, that being justice. We use 
these original objectives as our touchstones and concrete 
results as the benchmarks of the effectiveness of ICHEIC. We 
also have helped to apply our resources from the State level to 
assist ICHEIC claims operations which, through the redeployment 
of personnel items from administrative and executive positions 
to claims processing jobs in Europe, through the retention of 
other outside advisors to direct the coordination of claims 
investigations here and abroad, and through the commitment of 
resources from the States of California, New York, Washington 
and others, ICHEIC is in a vastly improved position at this 
time. The progress that we believe ICHEIC is making to date, 
together with faster attention to new issues that arise, will 
be the focus of greater oversight by the NAIC and the 
commissioners that serve on the Holocaust task force.
    Since I became chairman of the task force in January of 
this year, I and my colleagues have worked to forge a more 
meaningful review of ICHEIC activity, including leveraging 
technology and the offices of the 50 State insurance 
commissioners to expedite the sharing of information to 
claimants and to ease their way through the claims process. The 
Commissioners, Commissioners Koken, Kridler, Garamendi, 
Gallagher, and others, myself included, are asking the tough 
questions in pressing for better action sooner and offering the 
States as conduits to the claimant community.
    Given the passage of time and delay that has been realized, 
maintaining strict focus on the claim settlement process and 
the unearthing of information from files long forgotten or 
previously undiscovered are paramount. Well-intentioned actions 
that are borne of care, concern and frustration may not be best 
suited if they give any sense that we are rethinking our 
approach. If any action is to be taken by the Congress, it 
should be directed at assisting these activities and proving 
the track we are on, rather than attempting to create a 
parallel track. Mr. Waxman in his opening comments may have 
appropriately established the scope. With respect to possible 
remedies, regulatory, administrative and diplomatic avenues 
should be considered along with any legislative action that may 
be contemplated. I thank the committee for its time and 
attention.
    Ms. Ros-Lehtinen. Thank you very much. Thank you for your 
comments.
    [The prepared statement of Mr. Serio follows:]
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    Ms. Ros-Lehtinen. We will hear from Mr. Gideon Taylor, the 
executive vice president of the Conference of Jewish Material 
Claims Against Germany.
    Thank you, Mr. Taylor.
    Mr. Taylor. Thank you for giving me this opportunity to 
testify before you today. The holding of this hearing clearly 
reflects your commitment to the pursuit of justice for 
Holocaust survivors and their heirs, which has long been an 
important value held by the U.S. Government and by so many of 
you individually. We understand the frustration felt by so many 
members of the committee. All of us involved in this tortuous 
process feel the same frustration.
    Let me open by acknowledging the tremendous efforts that 
Lawrence Eagleburger, as chairman of ICHEIC, has made on behalf 
of claimants and Holocaust survivors. His dedication and 
commitment have, despite the huge challenges, frustrations and 
difficulties, brought great progress on an issue that has for 
over 50 years seen only obfuscation and denial. The question is 
not whether ICHEIC is perfect; the question is whether the 
alternatives can or would have brought faster or better relief.
    First, let me comment on the focus of ICHEIC.
    The ICHEIC has directed most of its efforts in three main 
areas: Notification of the ICHEIC to claimants and informing 
potential claimants that they may have a claim through the 
publication of lists. ICHEIC launched an extensive media 
campaign in February 2000, and with the recent incorporation of 
additional names, ICHEIC has again placed advertisements 
worldwide to ensure that potential applicants are aware of the 
process.
    Assisting claimants in achieving a positive resolution of 
their claims by establishing relaxed standards of proof and a 
fair evaluation system, conducting research to assist claimants 
by finding proof of their claims in governmental archives and 
establishing procedures to assist in the identification of 
positive claims through effective matching techniques.
    ICHEIC has spent significant funds on conducting research 
in governmental archives. In this regard, the matching of names 
is, we believe, critical to identifying valid claimants. The 
matching system must take into account all relevant factors to 
be comprehensive, and variations and inaccuracies of names 
should not disqualify a claim. For example, an individual with 
the name of Schwartz may seek to prove ownership of a policy. 
The name of Schwartz may have significant spelling differences. 
How these claims are matched and identified will, we believe, 
have a significant impact on the number of claims that can be 
paid. Verification of those decisions of the companies was 
instituted to ensure that the claimants have trust in the 
system. It comprises three components: ICHEIC internally 
monitors the responses of the companies, independent audits 
into processes of the companies are conducted and an 
independent appeals system has been established.
    In addition, monitoring: ICHEIC recently established a 
policy of reviewing all company decisions. We believe this is 
vital. While we applaud this development, we believe it is 
important that ICHEIC now goes back and ensures that past 
decisions of companies also be reviewed. Cooperation from the 
companies will be essential in this regard. Audit: The first 
stage audit looked at systems of the companies. The second 
stage of the audit will, however, be critical. It will consist 
of a sample of the claims processed by each company and will 
verify whether the company is complying with ICHEIC rules. 
Appeals: The number of appeals has not been large. However, we 
believe the appeals system will enhance the process.
    I would also like to mention some of the problems 
encountered to date. Despite the best of our efforts, there 
have been significant problems in the processing of claims. The 
main problems are consequences of delays in the processing and 
difficulty in establishing and proving claims. First, delays in 
company processing: The system established by ICHEIC is 
dependent on the company's processing the claims. Many of the 
companies did not dedicate sufficiently qualified staff to the 
processing. Clearly, it is not adequate that more than 3 years 
into the process a large number of the claims have not been 
processed by the companies. We believe it is necessary that 
companies have adequate staff in order that the process can be 
concluded without further delay. Second, delays at 
indemnification archives: Many of the claims on policies issued 
in Germany must be checked in archives to see if a prior 
payment was made. Unfortunately, we have seen claims in which 
companies have waited for a long time for an answer, the burden 
of which falls upon the claimants. Third, there have been 
issues of data protection, and we hope that some kind of 
mechanism can be developed and will be developed to overcome 
the problems in this regard. Fourth, lack of information: 
Claimants generally have no documents and little detailed 
knowledge of the assets of their parents. A combination of 
limited information on the part of claimants and incomplete 
records of the insurance company have led to a situation in 
which it is extremely difficult to process successful claims. 
Fifth, nonmember companies: Many companies have not joined 
ICHEIC because they do little or no business in the United 
States. Further action is necessary in this regard. 
Unfortunately, many companies that issued policies no longer 
exist.
    Finally, I would like to make a few comments on the current 
situation. At present, over 3,000 claims have received offers, 
as you have heard. However, I hope this number will be 
increased for the following reasons. Many companies that have 
good records still have a significant number of claims to 
process, and speeding up that process is clearly a high 
priority. Second, the ICHEIC Web site now has a total of over 
500,000 policyholder names. It is expected, as a result of 
recent agreement with three companies, additional names will be 
published; and we hope and believe that this will result in 
further successful claims. And, finally, a protocol and system 
for matching of names, we believe, will be significant and is a 
high priority to finalize and to implement.
    Although about $40 million has been offered to claimants, 
it is vital to note that agreements with insurance companies 
have generated almost half a billion dollars. This will be used 
to pay claims on Holocaust era insurance directly from 
companies to claimants; to make ICHEIC humanitarian payments to 
certain claimants who cannot name an insurance company and 
whose claims are not found by the matching process but have 
some anecdotal evidence; and for projects such as the provision 
of home care, medical assistance and food that will assist 
Holocaust victims living in dark conditions in 31 countries 
across the world, including here in the United States. Since 
insurance was common in Jewish families throughout Europe, it 
is highly likely that families of these needy Holocaust victims 
probably had insurance, but either the victims do not know the 
policies, they could not be found or perhaps the victim is too 
frail to even apply. It is about achieving a measure of rough 
justice.
    Of course, the Holocaust era restitution process is too 
little, too late. All Holocaust restitution is too little, too 
late. There is still much to do, and we will continue to pursue 
the effort on behalf of survivors of the Holocaust.
    Ms. Ros-Lehtinen. Thank you. Thank you very much.
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    Ms. Ros-Lehtinen. We will round out the panel with Mr. 
Roman Kent, who is a Holocaust survivor serving as the chairman 
of the American Gathering of Holocaust Survivors.
    Mr. Shays. From Stamford, CT.
    Mr. Kent. Thank you very much for inviting me to this 
hearing; and thank you very much, Chris, for saying a few kind 
words about me. I don't know whether I deserve it or not, but I 
will take it at face value.
    I heard here a lot of statements, and I would like to 
mention to you that I am here right now testifying maybe in a 
dual capacity, both as a survivor and a member of the 
Commission as well as a U.S. taxpayer and citizen, and I think 
the views which you will hear from me right now are based on 
the above.
    The views I am going to express are really based on some of 
the things I heard here; and I was disturbed, to put it mildly. 
I am here not to disprove what I heard, but I am here rather to 
tell you what I do know. Long ago, when I went to school here, 
I studied Mark Twain; and he said that there are three kinds of 
lies: There is a lie, a big lie and then there are statistics. 
Statistics was knowing the totality, is knowing exactly what it 
is. It is a big lie.
    Now the second thing which I heard also here is--how should 
I say it--an attack on ICHEIC, as if ICHEIC would be the 
criminal, as if ICHEIC didn't do anything. We did not take 
under consideration what ICHEIC did accomplish. And I am not 
here only to say what ICHEIC accomplished. God as my witness, 
they made a lot of mistakes. But, on the other hand, ICHEIC 
undertook something that was never done before. So in making a 
judgment, we have to take the good and the bad things.
    And let's say what ICHEIC did accomplish. ICHEIC 
accomplished things which were completely against the arts for 
a normal person to accomplish. They had to deal with the 
largest companies in Europe, with the Generalis, with the 
Allianz, with the AIA, and they each one have a different kind 
of aim. They have different characteristics, they have 
different valuation systems. But they had one thing in common: 
They really did not want to pay any claims. That was one common 
ground for them.
    ICHEIC accomplished by taking all these diversified views 
and they have created, yes, an imperfect system to evaluate the 
views--the insurance to provide a certain system in the chaos 
which was created by the companies due to the unpaid policies.
    We have to realize that when we are talking about, ``yes, 
let's just force the people to get the list,'' it took us 
years--years--to get the list from the Allianz, for example. 
And the German Foundation was instigated not to give any list, 
but we finally achieved it; we have over 500,000 names.
    But now let's consider what the names will do by 
themselves. The names by themselves would only give us an heir, 
if he survived, or if his members of family survived. Very few 
of us survived; very few of the family members survived. So the 
list would only give us a small percentage of claimants. Thus, 
the companies would be left with all the unclaimed money in 
their own coffer.
    ICHEIC accomplished that we were able to receive, like 
Gideon said, about $500 million already. So we have money not 
only to pay for the actual heirs, but we also have money to do 
what you people are talking about, the humanitarian justice for 
the survivors.
    Let's say we cannot have in this world--and you in the 
Congress know better than anyone else--there is nothing on this 
Earth like perfect justice. We can have relative justice, and I 
think the relative justice is being accomplished by a system of 
voluntary--voluntary, but it was a push, it was a push. And you 
people in the Congress, you are part of the U.S. Government, 
and you could give the voluntary push to us, to ICHEIC. We 
welcome it, I welcome it; I would love to have a push. Because 
of this direct push to the aims which we want to accomplish, we 
could achieve much, much more. I know, Lady Chairwoman, you 
want to cut me, but let me tell you the following issue.
    I had a meeting a few years ago with Dr. Breuer, who is the 
chairman of the Deutsch Bank, and he told me very simply--it 
was a very private meeting, and he told me the following. He 
said, ``Mr. Kent, look, we can fight the survivors in the court 
for the next 20 years. So what? It will cost, $2, $3, $5 
million a year, and we have good lawyers. But what will this 
accomplish? If we can achieve a voluntary settlement, we can do 
it faster.''
    This is what I am asking you; give us the help, we need 
your help. And let the Congress issue a statement, a sense of 
Congress that they are supporting us. That would be the biggest 
help you can give us.
    Thank you for giving me the extra minute.
    Ms. Ros-Lehtinen. Thank you so much. That is only because 
you are Congressman Shays' constituent.
    Secretary Eagleburger, you have expressed your opinion 
regarding the two bills put forth on this issue. Do you not 
believe, however, that the companies could do more with the 
threat of sanctions to achieve this purpose?
    Mr. Eagleburger. No, I shouldn't have answered both 
questions with a no. Yes, the companies--within limits, the 
companies could do more. I don't deny that. They have been--I 
have to do--answer this in pieces, I think. The companies could 
do more. They are still too slow sometimes--many times--and 
there's no question they could speed up their process. I can 
only say this, however, in the sense that, in comparison with 
the way they used to act, they are substantially better, but 
they still need to do better than they have. But they are doing 
better than they did.
    Ms. Ros-Lehtinen. Don't you think pressure and the threat 
of sanctions has caused them to be better--or certainly 
goodwill?
    Mr. Eagleburger. Certainly the experience of the last few 
years has caused them to do better, and the threat of sanctions 
at an earlier stage at least certainly made them do better.
    I will say to you--and this is something that my dear 
friend, the constituent from Connecticut--a point he made, and 
I would say it again. Part of the reason for the doing better, 
believe it or not, I think is because over the course of the 
years that we have dealt with these people, the fact that we 
have dealt with them for so long has also, I think, convinced 
them by dealing with us instead of fighting us all the time has 
led to some progress.
