    [House Hearing, 110 Congress]
    [From the U.S. Government Publishing Office]

                     THE HOLOCAUST INSURANCE ACCOUNTABILITY
                     ACT OF 2007 (H.R. 1746): HOLOCAUST ERA
                    INSURANCE RESTITUTION AFTER ICHEIC, THE
                     INTERNATIONAL COMMISSION ON HOLOCAUST
                              ERA INSURANCE CLAIMS

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

                                    HEARING

                                   BEFORE THE

                        COMMITTEE ON FINANCIAL SERVICES

                         U.S. HOUSE OF REPRESENTATIVES

                           ONE HUNDRED TENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                FEBRUARY 7, 2008

                                   __________

           Printed for the use of the Committee on Financial Services

                               Serial No. 110-85

                         U.S. GOVERNMENT PRINTING OFFICE

    41-176 PDF                 WASHINGTON DC:  2008
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                     HOUSE COMMITTEE ON FINANCIAL SERVICES

                     BARNEY FRANK, Massachusetts, Chairman

    PAUL E. KANJORSKI, Pennsylvania      SPENCER BACHUS, Alabama
    MAXINE WATERS, California            DEBORAH PRYCE, Ohio
    CAROLYN B. MALONEY, New York         MICHAEL N. CASTLE, Delaware
    LUIS V. GUTIERREZ, Illinois          PETER T. KING, New York
    NYDIA M. VELAZQUEZ, New York         EDWARD R. ROYCE, California
    MELVIN L. WATT, North Carolina       FRANK D. LUCAS, Oklahoma
    GARY L. ACKERMAN, New York           RON PAUL, Texas
    BRAD SHERMAN, California             STEVEN C. LaTOURETTE, Ohio
    GREGORY W. MEEKS, New York           DONALD A. MANZULLO, Illinois
    DENNIS MOORE, Kansas                 WALTER B. JONES, Jr., North
    MICHAEL E. CAPUANO, Massachusetts        Carolina
    RUBEN HINOJOSA, Texas                JUDY BIGGERT, Illinois
    WM. LACY CLAY, Missouri              CHRISTOPHER SHAYS, Connecticut
    CAROLYN McCARTHY, New York           GARY G. MILLER, California
    JOE BACA, California                 SHELLEY MOORE CAPITO, West
    STEPHEN F. LYNCH, Massachusetts          Virginia
    BRAD MILLER, North Carolina          TOM FEENEY, Florida
    DAVID SCOTT, Georgia                 JEB HENSARLING, Texas
    AL GREEN, Texas                      SCOTT GARRETT, New Jersey
    EMANUEL CLEAVER, Missouri            GINNY BROWN-WAITE, Florida
    MELISSA L. BEAN, Illinois            J. GRESHAM BARRETT, South Carolina
    GWEN MOORE, Wisconsin,               JIM GERLACH, Pennsylvania
    LINCOLN DAVIS, Tennessee             STEVAN PEARCE, New Mexico
    PAUL W. HODES, New Hampshire         RANDY NEUGEBAUER, Texas
    KEITH ELLISON, Minnesota             TOM PRICE, Georgia
    RON KLEIN, Florida                   GEOFF DAVIS, Kentucky
    TIM MAHONEY, Florida                 PATRICK T. McHENRY, North Carolina
    CHARLES WILSON, Ohio                 JOHN CAMPBELL, California
    ED PERLMUTTER, Colorado              ADAM PUTNAM, Florida
    CHRISTOPHER S. MURPHY, Connecticut   MICHELE BACHMANN, Minnesota
    JOE DONNELLY, Indiana                PETER J. ROSKAM, Illinois
    ROBERT WEXLER, Florida               KENNY MARCHANT, Texas
    JIM MARSHALL, Georgia                THADDEUS G. McCOTTER, Michigan
    DAN BOREN, Oklahoma                  KEVIN McCARTHY, California
                                         DEAN HELLER, Nevada

            Jeanne M. Roslanowick, Staff Director and Chief Counsel

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on:
        February 7, 2008.............................................     1
    Appendix:
        February 7, 2009.............................................    59

                                   WITNESSES
                           Thursday, February 7, 2008

    Arbeiter, Israel, President, American Association of Jewish
      Holocaust Survivors of Greater Boston..........................    28
    Dubbin, Sam, Esq., Attorney, Miami, Florida......................    36
    Eizenstat, Stuart, Former Special Representative of the President
      & Secretary of State on Holocaust-Era Issues...................    31
    Kennedy, Ambassador J. Christian, Special Envoy for Holocaust
      Issues, U.S. Department of State...............................    10
    Kent, Roman, Chairman, American Gathering of Jewish Holocaust
      Survivors......................................................    39
    Koken, Diane, Former Vice-Chairman, ICHEIC, and Former
      Pennsylvania Insurance Commissioner............................    34
    Kurtz, Dr. Michael, Assistant Archivist for Records Services,
      National Archives and Records Administration...................    12
    Zabludoff, Sidney, Former Consultant, Conference on Jewish
      Material Claims Against Germany, Inc...........................    41

                                    APPENDIX

    Prepared statements:
        Ros-Lehtinen, Hon. Ileana....................................    60
        Arbeiter, Israel.............................................    63
        Dubbin, Sam..................................................    66
        Eizenstat, Stuart............................................   102
        Kennedy, Ambassador J. Christian.............................   111
        Kent, Roman..................................................   119
        Koken, Diane.................................................   128
        Kurtz, Dr. Michael...........................................   142
        Zabludoff, Sidney............................................   148

                  Additional Material Submitted for the Record

    Frank, Hon. Barney:
        Letter from the American Jewish Committee, dated February 4,
          2008.......................................................   153
        Letter from the Anti-Defamation League, dated February 4,
          2008.......................................................   155
        Letter from B'Nai B'Rith International, dated February 6,
          2008.......................................................   156
        Letter from the Association of Insurers in the Netherlands,
          dated February 1, 2008.....................................   157
        Letter from the World Jewish Congress, dated January 31, 2008   159
    Ros-Lehtinen, Hon. Ileana:
        Dear Colleague letter from Representative Ros-Lehtinen and
          Representative Robert Wexler, dated February 5, 2008.......   161
        Collection of letters from Holocaust survivors...............   162
    Koken, Diane:
        Letter from AXA Group, dated January 31, 2008................   179
        Letter from Generali, dated February 4, 2008.................   180
        Letter from Zurich Insurance Company, dated December 4, 2007.   181

                            THE HOLOCAUST INSURANCE
                           ACCOUNTABILITY ACT OF 2007
                           (H.R. 1746): HOLOCAUST ERA
                          INSURANCE RESTITUTION AFTER
                           ICHEIC, THE INTERNATIONAL
                            COMMISSION ON HOLOCAUST
                              ERA INSURANCE CLAIMS

                                  ----------

                           Thursday, February 7, 2008

                 U.S. House of Representatives,
                       Committee on Financial Services,
                                                       Washington, D.C.
        The committee met, pursuant to notice, at 9:33 a.m., in
    room 2128, Rayburn House Office Building, Hon. Barney Frank,
    [chairman of the committee] presiding.
        Members present: Representatives Frank, Waters, Maloney,
    Ackerman, Sherman, Moore of Kansas, Capuano, Clay, Baca, Scott,
    Green, Klein, Mahoney, Wexler; Castle, and Shays.
        Also present: Representative Ros-Lehtinen.
        The Chairman. The hearing will come to order. To begin, the
    representative of the minority--one of the members of the
    minority is on the way up, but as soon as he gets here, I am
    going to ask unanimous consent that our colleague from the
    Foreign Affairs Committee, a major author of the bill, the
    gentlewoman from Florida, Ms. Ros-Lehtinen, be given by
    unanimous consent the right to participate as a member of the
    hearing. Is there any objection?
        [No response]
        The Chairman. There being none, the gentlewoman from
    Florida will participate as if she were a member of the
    committee. This is a very important hearing. It's particularly
    relevant for us to be doing this, because I think it's fair to
    say that this whole effort has been a result of congressional
    involvement. We are often told that we should stay out of
    foreign policy. That is in fact up to the Executive, and we may
    from time to time send them notes expressing our opinion, but
    we should not anticipate any significant weight being given to
    those expressions of opinion.
        This is an example of why it is a mistake to pay attention
    to that argument. If it had not been for work that began in
    this particular committee under the chairmanship of our former
    member from Ohio, Jim Leach, things would not be nearly as far
    along as they are. Now they're not where they should be in the
    opinion of many, but they are somewhere, and they would not
    have been had there not been this intervention. I was grateful
    to one of the advocates, and my constituent, Mr. Arbeiter, who
    mentioned in his statement that this began, I think it was
    about 10 years ago, with hearings that Mr. Leach convened. And
    we will continue that.
        So this is a subject of particular interest to this
    Congress and to this committee. I cannot think of an issue, to
    touch briefly on the substance, that is more important than
    doing justice to the victims of the greatest crime in recent
    times, perhaps in all of history. And people should not be
    surprised when that insistence that justice be done as fully as
    possible motivates members of this body to the extent that it
    does and that it will.
        There are obviously other considerations that come into
    play. But even considerations that have some impact in the
    normal course of events in my judgment shrink in their
    importance when measured against the need to provide justice to
    victims of the Holocaust. Obviously, the great majority of
    victims are beyond any recompense. They're beyond anything we
    can do. And that is a terrible and tragic fact. But it makes us
    all the more eager to make sure that those who are still here,
    those who did survive, that we do everything possible for them,
    that we not compound in even the most minor of ways the past
    tragedy by letting remain undone that which should be done.
        I'm going to start now, because there is a great deal of
    interest in this, and a number of my colleagues want to make
    statements. We have a number of witnesses. I will ask people to
    be cognizant of the time, and I will begin with the gentlewoman
    from New York, the chairwoman of the Financial Institutions
    Subcommittee, Mrs. Maloney.
        Mrs. Maloney. Thank you, Mr. Chairman, and I'd like to be
    associated with your remarks. This is a very complicated and
    highly sensitive issue, and I hope that today's hearing will
    shed more light on how we can resolve the problems that still
    exist.
        The International Commission on Holocaust Era Insurance
    Claims was established in 1998 to give Holocaust victims and
    survivors a way to settle their insurance claims. The agreement
    did not charge claimants to file a claim, and included relaxed
    standards of proof, recognizing that for many people, papers
    and documents were understandably destroyed by the Nazis. Over
    the years, I have participated in a number of Oversight and
    Government Reform Committee hearings on this issue, and have
    learned about the successes and the shortcomings of this
    program.
        It has become clear that it was a positive step towards
    addressing Holocaust insurance restitution, but that much, much
    more is needed. Over a period of about 9 years, over $306
    million was paid out to roughly 48,000 of about 90,000
    claimants; 34,000 of those received $1,000 humanitarian awards.
    Though I firmly believe that intentions were good with this
    program, it has not achieved the goal of processing claims
    quickly and fairly for the survivors, the very people who are
    now running out of time.
        I am a co-sponsor of H.R. 1746 because I believe
    transparency and justice are our primary obligations, which we
    should give to the survivors. When something doesn't function
    properly, we need to find a better solution. In this case, this
    bill offers a better solution. The bill would require insurers
    to disclose Holocaust era policies, and without an exhaustive
    list of policyholders, we will not be able to reach everyone
    affected.
        The bill also establishes a Federal cause of action
    allowing individuals to pursue claims in U.S. courts. Survivors
    must not be denied the sole class of people who--they should
    have their day in court, and they should not be denied their
    ability to go into court. Too much has been taken away from
    them. This must not be another thing that is taken away from
    them. And I understand that there is some opposition. I look
    forward to hearing the testimony, but in the end, I believe
    strongly that we must not let obstacles get in the way of doing
    the right thing and helping the Holocaust survivors.
        I yield back the balance of my time.
        The Chairman. The gentlewoman from Florida.
        Ms. Ros-Lehtinen. Thank you so much, Mr. Chairman. First of
    all, thank you for your kindness in allowing me to participate
    in the committee's hearing today. Certainly the Holocaust
    stands as one of the darkest chapters in human history.
        Over half-a-century has passed since the world witnessed
    the atrocities committed by Hitler's regime, yet many
    Holocaust-related issues remain unresolved. One of these is the
    continued failure of insurance companies to pay Holocaust
    survivors or families of Holocaust victims for policies they
    purchased before or during World War II.
        These insurance companies have for over 60 years refused to
    provide compensation under the insurance policies to Holocaust
    survivors or families of Holocaust victims. These companies
    argued that Holocaust survivors and their families do not have
    the documentation, such as a death certificate and insurance
    records. Concentration camps in which many of these Holocaust
    victims perished did not issue death certificates, and all
    assets and documents were confiscated from the Jews during that
    time by the Nazis.
        For years, I have worked on the issues related to
    Holocaust-era compensation, and to address the issue of
    insurance policies specifically, my colleague, Robert Wexler,
    and I introduced H.R. 1746 in March of last year. Among other
    provisions, the bill requires insurance companies that do
    business in the United States to disclose the names of
    Holocaust-era insurance policyholders. Furthermore, the measure
    will allow Holocaust survivors or their heirs to sue the
    insurance companies in U.S. courts.
        People often ask us why we introduced this bill and why we
    feel so strongly about this issue. Well, let me answer by
    reading one of the many letters that I received from Holocaust
    survivors, and this one is from Elizabeth Lefkowicz of Florida:
        ``Dear Congresswoman Ros-Lehtinen: My name is Elizabeth
    Unger Lefkowicz, and I am a U.S. citizen and a Florida
    resident. I was sent to the Auschwitz concentration camp in
    1944 when I was 20 years old. During the Holocaust, I lost both
    of my parents, my grandparents, my two sisters, and a 2-year-
    old nephew. After the war, I found a document that was hidden
    by my father, Ignatz Ungar. This document contained his life
    insurance policy for 25,000 gold dollars. In 1945 when I
    presented the insurance claim to the insurance company, they
    requested a death certificate as a prerequisite to pay the
    claim. Without the death certificate, they said the policy was
    invalid. A few years ago, the International Commission on
    Holocaust Era Insurance Claims revived our hope for justice
    with the insurance companies, and I filed the claim, Claim
    Number 77452, reference Ignatz Ungar Life Insurance.
    Unfortunately, this effort produced no results. I'm very glad
    that the Holocaust Claims Insurance Accountability Act, H.R.
    1746 legislation has been introduced in Congress and if passed,
    the insurance companies doing business in the United States
    that profited from the Holocaust will be held accountable for
    their actions.''
        So Mr. Chairman, it is because of Ms. Lefkowicz and
    countless others who share her history and her tragedy, her
    circumstances, that Mr. Wexler and I introduced our bill.
    Unfortunately, today, obviously, we cannot bring back those who
    perished in the Holocaust, nor can we erase the pain and
    suffering from the memories of those who suffered these
    atrocities. However, we can work to bring about long-awaited
    justice to Holocaust survivors and their families. Because the
    number of Holocaust survivors who are alive decreases
    drastically every year, it is critical that Congress move
    expeditiously to pass H.R. 1746 and offer a level of closure to
    those who suffered immensely under Hitler's regime and then
    were shamelessly mistreated for decades by the insurance
    companies that sought unjust enrichment at the expense of
    Holocaust victims.
        Thank you again, Mr. Chairman, for the opportunity to
    participate in the hearing.
        The Chairman. The gentlewoman is welcome. And you never
    know when I'm going to show up at Foreign Affairs and make a
    speech, so I'm sure you'll remember that.
        The gentleman from New York, Mr. Ackerman, who has been a
    strong advocate of justice in this area is now recognized.
        Mr. Ackerman. Thank you very much. First let me thank you,
    Mr. Chairman, for holding this what I consider essential
    hearing before our committee and of course you're always
    welcome at our International Relations Committee as well.
    Special thanks to Ms. Ros-Lehtinen and Mr. Wexler for being the
    authors and initiators of this important piece of legislation
    that would finally bring some justice to so many people for
    whom justice has been denied.
        The issues surrounding the question of Holocaust era
    insurance restitution are both immensely sensitive and highly
    complex. More examination yields less certainty, more
    questions, finer distinctions and unabating concern that not
    only has justice not been done, but that it may never be done.
        While the principal of restitution is stark and clear and
    definitive, there are significant differences in the policies
    and behavior of the relevant European insurance companies, and
    among the countries in which they are based. There are
    differences based on the type of assets that were
    systematically stripped from Holocaust victims. There are
    differences in the scope of records, in the history of
    different firms, in the limits of privacy laws, and there are
    differences among the survivors, plaintiffs, and heirs.
        And there are questions. There are questions about the
    scope of assets deserving restitution. There are questions
    about the transparency and the efficacy of the ICHEIC process.
    There are foreign policy questions. There are constitutional
    questions about the proper role for America's foreign policy
    interests in the context of private civil litigation.
        There are public policy questions about the role of the
    States and the Federal Government when it comes to insurance,
    moral questions about the rights of communities to speak for
    individuals, and philosophical questions about what justice
    means in so singular a catastrophe.
        In this case, Mr. Chairman, the more that I learn, the less
    I seem to know. Accordingly, Mr. Chairman, I want to suggest
    that this hearing should be the first of a series. While we
    must recognize that many survivors are entering their last
    years, I believe the issue is too important and too complex for
    us to fall short in our due diligence. We need to act both
    quickly and correctly. We need to get this right.
        Mr. Chairman, thank you again for bringing the matter
    before the committee, and I yield back the balance of my time.
        The Chairman. The gentleman from Delaware.
        Mr. Castle. Thank you, Mr. Chairman. I appreciate the
    opportunity to learn something about this issue. This is very
    complex for those of us who are coming in from scratch on this,
    and I have no particular opinion as to the legislation at this
    point.
        But I do think the issue is of substantial importance, and
    I agree with Ileana and others as to the need to look at this
    to make a determination of what, if anything, we should be
    doing from a legislative point of view to try to help,
    particularly with the survivors of the Holocaust.
        On the other hand, the complications of how to do that also
    presents some interesting questions, and that's why it is very
    hard to say that this legislation is absolutely the right
    course of action. I believe the hearing we are having today,
    which unfortunately I won't be able to take full part in
    because of other scheduling issues, is of vital significance in
    terms of developing exactly what our course of action should
    be.
        I appreciate all of the witnesses who are here today and
    all of those who are participating, and I think we have a
    responsibility to try to learn all that we can in making a fair
    and good evaluation of where we are and what we should be