    So, yes, certainly the threat of sanctions in the earlier 
stages and, frankly, my threatening to go public on a number of 
occasions with their problems has made a difference, but also 
the experience with working with us has helped some. So I think 
there is more the companies can do. I also think there is real 
room for help from the Congress. I do not think, however, that 
to try to sanction them at this stage would help at all. I will 
give you an example, however, where we desperately need help.
    In the agreement with the German Foundation, many of the 
German insurance companies that are now encompassed in our 
agreement are in a number of different German states and a 
number of the claims have to go through the insurance 
administrators in those states. They are organized in many 
cases the same way we are in the United States in terms of 
regulations being handled by the states. And the ponderousness, 
to the degree to which the state regulators and the state 
insurance institutions move in handling and checking their 
records is wondrous to behold. If there is any way that the 
Congress could help us to encourage the state insurance 
regulators and regulations in those German states to speed up 
the process, it would make a tremendous difference. This is a 
classic example in the German case of the fact that the 
insurance industry is not controlled from the center and a 
number of the German state insurance regulators are less than 
enthused with this system that we have developed and some of 
the processes are slowed down because of that.
    So I have gone off from your question a bit, but it is an 
area where we find real trouble and where there could be some 
encouragement from the Congress. But to get back to your 
question, the companies are doing better than they have in the 
past. They still are not totally cooperative and, on occasion, 
we have real trouble, but we have been able to find our way 
through most of that. I do not think at this stage that 
legislated sanctions would help.
    Ms. Ros-Lehtinen. Thank you, Mr. Secretary; and just one 
more question. How relaxed are the standards for survivors to 
make claims? What burden of proof rests on the survivors? What 
burdens rests on the companies? Is it equal? Is it more one 
than the other?
    Mr. Eagleburger. It's hard for me to give you a specific 
answer on that and maybe to say my expert on insurance can help 
me out here. We have substantially relaxed the standards of 
proof, very substantially, to the great discomfort of the 
insurance companies. But when it gets into an explanation of 
how they are--how much they are relaxed, all I can say is I 
don't think there's any insurance company in this country or 
any other country, as far as that's concerned, that would feel 
comfortable with the relaxed standards, but let me ask him to 
be more specific.
    Mr. Serio. The ICHEIC process doesn't require much more 
than showing the existence of a policy at some point in time. I 
think as the way the process has been set up we've tried to 
create a combination of both handling specific claims as well 
as handling almost an aggregated type of approach to the 
humanitarian funds, and I think between those two ways of 
approaching it we have been able to provide a relaxed standard 
through nothing more than the existence of a policy as well as 
the large and more aggregate approach to compensation through 
the humanitarian funds.
    Mr. Eagleburger. If I could, I have to--I've been corrected 
by my brains behind me here. In the earlier problems I 
mentioned with the German states, it is their archives we need 
access to more than anything else. It's not their insurance 
regulators so much as it is access to the state archives; and 
our biggest problems there are Bavaria, Hesse and the Rhineland 
Palatinate. So if there's any way we can get any assistance 
from the Congress or a sense of Congress or something that 
suggests that these German states could be more cooperative, it 
would be a help.
    Ms. Ros-Lehtinen. Thank you, Mr. Secretary.
    Mr. Waxman.
    Mr. Waxman. Thank you very much.
    Secretary Eagleburger, one of the main problems, as I see 
it, is that the companies are not publishing a complete list of 
the names of the Holocaust era insurance policyholders. Let me 
get basic facts straight. How many names of policyholders have 
been published by the companies?
    Mr. Eagleburger. By the companies? Do we know that at all?
    The best--I guess this would be the answer to your 
question. We have 520,000 names on our Web site, and those are 
names that have come from the companies, but--I am trying to be 
careful here because you have specifically mentioned companies, 
and what I am trying to be careful about here is whether these 
have all come from the companies or whether any of them have 
come from our independent research. What I am trying to get 
here is the specific answer to his question.
    In terms of the sources of policyholder names on ICHEIC's 
Web site, the German Insurance Association provided 363,232, 
and that includes--do you want to go by company?
    Mr. Waxman. I think your answer is, overall, 520,000. My 
second question is, how many Holocaust-era insurance policies 
did these companies actually have? How big is the universe of 
the actual policies that were issued?
    Mr. Eagleburger. I can't answer the question other than to 
say, so far as we know, given the fact that some of these will 
be duplicates of more than one policy to a specific person, as 
far as we know, that's the universe we know about.
    Mr. Waxman. Well, the charts that I displayed earlier 
indicate to me that there are likely to be many names that 
haven't been disclosed. In Poland there were 3 million Jews but 
11,000 policies listed. Surely there are many more Jewish 
families with insurance policies. The only country that seems 
to have an adequate collection of names is Germany, where 
400,000 names have been listed with a population of 585,000 
Jews. So there is a larger universe of insurance policies we 
are not getting to, and failure to get those names of the 
insured is putting survivors and their heirs in a ``catch-22.'' 
What can ICHEIC do to increase the number of names that are 
being disclosed?
    Mr. Eagleburger. Let me give you some of our statistics.
    For example, on the German numbers, there were 8 million 
policyholder names, which included both Jewish and non-Jewish 
names. ICHEIC matched 8 million policyholders names against the 
list of German Holocaust victims.
    If you want a country where the statistics were elegantly 
kept, it is Germany. They listed every single German--Jewish 
Holocaust victim. They would not have called them that. They 
had an elegantly complete list of the Jews who were victims of 
the Holocaust, and we came up--with that matching, we came up 
with 360,000 names.
    What I am trying to get at here, if we have confidence in 
our statistics anywhere, it is on the--that we have 360,000 
Jewish Holocaust victims out--that is insured victims in 
Germany. And I have to keep coming back and underline that word 
insured. There clearly were more German-Jewish victims than 
that. But insured victims: 360,000.
    Mr. Waxman. Excuse me for interrupting. We both acknowledge 
that Germany had better statistics, but I'm sure you would also 
agree that we look at Poland.
    Mr. Eagleburger. I'm coming to that. I'm coming to that.
    Mr. Waxman. Well, I have a problem, because my time is 
going to run out.
    Mr. Eagleburger. Well, I'm sorry, but I can't answer your 
questions other than to answer--if I take too long, I will be 
glad to give you all of these figures in writing, if you wish.
    Mr. Shays [presiding]. Here is what we're going to do, if 
the gentleman will suspend. I am going to give the gentleman 
another 5 minutes, because there are not that many of us here, 
and that way we can pursue the questions.
    Mr. Waxman. I think that's fair, because I don't want to 
cutoff the Secretary. So I want him to proceed.
    Mr. Eagleburger. All right. Let me see, I have my notes 
here on Poland. Just 1 minute. Where is it? No, it's here 
somewhere because I just had it. Here it is.
    The total market in insurance at the time in Poland, Jewish 
and non-Jewish, was 261,000. Of that total of 261,000, 11,225 
is the number of Holocaust victims whose policies we have 
published.
    As my written statement notes, we would look for your 
assistance in supplementing our effort with the Polish 
Government as well as with the Governments of Hungary and 
Romania.
    As a comparison point, the total number of Jewish 
professionals in Poland in 1929 was 45,000. That's lawyers, 
doctors and industrialists. Our assumption is that the total 
number of Jewish insured would be somewhere above the 11,225 we 
have listed, but certainly not more than the 45,000. Now, that 
is not to say that nonprofessional Jews wouldn't insure. It is 
to say, however, that on the basis of what we have been able to 
establish over the last 4 years, it is highly unlikely that 
many of them would.
    So I am saying our Polish statistics are by no means 
complete and we are trying to get more information, but it is 
probable that, at the most, we will find--as we continue the 
process, we will find less than, let's say less than 50,000, 
and we now have 11,225 names. We are continuing the process of 
trying to get more on that.
    Mr. Waxman. Mr. Secretary, I appreciate that, but if in 
Poland, Hungary, and Romania we don't have the full list----
    Mr. Eagleburger. That's right, we don't.
    Mr. Waxman [continuing]. Then the people who have relatives 
that came from those countries are in a ``catch-22.'' They 
can't file a claim, even through ICHEIC, without knowing if 
there's a policy.
    Mr. Eagleburger. Congressman, you are absolutely correct.
    Mr. Waxman. Let me finish.
    So then the question is, what can be done to increase the 
numbers of names that are being disclosed? One is, what can 
ICHEIC do? We have laid out a different proposal.
    Mr. Eagleburger. Well, do they have names? Excuse me, go 
ahead.
    Mr. Waxman. Yeah, I think it would be nice to let me 
finish, because then you can answer.
    Mr. Eagleburger. Go ahead.
    Mr. Waxman. We want to get the names disclosed and to 
require it. Then they could go through ICHEIC. I don't see it 
as an alternative to ICHEIC. We want to get the names out so 
they can go through ICHEIC.
    What can you do, what can we do, to get those names if the 
companies are refusing to disclose them, especially in light of 
the fact that, at the end of this year, there's a deadline, and 
those people who can't come in and establish a claim are going 
to be out of luck and the funds will not go to those people who 
deserve it?
    Mr. Eagleburger. First of all, if they have a name, in 
other words, they are not simply searching to see if they can 
find a name--if they have a name, they can go ahead and file a 
claim, even if they do not have a company. That then produces--
forces us to go through our matching process to see what we can 
find out. And if it comes into one of our companies, we will go 
ahead and try to match the claim, even if it's in Romania or 
wherever it is.
    This is not a total answer to your question; it is a 
beginning. But they can go ahead and file a claim, and we will 
see what we can find out. Beyond which, we are continuing to 
try to get better access in Hungary and in Poland--in Hungary 
and Romania. And it has been difficult, but we have not stopped 
our attempts, and we are going through the State Department and 
we are going to continue to try to get into them, and in Poland 
as well. But he can go ahead and file his claim.
    But as Mr. Serio has pointed out to me, one of the problems 
you're going to face is that most of the policies that were 
issued in Poland, particularly, were by companies that are no 
longer in existence. That does not solve any of our problems.
    Mr. Waxman. And there is nothing we can do about that. But 
those companies that are in existence, I believe, ought to be 
required to disclose the names.
    As I understand, the matching that you do is based on the 
lists of Yad Vashem, which is 3 million of the 6 million Jews 
that were killed. We don't have all the names even of those 
people who have died in the Holocaust, but we ought to require 
those companies that are still around to disclose these names. 
Do you disagree with that?
    Mr. Eagleburger. No, I don't disagree. The question is, to 
come back to my point, if you have people who already have a 
name and they want to see if there's anything in our records 
they should file a claim. In terms of our being able to get 
into the three countries to get more names--in the Polish case 
get more names, and in the other two cases to get some names--
we're going to continue to try, and we will, I think, in the 
end, succeed. But the point at this stage is, in answer to your 
specific question, as of right now, if they have a name, they 
should file a claim, and we will run it through our system to 
see if we have any match at all.
    Mr. Waxman. Thank you, Mr. Chairman. I know the time is up 
and we will have a subsequent round.
    Mr. Shays. We definitely will. We don't have many 
opportunities like this, and there are not many Members, so we 
can make sure all our questions are answered.
    At this time the Chair will recognize Mr. Foley.
    Mr. Foley. Thank you very much.
    Mr. Secretary, please understand, I know this is not a paid 
job; you are doing this to try to----
    Mr. Eagleburger. No, I'm not getting paid.
    Mr. Foley. I understand that, and we, hopefully, are not 
being argumentative, but it is a sensitive subject.
    Mr. Eagleburger. I have learned that, Congressman. I have 
really learned that it is a sensitive subject.
    Mr. Foley. Well, thank you for serving in this capacity. I 
want to make sure everybody understands: I think Mr. Waxman and 
I, both of our bills, try to reaffirm a longstanding right that 
Congress gave to the States to broadly regulate the insurance 
industry. So I don't think we are creating any new body of law 
here. We're trying to be consistent with what we see as the 
rights of States in order to ensure that those who are doing 
business in their States are complying with all other 
responsibilities for corporate citizenship. We also don't, in 
our bill, H.R. 1905, usurp the process, the goals or the 
activities of ICHEIC; I want to underscore that. And there has 
been good progress, without question, but it is, in our 
opinion, taking a bit too long.
    Professor Bazyler included with his testimony some examples 
of insurance claims that are still pending in the ICHEIC 
process. In one example, a claim is still pending despite the 
fact the claim was filed in 2000 and included the name of the 
insurance company and the policy numbers. In another example, a 
claim was denied based on insufficient documentation, despite 
the fact the insurance company identified the policies.
    I would just hope, Mr. Secretary, you would followup on 
some of those cases supplied by Professor Bazyler and report 
back to the committee on how they were resolved.
    Mr. Eagleburger. If you or somebody will give me those 
cases, I will assure you I will get you an answer within 2 
weeks, at least that we are following up, and see what I can 
find out. I will be glad to do that.
    Mr. Foley. Thank you.
    Mr. Eagleburger. In fact, if I may, one of the problems we 
have had is, there is lack of understanding. Well, first of 
all, we have screwed up. I'm sorry, that's the wrong word. We 
have messed up sometimes, there's no question about that. And 
in those cases, I would like very much to find out any 
information I can. In a number of the cases, however, people 
don't understand that companies have disappeared and/or that 
it's a policy that was written by a company that is outside our 
jurisdiction.