    doing. I realize that even among the witnesses there are some
    differences, and for that reason, we have a responsibility to
    try to sort this out and make sure we're going in the correct
    direction to try to alleviate a problem which we all agree is
    there.
        So I appreciate, Mr. Chairman, the opportunity of
    participating and learning and hopefully arriving at a final
    resolution which will be in the best interests, particularly to
    the survivors of the Holocaust.
        I yield back the balance of my time.
        The Chairman. The gentleman from Florida, Mr. Mahoney.
        Mr. Mahoney. Thank you, Mr. Chairman. I appreciate you
    holding this important hearing today. I would also like to
    thank my colleagues from Florida, Mr. Wexler and Ms. Ros-
    Lehtinen, for their leadership on this important issue.
        Mr. Chairman, I believe this hearing is of the utmost
    importance because we as a society owe survivors of the
    Holocaust the opportunity to have their voices heard. There is
    no greater way to honor the victims of the Holocaust than to
    let their stories be told.
        This issue was first brought to my attention by one of my
    constituents, Mr. Alex Moskovic. Mr. Moskovic, who lives today
    in Hope Sound, Florida, as a constituent, is a Holocaust
    survivor from Zibronsk, Slovakia. In 1944, Mr. Moskovic, his
    parents, Joseph and Gittel Moskovic, and two brothers were
    deported to the Auschwitz Birkenau concentration camp. Mr.
    Moskovic was the only one of 41 family members to survive the
    Holocaust and during a torturous march through freezing
    weather, nearly 2 weeks on a cramped train where thousands died
    of hunger and the horrors of Auschwitz.
        Upon his return to Zebronsk after the war, he found that
    his family's house had been destroyed. In 1947, Mr. Moskovic
    came to the United States where he established a successful
    career as an editor for ABC Sports. In fact, Mr. Moskovic was
    awarded numerous Emmys for his 30-year career.
        After moving to Florida, Mr. Moskovic volunteered to work
    on the advisory committee of the Ruth Rales Jewish Family
    Services Board in Boca Raton, a nonprofit organization that
    provides members of the Palm Beach County community with
    counseling and an educational program. In addition, he is a
    member of the board of directors and executive committee of the
    Holocaust Survivors Foundation, where he has worked tirelessly
    on this issue.
        I wanted to spend a few moments today talking about Mr.
    Moskovic's story because I believe it's important for the
    members of this committee to hear the stories of those fighting
    for restitution, whether it be through the International
    Commission on Holocaust Era Insurance Claims or other
    agreements.
        Mr. Chairman, I hope that as a result of today's hearings,
    we have a better understanding of how the ICHEIC process
    worked, the promises that were made by the insurance industry,
    and the agreements reached by the U.S. Government. I am also
    interested in hearing what each witness thinks the impact of
    H.R. 1746, the Holocaust Insurance Accountability Act, will be
    on the process moving forward.
        In the final analysis, gentlemen, right is right. In this
    case, this body needs to make sure that these claims are paid.
    To deny these benefits to Holocaust survivors on the basis of
    politics or administrative snafus only serves to trivialize the
    Holocaust itself. These unpaid premiums do not belong to the
    insurance companies. They belong to the survivors.
        Again, thank you, Mr. Chairman, and I yield back the
    balance of my time.
        The Chairman. Does the gentleman from Connecticut wish to
    make a statement?
        Mr. Shays. It will be a short one just to say that I agree
    and want to align myself with all of the speakers, particularly
    Ileana Ros-Lehtinen, and to say that as a Peace Corps
    volunteer, we had a lot of time to read, and I read all of Leon
    Uris's books. You can't read Exodus, Mila 18, particularly Mila
    18 or Armageddon without realizing there is nothing to compare
    to the Holocaust. There is nothing. Nothing comes to the level
    of the Holocaust, this premeditated, factory system of
    annihilating people. And I just really believe that this is one
    of many hearings we have had so far in Congress. I really hope
    we're able to push a little harder and to see some action,
    overseas in particular. Thank you.
        The Chairman. The gentleman from Florida, Mr. Klein.
        Mr. Klein. Thank you, Mr. Chairman. Mr. Chairman, I come to
    this hearing with mixed feelings. On the one hand, I'm
    profoundly disappointed that it has taken so long for survivors
    to get an inkling of hope that their claims will be settled.
    And although there has been a lot of representations over the
    years and some action, we stand here today, 63 years after the
    end of World War II, and there are families and survivors who
    have never had any type of compensation for an insurance policy
    that was purchased during or prior to World War II.
        I appreciate the fact that Chairman Frank, Congresswoman
    Ros-Lehtinen, and Congressman Wexler have brought this forward.
    I personally have been involved in Florida in Holocaust
    education and awareness and working with a lot of people in our
    community, who have needs, great needs because of their
    economic situation. The survivors who are here today appreciate
    your coming forward and bringing your stories forward.
        But this is not just about stories. This is about what's
    right and what's moral. And as far as I'm concerned, we don't
    have to have long hearings, we don't have to have multiple
    hearings to get this issue resolved. This has been discussed;
    it has been debated; and it has been analyzed. And with the
    number of people remaining today, and the age of many of the
    survivors, the time is now to finish and do the right thing.
        Thank you very much, Mr. Chairman.
        The Chairman. The gentleman from Georgia, Mr. Scott.
        Mr. Scott. Thank you, Mr. Chairman. First I want to thank
    you, Mr. Chairman, for holding this hearing on this long-
    overdue issue. It is very important that we continue to address
    this decades-long movement for fair and just equality for
    survivors of the Holocaust as it relates to thousands of still
    uncompensated insurance policyholders.
        And even as the International Commission on Holocaust Era
    Insurance Claims was set up to address various issues involved
    and settle outstanding Holocaust-era policies, there are still
    today delays in participation of these insurance companies.
    Companies failed to provide the comprehensive lists of the
    policyholders' names, and as we know, these individuals' names
    are essential as Holocaust survivors and heirs often recall,
    that their families held these policies. However, they do not
    know the name of the companies that issued the specific
    policies.
        These insurance issues facing Holocaust victims and their
    survivors are extremely complex, and efforts to provide
    restitution are certainly challenging at best. However, it is
    very, very important that we look into other ways to help speed
    up this process and maybe curb some of the frustrations being
    experienced by all involved. And that's why, Mr. Chairman, I'm
    very proud to support H.R. 1746, which would do some essential
    and very important things.
        First, it would create a publicly available registry of
    insurance policies issued between January 30, 1933, and
    December 31, 1945, to persons who were domiciled in an area
    controlled by Nazi Germany, and require insurers to file
    information on these policies with the Secretary of Commerce
    within 90 days of the bill's enactment. This is very, very
    important. And second, this bill would create a Federal civil
    cause of action for any claim arising out of such a policy.
        This is a very, very important piece of legislation. It
    moves to correct one of the great omissions and one of the
    greatest sins of mankind's inhumanity against their fellow
    mankind.
        Thank you, Mr. Chairman.
        The Chairman. The gentleman from Texas, Mr. Green.
        Mr. Green. Thank you, Mr. Chairman, and I associate myself
    with the remarks of the chair. I have had the opportunity to
    travel to Israel, and I visited the Holocaust Museum. And I
    assure anyone who questions why we are so concerned that if you
    have an opportunity to just visit one of the museums--we also
    have one in Houston, Texas--you will understand. Tears
    literally welled in my eyes as I saw the pictorial
    representations of the horrors and the atrocities that were
    committed.
        We are truly embracing a circumstance where we cannot do
    enough. We really cannot. However, whenever you cannot do
    enough, you do have a duty to do all that you can. We must do
    all that we can to bring justice to the victims of the most
    horrific atrocity perpetrated upon humankind.
        I yield back the balance of my time.
        The Chairman. The gentleman from Florida, Mr. Wexler, is
    recognized, the sponsor of the bill and a major mover in having
    this hearing and in trying to get action.
        Mr. Wexler. Thank you very much, Mr. Chairman. I am deeply
    grateful to you for your seriousness of purpose in allowing us
    to have this hearing. I am also deeply grateful to my colleague
    and friend from Florida, Mrs. Ros-Lehtinen, for being a
    champion.
        The two of us have worked very, very hard in bringing this
    issue forth, and there is opposition. What I would like to do,
    Mr. Chairman, is to talk about the specific facts relating to
    this bill, what the bill actually does, what the opposition is,
    and why, in my view, that opposition is not meritorious.
        First of all, this bill essentially does two things. It
    mandates that insurance companies who do business in the United
    States publicly disclose all Holocaust era insurance policies.
    Why that should be debatable, why there should be controversy
    about whether or not insurance companies who have profited from
    the Holocaust should disclose their insurance policies in the
    United States sixty-some-odd years afterwards to me is not
    debatable. It should be disclosed, period. There should be no
    legitimate debate.
        The second part of the bill is that those people who claim
    to have insurance policies are given an opportunity to go into
    Federal court and prove their claim. There are a couple of
    misnomers here. If we passed this bill today, Mr. Chairman, not
    a single Holocaust survivor would receive a penny. Not a single
    one, because they would all have to go into Federal court and
    prove their claim. Do they have a lower standard that they have
    to prove in Federal court than anybody else who walked into
    Federal court? No. They would have to prove the same insurance-
    related evidentiary matters as everybody else. So what is the
    issue?
        The issue is this: previously, we entered, the United
    States of America, into an ICHEIC process. And that ICHEIC
    process, to sum it up, has divvied out, according to Secretary
    Eagleburger, who is in fairness an opponent of this
    legislation, $306 million to the survivors of the Holocaust. If
    you add in the amounts of money that were given to the claims
    conference and other related organizations, $450 million has
    been distributed through that process. Now was that a fair
    amount? That should be the question everyone is asking.
        If you use the amount of money estimated by the proponents
    of the bill, the assets available; in other words, the amount
    of the insurance policies that these companies hold, are
    probably about $17 billion. But even if you use the estimate of
    the opponents of the bill, if you use the estimate of
    Ambassador Kennedy, whom I have enormous respect for--he is a
    terrific man--the estimate is roughly $3 billion. So the
    opponents of the bill essentially are saying that even though
    $3 billion is rightfully owed to survivors of the Holocaust,
    $450 million has been paid, and that's it. Fifteen percent.
        In other words, what the Administration is saying, what the
    opponents of the bill are saying is that 85 percent of the
    value of the insurance policies held by survivors during the
    Holocaust should remain with the insurance companies, period.
    And what they will argue is that legal peace was made, and that
    it's not fair, it's not equitable today to undo that legal
    peace. Well, there is a big problem with the argument of legal
    peace. How is it that insurance companies who have not fully
    disclosed their policyowners can take advantage of the
    agreement that was made by not having to pay out that which is
    rightfully owed, and those that are rightfully owed are
    penalized by the agreement? This can't possibly be an equitable
    conclusion.
        So the question isn't whether or not we are abrogating the
    word of the United States Government. The question is, there
    are insurance companies who hold billions of dollars of assets
    rightfully held by the survivors of the Holocaust. And is this
    Congress in the last moments of these survivors' lives going to
    give them an opportunity to use our Federal judicial system to
    gain some measure of justice? If this bill does not pass, game
    over. Game over. Insurance companies keep 85 percent of the
    assets even using the insurance company numbers, the
    Administration numbers. They keep 85 percent of the assets that
    are rightfully owed to the survivors of the Holocaust and they
    don't--they are not required to disclose those policyowners
    that rightfully have a right to know who they are.
        Thank you, Mr. Chairman.
        [Applause]
        The Chairman. There will be no demonstrations. None. Zero.
    We will now begin the hearing, and I am pleased to welcome the
    representative of the Department of State. I'm especially
    pleased to welcome the representative of the Department of
    State today, because I won't be able to do that tomorrow when
    we have a very important hearing on the signing statement
    issued by the President that would undercut the effect of our
    bill to strengthen the divestment from Sudan, and the State
    Department has refused to show up.
        But we are glad to have Mr. Kennedy. We will take what we
    can get from this Administration, and we won't ask you to
    defend that. We will ask you instead to discuss this position.
    So, Ambassador J. Christian Kennedy, who is a Special Envoy for
    Holocaust Issues at the Department of State, you are now
    recognized.

    STATEMENT OF AMBASSADOR J. CHRISTIAN KENNEDY, SPECIAL ENVOY FOR
               HOLOCAUST ISSUES, U.S. DEPARTMENT OF STATE

        Ambassador Kennedy. Thank you very much, Mr. Chairman, and
    thank you to you and your colleagues for the invitation to be
    here today.
        Thank you for holding this important hearing about issues
    concerning my office's main constituency, Holocaust survivors.
    We all agree that those who spent the Nazi era in concentration
    camps and ghettos or in hiding deserve not only our sympathy
    and moral support, but also a measure of justice in their
    lifetimes. Our office therefore supports the continuing general
    effort to obtain compensation for their suffering and
    restitution or compensation for their material losses.
        Your hearing today deals with insurance purchased by
    Holocaust victims and the International Commission on Holocaust
    Era Insurance Claims, known as ICHEIC. Let me say that the
    State Department believes ICHEIC was very successful in dealing
    with the most difficult life insurance claims arising from the
    Holocaust; cases where the claimants had no documentation or
    only the scantiest of records.
        Earlier claims payments programs starting in 1953 had
    already dealt with other life insurance claims. ICHEIC created
    a process that included archives, appeals, audits, payments to
    individuals totaling more than $300 million, and nearly $200
    million to humanitarian programs administered by the claims
    conference. It is a signal achievement, and I know that you
    will hear much more detail from the next panel.
        Since 1969, State Department negotiations with governments,
    companies, and nongovernmental organizations have made over $8
    billion in new money available to Holocaust survivors and other
    victims of the Nazis. Because negotiation and conversation have
    been so successful in getting Holocaust victims and victims'
    heirs a measure of compensation, the Administration opposes
    H.R. 1746, which would make litigation the main vehicle for
    claiming unpaid life insurance proceeds. Litigation always
    bears great uncertainty for the litigants, and it takes time.
    Negotiation is faster, especially with well-meaning partners.
        Holocaust reparations are part of our very strong
    relationship, bilateral relationship with Germany, for example.
    Thanks to ongoing negotiations and the strength of this
    relationship, Germany has made available 350 million euros in
    new pensions and one-time payments to survivors since March of
    2007. March 2007 was the date when ICHEIC closed its doors
    after completing, successfully we believe, its very important
    task of processing the most difficult life insurance claims
    arising from the Holocaust.
        ICHEIC succeeded because of voluntary cooperation between
    insurers, governments, American State insurance regulators, and
    Holocaust survivors organizations. It did not charge claimants
    for its work, and nearly 48,000 people received payments.
    ICHEIC compiled a list of 519,000 names of people likely caught
    up in the Holocaust who also probably had life insurance
    policies. This database was the result of careful research and
    cross-checking with Israel's Yad Vashem Museum.
        The completeness of this database was driven home for me
    very recently. We received a few days ago a Gestapo document
    that included two names of Holocaust victims who were listed as
    owning life insurance policies in 1942. A quick check with
    ICHEIC's 519,000 name list showed that the names of both people
    were on that list.
        Returning to the broader issue, ICHEIC undertook research
    across company archives and even international boundaries to
    complete its database. Its research also studied insurance
    markets extensively, for example, the number of policies per
    capita in given countries.
        Most important, perhaps, is that dialogue and negotiation
    allowed ICHEIC to establish relaxed standards of proof in order
    to pay claims. And insurance companies cooperating in the
    ICHEIC process have agreed to continue using relaxed standards
    of proof to process new claims that might appear even after the
    extensive outreach that ICHEIC did.
        The Administration is concerned that because H.R. 1746
    favors an adversarial relationship of litigants over
    negotiation, the bill would undermine the many positive working
    relationships we have built over the years and discourage
    countries that haven't met their obligations to survivors.
        Lastly, let me touch on ongoing business. Germany has paid
    Holocaust reparations totaling nearly $100 billion in current
    value, but we still have many pending issues there involving
    elderly survivors. My office is involved in conversations and
    negotiations with other countries, too, especially the new
    democracies in Europe, where much remains to be done.
        In negotiating the bilateral executive agreements that
    supported the creation of ICHEIC, we promised legal peace if
    participating companies were sued in U.S. courts about matters
    relating to the Holocaust. This legal peace does not prevent
    U.S. citizens from bringing suit, but it does obligate the
    government to seek dismissals. Our partners expect us to uphold
    our word and see H.R. 1746 as a grave threat to legal peace. If
    we cannot keep our given word--our word given in negotiations
    that have borne so many positive results, future negotiations
    will be much more difficult.
        The perceived inability to keep our word would undermine
    our capacity to continue helping survivors of the Holocaust and
    the heirs of victims.
        Chairman Frank, members of the committee, thank you very
    much for your invitation to be here today. I will be happy to
    answer your questions.
        [The prepared statement of Ambassador Kennedy can be found
    on page 111 of the appendix.]
        The Chairman. Thank you.
        Next, we will hear from the Assistant Archivist for Records
    Services of the National Archives and Records Administration,
    Dr. Michael Kurtz.

    STATEMENT OF DR. MICHAEL KURTZ, ASSISTANT ARCHIVIST FOR RECORDS
         SERVICES, NATIONAL ARCHIVES AND RECORDS ADMINISTRATION