    Anyway, my only point is, there's great misunderstanding 
all along the line. And when we can find out these cases, I 
will be glad--if you can find somebody to give them to us, I 
promise you an answer within a very short period of time, even 
if the answer is, we are still looking into it.
    Mr. Foley. Thank you, Mr. Secretary.
    Mr. Serio, you are with the National Association of 
Insurance Commissioners, I understand. Can you give me an idea 
when you expect, having served on this tribunal, to have all 
the valid claims paid to the ones that are now standing, that 
are valid? What year do you expect payments to be made? Do you 
have a timeframe?
    Mr. Serio. I would have to go back and work with the ICHEIC 
folks. I will put it this way, and I think this is a position 
held by my colleagues, as well as myself.
    What we are trying to do is to use our positions as members 
of ICHEIC to help change the process so that the process can be 
moved as expeditiously as possible. Expediting that, I think, 
has been one of the weaknesses of ICHEIC in the past. And I 
think the steps that ICHEIC has taken to put more claims people 
on the ground with a capable manager in London to investigate 
those claims and adjudicate those claims, I think, is a big 
step in the right direction. And that is a step that had not 
been there previously.
    The mechanism has been changed, which is a positive thing, 
and I am hoping--and I guess I could concur with what the 
Secretary said in terms of, that you will see a lot more action 
coming this year now that these steps are in place, rather than 
the last couple of years where we were trying to do five 
different things at the same time--negotiate settlements, get 
the process in place, put people on the ground in Europe, and 
to a certain extent, not even knowing where to look at those 
points, because suddenly we would find out there was a cadre of 
policies in Poland and elsewhere.
    But I think now that both the intelligence, in terms of 
where the claims might be and, more to the point, the fact that 
this isn't just what you might call the ``traditional insurance 
industry'' as the only focal point of this process but rather 
the ``extinct insurance community,'' those companies that did 
not survive, changeovers after the war, did not survive the 
years after the war, and where they kind of fell off the radar 
screen. I think that is what ICHEIC really needed to get in 
place what I think now is in place.
    Mr. Foley. So as a regulator you are starting to see the 
infrastructure finally following along with the design of the 
panel?
    Mr. Serio. Yes. And this is overdue, there is no question 
about it. But the infrastructure is now there. And the 
infrastructure is important in another way, and that's this: 
From the State level, in terms of working with the claimants 
who will approach the insurance commissioners and say, ``I have 
an issue,'' or, ``I have a claim,'' or, ``I think I have a 
claim,'' to better expedite claimant information to ICHEIC is 
also important.
    One of the things we have been doing at the NAIC this year 
is to try to expedite claimant information into ICHEIC and to 
set up a process of tracking those claims. One of the things 
that has been happening is this: There has been a lot of 
inefficiency in the process up to this point. Some claimants 
call their insurance commissioners, and those are the folks we 
know. Some claimants call ICHEIC directly, and those are the 
claimants they know. But we haven't really put that information 
together. So for the first time we have actually created a 
spread sheet, and we are working on it at the ICHEIC to 
coordinate claims with the ICHEIC so that we are not counting 
people three times and then missing counting people on the 
other hand. I think that has been a crucial part of this.
    One reason the insurance commissioners were a part of this 
is not because it was just created with the impetus of 
Commissioner Pomeroy and Superintendent Levin and the others, 
but because we, on the ground level, really have some of the 
best intelligence from the bottom up, as the Secretary 
described. And I think by assisting the process from the bottom 
up, as well as keeping the pressure from the top down, which I 
think the committee has told us before is a process that has 
been going on all along--and, in fact, as the first Deputy 
Superintendent in New York, serving under Superintendent Levin, 
I sat through many very contentious sessions with the insurance 
community where they were bristling at these notions, but where 
they did come around to understanding that their cooperation in 
ICHEIC was an important matter for us and, frankly, an 
important matter for them.
    Mr. Eagleburger. By the way, I should make the point that 
Superintendent Levin, who had moved on to another job, was 
killed in the September 11 event in New York. It was a great 
loss.
    Mr. Kent. If I may add just a couple of points here, which 
the Secretary mentioned, that some of the problem with the 
slowness of the claim is also due--particularly in the German 
case, is that they want to check if the claim was not paid 
already under what they call BEG payments, and they have a very 
slow process doing it. So they are delaying us in handling the 
claim.
    And the second thing which--I want to give credit to the 
State regulators, that they were indeed extremely helpful in 
two areas. No. 1, during the negotiation they were helping us 
in the pressure point to accomplish certain things from the 
insurance companies, and right now, also, they are helping in 
developing the system which never existed before to do 
something more expeditiously.
    Mr. Foley. Mr. Serio, have they ever ventured an estimate 
of what the present-day value of these aggregate policies are 
worth, with interest earnings and all; what we may have roughly 
out on the table as far as when companies took in premiums, 
what they would be worth in terms of present value?
    Mr. Eagleburger. Not as far as I know.
    Mr. Serio. I don't think we've done a present value 
calculation of those policies.
    Mr. Foley. Do we have a value of the day, say, the war? Is 
there any kind of number out there?
    Mr. Serio. I'm not sure. I suppose some of the policies 
were relatively small, some of the policies were large, 
depending upon the purchaser.
    Mr. Eagleburger. I don't know.
    Mr. Serio. I'm sure that will come out as the portrait is 
expanded in terms of the claimant community that we have and in 
terms of the types of policies that we have. We haven't done 
that. And, frankly, I think one of the things we've been trying 
to do, and I guess from the Commissioners' perspective is, we 
have been trying to assist, if not push at the appropriate 
times, the process issue. And I think some of those facts you 
are asking for, Congressman, will come out as that process 
starts to yield some benefit.
    Mr. Foley. Thank you.
    Thank you, Mr. Chairman.
    Mr. Shays. I have some questions I would like to ask.
    It seems to me that if you could take in premiums and not 
pay out benefits, you'd do pretty well, and ultimately, that's 
what a number of insurance companies did. And it really wasn't 
brought to my attention in a such a graphic way until the 
gentleman in a Swiss bank or insurance company, I'm not sure 
which, talked about records being destroyed. To me, it was like 
a wake-up call and a real kind of indication that we were not 
getting cooperation; and some attempts to just ignore this 
problem and pocket the money had gone on for years and years 
and years. Then, when the individual made it public, he was 
condemned as somehow being anti-Swiss. Frankly, that speaks 
volumes for the attitude among many Swiss people, which is 
regrettable.
    My question is a reaction to what Secretary Eagleburger 
said when he said, ``Well, what's the point''--and I hope I'm 
saying it correctly--``what's the point of printing out such a 
vast list?'' With banks, if they have savings accounts and 
nobody claims them, they have to print that. And people see it 
and they say, my gosh, someone in their family was actually one 
of the people named.
    So my question, Mr. Kent, and then Mr. Taylor, and we will 
go right down the line, what conceivably is wrong, conceptually 
wrong with--if you had beneficiaries who weren't paid benefits, 
what's wrong with noting those names? Maybe it's not even a 
family member, but it's a neighbor who says, I knew that person 
and that person, and so on. I don't see the problem. It seems 
like a no-brainer. Print the names of all the policyholders and 
then go from there. Mr. Kent, what's wrong with that?
    Mr. Kent. I have no problem at all with having the list of 
names. As a matter of fact, we were fighting for 4 years to get 
the list of names.
    Mr. Shays. So you have no problem with that?
    Mr. Kent. We were fighting to get the list of names for 
three reasons. One reason is for the reason which you mention. 
The second reason was for the history, because the Germans said 
there was no insurance meant for the Jews. They had hardly any 
insurance. For the history it was important to show that, yes, 
there were people that had hundreds of thousands of insurances. 
And the third thing is also that, to me, it's like you 
mentioned, the insurance companies created the most cynical 
business structure. The insurance company actually is based on 
trust, not for today, but for tomorrow, for 10 years from now, 
for 20 years from now. Suddenly, they already had 50 years of 
not paying the policyholder. They considered it their own 
money. They didn't want to pay it anymore.
    Mr. Shays. So your bottom line is, you have no problem with 
the list being printed?
    Mr. Kent. I have no problem. But I will say to you that 
from the experience I have seen, even if I print a lot more 
names, and I want to print as many as I can, 85 percent of the 
Jews who were killed, so that the people will not be able to 
claim the insurance because they are no more alive and their 
family is no more alive. So unless we will force the companies 
to have the total agreement how much we estimate there was in 
insurance in force and ask for the money, so there will be 
money for humanitarian purposes for others.
    Mr. Shays. Very helpful. Thank you very much.
    Mr. Taylor. Mr. Chairman, I think it is a no-brainer. I 
think it is critical that lists are published; that is, being, 
as you have heard, a central piece for the negotiations most 
recently with the German Foundation, and the priority of 
getting lists has been one that has been pushed by ICHEIC since 
the beginning of ICHEIC.
    I think the question is simply, what's the best way to get 
the most number of names that are going to help the maximum 
number of people as quickly as possible without creating an 
unwieldy system that's going to include hundreds of thousands 
or millions of names of people who weren't Holocaust victims, 
for whom policies were already paid, without having a system to 
try to handle them? What ICHEIC has tried to do is try to find 
ways. They are not finished, and it is clear--you have heard it 
from the chairman--to make sure that we have the lists of those 
who were victims of the Holocaust as accessible and quickly as 
possible, not something that will be dragged out for years to 
be accessible and available. And I think the results of 500,000 
names being available is progress. It's not the end of it, and 
I think in some ways we will never know.
    Mr. Shays. The problem with progress is that if there is a 
legal, cut deadline, and then people have attempted by legal 
peace, by so-called ``searching their archives'' and didn't 
make a good-faith effort to do it, but then they bought legal 
peace and then they have a claim now that they have reached the 
cutoff, then the system has worked against us.
    Mr. Taylor. Right. I think the issue is, has ICHEIC 
succeeded in getting the largest number of names within the 
kind of timeframe that is not going to drag on for years; and I 
think ICHEIC has done that. I think it has a very significant 
number of the names available. I think there are a couple of 
areas where it's clearly lacking, and hopefully, those issues 
will be finalized very quickly.
    Mr. Shays. I just react to this, and maybe I am way off, 
but maybe the fact that we have wanted to get this sooner 
rather than later has put us at a disadvantage. Because, 
frankly, we're not talking about a lot of money to any of these 
individuals anyway. Maybe it won't be the grandchildren, maybe 
it will be the great-grandchildren, but it seems to me that by 
giving ourselves a deadline, they are using it against us, 
frankly.
    Mr. Serio. I agree with Mr. Taylor's assessment. It is not 
really a question of list versus no list, but what list and 
from whom. And I think as both the Secretary has requested and 
I think as we have been finding, getting a complete list from 
those, that we don't have a current regulatory nexus to, 
probably has been the hardest part of this. That is probably 
the bigger gap we are dealing with at this point. Again, if 
something was fashioned that could go after those folks who 
don't fall under the regulatory structure, who would never have 
been subject to a California law to begin with, I think that's 
really where the focus of our mutual effort has to be at this 
point.
    Mr. Shays. Mr. Eagleburger.
    Mr. Eagleburger. I have a lot of problems.
    Mr. Shays. Mr. Eagleburger, could you put your mic down 
lower, please?
    Mr. Eagleburger. Then I'll hit myself in the nose, but 
that's all right.
    Mr. Shays. Mr. Eagleburger, you're not going to hit 
yourself in the nose.
    Mr. Eagleburger. I've done that many times, or shot myself 
in the foot, one or the other.
    Let me explain, if I may, why I have a different view of 
this, and I have it for two reasons. One is, I think it is not 
the best way to do what I know we both are trying to do, which 
is to solve this question of paying claims to Holocaust 
survivors. But let me follow it through for a minute, if I may.
    If you demand that these companies publish the lists, and 
let us assume they go along with that--which I think you are 
going to have a terrible time getting them to do, but let us 
assume they go along with it. I have to assume that from that 
you are going to be faced with lists of some millions of names; 
and so those are all published, and that's going to include a 
great many names that have nothing to do with victims of the 
Holocaust, and somewhere in there are going to be mixed in 
there the names of Holocaust victims. And how you find those is 
going to be an extremely difficult problem, but forget that for 
a moment.
    First of all, as we have found out, you are going to have 
to find some mechanism--it is the mechanisms that follow from 
this that I want to point out. First of all, how are you going 
to know that the companies have provided you with all of their 
names? The only way you can be sure of that is, you are going 
to have to establish some form of policing system that goes to 
look to make sure they did it.
    Second, how are you going to know, when someone makes a 
claim against that company, that the company gives the right 
kind of response to the claimant? You are going to have to have 
some form of audit system or some form of policing system to 
make sure that when they read the file, they give the right 
kind of response to the claimant. That's going to require some 
other form of auditing of what they do.
    Those are just two small--they are not small, but two 
issues that are going to require, one way or another it seems 
to me, the establishment of some form of mechanism, some 
mechanism to follow through on how the companies deal with 
these problems.
    And by the way, let me just say, and then I'll stop--that's 
all on the assumption that having dealt with some, let's say 
2.5 million names, it will be more than that by a long shot, 
but having dealt with 2.5 million names, and with all of the 
claims that will come in on those 2.5 million names, most of 
which I suspect will be specious, how are you going to 
establish--what are you going to do with the claims that are 
made where there is, in fact, no evidence of any Holocaust 
involvement?