        Mr. Kurtz. Thank you, Mr. Chairman. I'm honored to be here
    today, and thank you for the invitation to testify.
        For the record, I would like to note that in the holdings
    of the National Archives, we have tens of millions of pages
    relating to all aspects of the Holocaust, and we have worked
    assiduously over many decades to make these records available.
    I was honored to serve as the first chair of the Interagency
    Working Group on Nazi War Crimes and I worked very closely with
    Congresswoman Maloney, who was the legislative leader of this
    effort.
        Our concerns with the bill are of a practical nature, as
    the National Archives would be responsible for the creating and
    servicing of the registry, and we also have concerns about the
    funding. So, we tackle these issues from a practical point of
    view and ask the committee's consideration of these concerns.
        First, the size and scope of the registry is unclear. And
    there is no firm number for the size of the registry. We
    estimate that there are potentially millions of names of
    individuals who could file claims, and submitting claims in a
    variety of different formats and styles and so forth, so it has
    been very difficult to estimate exactly what resources would be
    required. Our information technology experts roughly estimate
    the cost to be at about $28 million.
        One of the major concerns that we have is that the National
    Archives is a small agency, and we are fully taxed at this
    point trying to implement an electronic records archives for
    the first time. So almost our entire IT staff is devoted to
    this, and so we would need a stable and secure source of
    funding. We estimate it would cost about $28 million to develop
    and maintain the registry over the life of the legislation.
        Our concern for the funding is that we are unclear from the
    bill as drafted if the penalty fees charged against
    noncompliant insurance companies would be the main or sole
    source of the funding for the registry. If that's the case, if
    insurance companies do comply with the law, we would have
    responsibility for Web access to a potentially huge name
    registry, but we would not receive any direct monies to
    establish and maintain the registry.
        So we strongly state the need for a stable, appropriated
    source of funding that would enable us to get the
    infrastructure created necessary to properly create and service
    the registry, and to hire the expertise, both information
    technology and archival expertise. There are a number of issues
    related to privacy and information security and things of that
    nature where we really would need experts to work with us.
        This would be a new and separate line of business for the
    National Archives, and we would need the support of Congress
    with a clear, stable source of funding to be able to do this.
        Mr. Chairman, thank you again for the opportunity to
    testify on this bill.
        [The prepared statement of Dr. Kurtz can be found on page
    142 of the appendix.]
        The Chairman. Thank you. Let me begin my questioning.
    Ambassador Kennedy, I understand the State Department's concern
    with bilateral relations with Germany. Indeed, the German
    ambassador came in to see me. Does anyone think that the
    outcome of congressional deliberations on this bill will have
    any significant effect on overall American-German relations?
        I must tell you, I'm of the opinion that the nature of the
    ties that bind us, the issues that might arise, really are of
    such magnitude that it's hard for me to see that the fate of
    this bill one way or the other would have any significant
    effect on our relations. Is there a serious concern about
    American-German relations if this bill passes?
        Ambassador Kennedy. Thank you for that very important
    question, Mr. Chairman. Let me answer in two parts if I may,
    one personal, and one broader. I have been very surprised at
    the depth of feeling from my German interlocutors on the
    subject of this bill both in the private sector as well as the
    official sector. This is something which they take with great
    umbrage.
        In the second area, or more broadly, I think it's hard to
    envision a change in a relationship that has been
    collaborative, that has been based on negotiation, that has
    produced substantial results. I don't claim they're enough,
    that they're sufficient, but substantial results. It's hard to
    see how that would not have a negative impact on the
    relationship. In the broadest sense--
        The Chairman. What kind of negative impact? I mean, what
    would you foresee?
        Ambassador Kennedy. Well, as I said in my statement, sir,
    we still have a number of issues to resolve involving Holocaust
    survivors, and that's of course the area that I worry about the
    most.
        The Chairman. Well, would you see any--you are testifying
    on behalf of the Department of State.
        Ambassador Kennedy. I'm sorry?
        The Chairman. Would there be any--there were suggestions
    from some that there might be a spillover into broader issues
    because the American-German relationship is a very important
    one in terms of Europe, NATO, and the economy. Do you see any
    broader negative implications?
        Ambassador Kennedy. Well, I think that would be speculative
    at this point. I know that the--in the area of Holocaust
    reparations, I think I can say clearly that there might very
    well be some very negative repercussions.
        The Chairman. You mean they might stop cooperating in some
    areas where they're now cooperating?
        Ambassador Kennedy. Well, the--
        The Chairman. I'd like to be kind of specific.
        Ambassador Kennedy. The companies certainly would not want
    to, I think, deal with an issue in the courts and also deal
    with it in negotiation. They would have to choose a venue.
        The Chairman. So there are ongoing negotiations that would
    be broken off, you think? Or might be?
        Ambassador Kennedy. I think there is that risk, yes, sir.
        The Chairman. And Dr. Kurtz, your issue went to two, as I
    read, one was the absence of an end date in maintenance of the
    record, and also the money. If we could meet--just one
    question. You mentioned $28 million. Is that an annual cost or
    a total cost?
        Mr. Kurtz. That would be a total cost.
        The Chairman. Total cost--$28 million?
        Mr. Kurtz. $22 million for the creation and servicing of
    the registry, and about $2 or $3 million a year for ongoing
    maintenance.
        The Chairman. All right. So we're not talking about huge
    sums. That is, it would be within the capacity of this
    Congress, if we were to pass the bill, to appropriate $28
    million to take care of this. If we were, in fact, to accompany
    passage of the bill in some form with the $28 million, and give
    you enough time to hire, would that then be disruptive of your
    operations?
        Mr. Kurtz. No. I don't think it would be disruptive.
        The Chairman. Thank you. The gentlewoman from Florida.
        Ms. Ros-Lehtinen. Thank you, Mr. Chairman. Thank you, Mr.
    Ambassador. I wanted to ask you a few questions about the
    ICHEIC process and proper compensation for the victims and
    their descendants.
        ICHEIC has been criticized for failing to review hundreds
    of thousands of relevant files. For example, ICHIEC's final
    report of external research indicates that when looking at the
    Central Property Office files of Slovakia, ``more than 700
    boxes or records dealing with the Ayrianization of Jewish firms
    in Slovakia were found.'' Over 700 boxes of records. And these
    files contained information about the assets of the firms or
    their Jewish owners. However, the researchers searched only
    what they call, ``a small amount,'' of those 700 boxes, which
    provided information about 18 policies--18 policies. Would it
    be accurate to say to either of our witnesses actually that
    there were many files that ICHIEC did not examine containing
    information about Holocaust era insurance policies? And
    shouldn't the beneficiaries of these policies have a right to
    be compensated for their insurance policies?
        Ambassador Kennedy. Thank you very much, Congresswoman. I
    think that the point I'd like to focus on in replying is that
    if insurance policy documents come to light, and there will be
    a few, the members of the ICHIEC participating companies have
    all agreed to continue to use the relaxed standards of proof
    that characterize the ICHIEC process to process those claims.
        So while ICHIEC has closed its doors, the committees--I'm
    sorry--the companies have said that they will continue to use
    those standards as they process the claims. And that's what I
    think is important from our point of view, that the people who
    have claims can still file them.
        Ms. Ros-Lehtinen. Thank you. That in no way answers the
    question, but on that issue that there will be a few insurance
    companies that have participated in the ICHIEC process have
    agreed, as you say, to continue to consider claims and use the
    ICHIEC's lower standard of proof. However, there are no
    oversight mechanisms. There is no way to appeal the decisions
    of the insurance company. And it seems as though the insurance
    companies will again be in full control of deciding who will or
    will not be compensated, as well as determining the amount of
    that compensation. And considering that ICHIEC was established
    because the insurance companies failed--failed to act on their
    own--how would this voluntary process that you talked about
    offered by the insurance company, which lacks an appeals
    mechanism, which lacks oversight, will be at all effective in
    fairly resolving what you consider a few of these unpaid
    claims?
        Ambassador Kennedy. Well, in my conversations with people
    from the insurance associations, they have welcomed the idea of
    some oversight. I imagine that people here in the United States
    who have an issue, if their claim is not resolved, would still
    be able to go to the State insurance commissioners and to other
    entities that have real expertise in these matters.
        Ms. Ros-Lehtinen. Thank you. Your responses--well, it has
    often been argued that the court's proof requirements would be
    a lot more stringent than those used by ICHIEC's and that it is
    unlikely that many claims will turn out to be successful. And
    if that's the case, then I ask myself, why are the insurance
    companies so worried about litigation if there is not enough
    proof and the case will be quickly dismissed because of lack of
    evidence? So why not let the survivors have their day in court,
    have a judge or a jury decide rather than have an insurance
    company, again with no oversight, although they say that they
    would welcome it? That's a real stretch of the imagination.
    They have not done so yet. But what would be wrong with having
    the survivors have their day in court rather than have this
    insurance company or that insurance company whose interests lie
    in not paying, in having to pay as few policies as possible?
    That's how they make their money.
        Ambassador Kennedy. Thank you, Congresswoman. The bilateral
    executive agreement that we have, for example, with Germany, in
    no way infringes on the ability of someone to go into court and
    seek redress right now.
        Ms. Ros-Lehtinen. Well, yes, the U.S. Federal Government
    cannot forbid U.S. citizens from pursuing legal action against
    the insurance companies. However, it did commit to filing
    statements of interest encouraging dismissals of any legal
    action against European companies in the United States, and
    these statements have prevented lawsuits against European
    insurance companies brought by Holocaust survivors. And after
    seeing that only a fraction of the policies have actually been
    paid out by the insurance companies, and that the ICHIEC
    process ended without adequately addressing the issue of
    Holocaust era insurance policies, shouldn't the U.S.
    Government's statement of policy change in order to allow those
    who have been denied a fair opportunity to recover their
    insurance policy? To be able to bring their claims to court? I
    think that would be the fair thing to do.
        Thank you so much for your time and generosity, Madam
    Chairwoman.
        Ms. Waters. [presiding] You're welcome. And you may answer
    the question.
        Ambassador Kennedy. Thank you very much, Madam Chairwoman.
    Let me take the two parts of your question separately, if I
    may. The government negotiated an agreement, and it has been
    the policy since those agreements were entered into that we
    would favor negotiation and dialogue to resolve Holocaust era
    claims because they are--negotiations has produced results
    rapidly. I think that is the point I would like to underline
    there.
        And secondly, as I said in my testimony, in my written
    statement, we need to be able to continue to negotiate credibly
    with countries where there are still many, many issues to be
    resolved, hopefully in favor of Holocaust survivors and the
    heirs of the victims.
        Thank you.
        Ms. Waters. Thank you very much. I will recognize myself
    for 5 minutes. Let me welcome our witnesses and just raise some
    very basic questions of you. I do not know all of the details
    of the establishment of the International Commission on
    Holocaust Era Insurance, so I'd like to ask you when this
    Commission was established, were you specifically given the
    ability to negotiate this legal peace deal that you negotiated?
        Ambassador Kennedy. The State Insurance Commissioners here
    in the United States in the mid- and late 1990's noticed a
    serious number of holocaust era claims that were not being
    resolved. They themselves started to talk about a mechanism
    that might deal with this, and this mechanism ultimately led to
    ICHIEC. At the same time, the U.S. Government, represented very
    ably by Stuart Eizenstat, began negotiations with the various
    countries involved, especially Germany.
        Ms. Waters. I understand that, generally. I want to know
    about the specificity of the authorization. Were you
    authorized? Was the Commission authorized to negotiate legal
    peace?
        Ambassador Kennedy. Well, the kind of legal peace that is
    offered, the commitment of the government to seek dismissals,
    is something that the negotiators felt was inherent in the
    executive's powers to reach.
        Ms. Waters. This was born out of the negotiations, but
    there was nothing specific in the establishment of the
    Commission that gave authority to negotiate and settle on the
    so-called legal peace. Is that correct? Would you accept that
    as correctly identifying what power you have or did not have
    relative to establishing this legal peace agreement?
        Ambassador Kennedy. Well, the agreement covered a number of
    things.
        Ms. Waters. Did it give you the authority to negotiate a
    legal peace agreement? Yes or no.
        Ambassador Kennedy. Well, first, I was not present in those
    negotiations.
        Ms. Waters. So you don't know whether or not that
    authorizes this?
        Ambassador Kennedy. The authority, I believe, is inherent
    in the executive ability, but not foreign relations.
        Ms. Waters. You think it's implied, but not specific. Is
    that correct?
        Ambassador Kennedy. I'd be happy to take that question,
    Madam Chairwoman.
        Ms. Waters. Do you know if anyone sought the opinion or
    support of Congress in the negotiation of that legal peace
    agreement?
        Ambassador Kennedy. Again, I'd like a chance to go back and
    review the record and get back to you Madam Chairwoman.
        Ms. Waters. Is it safe to say that Congress was not
    involved in that agreement? Do you know of any bill or
    resolution that was sought or passed in Congress that would
    support that agreement?
        Ambassador Kennedy. I know of no bill that was sought prior
    to the education, ma'am. I'm sorry--to the conclusion of the
    negotiation.
        Ms. Waters. So then this bill that's before the Congress
    today would be the first time that we have been engaged on that
    so-called legal peace agreement and we were not asked before to
    give an opinion to support to question that agreement that was
    made, even though the significance of this peace agreement is
    such that it would deny the opportunity for survivors to even
    address the issue. So given that it was that important, the
    Congress of the United States was not engaged on it at all.
        Ambassador Kennedy,. Well, Madam Chairwoman, I don't think
    the statement that we deny Americans the right to sue in court
    is quite accurate. The ability to deny Americans to go into
    court, the opportunity to go into court would be something very
    serious. Americans can go into court. Nothing in the executive
    agreement prohibits or prevents people. It simply states that
    the executive, that the government will seek dismissal on all
    valid, legal grounds.
        Ms. Waters. Okay, thank you. I think that's very clear, and
    I will now recognize, for 5 minutes, Ms. Maloney.
        Mrs. Maloney. Thank you very much and thank you for your
    testimony today.
        Ambassador Kennedy, between 1933 and 1938, the Jews of
    Germany were obligated by law to deliver to the Nazi government
    declarations specifying all their property and assets. The duty
    to file such declarations was imposed on all the Jews of
    Germany with the clear intention being to use these
    declarations in order to confiscate all Jewish property and
    assets in Germany. This documentation is highly detailed,
    including real estate, money, insurance policies, tangibles,
    intangible rights and other assets held by German Jews prior to
    the holocaust.
        However, this information will not be made public until
    2018, and my question is, why not? Even the KGB has opened up
    the files of World War II. We in the U.S. Government, our most
    secretive agency, the CIA, has opened up its files, the Nazi
    War Crimes Bill that Dr. Kurtz and I worked so hard on, to
    learn and to go forward.
        Why not? Why are they not opening up these files? This is
    quite a long, long time. These should be opened, and what are
    we doing as Americans and as the U.S. Government to ensure that
    Holocaust survivors get access to this very important
    information. There's absolutely no reason to keep this
    confidential. These people are entitled to this information and
    I'd like to know what steps have we taken to open up these
    files, to provide this information and transparency, and what
    should we do in the future?
        Ambassador Kennedy. Thank you very much for that important
    question, Congresswoman. There are a number of archival issues
    that have gotten alot of serious work over the last few years.
    We have managed, thanks to the leadership of the United States
    Holocaust Memorial Museum and my office, to get the
    International Tracing Service files located in Bad Arolsen
    transferred electronically to the United States where we
    believe survivors will have a friendly environment to work with
    at the museum.
        There are archival issues in other countries, such as
    Hungary, where we have been dealing with our Hungarian
    colleagues asking them for specific files as well. My
    understanding is that the asset declarations which you
    mentioned, which were just one more inhumane and criminal tool
    that the Nazi's used in their depredations on Germany's Jewish
    population, are in the Bundesgard keep in the various German
    states and that parties who under European privacy law have a
    right to access can get at those, a specific file for say their
    family.
        One of the frustrations in dealing with file issues,
    archival issues, for us in Europe is that our legislation is
    much, much more liberal, and European privacy legislation, I
    found out in my negotiations on the tracing service, is
    actually going in the opposite direction, and it's much more
    restrictive the lengths of time are frankly, excessively long,
    in this American's opinion.
        I would be happy to raise this issue with my German
    counterparts and get back to you after my next trip to Germany.
        Mrs. Maloney. Well, we would appreciate you raising this
    issue in writing. To hide behind a privacy protection, when
    citizens, American citizens or citizens of the world, are
    trying to get information on their insurance policy that could
    help them, so this to me seems like a stonewall, a really
    unresponsive step.
        You and I know how difficult it is to work through a
    bureaucracy. So to tell someone, ``Oh, go to Germany and you'll
    get your file,'' that is like saying, ``We're not going to help
    you at all.'' And I for one think that we should, as a
    government, request that this information be made available and
    public. And if they won't do it, then I think our country
    should do it along with other like-minded countries that feel
    strongly about justice.
        These asset declarations, to hide behind a shield of we're
    protecting privacy laws, I think is ludicrous and comical. And
    I for one would like to join my colleagues in a congressional
    letter or possibly a congressional resolution that these files
    should be made public.
        As I said, our government has opened our files. Argentina,
    even the former Soviet Union, has opened up the files of the
    war. And to keep private insurance information hidden until
    2018 is just, I think, scandalous, absolutely scandalous.
        My time has expired. I have a number of other questions,
    but I'll put them in writing. Dr. Kurtz, I do want to thank you
    for your hard work on the Nazi War Crimes Disclosure Act, the
    really brilliant work that you did with these archives, and I
    hope you get the opportunity to work on the asset disclosure
    declarations and other important archives for our country and
    the world. Thank you for your testimony.
        Ms. Waters. Thank you very much.
        The gentleman from New York, Mr. Ackerman?
        Mr. Ackerman. Thank you, Madam Chairwoman. I thank the
    panel for the good work that they have done to-date, the
    progress that they have made.
        I sit here somewhat in disbelief, because it is very hard
    for me to process some of the things that I'm hearing, although
    I've heard them many times. It seems to me that there is an
    inherent conflict between life and time. Time always wins, but
    justice should not fall victim in that contest.
        In the closing days of World War II, Hitler put on a
    maddening rush, not to defend Germany, because that was all
    over, but to kill as many Jews as he could, to rev up the
    action in his murder machinery and put more people in the gas
    chambers and the furnaces just to destroy people--to run the
    clock on them. This is all about running the clock.
        The insurance companies are in no way part of Hitler's
    machinery. They're a commercial industry motivated by making a
    profit. We should not confuse profit with greed. The people who
    were fortunate enough to be among the very, very few who
    escaped temporarily from that contest with time, should not
    fall victim today to our participation in helping with what
    motivated Hitler. These people are in a very close race. I
    don't have to tell you what their ages are; some of them are in
    this audience today. There are others too frail to come.
        In international relations, it is very, very important that
    we keep our word, and sometimes we give our word in order to
    make progress. But there are higher issues and more important
    values that are really at stake here. What we have done,
    inadvertently I'm sure, in signing important agreements even in
    order to get compliance in issues where there should have been
    compliance out of a sense of morality, rather than negotiation,
    is to put an expiration date on justice.
        That should not be allowed to stand, although arrived at
    honorably. There is no justice in our government going to court
    against U.S. citizens, seeking restitution for horrendous
    things that were done against them personally, against the
    people, against humanity. And to be able to prove their day in
    court without their government standing on the other side of
    the bar and saying we have to object because we signed a
    document at one point in time, I am not impressed that Germany
    has paid out a hundred billion dollars or a trillion, billion
    dollars. It is not what is paid. It is what is owed.
        I think an awful lot is owed to these people, and it has
    nothing to do with money. It has to do with the dignity that so
    many were stripped of, the hope to get it restored to which
    they cling, and those principles, and those values, that we
    have to look at, that we have to fight for.
        How do we go to court and stand up against those who seek
    restitutions before a court of law to be able to make their
    case and to say that they should be denied that opportunity
    because we signed a document. We gave away their rights and put
    our government in between them and the justice that they seek.
    I suppose that's the only question that I have.
        Ambassador Kennedy. Thank you very much for your remarks,
    and for your question, Congressman.
        I think it is important to recognize that in the area of
    insurance, which we're discussing today, that ICHIEC basically
    took the hardest cases; and those were the ones that were left
    after the reparations and compensation programs started in 1953
    that dealt with other insurance issues. Getting to that very
    difficult mechanism was the product of arduous negotiation that
    was undertaken by the government and it included the slave
    labor foundation. ICHIEC was eventually joined to that.
        So I can certainly share your frustration that we are
    probably going to have some people with claims that were not
    resolved, but I do honestly believe that those are very, very
    few and that the ICHIEC negotiation and the ICHIEC process was
    successful in answering those claims that had not been resolved
    in the earlier programs in the 1950s', 1960's, and 1970's.
        Mr. Ackerman. If I may continue, Madam Chairwoman?
        Ms. Waters. Yes, you may, for one more minute.
        Mr. Ackerman. I appreciate the progress made by the ICHIEC
    process, and it was important. It was extremely helpful. It's
    laudatory. But to say that because there was progress made with
    some, that others can be denied, is not really an acceptable
    argument.
        I don't understand how our President would veto this bill.
    Those of us who are on both this committee and on the
    International Relations Committee, some of us have a hard time
    understanding how this would be disruptive to our relations
    with Germany--painful, yes--but not disruptive. There are too
    many other things at stake, and the people.
        If I had to name a country that was more anti-Nazi than any
    other country in the world today, it would be Germany, because
    they know what the Nazis did. This is not about anything other
    than greed. Greed is the answer to the questions that my
    friends Mr. Wexler and Ms. Ros-Lehtinen and others on this
    committee have raised.
        Why would somebody object to publishing the list? I mean, a
    lot of people are the heirs to things that are owed to them
    that don't know that their uncle or great grandmother, or
    grandmother or father had a policy unless they see it written
    down somewhere. This is about greed. This is about denial. This
    is another aspect of Holocaust denial, not that the Holocaust
    took place, but that people paid for policies. And because of
    greed, as a result of the Holocaust, had no way of knowing
    policies existed, assets were in place, that they were
    entitled. That is the answer to, why not? It is greed.
        Ms. Waters. Thank you very much.
        Mr. Green, for 5 minutes.
        Somebody gave me a list. You're next, Mr. Scott. Thank you.
    Mr. Scott, for 5 minutes.
        Mr. Scott. Thank you very much, Madam Chairwoman.
        This is a fascinating hearing dealing with one of the epoch
    parts of our history, world history. I think it's important to
    recall at this point a correspondence between Heidrich and his
    superior at the time, Himmler, just prior to Heidrich being
    assassinated in Prague.
        And in that communication Heidrich, who was the henchman,
    the architect of this for Himmler, said this: ``that it is not
    just the human worth that comes from this holocaust, or final
    solution, it is the wealth. It is the economic.'' And this is
    illustrated right down to the very taking of Jewish people's
    teeth during the holocaust. So we're dealing with a monstrous
    situation here.
        Now, I want to ask about Bad Arolsen. I believe I'm
    pronouncing that right. Can you tell me about Bad Arolsen?
        Ambassador Kennedy. Thank you, Congressman. I'd be happy to
    talk about Bad Arolsen a little bit.
        When the Western allies were storming into Europe at the
    end of the Second World War, they began finding, in addition to
    these horrific death camps and other places of mass murder, a
    lot of documentation and files that dealt with this issue. They
    were kept in the individual occupation zones for awhile. And
    then in the early 1950's, there was an agreement among the
    Western allies that we needed to put all this in one place, and
    find a way to help families use it for family reunification
    purposes, primarily.
        There are three major groups of files at Bad Arolsen: one
    which is called the detention records, which is largely, well,
    it can be characterized by any contact with any of the police
    organizations, not the Gestapo, the Crepo and also deportations
    to concentration camps. It covers the whole apparatus of the
    death machine, shall we say.
        Mr. Scott. Let me ask you: I only have a few minutes to
    follow this. But, in addition to all of that, is it not true
    that also with Bad Arolsen, there has been revealed evidence of
    corporate complicity, unrevealed insurance company involvement,
    pervasive IBM punch-cards among the papers, and the secret Bad
    Arolsen repository, and that this has reignited the grassroot
    survivor campaign to recover the rightful Nazi-era insurance
    claims against this huge Italian company and insurance company
    Generali. And is there evidence of Generali's complicity in
    this?
        Ambassador Kennedy. Congressman, I have been asking
    questions like that of the archivists who know the Bad
    Arolsen's collections best on both sides of the Atlantic for
    over a year now. And I'm told that there is no systematic
    archive related to insurance.
        I think it's possible, and in fact the case I talked about,
    the Gestapo document we received just recently, we will
    occasionally find traces of insurance-related information that
    comes out. But at this point, what's in Bad Arolsen, in
    addition to detention records, are slave labor and forced labor
    records, and then finally the displaced persons records.
        And in those it's possible that there will be some,
    occasionally appearing document that deals with insurance, but
    no one who knows the collection well has been able to identify
    anything that would systematically reveal life insurance
    documents. There are some documents relating to medical and
    retirement insurance, which was another scam that the SS
    operated to build companies and then use that money for their
    own purposes.
        But, when it comes to life insurance, casualty insurance,
    other than the random appearance of a document once in a while,
    there hasn't been anything yet. But it's something that we ask
    about constantly.
        Mr. Scott. This Bad Arolsen, I don't think, has been
    examined thoroughly enough. I mean, if you look at it, they--or
    the repository of nearly 18 million, as a matter of fact, 17.5
    million Jews, and non-Jews. Wouldn't you think that this alone
    gives renewed justification for this legislation?
        Ambassador Kennedy. Well, Congressman, as I say, I don't
    think that the collection at Bad Arolsen is going to be very
    useful for insurance recovery matters. It is just the nature of
    the files doesn't lend itself to that. There will be the
    occasional document that is helpful to a particular person, but
    it's not systemic.
        The Chairman. No. Your time has expired. You can't ask
    another question.
        Mr. Scott. Oh, okay.
        The Chairman. We're over time. Did you want to finish
    answering? Are you finished?
        Ambassador Kennedy. Well, I think I finished, Mr. Chairman.
    Thank you.
        The Chairman. Mr. Green?
        Mr. Green. Thank you, Mr. Chairman, and I thank both of the
    members of the panel for appearing.
        Mr. Ambassador, you have indicated that there is nothing
    that will prohibit victims from suing. Is this correct?
        Ambassador Kennedy. Yes, sir. That's my understanding.
        Mr. Green. Let us please examine this statement, because in
    the United States, we have a concept known as open courts,
    which literally means that anyone can sue anybody for any thing
    at any time for any amount of money. It does not, however, mean
    that you will prevail. It literally means, if you want to sue,
    you may.
        So to say that you may sue is not enough to give people a
    proper understanding of what will happen after the lawsuit has
    been filed. Is it a fair statement that the government would
    file pleadings indicating that there is a limitations problem?
        Ambassador Kennedy. Sir, our pleadings, generally speaking,
    have asked the court to dismiss on valid, legal grounds.
        Mr. Green. Yes, sir. What--
        Ambassador Kennedy. On valid legal grounds. I'd be happy to
    check whether we have specifically cited in a particular case a
    specific reason like the one you know.
        Mr. Green. Well, generally speaking, requests for
    dismissals that broad are not granted, because you have to be
    specific as to why general, legal grounds. And you're saying,
    ``Judge, you become my lawyer and determine what my legal
    rights are and my legal grounds are.'' So generally speaking,
    that would not be sufficient.
        And if you plead limitations, what you in essence are
    saying is this: The companies that we are suing, that to some
    extent created the problem, now get the benefit from the
    problem that they have created. They have put us in the
    position where we could not bring the action and now they're
    saying it's too late for me to bring the action.
        That is in and of itself an injustice. It appears to me,
    and by the way, I think honorable people can have honorable
    disagreements, and I perceive you to be an honorable person.
    But it appears to me that this really is about more than money.
    It is about due process. It is about a desire to have an
    opportunity to know for myself what happened. It is about the
    desire to have discovery, to find out for myself what is in the
    record.
        What's in the files? Has there been something secretive
    that someone, even my government, may know about and not tell
    me?
        That's what due process gives you when you go to court, the
    ability to have your day and to understand what happened to the
    life that has been so horribly interrupted and so dastardly
    dealt with. It's just about that, and people in this country
    seem to cherish that right to have a day in court. So I would
    say to you as you make that comment, this is just about the
    comment that people have the right to sue. If you would, I
    think it leaves something terribly necessary--missing--when you