    Mr. Shays. Before giving the floor back to Mr. Waxman for 
another round, since you are talking about policing, on a 
November 2001 hearing you testified you would institute a 
policing function to ensure that ICHEIC rules and standards are 
followed. Can you give us an example of some of the policing 
policies you have implemented?
    Mr. Eagleburger. I couldn't hear you, sir.
    Mr. Shays. Let me say it again. At the committee's November 
2001 hearing when you came before us, you testified that you 
would institute a policing function to ensure that ICHEIC rules 
and standards are followed. Can you give us an example of some 
of the policing policies you have implemented?
    Mr. Eagleburger. Yes. We have made a number of improvements 
in the claims processing. For example, we have put out final 
valuation guidelines, which were not at the time you were 
talking about. We have now put those out in final form, and as 
Mr. Serio indicated, they are substantially less than would be 
required in normal circumstances. We have a means of now 
reviewing and have reviewed over 2,200 offers and denials where 
we had a team that looked at both the offers and the denials. 
We have established a new claims team, which is now in London 
under the supervision of our new London office director, and it 
will be looking at all claims that come in and how they are 
handled and at the responses to those claims. We have a system 
in place to check company office and denials. We have put out 
an extensive claims processing guide, which is now in the hands 
of all of the insurance companies, and lists in elegant detail 
how they are to handle those claims. And we have established an 
improved statistical system, which should make it much easier 
for us to answer your kinds of questions from now on. And we 
have also--is that enough, or do you want more?
    Mr. Shays. That's pretty good. Do you have a few more?
    Mr. Eagleburger. Yes. We have established an ICHEIC 
quarterly report which goes out to all of the interested 
parties in ICHEIC, which gives a list of the things that have 
occurred over the course of that quarter, and it lists all of 
the information that's come out as a result of those other 
changes I have indicated. We have put out a recent Webcast to 
promote the new lists that are available.
    Mr. Shays. Let me just understand, though. Is all of that 
what I call ``policing''--or what you call ``policing,'' is 
that, all of that, what I call ``policing?''
    Mr. Eagleburger. No, it's not all of it. Most of what I 
suggested up here earlier is. Not all of this now. The 
quarterly report isn't, no. Things like the valuation 
guidelines, reviewing the 2,200 offers and denials, the claims 
team, all of that is policing, yes.
    Mr. Shays. Let me go to Mr. Waxman. We will give you 10 
minutes and we will do a 5 and then a 5.
    Mr. Waxman. Thank you, Mr. Chairman.
    Mr. Eagleburger. I'm having trouble hearing. I'm getting 
old.
    Mr. Waxman. I haven't said anything yet.
    Mr. Eagleburger. Oh, all right.
    Mr. Waxman. That can make it difficult. Mr. Eagleburger, on 
this last point, you testified in November 2001 you were going 
to have this monitoring committee to police the companies and 
conduct an audit to identify deficiencies in the claims 
process, and then there was a committee created by ICHEIC, 
chaired by Lord Archer, that made its report, with 
recommendations, in April 2002, highlighting the need for 
strict oversight of the decisions made by the companies. I 
understand that this key recommendation was not implemented 
until this summer when three people were hired to handle these 
responsibilities. Why did it take so long to implement these 
key recommendations?
    Mr. Eagleburger. Well, in the first place, we haven't sent 
Lord Archer out again at all. I have to be even more direct 
about it. Archer hasn't gone at all, although I'm going to ask 
him to go soon. But principally, and I'm not sure this is an 
answer to your question, but what we were doing was looking at 
the best means--and some I have just listed to you.
    Mr. Waxman. I'm asking about the timing.
    Mr. Eagleburger. I understand that, but we were looking for 
the best means of establishing the proper kind of policing 
system. And I guess the best answer to you is that in that 
process it took us more time to establish the kinds of policing 
system that satisfied me.
    That's about it, isn't it? What?
    We started the review of the claims cases and the 
training--that's right--and the training of the claims review 
team, we started that in January, but it was still some time--
nevertheless, we started in January.
    What time did you say that we began?
    Mr. Waxman. Summer.
    Mr. Eagleburger. No, we started in January. But even so, 
it's a length of time from when I said it.
    Mr. Waxman. My understanding at the last hearing in 2001 
was that the monitoring committee would become a permanent 
feature, and I thought that was a good idea. I think it would 
go a long way to reassure the claimants and the public that 
real changes are taking place to improve the system.
    Mr. Serio, would you agree that the monitoring committee 
should become a permanent feature of ICHEIC, capable of 
overseeing the proper limitation of its recommendations, and 
make its reports available to the public?
    Mr. Serio. I haven't consulted with my colleagues from the 
insurance regulatory community on that. In terms of the five 
members on ICHEIC, I think that some permanent feature is 
necessary and it would be appropriate.
    I think one of the places we have been trying to find or 
focusing our work on has been on assisting ICHEIC at getting 
the rest of their processes squared away; as the Secretary 
indicated, getting the London office up and running, getting 
the claims folks trained and working and then bringing 
something of a permanent nature behind that I think would be a 
perfect one-two, if you would, for that.
    Mr. Waxman. Mr. Eagleburger, do you want to comment on 
that?
    Mr. Eagleburger. Yes, I have changed my mind since that 
last hearing to this extent. The monitoring group will continue 
to operate, but it was then, and it continues to be, an ad hoc 
operation. And, therefore, while I agree it's a useful idea, 
it's not, in my mind--and one of the reasons I changed my 
mind--is that it is not permanent enough. And that's why I 
mentioned earlier here these other systems that we're setting 
up as well. And they, it seems to me, will provide a much more 
regular review of what's going on. The monitoring group doesn't 
oversee operations. What it does do is report on them and lets 
me know when things aren't going well. But I want something 
that is much more a daily or weekly or monthly report on what's 
going on.
    So the reason I changed my mind is that I wanted to 
institute things that were much more directly involved in 
watching what was going on. The monitoring group will continue, 
but I wanted to put in there in much more direct control these 
other ideas that I have suggested. And the monitoring group 
will continue to oversee or, rather, continue to evaluate, but 
it will not be in charge.
    Mr. Waxman. Mr. Serio, considering the expertise of the 
National Association of Insurance Commissioners and the 
fundamental role of insurance regulators in enforcement, I'm 
interested in the role you think the NAIC should play in 
increasing transparency at ICHEIC and increasing oversight of 
the way the ICHEIC office in London and the companies handle 
claims. Do you have a response to that?
    Mr. Serio. Yes, and I think we have actually started that 
process. A couple of things that we've done since January--in 
fact, since March: No. 1 is that we have not only offered but 
we have bestowed upon ICHEIC some State assistance in terms of 
direct contact and direct involvement in the London operation.
    One of the things that a number of States have done over 
the years is set up their own Holocaust claims processing 
offices. New York, I think, may have been the first to have set 
up its own separate State Holocaust Claims Processing Office. 
Superintendent Levin, who I believe was the Banking 
Superintendent at the time, and Governor Pataki set that 
processing office up. And what we have now done is that we have 
now offered the services of the New York HCPO directly to 
ICHEIC, and we have the HCPO staff, not one but two people, who 
are now regularly interacting with the London staff.
    Mr. Waxman. Thank you very much, Mr. Serio. I appreciate 
your response. You think you are playing an appropriate role in 
the expertise of regulators?
    Mr. Serio. Exactly.
    Mr. Waxman. I want to go in another area, because the 
failure to publish the names is a concern to me, but it is not 
the only problem with the ICHEIC process. Even when survivors 
are able to file claims, they are encountering all kinds of 
problems in dealing with the insurance companies. And one of 
the key components of oversight is whether the companies are 
researching the claims against their data base in a fair and 
accountable way.
    One case that has been brought to my attention involves two 
sisters in their eighties from Los Angeles, who filed an 
undocumented claim in July 1999 for policies issued to their 
parents. In 2000, they got a response from Generali that there 
was no match. In June 2003, both of their parents' names showed 
up on the Generali policy lists finally published on the ICHEIC 
Web site spelled exactly as the claims form in 1999. These 
women have waited 4 years for no reason.
    Mr. Eagleburger, what are the benchmark guidelines that 
companies are required to use and what is being done to make 
sure that they are enforced?
    Mr. Eagleburger. I'm not even sure I understand the 
question. What do you mean?
    Mr. Waxman. You said people ought to file claims.
    Mr. Eagleburger. Yes.
    Mr. Waxman. These two sisters filed a claim. They filed a 
claim with Generali and they were turned down. But then 
Generali published a list and the parents' names were on the 
list. These women have had to wait 4 years. I'm trying to find 
out whether ICHEIC is processing these and trying to check 
these things out.
    Mr. Eagleburger. Congressman, the only thing I can tell you 
there is that there is no question that if that is an accurate 
case, then somebody has made a mistake and royally messed up. 
But if you will give me the names, I will do what I can to find 
out immediately what happened and correct it. Admittedly, 4 
years too late, apparently, but all I can say to you is there 
has apparently been a mistake made and we will have to try to 
correct it.
    Mr. Waxman. Well, I will give it to you, but I also have an 
ICHEIC claim filed by Iga Pioro, a survivor from Los Angeles, 
who filed a claim with Generali in 2000 for two policies taken 
out by her parents worth $5,000 each. Generali rejected the 
claims because its records could not show that the policies 
were still in effect in the Holocaust era. The decision 
violated your rule that companies cannot reject these kinds of 
claims unless they supply proof that a payment was made.
    Now, if ICHEIC staff had gone through every wrong denial, 
why hasn't Mrs. Pioro's case been resolved?
    Mr. Eagleburger. No, no, I indicated to you that this 
question of going through every denial is something we've 
instituted recently. I assume this one was done some time ago?
    Mr. Waxman. This was done in 2000.
    Mr. Eagleburger. We have instituted this individual review 
since then. Again, I will be glad to take a look at the case.
    Mr. Waxman. What can ICHEIC do to prevent the companies 
from giving these kinds of runarounds to survivors?
    Mr. Eagleburger. Well, I hope that what we have indicated 
to you, Congressman, on the things that we have instituted over 
the course of the last 6 to 9 months will in fact correct these 
things.
    One of the things that I have indicated to you is that we 
have now got a system that is supposed to be going through 
every single one of these cases in London, and it is a system 
we have just set up in the last few months, last few weeks, 
really, and hopefully that will stop all of this.
    Mr. Waxman. Mr. Eagleburger, from your testimony we have 
learned that $465 million has been contributed by the companies 
for the payment of individual claims with an additional $35 
million from beneficial exchange rates. From Ambassador Bell's 
testimony we know that $217 million of that money was 
contributed for the payment of individual claims. Currently, 
ICHEIC has made $42 million worth of offers. How much money 
actually has been accepted by the claimants? How much money, in 
total, does ICHEIC project to pay out to individual claimants 
during the course of the commission?
    Mr. Eagleburger. I indicated a little earlier, Mr. Waxman, 
that I can't tell you how much has now totally been accepted by 
those to whom it has been offered because of the time lag 
between the time of offering and the time of acceptance or the 
time of an appeal. So we are always some weeks--or months, in 
fact, on occasion--behind. So I do not have at this stage 
accurate figures on how much has been accepted.
    I will be glad to give you--as soon as we can get it pulled 
together, give you what figures we do now have. I will be glad 
to send it to you, but at the moment I do not have it, and it 
will be some time before we can pull it all together. It is 
always lagging behind the real facts.
    Mr. Waxman. Do you have any projection about how much is 
going to be paid for individual claimants?
    Mr. Eagleburger. No. I could give you a guess, but that 
would be all it is, and I would be very reluctant to do it 
because I could be way off. I can only say this to you, that on 
occasion I have seen figures that run to over $1 billion; and I 
can tell you with total confidence on the basis of what I have 
seen so far, it will be very much below that.
    Mr. Waxman. Well, I guess that's my concern, that it will 
be very much below it because we don't have the names, people 
get a runaround from the companies; and I worry about all these 
individual claimants that should be satisfied and are not going 
to be paid.
    Mr. Eagleburger. Mr. Waxman, I just think that's the wrong 
judgment. I just don't think they are there. But, anyway, 
that's the difference between us.
    Mr. Waxman. Thank you.
    Thank you, Mr. Chairman.
    Mr. Shays. I thank the gentleman. Just very quickly. Mr. 
Serio, the National Association of Insurance Commissioners 
[NAIC], is that how to say it?
    Mr. Serio. NAIC. We try not to pronounce it out.
    Mr. Shays. OK. NAIC filed a brief in support of the 
California law that was at issue in the recent Supreme Court 
case. Since NAIC supported the California law, is it safe to 
assume there was dissatisfaction among insurance regulators 
with policyholder lists?
    Mr. Serio. That's stating the case mildly, Congressman. 
There was dissatisfaction, and the directness of the decision 
left little room for doubt as to where the Supreme Court stood 
on the question.
    But there are a couple of, perhaps, glimmers of hope that I 
think have allowed us to refocus some of our efforts on 
assisting the process with direct State assistance, whether 
it's through the dedication of staff from our own Holocaust 
claims processing offices to ICHEIC, or trying to assist the 
claimant process. And I think that's where the State efforts 
have been refocused, given the conclusion of the Supreme Court.