    don't explain that right doesn't necessarily mean that it will
    be anything more than filing a lawsuit.
        A final comment, because my time is about up: There was
    nothing that prohibited the Administration from working with
    Congress so that we could have in the final analysis an
    agreement that Congress was a part of, that the Administration
    was a part of, and that would have brought in all of the
    victims so that they could be a part of it in some way, because
    that's what's missing.
        I think people live in this world where it is not enough
    for things to be right, they must also look right, and it
    doesn't look right to victims to have someone decide their fate
    without their input. I think that we should do more to dialogue
    before we get to this point.
        I yield back the balance of my time, Mr. Chairman.
        The Chairman. Do either of the witnesses wish to respond?
        Ambassador Kennedy. No. I thank the Congressman for his
    time.
        The Chairman. The gentleman from Florida?
        Mr. Mahoney. Thank you, Mr. Chairman.
        And let me start out by thanking Dr. Kurtz for his
    testimony and the fact that the National Archives is up to the
    task as long as Congress is up to the money, and I'm glad to
    hear that.
        Some quick questions for Ambassador Kennedy. Thank you very
    much for your testimony and representing the Administration's
    position here.
        Now, my understanding is that $300 million in claims that
    have been paid out, roughly, represents about 15 percent of
    what the Administration thought was the potential pool. Is that
    correct?
        Ambassador Kennedy. Well, the current market value of the
    policies involved is something that economists have been
    struggling with since the end of the Second World War. It's
    very, very hard to do. I would say that for example if you pick
    your point in time and you can make calculations, now whether
    those calculations have any bearing on what finally happens to
    people, if I can give you an example.
        Mr. Mahoney. Well, you're using up some time. I mean, the
    point I'm just trying to make here is that, you know, I've seen
    estimates of 17 billion that you guys are saying is something
    significantly less, but whether it's the Administration's
    estimate or what other folks are saying is the total amount,
    it's a small percentage that paid off.
        Ambassador Kennedy. Well, I think if you look at ICHIEC
    dealing with the most difficult cases that were not resolvable
    in other fora, ICHIEC dealt with those cases. There were
    considerable other fora, starting in 1953 in Germany, that
    dealt with insurance reparations.
        Mr. Mahoney. Okay. Let me ask you a question. Do you know
    how much we spent on all the administrative costs to have
    ICHIEC operate for this period of time? How much money did we
    spend administering the program?
        Ambassador Kennedy. Well, the U.S. Government was not the
    funder of ICHIEC, the German insurance companies, the German
    businesses, and the German government.
        Mr. Mahoney. So the answer is, you don't know how much was
    spent?
        Ambassador Kennedy. You'd have to ask ICHIEC, sir.
        Mr. Mahoney. Well, the number I have heard is around $80
    million.
        Ambassador Kennedy. Well, I think--
        Mr. Mahoney. I understand. The next question I have for you
    sir is that you made an argument earlier that you thought that
    it was better to use diplomacy, because diplomacy in this
    particular case will get a better result than by going to
    court.
        Do I understand that to be one of your main points?
        Ambassador Kennedy. Generally speaking, yes, sir.
        Mr. Mahoney. So, given Mr. Wexler's point that only 15
    percent of the claims had been paid, does the Administration
    consider diplomacy to be working?
        Ambassador Kennedy. Well, no amount of money that's
    recovered is ever going to make people whole for this horrific
    experience that they suffered losing their loved ones, the
    material depredations they suffered. We're not asserting that.
    I would just go back.
        Mr. Mahoney. So you're saying diplomacy didn't work in this
    particular situation?
        Ambassador Kennedy. No, I'm saying it does work, because
    ICHIEC dealt with those difficult cases that previous
    administrative processes had not been able to resolve.
        Mr. Mahoney. Okay, now let me ask you a question. I don't
    think you were back there in 1998 when they put this together,
    so it puts you at a disadvantage. I understand. But, you know,
    given all of your experiences of diplomat and everything, you
    know. And I'm just new to Congress so I'm just trying to figure
    this all out.
        But it would seem to me that if you had a crystal ball back
    in 1998, that if you only thought that 15 percent of these
    potential claims would get paid out, would we have entered into
    an agreement in your estimation to spend hundreds of millions
    of dollars to get such a small result back in 1998?
        Is that something that diplomats do in the Administration--
    I think it was the Clinton Administration--would have entered
    into if they thought that was going to be the result here?
        Ambassador Kennedy. Well, when the ICHIEC process was
    claims-driven, people had to file a claim for there to be a
    payment. I don't think anyone at the beginning of the process
    knew exactly how many claimants there could be. They knew that
    there was a large number of people who held, were victims, or
    caught up in the Holocaust and who held insurance policies.
        But it was the excellent research that ICHIEC did after the
    process started, once it was established, that got us the
    results we have today. And I'd also note, as Chairman
    Eagleburger did in earlier testimony, that in every case,
    ICHIEC's estimates of what it needed were very much on the
    marker.
        The Chairman. One last quick question.
        Mr. Mahoney. Okay. The only point that I'm trying to make
    here is that common sense tells you that a 15 percent result
    doesn't make sense. And your argument is that we entered into
    an agreement, okay? And that we should honor an agreement for a
    flawed process.
        It's clear to me that the process that ICHIEC processed did
    not deliver the result. And if it didn't deliver the result,
    and it's not delivering the justice that these Holocaust
    survivors deserve, why would we then continue to want to
    support this failed policy? Why not do what's right for the
    Holocaust survivors and get these people paid?
        The Chairman. Any response, Ambassador Kennedy?
        Ambassador Kennedy. Yes. I think the earlier compensation
    programs took care of probably the vast bulk of the unpaid
    insurance claims that were out there, so ICHIEC is dealing with
    what couldn't be handled easily without the research, without
    the very dedicated work that the staff at ICHIEC did.
        Thank you, sir.
        The Chairman. The gentleman from Florida, Mr. Wexler?
        Has the gentleman from Missouri asked his questions yet?
        Mr. Clay. I have not.
        The Chairman. All right, well, let me go to the gentleman
    from Missouri first, then the gentleman from Florida.
        Mr. Clay. The microphone isn't working over here.
        Ms. Waters. Could you move to the next one? Perhaps that
    would be better, Mr. Clay.
        Mr. Clay. That is better. Thank you so much.
        Ambassador, with ICHEIC having finished their process, what
    assurances do you have that companies will continue to process
    Holocaust era claims?
        Have you gotten any word back from insurance entities that
    tell you we will continue this process until it is complete?
        Ambassador Kennedy. Thank you for that very important
    question. I am in very frequent contact with insurance
    companies, with insurance associates in foreign countries, and
    we have received assurances from the companies that
    participated in ICHIEC that they will continue to process
    claims with the relaxed standards of proof that are similar to
    the ones ICHIEC used.
        Mr. Clay. Would you have a running tally of how many have
    come through since the end of 2004 or since the corporation
    shut down?
        Ambassador Kennedy. The German Insurance Association
    groups, I believe, 77 companies, we have a letter from the
    Association, a copy of the letter from the Association that it
    sent to this committee saying that they will continue to use
    relaxed standards of proof. I have similar assurances from
    Generali, which has a very significant company archive in
    Trieste.
        We have received similar assurances from Austria is, I'd
    say, yes. We do have the basis to be optimistic.
        Mr. Clay. But no hard numbers of how many remain out there?
        Ambassador Kennedy. It's very difficult to estimate,
    Congressman. I will say that the German Insurance Association
    shared with me that between March 31st of last year, and the
    1st of December of last year, they had received a total of, I
    believe, 72 new claims--less than 10 a month.
        Mr. Clay. For those claimants who have had their claims
    satisfied, what kind of reaction do you get from the Holocaust
    era survivors or their families?
        Ambassador Kennedy. Well, I think those that effected a
    substantial recovery are happy they did. Those who received
    smaller payments that they considered insufficient were
    probably happy they got the money they did, but wish they'd
    gotten more--normal human reactions.
        Mr. Clay. How about you, Dr. Kurtz? Any reaction to that?
        Mr. Kurtz. I think the only thing I would say, Congressman,
    is that from the point of view of the National Archives, any
    access to records, any access to information related to the
    Holocaust or any of these other areas, is extremely significant
    and important, and our emphasis is always on access.
        Mr. Clay. Do you think it brings closure to the chapter for
    some of the survivors and their families?
        Mr. Kurtz. To get these payments?
        Mr. Clay. Yes.
        Mr. Kurtz. I think it brings partial closure. I think also
    from the point of view of closure, this comes also from
    historical accountability, and that is why I said what I said
    about access. Because the more of this information that is out,
    and people really understand not only what happened, but the
    whole effort to try to rectify what happened, this really
    provides closure, I think, in a broader sense.
        Mr. Clay. Well, thank you both for your response, and I
    yield back, Mr. Chairman.
        The Chairman. The gentleman from Florida, Mr. Wexler.
        Mr. Wexler. Thank you, again, Mr. Chairman.
        I just want to say at the outset, I did not file this
    legislation with Mrs. Ros-Lehtinen to in any way minimize the
    achievements and the accomplishments of Ambassador Eizenstat
    and Secretary Eagleburger, which have been extraordinary. I
    stand in admiration and respect for what they have done. But I
    filed this legislation because what we are presented with today
    is the ultimate injustice, having proceeded through the ICHIEC
    process, which has expired.
        And Ambassador Kennedy, I appreciate that you say insurance
    companies have voluntarily agreed to participate, even though
    there's no appellate process, there's no auditing process. I
    appreciate that they have voluntarily agreed to continue in
    some respects, but the process has expired, and we are
    presented with the ultimate injustice because what we have is a
    situation we're using the Administration's estimates and the
    estimates of the insurance companies, roughly 85 percent of the
    assets, the value of the assets of insurance policies from the
    holocaust era remain unpaid.
        So the question is, do we let it lie? That's it? Game over?
    Or does this Congress participate in a remedy which allows yet
    one last chance? This is it--one last chance. This legislation
    is the last chance for those survivors who have not received an
    equitable result to get it. And what the position of the
    Administration is, is ``no.'' They will not get it. The
    position of the opponents of the bill is ``no.'' The Holocaust
    survivors are done. They will not get their last chance. Now,
    what's the inequity?
        The inequity is because the victims of the Holocaust do not
    have their records. They burned. They were exterminated.
    They're in ravines. They don't have records. We talked about
    that often. Yes, there may or may not be something in Bad
    Arolsen, but there's one place where there are records. The
    insurance companies have the records.
        And yet, the insurance companies are not mandated. They
    have not provided all the records so that they can be viewed by
    everyone. If the insurance companies would provide the records,
    this issue would be largely over, but they haven't provided the
    records. So the next question is why is the United States
    Government putting itself in the position of protecting
    insurance companies who refuse to disclose records from the
    Holocaust era?
        And with all due respect to a few of the leaders in the
    American-Jewish community who have called me and said,
    ``Wexler, you're upsetting the apple cart. Stop doing it,''
    they should also ask themselves how it is that they can sleep
    at night when they know that the effort here is simply to
    provide that insurance companies should disclose their efforts
    to give people a reasonable opportunity in Federal court. Let's
    see, Ambassador Kennedy, if we can agree on certain facts.
        I think we agree that 90,000 claims were made in the ICHIEC
    process, correct?
        Ambassador Kennedy. That would be approximately right. Yes,
    sir.
        Mr. Wexler. Approximately 43,000 of those 90,000 claims
    received were rejected outright. Correct?
        Ambassador Kennedy. You'd have to ask ICHIEC about their
    process.
        Mr. Wexler. That's what their records indicate; 43,000 of
    the 90,000 were rejected outright. What their records indicate,
    maybe you can concur, is that 34,000 people received a
    humanitarian award of $1,000.
        Would you agree?
        Ambassador Kennedy. That's right.
        Mr. Wexler. So that's 77,000 of the 90,000. The remaining
    13,000 received an average of $16,000 in compensation.
        Ambassador Kennedy. I believe that's also right.
        Mr. Wexler. That's it. That's it. Six million people died
    in the holocaust. Thirteen thousand people have received
    compensation of more than a humanitarian token payment. That's
    the process we're defending here. That's the process that we're
    saying prohibits American citizens from going into court and
    having to fight their own government to get past the first I'm
    here to make a claim.
        And I think it was Mr. Green and Mr. Cleaver who both
    brought out an extraordinary point, which is that it is a bit
    duplicitous to say we're not stopping people from suing. You're
    right. You can't stop them from suing, but the Administration
    is saying the moment you get into court, the forum of the
    American government is going to say we underwrote your ability
    to sue because we made an agreement with Germany. We made an
    agreement with other countries.
        Could we also agree that all of the companies that hold
    Holocaust era insurance policies have not been before the
    ICHIEC process and their subsidiaries? Have they all been
    before that process?
        Ambassador Kennedy. I think all of the companies that
    probably were involved in European insurance markets or their
    successors, because many of these companies existed, the vast
    majority took part in the ICHIEC process.
        Mr. Wexler. Vast majority--so there are some insurance
    companies and/or their subsidiaries who have not participated?
        Ambassador Kennedy. I'd be happy to try and get a list for
    you, sir, but I would assert that basically they participated.
        Mr. Wexler. Okay, well that is a legitimate difference of
    opinion then, because--
        The Chairman. Finish up.
        Mr. Wexler. Because there are claims, I think, legitimate
    credible ones, that there are insurance companies and/or their
    subsidiaries who have not participated. But they, too, now are
    benefiting from this legal peace argument, which is then even a
    double, compounded, legal inequity.
        Ambassador Kennedy. Well, the legal peace argument applies
    primarily to Germany and Austria. Those are the two countries
    with which these agreements were negotiated.
        Mr. Wexler. Thank you. Thank you, Mr. Chairman.
        The Chairman. I thank the witnesses, and we will now hear
    from the next panel.
        All right, I need the room cleared, we have another panel
    coming up. So, please let's move quickly, let's get everybody
    seated quickly. Let's not block the aisles there. Would the
    witnesses please take their seats. I want to get this thing
    started.
        Thank you, oh, we need everybody to sit down. We are going
    to begin in a minute. Let me just say that everyone will have
    whatever material he or she wants submitted for the record, so
    there will be no need to ask. We will also grant by unanimous
    consent, to which there is no objection, the right for
    everybody to submit.
        I would also make a suggestion. We will consider ourselves
    thanked in advance. We probably save time, getting rid of five
    ``thank you's.'' And we know what is in the bill, so don't
    summarize it. Tell us why you think we should, or shouldn't
    pass it, or we should change it. And we will begin with a
    constituent who has been a great source of advice, and
    inspiration on this issue to me, central to mine.
        This is Mr. Arbeiter. Mr. Arbeiter is president of the
    American Association of Jewish Holocaust Survivors of Greater
    Boston. Mr. Arbeiter?