    Mr. Shays. Mr. Eagleburger--excuse me, Secretary 
Eagleburger----
    Mr. Eagleburger. Congressman, Mister is perfectly 
acceptable to me. I don't need to be reminded I'm a has-been.
    Mr. Shays. May I say something? You deprecate yourself too 
much. It makes me uncomfortable.
    Mr. Eagleburger. That's why I do it.
    Mr. Shays. Well, OK. Because you were an extraordinary 
Secretary, and you should carry that title with pride.
    I just want to know if the cutoff date of December 31 can 
be put back a bit, given the question of a few who may not meet 
that cutoff date? Is that something that is potentially on the 
table?
    Mr. Eagleburger. If I say anything but, ``no, sir,'' I 
won't get out of this building alive. No, sir.
    Mr. Shays. No, sir, means it can't be extended?
    Mr. Eagleburger. No.
    Mr. Shays. Mr. Kent and Mr. Taylor, we didn't ask as many 
questions from you. Would either of you like to make a--
actually, I will say to all of you, but I will start with the 
two of you, is there anything you want to put on the record, 
briefly, before we get to the next panel?
    Mr. Eagleburger. Yes, I would like to.
    Mr. Shays. I'm going to have you go last.
    Mr. Kent, is there anything you would like to say?
    Mr. Kent. First of all, I would like to agree with you, 
with the last statement you said about Secretary Eagleburger. 
He is not only an outstanding secretary--was--but he is an 
outstanding human being, and that's very important to me. And 
if I have learned anything during the years of being in this 
negotiating committee, one of my pleasures was to get to know 
Secretary Eagleburger.
    The second thing is, as I said at the very beginning, 
believe me, being a survivor, I definitely want to have the 
thing beyond me. I do want to see that some kind of justice is 
being done to the survivors while we are alive, not a perfect 
justice, but some kind of justice. So whatever we can do--and 
it is my belief that the Congress can help us; that's why I 
say, I open my arms to any pressure that you can give us with 
the governments which--we still have a lot of problems, and we 
have problems with various governments. And this would be 
faster than by pressing the laws, because by pressing the laws, 
they will find out, they will have lawyers to counterbalance 
the law and fight it in courts for another 20 years.
    Mr. Shays. OK. Thank you very much. Very thoughtful.
    Mr. Taylor.
    Mr. Taylor. Yes, I would just like to echo the comments 
that Mr. Kent made about Chairman Eagleburger and also to 
acknowledge Superintendent Serio, who has really put much time 
and effort and weight of authority.
    One brief comment I just wanted to make was, there was 
reference earlier to issues of transparency and so on with 
regard to ICHEIC. I think it should be noted that since the 
last hearing there is a considerable amount of information on 
the ICHEIC Web site, including the budget of ICHEIC, detailed 
reports on what's going on with ICHEIC; and I think that point 
should be noted for the record. I think ICHEIC has done a lot 
in that regard in recent months.
    Finally, I think the importance of a hearing like this and 
the role of this committee is to bring these issues to the 
attention of an increasingly disinterested world. When we 
started this process, there was a very interested community of 
people involved in the issue and a very interested media and 
public. I think that is not the case now, or to a much lesser 
extent. And I think highlighting these issues and particularly 
the role of companies and the importance of companies 
processing these quickly and fairly and doing the proper 
matching of all these issues is very important.
    Mr. Shays. Very nice way to close this meeting. Thank you.
    Mr. Serio. Yes, Congressman, two quick points, and it goes 
to the list question. I think everybody up at this dais 
understands the frustration of the Congress and of the 
committee and wanting to do something. But the concern we have 
is that by going back to those who have already committed to 
cooperating, those who have supplied the lists--and those are 
the ones who either we hold sway over as insurance regulators 
in the country or you hold sway over as businesses doing 
business in this country--I think there is some concern that we 
are going back to the same well again as opposed to expanding 
the scope of our review.
    Also, just for the record, expanding on what Secretary 
Eagleburger mentioned about the review and monitoring process, 
working together, the New York Holocaust Claims Processing 
Office and ICHEIC started back in January 2002, as he 
indicated, the review process; we went through over 400 claims 
in December, preparing for the claims process as it would be 
operating under ICHEIC in London. And that is the kind of 
volume that we were doing under a test pattern, and we suspect 
we will be able to do significantly more than that going 
forward.
    Thank you.
    Mr. Shays. You get the last word, Mr. Secretary.
    Mr. Eagleburger. Thank you, sir.
    First of all, it's really in reference to your question 
about extending the deadline. People need to understand they 
can still file a claim without naming a policy through ICHEIC's 
matching process, and then we have the companies that do the 
match themselves. So just because the deadline is coming, that 
doesn't mean they can't file a claim.
    Mr. Shays. It's very important, if the deadline is not 
going to be extended, to make sure that people file claims.
    Mr. Eagleburger. File the claim. So there's that point.
    And the second point I would make, sir, is that when we 
have a hearing like this and there's no yelling and screaming, 
we get a lot farther than we do, or have, on other occasions. 
So I just want everybody to know that I really did appreciate 
the way things have gone today, and I want to thank everybody 
involved.
    Mr. Shays. Thank you very much, all of you.
    Mr. Waxman. Mr. Chairman, I appreciate the responses and 
the way that they were given to our questions this time, 
particularly compared to last time, and I thank the witnesses.
    All these witnesses on this panel are from ICHEIC. I regret 
the fact that we didn't mix up the panels, but we didn't set up 
the hearing that way. The next panel is going to say some 
things that are critical, and it would have been good to get 
the back-and-forth so that we could have gotten responses from 
ICHEIC for some of the criticisms we are going to hear later. 
But I do thank these four witnesses.
    Mr. Shays. What I think we will do in that regard is make 
sure that the ICHEIC folks know that we will maybe followup 
with a letter or two, or questions; and the record will remain 
open for 10 days so that we can have some good exchange.
    So I thank this panel very much.
    And I thank our third and final panel for its patience: 
Israel Arbeiter, president, American Association of Jewish 
Holocaust Survivors of Greater Boston; Daniel Kadden, Holocaust 
Survivor Advocate; and Michael Bazyler, professor of law, 
Whittier Law School.
    I would ask all three of you to come and stand, because I 
am going to swear you in.
    [Witnesses sworn.]
    Mr. Shays. Note for the record all three of the witnesses 
have responded in the affirmative.
    It is a pleasure to have you here and thank you very much. 
I think I am going to do it as the way I called you. Mr. 
Arbeiter. Take your time and get settled here.
    Is there any symbolism between the empty chair there? If 
not, I'm going to have you move over. I'm sorry, I like to 
micromanage sometimes.

STATEMENTS OF ISRAEL ARBEITER, PRESIDENT, AMERICAN ASSOCIATION 
 OF JEWISH HOLOCAUST SURVIVORS OF GREATER BOSTON, INC.; DANIEL 
  KADDEN, Ph.D., HOLOCAUST SURVIVOR ADVOCATE; AND MICHAEL J. 
         BAZYLER, PROFESSOR OF LAW, WHITTIER LAW SCHOOL

    Mr. Arbeiter. Mr. Chairman, Congressman Waxman, 
distinguished members of the committee, good afternoon.
    Mr. Chairman, first of all, with your permission, I would 
like to express my most sincere thanks to the staff of the 
committee for their assistance, for their help in coming here. 
Zahava Goldman, Drew Crockett, and Dee Kefalas, thank you very 
much for your help and assistance.
    I am Israel Arbeiter; I'm a survivor of the Holocaust and 
president of the American Association of Jewish Holocaust 
Survivors of Greater Boston. I serve as chairman of the 
Advisory Committee of Hakala, a program of the Jewish Family & 
Children's Services in Boston, which provides emergency 
assistance to needy survivors. I am also a founding board 
member of the Holocaust Survivors Foundation-USA, a national 
coalition of survivor organizations. In these roles, I am in 
frequent contact with survivors who have filed claims for 
unpaid insurance policies. I appreciate the opportunity to once 
again address the committee both as a leader in my community 
and as an individual claimant.
    I express my alarm over the slow pace of justice as 
practiced by the ICHEIC. Today, I feel like we have reached the 
end of the line. Twenty-two months ago, I sat in this spot and 
appealed to you for help in resolving this matter of great 
concern to so many survivors. Time, we all agreed, was of the 
utmost importance. I listened to the testimony that day of 
Chairman Eagleburger, government officials and other members of 
ICHEIC. They all promised quick action, a fair process where 
rules are enforced, where everyone gets a fair shake. We were 
told to be patient, that improvements would be made, that the 
process would soon succeed. The frustration I felt that day has 
become deeper with each passing month that my fellow survivors 
and I are left waiting for a solution.
    There are several issues I wanted to touch on today. Each 
of them is an important part of why survivors little or no 
confidence in ICHEIC at all.
    No. 1, publication of names. It was certainly an 
achievement to see hundreds of thousands of names from German 
insurance companies published by ICHEIC a few months ago. It 
was, unfortunately, a few years late, but welcome all the same. 
For many survivors and families originally from Germany, it was 
important to see the names of loved ones come into light. Among 
the discoveries on the lists were the parents of one of my 
colleagues in Seattle, Fred Taucher, which was reported in the 
New York Times in May. Fred, like myself, had no documentation 
but had very clear memories of insurance coverage purchased by 
his father. His efforts to file a claim with ICHEIC originally 
resulted in quick denial by Allianz and other insurers. Now the 
list has revealed that both his parents who died in the 
Holocaust actually had life insurance. We will now see if the 
list translates into real payments for Fred and others.
    While the list is important for many German-Jewish 
families, it is not really of any use to the vast majority of 
us who came from Poland and Eastern Europe. You see, the German 
companies didn't do business there. We are still waiting for 
the light to fully shine on the files of Generali, RAS and 
other companies that operated in the East. I know for every 
name Generali has agreed to release, there are many more kept 
hidden. Why? Because they get to make the rules about which 
names get published. Unfortunately, when it comes to Eastern 
European names, French names and many other lists, the 
agreement which led to German names being published does not 
apply.
    Chairman Eagleburger says he thinks the current lists are, 
in his words, ``virtually all the names that the companies 
have.'' How can he say this when so many of Generali's names 
remain purposely hidden from us? We believe that the only way 
to make the process work, the only way to prove to skeptical 
survivors that the process is honest, is to allow the 
publication of comprehensive lists.
    No. 2, the claims process. I submitted my claim late in the 
year 2000, almost 3 years ago. In December of that year, I was 
informed by ICHEIC that they received my claim and that I would 
hopefully receive a response in 90 days. That was exactly 1,011 
days ago. And in the whole period, I have not had one word from 
ICHEIC about my claim. My repeated calls to their help line 
have provided no new information about the status of my claim. 
I had decided to try again just last week. I was told that 
nothing could be determined about my claim until the completion 
of the company's audits. When I asked when these audits were to 
be completed, I was told the date was indefinite. Mr. Chairman, 
for someone who is 78 years old, this is not a comforting 
answer.
    What has ICHEIC been doing with my claim since they 
received it? Are they still negotiating with the companies over 
how to handle claims like mine? Are they still waiting for 
Generali and other companies that once did business in my 
native Poland to complete their investigation? Are they waiting 
me out? Have they lost my claim? Do they care? I have the 
impression that ICHEIC is still struggling to establish basic 
ground rules for its claims process, and this is holding up my 
claim and probably thousands of others. How can this honestly 
be called a claims process?
    No. 3, claims with no company named. I read recently in the 
Economist magazine that ICHEIC was still trying to figure out 
what to do with the thousands of claims it has received that do 
not have documentation naming a specific company. Because the 
lists of names from Eastern Europe are so meager, most of us 
have only our sharp and painful memories to go on. I am in this 
category. I will repeat what I told this committee in November 
2001: My father, Itzchak Arbeiter, had life insurance. I 
remember distinctly the insurance agents coming to my home 
regularly and collecting premiums from my father. I remember 
how my father kept the records of these payments using a 
booklet provided by the company. I remember how my father 
explained that he was thinking about the future. But after the 
war, I had no papers; nothing was left.
    ICHEIC has been accepting claims like mine for over 3 
years, and here we are, September 2003, and they haven't been 
able to decide how to deal with them. This is shameful. After 3 
years, they should have been able to make some kind of a 
decision one way or another. At the very least, they could have 
provided an honest explanation of what is causing this holdup. 
I have read that the companies and other ICHEIC members feel 
they need to create a special system for considering claims 
like mine that do not have a company in order to prevent fraud. 
I want to ask Chairman Eagleburger, if he is still here: 
Because I have no documentation, is my story not believable? Am 
I considered a potential risk for fraud? I will tell you what 
fraud is. It is the ICHEIC process itself that is carrying on a 
deception on people like me. What good does it do to create an 
elaborate claims system and proclaim there are relaxed 
standards of proof when everyone knows from the beginning that 
most of us survivors have no documentation. Hitler didn't allow 
us to keep any documentation. What good does it do to have 
rules about completing claims investigations in 90 days when 
they don't honor them? What good does it do to have a claim 
process when claimants receive no word about the status for 
almost 3 years? I feel like I have no voice in the process and 
am at the mercy of the companies which control the process.
    No. 4, ICHEIC Humanitarian Fund. While we wait for the 
claims process to somehow begin working for us, we are also 
reading about the efforts by Chairman Eagleburger and the 
ICHEIC members to distribute funds specially designed for 
humanitarian purposes. So far, as I understand it, ICHEIC has 
$162 million at its disposal. This amount may grow depending on 
how many claims are paid or denied. Ladies and gentlemen, I 
must report to you that thousands of aging survivors in this 
country are today facing a crisis. They lack the adequate 
social services to meet their needs. Thousands of survivors, 
alone and in poor health, depend on special services. I see 
this problem personally in my community in my capacity as 
chairman of the advisory committee reviewing emergency 
assistance in greater Boston. The Jewish Family Service 
agencies everywhere are straining to meet even the minimal 
needs of survivors who need home care, transport, and other 
special services to maintain a decent quality of life. The 
strong consensus in my community is that until the needs of 
aging survivors are met, all available funds from the insurance 
settlements and other insurance settlements must be devoted to 
these needs.
    The ICHEIC has been debating how to use humanitarian funds. 
The debate takes place behind closed doors; my voice and my 
community's voice is not heard. This is no way to run a 
humanitarian program. ICHEIC has taken on a major 
responsibility in this humanitarian area with the approval and 
support of our government. I ask you to do everything you can 
to require an open and transparent process for the distribution 
of these desperately needed resources. $162 million is a lot of 
money that can make a huge difference in people's lives. Let's 
make sure it is distributed fairly.
    Let me share with you from a letter written jointly by 48 
executives of Jewish Federations and Community Relations 
Councils in the United States to Chairman Eagleburger last 
March, urging all ICHEIC humanitarian funds to be directed to 
the care of needy survivors. I have attached the complete text 
of the letter to my written testimony. The letter concludes 
this way: ``The story of the Holocaust is not yet complete. 
There is at least one important chapter remaining which will 
tell the story of how the survivors of mankind's darkest hours 
lived out the balance of their lives while under our care, 
after being extricated from the death grip of the Nazis. When 
you consider the distribution of funds under your control, we 
beg you to be guided by the very name you have chosen for the 
fund, humanitarian. Please help ensure that Holocaust survivors 
are not abandoned in their final years.''
    I am proud to tell you that the leadership in my community 
under the Jewish Federation of Greater Boston helped initiate 
this letter.
    In conclusion, I believe you and Congress can do much to 
address this problem either through legislation calling for 
publication of comprehensive lists of Holocaust-era policies, 
by exposing the problem fully and honestly, demanding real 
oversight of ICHEIC by conducting hearings on the plight of 
needy survivors in our country, and through moral persuasion. 
Hopefully this hearing will help ICHEIC turn a new page, and 
that fundamental changes can be implemented. My community has a 
glimmer of hope that something good and decent can come out of 
the insurance settlement process while we are still alive to 
see justice done. Thank you very much.
    Mr. Shays. Thank you Mr. Arbeiter.
    [The prepared statement of Mr. Arbeiter follows:]
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    Mr. Shays. Let me just say to you that I used to, in 
chairing hearings about Gulf war illnesses, we used to have the 
Department heads come first and they would tell us no veterans 
were sick. And after they spoke, they left, and the veterans 
came and showed how they were sick. So we reversed the role. 
And I do probably agree that we should have had the three of 
you go first. In part, because you are the third panel, we let 
you go on for 15 minutes because it was important for you to 
put on the record. I do want to ask, is there--and I hope the 
answer is yes. So I am hoping that there is a staff member from 
ICHEIC here right now. Is there any staff member? Thank you. I 
appreciate you being here. And you are taking good notes. 
Correct? Thank you very much. Would you identify your name, 
please? Pat Boudish? Thank you very much. Appreciate you being 
here.
    Thank you. Dr. Kadden.
    Mr. Kadden. Thank you, Mr. Chairman, Representative Waxman. 
We thank the committee chairman, Mr. Davis, for this 
opportunity. And I am pleased to come back here and speak with 
you again after 22 months. My name is Daniel Kadden; I work as 
a Holocaust survivor advocate, it seems around the clock lately 
because time is very urgent.
    The hour here is late and the number of people hearing me 
are small, but I appreciate this opportunity, and I will try to 
condense my written testimony today for you. Most of my points 
were covered by Mr. Arbeiter, I think, much more eloquently. 
And I do want to leave you with an impression which I came into 
this meeting with, which has not changed one bit after hearing 
the testimony of the last few hours.
    I want to focus briefly on the central issue before us, 
which is the publication of policyholder names. My written 
testimony includes other material covering the fundamental 
accountability issues, which I appreciate your spending some 
time and reading through, and the committee's members have 
that, I understand.
    I believe the publication of names and whether there is any 
success in that area is going to determine whether ICHEIC has 
even a chance of gaining a passing grade in the weeks and 
months ahead. As of today, they have not reached a passing 
grade. Let me emphasize that the publication of names is the 
single most important resource enabling the public to 
participate in the Holocaust insurance claims process. For 
claimants, the list simply demonstrates transparency of the 
entire process.
    I wanted to mention for the record on a personal note my 
own recent experience with the German policyholder list. Both 
sides of my family are German-Jews from the Hitler era. My 
parents and grandparents were all Holocaust survivors. Previous 
archival research by ICHEIC identified one of my grandfathers 
as an insurance policyholder, the first time we had direct 
evidence of this. In reviewing the new names last spring from 
the German lists, I was able to locate my other grandfather, 
four great uncles, a great aunt, and about 25 additional 
relatives. It is a bittersweet thing to see the names of 
people, some who didn't survive and whom I never met, and to 
think about what this really signifies.
    The publication of the German lists demonstrate the value 
of names as a core element of the claims process. It argues for 
the expansion of this model to other companies in regions of 
Europe so that the greatest number of names can be published. 
Unfortunately, ICHEIC and the companies have failed to do so 
beyond the German list.
    And I was struck, I think, with an Alice in Wonderland 
feeling when I heard that publishing more names will in fact 
degrade the claims process during earlier testimony. I am 
struggling with how to even respond to that. I find it such a 
topsy-turvy statement which I reject and I strenuously would 
argue against. The entire claims process is driven by the 
publication of names. It should be a names-driven process 
because of the nature of the Holocaust and the intervening time 
that has passed, and it is simply an argument that I am going 
to stick by as strongly as I can. I have found it to be true 
and I am sure it will continue to be true if we could see more 
names published.
    I want to address the issue of lag time which I took some 
notes on. Mr. Eagleburger claimed that there was a long lag 
between the offering, of ICHEIC offering or the companies 
making an offer to claimants, and the reporting whether the 
offer was accepted. I find that it makes no sense at all. I 
think the reporting of how many claims have been settled, how 
many cases have been closed, finalized, ended, put to rest is 
the single most important measurement point of a claims 
process. It is the basic data line. And I want to tell you that 
Mr. Eagleburger spoke about weeks and months of lag time. That 
number stopped being reported internally in ICHEIC in June 
2002. That is not just a few weeks or months ago. This is a 
fundamental reporting problem. I will refer you to my written 
testimony for more points.
    Mr. Shays. If the gentleman will just suspend. One of the 
things that will be good is, I think, for the staff to make 
sure that we have a direct followup question as to why that is 
the case.
    Mr. Kadden. I believe they have had trouble collecting the 
information from the companies as to how many checks have been 
cut, literally, to people. I believe that they don't have the 
ability to collect that information from the companies. The 
companies can simply say, ``No, it is hard, we don't have time, 
it is confusing, we can't tell you.'' This is a fundamental 
reporting and oversight problem. And here we have a very public 
process that doesn't have access to internally or externally 
the single most important measure of its performance. And I 
believe there is a communication breakdown of some sort--I am 
not in a position to really understand it fully--between the 
ICHEIC and its member companies.
    Obviously, the companies have this information. If I was an 
executive in the companies, I would want to know how many 
checks are cut and how many people have signed away future 
rights to bring litigation against them by accepting an offer. 
That would seem to me a very, very important point that the 
company would be obsessed with knowing on a daily, weekly, 
basis even. The fact that there is a communication breakdown 
points to the failure of the ICHEIC to be the claims process 
that it purports to be.
    I want to, in the very little bit of time remaining--and I 
hope there will be an opportunity to return to these things 
when there are questions, and I do appreciate any additional 
minute or so that you can give me for this--I want to put aside 
ICHEIC the process for a moment, if you don't mind. I represent 
survivors; I work with survivors daily. I have had hundreds and 
hundreds of conversations with insurance claimants over the 
last few years, both in my capacity working with the Washington 
State Department of Insurance and now in the field, so to 
speak, as an advocate. This process has ground to a halt and 
come to an end, in my mind. We can talk about and describe the 
problems. We can come up with possible solutions. And I have 
had many ideas in the past. But I am looking at it from the 
point of view of the claimants of the survivors and their 
family members who need justice, who need completion.
    And I want to appeal to you, the committee, and all of 
Congress, based on some of the past discussions here today, 
that we have to keep all of the options open, including the 
litigation option. We should promote the publication of 
comprehensive lists of names for every reason. We should also 
support the right to litigation.
    I want to conclude by saying, the survivors I talk to--and 
I am not exaggerating--many, many of them talk about their 
experiences coming to this country after the war. My own 
parents were immigrants and my grandparents to this country 
after the war, and they embraced the American system, the 
political system, the justice system, and all the institutions 
of our democracy with passion, and they taught me that. 
Survivors cannot understand how the doors toward gaining their 
rights are being closed on them, how the government is turning 
its back on their efforts to at least have their day in court, 
even if they lose. It is something about being an American for 
them which is maybe amplified by the fact of their history and 
their experience coming to this country as immigrants. And I 
want to just underline that point in my conclusion, that they 
need your help, because they are not organized, they don't have 
resources to contend in the political sphere. They need your 
help to keep those doors open so that they can gain justice. 
And I will leave it at that, and I hope we can have a little 
more discussion about this.
    Mr. Shays. Thank you very much.
    [The prepared statement of Mr. Kadden follows:]
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    Mr. Shays. Mr. Bazyler.
    Mr. Bazyler. Thank you. Good afternoon, Mr. Vice Chairman, 
Congressman Waxman and distinguished members of the committee. 
My name is Michael Bazyler; I am a professor of law at the 
Whittier Law School in southern California, and a research 
fellow with the Holocaust Educational Trust in London, England. 
I am also a child of Holocaust survivors. I received my primary 
education in Poland and emigrated with my family to the United 
States as a refugee in 1964 at age 11. Since 1965, I have lived 
in Los Angeles.
    My legal specialty is international law, and I am the 
author of over 50 legal articles on the subject. For the last 8 
years, I have devoted my research and scholarship exclusively 
to the area of Holocaust restitution. And in April of this 
year, New York University Press published my book, ``Holocaust 
Justice: The Battle For Restitution in America's Courts,'' 
whose aim is to examine the various Holocaust restitution 
claims and settlements that have been reached since 1998. When 
the U.S. Supreme Court last June issued its decision in 
American Insurance Association v. Garamendi, both the majority 
decision of Justice Souter and the dissenting opinion of 
Justice Ginsburg cited to and quoted from my book.
    I want to emphasize that I have not been involved in any of 
the lawsuits filed by Holocaust survivors or their heirs or 
been involved specifically in any of the claims. My role is 
strictly that of the professor in the Ivory Tower analyzing the 
various claims being made and the responses to the claims. Now, 
in trying to figure out the actual situation on the ground, I 
keep in close touch with the individuals both in the United 
States and abroad, in and out of government, involved in 
Holocaust restitution, many of the people that were here 
testifying earlier including representatives of major Jewish 
organizations both in the United States, Israel and Europe, and 
elderly Holocaust survivors, primarily and most importantly.
    I hope to be able to assist the committee to assess how the 
Holocaust era insurance process is doing. Since I am limited to 
5 minutes, I am including a more complete statement. And, as 
Congressman Waxman previously noted, I have put together four 
summaries of actual case studies, of actual claimants, 
Holocaust survivors that have made claims. Let me go ahead and 
put on the record what they are and how I obtained them.
    The first one is that of Holocaust survivor Zev Jalon of 
Israel, who is 77 years old, and the claim he made is against 
the Italian company RAS, which is part of Allianz. I obtained 
this from Moshe Zanbar, who is the representative from Israel 
on ICHEIC, and in fact, is a former Governor of the Bank of 
Israel. And in sending me this information by e-mail, he tells 
me that: ``I now hasten to bring to your attention an excellent 
example of ICHEIC's negligence''--those are his own words--``in 
supporting and following up documented claims.'' And that is 
what Mr. Jalon's claim is.
    The second, third, and fourth claims I was provided by 
attorneys Lisa Stern and Bill Chernoff, and also Beth Settak 
Legal Services in Los Angeles, the organization that has been 
referred to before that has also been critical of the ICHEIC 
process. The second claim is of the sisters Esther Berger 
Lichtig and Violet Berger Spiegel, age 83 and 85 respectively, 
that Congressman Waxman asked secretaries to Eagleburger. The 
third one is that of Iga Pioro, also from Los Angeles. And the 
fourth one is of Holocaust survivor Felicia Haberfeld, 92 years 
old, who received an offer on two insurance policies from 
Generali of $500. That was the offer that she got. And then 
another policy which was issued to her father, she received a 
denial letter saying, just like for the Pioro claim, that they 
don't have any records of the policy being in existence in 
1936. So, negative proof was the reason for them to deny the 
policy, specifically contrary to the decision memorandum issued 
by Chairman Eagleburger.
    Mr. Shays. Let me just ask the gentleman to suspend. We 
have taken each of these cases and we have given them to ICHEIC 
to have them check out, and we are going to expect that there 
will be a report.
    Mr. Bazyler. Well, what I have done is this. I know Jodie 
Manning, the chief of staff of ICHEIC in her previous position 
of working with the Special Envoy's office, and so I gave her 
the four summaries with the backup documentation. I am more 
than happy to provide----
    Mr. Shays. No. What I said is, we have given these cases to 
ICHEIC.
    Mr. Bazyler. OK.
    Mr. Shays. And we expect ICHEIC will get back on a formal 
basis to the committee.
    Mr. Bazyler. Wonderful. I want to add that there is a fifth 
case that I just received last night, and that is from the 
Washington State Commissioner of a Fannie Mattalone who 
actually received a decision from the appeals board and is now 
waiting months for that decision, and I want to add that to my 
statement.
    Now, Mr. Chairman, next month ICHEIC will mark its 5th 
anniversary. Sadly, it will do so under a continuing cloud of 
public distrust and skepticism over its poor performance in 
mishandling claims and in getting claims paid. This is not 
where we expected to be 5 years ago. We on the outside, like 
you and Congress, have struggled to make sense of ICHEIC and 
evaluate its troubled track record. Let me briefly review what 
I feel are the two most critical failings that impact 
claimants.
    The first one, the passive pileup of unprocessed claims. A 
number of principles were adopted by ICHEIC at the time it was 
formed to take into account the unique challenges posed by the 
passage of time and the nature of the Holocaust. Among these 
were relaxed claims standards and the need to determine a fair 
mechanism for treating claims that are undocumented and do not 
name a company. Living up to these principles has proved 
elusive. An initial experiment with well-documented claims in 
1999, the so-called fast track process, was a complete disaster 
and showed that the companies were basically rejecting their 
best kind of claims for really specious reasons.
    After 5 years, and up to this very day, ICHEIC continues to 
struggle by consensus with how to handle and resolve these 
claims and also claims that do not name an insurance company. 
These claims that do not name an insurance company constitute 
the majority received from around the world. And these claims 
are being held up. Thousands of them have been held up since 
2000 when the claims process began. As the claims process has 
piled up with nowhere to go, ICHEIC in the past year has shown 
no hesitation to throw money at the problem. They contracted 
with a top-tier consultant to develop standards for claims 
without a named company. And, if completed, these will only be 
the latest in a series of standards that have been developed 
since 2000 but have never been implemented. That was per your 
reference to the Archer Commission. We are all waiting to see 
what will emerge and how many good faith claims will be honored 
in the end.
    The second problem I see is the administration of the 
claims by the ICHEIC staff. While the pileup of unprocessed 
claims is perhaps the single most important issue involved in 
ICHEIC and the cause of a good deal of paralysis, it is by no 
means the only unfinished element or gap in the process. What I 
see as time passes is that the London office of ICHEIC, where 
the administration and oversight of claims is done, has not put 
pressure on the companies, has not put their feet to the fire 
to resolve these claims. Over and over, I hear stories of 
survivors sending in their claims to ICHEIC, like Mr. Arbeiter, 
and waiting for years for a response from the companies with no 
followup from ICHEIC.
    Now, this brings me to the last point, which is with regard 
to the appeals process that Secretary Eagleburger mentioned. 
The right to an appeal is a fundamental element of fairness, 
but ICHEIC has developed a confusing system for appeals, with 
three different appeal bodies: The appeals tribunal for non-
German claims, the appeals panel for the German claims and what 
appears to be a separate appeal-like process only for Generali 
claims done with the Generali trust fund, completely separate 
from the other two. Each one has a different basis of standard 
and different authorities which decide the claimants.
    Moreover, and I think this is really critical, there have 
been no publication in any of these decisions. And I compare 
this to the Swiss bank dormant account claims where the 
decisions of the Swiss claims resolution tribunal are publicly 
available and posted on the tribunal Web site. And I urge 
ICHEIC to go ahead and start posting these decisions. It well 
may be that the appeals process is the court of real resort 
rather than the court of last resort in deciding these claims. 
If that is so, then the pending claims that exist, the 
unprocessed claims, should be decided quickly up or down, yes 
or no, and then go on to the appeals process where a final 
decision can be made.
    Now, what can Congress do? The publicity and the hearings 
that are done today I think are very, very critical. The second 
point is really important to keep the litigation option open to 
the claimants. If a claimant does not want to go through the 
ICHEIC process, has no confidence in it, he or she should be 
able to file a lawsuit in court and have that lawsuit decided 
by a judge or jury, as Dr. Kadden has mentioned.
    Now, the Supreme Court decision also makes clear that our 
Federal law requiring foreign insurance companies doing 
business in the United States to disclose Holocaust era 
insurance policies would not run afoul of the Constitution. And 
if such a Federal law would not instantly solve these problems, 
I think it would go a long way in moving the process forward. 
And I think, as has been said by others, the publication of 
names is the single most important resource enabling the public 
to participate in the Holocaust insurance claims process, and I 
urge you to pass such a law. Thank you.
    Mr. Shays. Thank you very much.
    [The prepared statement of Mr. Bazyler follows:]
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    Mr. Shays. At this time, the Chair will recognize Mr. 
Waxman for 10 minutes.
    Mr. Waxman. Thank you, Mr. Chairman.
    Well, I think the three of you have given us a pretty 
disturbing picture of ICHEIC. In trying to help my colleagues 
understand the problems in the ICHEIC system, I have used your 
case, Mr. Arbeiter, as an example of the system's unfairness. 
As I understand it, you are saying that since December 2000, 
when ICHEIC first sent an acknowledgment that your claim was 
received, you have never gotten one letter with an update on 
its status?
    Mr. Arbeiter. No, sir.
    Mr. Waxman. Even after you called the help line, ICHEIC 
still didn't send you a letter or an update explaining that 
your claim would be reviewed by ICHEIC once all other claims 
had been paid because your claim does not name a company?
    Mr. Arbeiter. No, sir. I did not get anything from them. 
The only answer was when I called them and they tell me we 
don't know anything yet. And, like I said, the last call which 
I made last week, they told me we won't have any answer for you 
until the audit is done. And I asked him how long will that 
take, and they said indefinitely.
    Mr. Waxman. Mr. Bazyler, Mr. Kadden, is it too late to 
restore public confidence in ICHEIC? Is it too late to have the 
people in the survivor community feel that this system is 
busted, that an easier process could still succeed?
    Mr. Kadden. I think it is largely too late. I have to be 
perfectly frank with you. I am looking at it from the point of 
view of survivors, Congressman Waxman, and not looking at it 
from the point of view of the mainstream of those invested in 
the process, in administering the process and the legal aspects 
of the process. I am talking about the concerned stakeholders 
that are most important here, which is the claimants, who are 
mostly older people who survived the Holocaust. And for them, I 
think it is largely too late. The suspicions run so high. And I 
have to say that the words from the Federal judge overseeing 
the Generali case, which is still active in the Federal courts, 
who called ICHEIC the company's store in one of his rulings is 
a very, very hard thing to rub off. And I think one has to look 
at it from the point of view of survivors, that there is 
virtually nothing at this point, especially based on the 
testimony we heard today, that can be done to earn the trust of 
survivors.
    Now, the process may muddle through and come to some kind 
of conclusion that is minimally acceptable to power brokers and 
others, but I don't think it is going to pass muster based on 
what I have seen with the survivor community, sorry to say.
    Mr. Waxman. Mr. Bazyler.
    Mr. Bazyler. Well, I would hate to see 40 million go to 
waste; and I hope that ICHEIC can improve and can go ahead and 
make progress. I will have to say that the publication of the 
German names was an important step. A lot of people looked at 
that list and came up with, I see, you know, my name is on it. 
I am able to make the claim.
    Mr. Waxman. So publication of names to you is really key.
    Mr. Bazyler. Absolutely. It is the first and most important 
step. We are dealing with a reality, as everybody knows, that 
most survivors don't have the information. They were children 
at the time. You need to start publication. If you suppress the 
names, you suppress the claims.
    Mr. Waxman. Mr. Kadden, the companies say the publication 
of the names is not important, because if you have a claim, 
your name will be searched at the companies even if you are not 
on the list of policyholders. Why is the list publication so 
important? And how will we know that the list of the names of 
policyholders is relatively comprehensive? Should we assume 
that a certain percentage of the Jewish population at the time 
held policies? Is that the way we should judge it?
    Mr. Kadden. Yes. I think we should assume that, to answer 
the second part of your question. There has been a great deal 
of research done, and if you don't mind, I am going to share 
with you a report which I obtained, an internal document of the 
ICHEIC. In December 1999, the estimation of unpaid Holocaust 
era insurance claims in Germany, Western Europe and Eastern 
Europe. And I will be happy to share my copy with the 
committee. This is actually in direct answer to the question 
asked of Chairman Eagleburger earlier, which he was unable to 
answer clearly. And I don't think he fully understood the 
question. The ICHEIC has gone through this process of trying to 
estimate in a very systematic way as much as possible, given 
various assumptions, the actual extent of insurance coverage 
within the Jewish communities across Europe. And, not only 
that, tried to attach a certain estimation of the value of 
unpaid insurance. It makes for fascinating reading for those 
interested in this issue.
    To answer your main question, I think----
    Mr. Shays. We will make that part of the record. Thank you.
    [The information referred to follows:]
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    Mr. Kadden. Thank you very much--not only answers the 
current question, but answers the previous question, which I am 
glad to do. It is ironic that perhaps I am the one that can 
answer these questions, not the ICHEIC.
    I said before that this has always needed to be a names-
driven process, not a claims-driven process. We have so many 
decades that have gone by in the intervening years between the 
Holocaust, the rebuilding of people's lives, and the way this 
has come back into the light. And based on that alone, you have 
to, you simply have to have the process driven by names, 
because the vast majority of people who had any direct 
knowledge as children of their parents' policies, of the actual 
victims of the Holocaust who were adults at that time, are 
dead.
    Families and child survivors, those who survived the 
Holocaust as children, like Mr. Arbeiter, must have that list 
in order to have even a glimmer of sense that there is an 
actual insurance policy to make a claim for. When you jury-rig 
the system from the beginning to force people on their own 
motivation and anger and frustration and just on a whim to file 
a claim in the hopes that something turns up, you are going to 
suppress claims. When you publish an extensive list, a 
comprehensive list, you are inviting people to participate in 
the process whether it comes to fruition for them or not.
    And the question of what are comprehensive lists, it is a 
very hard thing and I think we got at that during the earlier 
discussion. But I look to the model of the German list and want 
to see that replicated. And I think your chart here on the side 
said as much as I could about the gaps. We have only begun to 
turn over the stones. Chairman Eagleburger promised there will 
be no stones left unturned. Well, I know of many, many stones 
that still have to be overturned, especially archives in Poland 
currently which may have significant numbers of Generali and 
RAS policy information that have not been tapped. We need the 
time, we need the extension of the deadline, and we need people 
simply to get that information so that they can make a choice 
whether to join the claims process or file litigation or 
whatever other options they may have ahead of them.
    Mr. Waxman. I appreciate that. I have a lot of questions 
for the two of you, particularly, and I think I am probably 
going to submit them to you and get answers in writing because 
I want to ask your analysis of certain things in the ICHEIC 
process. But let me just ask this one question of you, Mr. 
Bazyler. In your testimony, you talked about ICHEIC's 
standards. How do we know whether relaxed standards are applied 
by ICHEIC and whether they have been applied consistently, and 
what would need to be publicly disclosed to make such a 
determination? This is the strongest argument for ICHEIC, they 
have this streamlined process with standards that are relaxed.
    Mr. Bazyler. Absolutely. And the evidence that I see of the 
claimants that I speak to is that the process is not being 
applied. That you have rules being made by either the chairman 
or through meetings or through consensus and then going through 
the process. They are not applied. I think the examples of the 
memorandum decisions saying that, if a claimant comes forward 
with the policy, then it is the insurance company that has to 
come up with proof that, in fact, the policy, you know, is not 
in existence during the Holocaust era. We can see two cases 
that I provided. It hasn't occurred. The last case that I 
mentioned from Washington, you have a situation where a claim 
was submitted to the Generali trust fund and the person is 
waiting for a decision to come out. And I just don't see a 
consistency. I don't see one set of process, one set of rules, 
and one consistent application of rules. I think more 
transparency is critical. Publication of the decisions, getting 
statistics as to how many claims have been accepted from each 
country, from each company over 3 months, 6 months, 9 months, 
is really critical to understanding it. And then, what is going 
on through the appeals process, through each of the three 
appeals bodies.
    Mr. Waxman. Well, I think those are excellent points. One 
of the biggest problems identified is oversight and 
accountability. Who or what should be overseeing ICHEIC? I know 
that NAIC, Congress and the State Department have limited 
roles. Do you think that more should be done in that area? It 
may be too late because they are so far along. And rather than 
respond to that, give it some thought and give me a response 
for the record.
    And I am going to ask Mr. Arbeiter one last question now 
and then we are going to ask you questions later through 
writing. I understand Mr. Eagleburger is deciding how funds 
contributed for humanitarian programs should be spent. What are 
the priorities of survivors' organizations that you have worked 
with? And do you think that survivors need to be part of the 
decisionmaking process to ensure that social services are going 
to those most in need?
    Mr. Arbeiter. Yes. We would--the survivor organizations and 
the survivors by and large would rather see the funds go to the 
emergency process, which is being carried out in conjunction 
with the Jewish Family and Children Service and the advisory 
committee consisting of Holocaust survivors; thereby, the money 
is distributed for the very needy Holocaust survivors. We 
supply them with help, with medication, help with food. And, 
Mr. Waxman, you would be surprised that in these days today in 
the United States of America how many elderly Holocaust 
survivors are in a position where they cannot afford to pay for 
their medication and they cannot buy the food, the necessary 
food that they come to us for help and we are doing the best 
possible to help them. And the same thing goes for clothing for 
the winter, helping with paying for the rent, and warm clothing 
and oil and so forth. In other words, the necessities of life.
    Mr. Waxman. So if some money then is going to be dispensed 
for humanitarian efforts, you think that some of the survivor 
organizations ought to be part of the decisionmaking?
    Mr. Arbeiter. Yes. Absolutely.
    Mr. Waxman. Time is running out for these survivors, and so 
many of them are still in great need.
    Mr. Arbeiter. I'm sorry, Mr. Waxman?
    Mr. Waxman. So many of the survivors that are still alive 
need a lot?
    Mr. Arbeiter. Yes.
    Mr. Waxman. And they need the attention paid to their 
concerns.
    Mr. Arbeiter. We are talking about the elderly survivors. 
Of course, today everybody--the average age today of a 
Holocaust survivor is 80 years. I am among the youngest group. 
I am 78. I am among the youngest. I am called a kid among my 
elderly friends because we are survivors, but in the 80's and 
even in the 90's. And some of them live just on the Social 
Security or on the fixed income. And----
    Mr. Waxman. I want to tell you that I appreciate that you 
are here and you are speaking for others who have had the 
experience you have and others have had worse experiences, and 
I think that all three of you have given us excellent 
testimony. It will be important for the record. There may not 
be a lot of Members here at this moment, but we will make a 
record of this hearing. And your testimony orally will be in 
writing, and then the responses to the further questions we ask 
will also be part of that record and it will be very helpful 
for us. Thank you very much for your testimony.
    Mr. Shays. I thank the gentleman. And, Mr. Waxman, thank 
you again for being such a motivator for this hearing.
    I think you had such nice and thoughtful statements that 
are part of the record that a lot of my questions would be 
redundant. I do want to ask this question and then make a point 
and have you react to it. What will it take for the various 
stakeholders--and I would like all of you to answer this. What 
would it take for the various stakeholders to be satisfied that 
a comprehensive list of Holocaust victim policyholders is 
compiled? I will start with you, Mr. Bazyler.
    Mr. Bazyler. Could you repeat the last part? I'm sorry.
    Mr. Shays. What will it take for the various stakeholders 
to be satisfied that a comprehensive list of Holocaust victim 
policyholders is compiled?
    Mr. Bazyler. I think that if we take the German model and 
apply that German model to the other countries, then the 
Holocaust survivors, the individuals who are making the claims 
have the possibility and their heirs, children and 
grandchildren, will be satisfied. I think that is a very 
workable, provable model. It has been done in Germany. It 
also--and Secretary Eagleburger mentioned this--took a long 
time to get the Germans to agree to that. This wasn't something 
they wanted to do and something that Chairman Eagleburger at 
first was not--was willing to forego. And then it was--their 
feet were held to the fire and they finally agreed to do so. 
That is a model that could be used for other countries. When 
that is done, I think that will be a feeling that the best 
possible thing could have been done.
    Mr. Shays. Dr. Kadden.
    Mr. Kadden. I think whether ICHEIC is the force that is 
able to extract these names or acts of Congress or a further 
clarified force of state regulators, the public will benefit. 
And that is really the goal here. I am not very optimistic 
about the ability of ICHEIC at this point to extract any more 
names, and I can certainly say that my concerns were raised 
further by the testimony today from all the parties.
    Mr. Shays. But what I asked is, what will it take for the 
various stakeholders to be satisfied that a comprehensive list 
of policyholders is compiled? Did you agree with Mr. Bazyler?
    Mr. Kadden. I do generally. I think ICHEIC has published 
the German names and has set a good and reasonable standard for 
what should be done when you get your teeth into a source of 
names and how to go about putting together the best possible 
list that captures by their own objectives 90 to 95 percent of 
the presumed victim population, policyholder population. I 
believe that can be done in other countries in Europe. We may 
fall short in some of the countries, but there is very clear 
evidence in my mind that can be done. It is physically possible 
to do it.
    Mr. Shays. And if it was done, you think----
    Mr. Kadden. And the survivor community--and I speak as a 
member of a family that found many, many names on the German 
list.
    Mr. Shays. Right.
    Mr. Kadden. Some may not understand this when I talk to 
them about it, but there is a symbolic value which goes a long 
way toward survivors making peace with this process. And even 
if they decide not to file a claim--and I know people like 
that--``It is not worth it, the pain.''--but there is a certain 
sense that something is being done by publishing these very 
comprehensive lists. Some good faith went into it, and the 
results that were yielded really showed that light is shining 
on this dark chapter. And I think that is quite apart from the 
claims process itself.
    Mr. Shays. Thank you very much.
    Mr. Arbeiter, how about you responding to that question?
    Mr. Arbeiter. I feel that the publishing of course of the 
list is of very, very great importance. To be honest with you, 
Mr. Chairman, the feeling in the survivor community is, today, 
resignation. They don't believe that something--that ICHEIC is 
handling this honestly and that something will be done in their 
lifetime. We don't see--I get calls quite often being the 
president of the Association of Holocaust Survivors, I get 
constant calls from members of our organization. Did you hear 
anything? Do you know anything?
    Mr. Shays. Well, but what that implies to me is that, 
whatever happened, they wouldn't be satisfied. And I want to 
have you respond to attorney Bazyler's--you are an attorney?
    Mr. Bazyler. I am, but much more I am a professor.
    Mr. Shays. Professor Bazyler commented that, if they used 
the German model, that a lot more people would be satisfied.
    Mr. Arbeiter. Any progress, anything the survivors will see 
that there is some movement, they would be--they would have 
hope and maybe a dim of satisfaction.
    Mr. Shays. I am sorry, sir.
    Mr. Arbeiter. As of now, they don't see anything. To the 
best of my knowledge, in the community in Boston, MA, I don't 
know of any survivor--and of course I don't know exactly how 
many claims were filed. I don't know of even one survivor that 
had his claim settled or had the satisfactory answer from 
ICHEIC about his claim.
    Mr. Shays. I remember at the last hearing we had someone 
who had a document that was the actual reproduction of the 
policy, and that person clutched on to that policy as if they 
were hugging their loved one. It spoke volumes to me.
    I appreciate--we, this committee and our staff--appreciate 
your presence and your participation. Is there any last thing 
you want to put on the record before we adjourn this hearing?
    Mr. Arbeiter. I would just like again to appeal to you, Mr. 
Chairman, and to the committee and to Congress, you are the 
only ones that can help us. We are citizens of the United 
States and we have rights, and we should have the right, if we 
don't get satisfaction from ICHEIC, then we should be able to 
use that right of law and go to court and sue them. And we 
believe that you can help us with this. You are the only ones 
that can help us. And you, of course, are our representatives.
    Mr. Shays. I don't intend to prolong this, but my 
understanding is that you could still go to court. So let us 
just put down on the record where I am wrong here. You can go 
to court right now. That is correct?
    Mr. Bazyler. Let me go ahead and answer that question. 
Right now, if you have a claim with a German company, you 
cannot go to court. It has been precluded by the German 
agreement.
    Mr. Shays. In the German court?
    Mr. Bazyler. The German.
    Mr. Shays. Because they have cooperated.
    Mr. Bazyler. Well, because you have an agreement, a 
comprehensive agreement with Germany in which all claims 
relating to World War II against Germany have been put aside. 
This is an agreement that was put together by the Clinton 
administration and the German Government and German companies, 
and included any kind of World War II claims.
    Mr. Shays. So, in German court we could not go for German 
cases.
    Mr. Bazyler. In a U.S. court.
    Mr. Shays. In a U.S. court?
    Mr. Bazyler. In a U.S. court.
    Mr. Shays. Let me just make sure I am saying it correctly. 
In a U.S. court over a German policy?
    Mr. Bazyler. Correct.
    Mr. Shays. Correct.
    Mr. Bazyler. The only claims right now that are still open 
are the claims against Generali, which is one of the largest 
sellers of insurance to Jews prior to World War II. That is 
still going on, that litigation is still open, and that is 
before Judge Michael McCasey, the chief judge, Federal district 
judge in Manhattan.
    Mr. Shays. I have triggered one last question. 
Unfortunately, when you ask one, you sometimes realize you want 
another answer. What would happen if the money that you set 
aside from the social expenditures was put in a fund for those 
people who didn't make the deadline? How would you react to 
that? So, instead of it going for social expenditures, it went 
to pay settlements? In other words, the companies in a sense 
are held harmless; they have no further draw on their 
resources. How do you react to that?
    Mr. Kadden. I don't like the sound of it. I think the 
process of which I am not very enamored of was set up 
envisioning a claims process and a humanitarian process. This 
is what was negotiated, this is what was settled. The desperate 
need of survivors in the streets, and in some cases I am 
literally saying in the streets, of American cities as well as 
in Europe and elsewhere requires this money to be made 
available. It is desperate need for----
    Mr. Shays. Well, we have a problem though. It is called 
compromise. And in this world of compromise, we have one 
problem; we have a deadline so they get nothing, or we try to 
find a way to deal with that deadline.
    Mr. Kadden. Well----
    Mr. Shays. But I understand you don't like the sound of it. 
I don't like the sound of it either, compromise. I don't.
    Mr. Kadden. I think the volume of the claims process, the 
number of claims coming in, the volume of claims that are 
meeting some kind of acceptability by the companies and winding 
up as offers, we don't know anything about how many have been 
accepted.
    Mr. Shays. Fair enough.
    Mr. Kadden. It is not enough, I think, to argue for the 
extension of the deadline using--borrowing money basically from 
other uses which are desperately needed. If the deadline is 
extended because there are innovations in the process, I think 
that would be a lot more acceptable.
    Mr. Shays. It would be more acceptable. I hear you. Any 
last comment before we adjourn this hearing?
    Mr. Kadden. I do, with your permission. I did note Chairman 
Eagleburger in a letter to the London Economist magazine on 
August 8th of last month, which is published on the ICHEIC Web 
site. I don't think it is published in print by the magazine. 
But he said very simply, ``ICHEIC is a process unlike the 
litigation course, which is also open to them,'' meaning 
claimants. Earlier, Mr. Bell said ``Would result in a slow 
process that may not yield payments.'' I don't know if Mr. Bell 
is confused. He may have been talking about ICHEIC, not the 
litigation process, because ICHEIC is a slow process that may 
not yield payments.
    I reiterate my point because it is so very important to the 
communities I work with: Keep the options open. Mr. Shays, you 
are in a sole position now to--and I take your promise very 
seriously that you will work hard to communicate with your 
fellow members and try to work out solutions with the ideas and 
the passion that exists here in Congress. The survivor 
community is depending on it. They don't have the resources 
literally to lobby. Thank you very much.
    Mr. Shays. Thank you very much, Mr. Kadden. Anyone else, or 
are we all set here?
    Mr. Bazyler. I just agree with what Mr. Kadden said 
completely.
    Mr. Shays. Thank you. All three of you have been a 
wonderful--the staff has just reminded me. We may be submitting 
followup questions to the three of you, so don't be surprised 
if you get that request in.
    Mr. Arbeiter, I just want to say again. Your statement is 
the reason why we are having these hearing. So, on behalf of 
Chairman Davis, I would like to thank our witnesses for 
appearing today. And I would also like to thank the staff that 
worked on the hearing. And I would say, Mr. Arbeiter, you are 
the first person I have ever heard as a witness thanking the 
staff. So that goes----
    Mr. Arbeiter. They deserve it. They did a great job.
    Mr. Shays. I understand, but I just thought it was very 
nice.
    I ask unanimous consent to insert in the record the written 
testimony of Christopher Carnicelli, the president and chief 
executive officer of the U.S. branch of the Generali Insurance 
Co. Without objection, it is so ordered.
    [The prepared statement of Mr. Carnicelli follows:]
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    Mr. Shays. I will also leave the record open for 2 weeks so 
Members or witnesses can submit additional materials or 
comments.
    It is this committee's hope that the information we have 
gathered today will help to facilitate the processing of 
insurance claims for Holocaust victims and their heirs. Almost 
60 years have passed since the end of the Holocaust. All 
parties, including the U.S. Government, ICHEIC, insurance 
companies, and Europeans nations should do whatever it takes to 
resolve these claims in a fair, efficient, and expeditious 
manner. Paying these legitimate claims is not only a legal 
responsibility, it is truly a moral one. Thank you. With that, 
we will adjourn this hearing.
    [Whereupon, at 5:56 p.m., the committee was adjourned.]
    [The prepared statement of Hon. Edolphus Towns and 
additional information submitted for the hearing record 
follows:]
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