     STATEMENT OF ISRAEL ARBEITER, PRESIDENT, AMERICAN ASSOCIATION
            OF JEWISH HOLOCAUST SURVIVORS OF GREATER BOSTON

        Mr. Arbeiter. Thank you very much. Mr. Chairman, and
    members of the committee, my name is Israel Arbeiter, and I
    have lived in Newton, Massachusetts, since 1970. I retired from
    my business in 1995, but have remained extremely active,
    especially in the face of Holocaust survivors, including as a
    speaker in public schools, representative of survivors of
    several community organization in the Boston area, and as
    president of the Jewish Holocaust Survivors of Greater Boston,
    a position I was first elected to in 1950, and I have been
    president of all but 8 years of this organization.
        I want to extend my utmost gratitude to Chairman Barney
    Frank, our own elected Member of Congress, and a real champion
    of rights to everyone. Mr. Chairman, the survivors of our
    community regard you as a great friend, and consistent
    advocacte on our behalf. And with your permission, Mr.
    Chairman, I would like to express my most sincere thanks to
    members of your staff, for assisting in helping me to come
    here.
        I appear here today with very mixed feelings. On the one
    hand, I appreciate the opportunity to address this committee to
    urge the immediate passage of H.R. 1746, the Holocaust
    Insurance Accountability Act of 2007. On the other hand, I am
    very distressed, and even angered, that 10 years after this
    committee first held a hearing in 1998, under Representative
    Jim Leach, on Holocaust survivor's insurance claims, and 7
    years after I first testified in Congress in 2001, the
    insurance industry has managed to escape having to fully
    account for its handling of our family policies, and has
    retained so many billions that we survivors should have
    received decades ago.
        Today, in 2008, there is no more time to talk. If Congress
    wants to do the right thing, passage of this insurance
    imperative with no more delays. The legislation would restore
    the basic rights of survivors. It isn't asking very much,
    really. Is it too much for Holocaust survivors to have the
    right to have access to American courts to sue insurance
    companies who cheated our families out of insurance proceeds?
        Is it too much for Holocaust survivors to make decisions
    for themselves about property rights? Is it too much to require
    insurance companies who want to do business in the United
    States to disclose information about their customers, and give
    a complete account of their conduct during and after the
    Holocaust? I don't think so. I don't think it is asking too
    much to have the same rights as any other American citizen to
    hold insurers accountable.
        The survivors I represent, and those I am in contact with
    everyday, are confused and frustrated, yet Congress will stand
    by and allow the status quo to prevail.
        I was born in Plock, Poland, one of five sons of Isaac and
    Hagara Arbeiter. My father was self-employed as a custom
    tailor, and had two employees and an apprentice. He made a
    comfortable living. In order to protect his family in case
    something happened to him, my father purchased life insurance.
    Every week, an agent from the insurance company would come to
    our house and collect the premiums. He wrote the date and
    amount in a booklet that was given to my father for that very
    purpose.
        I remember distinctly, when my siblings and I asked my
    father why this man was coming every week to collect money, we
    were told that payment was ``for your future.'' Unfortunately,
    our future was anything but secure. In September 1939, World
    War II broke out, and Nazi Germany occupied Poland. On February
    26, 1941, in the middle of the night, following the orders of
    SS storm troopers, we were ordered out of our homes, and
    required to leave everything behind, including the life
    insurance policies, paperwork, and the booklet in which the
    agents of the insurance company recorded my father's payments.
        From there, we were taken to concentration camps. My
    parents, and my younger brother were later gassed in Treblinka.
    Two of my brothers and I spent the next 4 years in various
    concentration camps, including Auschwitz. Then, by some
    miracle, the war ended, and I was liberated. After the war, I
    attempted to pursue my father's insurance policy. I tried to
    find out where it could be cashed since my father had died in
    the Holocaust. However, my efforts were unsuccessful.
        When ICHEIC was created in 1998, Holocaust survivors and
    family members were promised a decent, total process to recover
    our fair value from these insurers from their massive theft.
    Instead, we have been victimized again by a commission process
    which has operated without any public accountability, far from
    the preying eyes of the United States legal system. Amazingly,
    it was populated by the companies that had managed to hold on
    to our money for 5 decades. This idea was an abomination,
    because companies were represented, but the survivors did not
    ask for their officials, insurance commissioners, or anyone
    else to negotiate for us.
        Why, of all people, should the Holocaust survivors be the
    only ones whose property rights would be negotiated by others?
    In Italy, in 2007, after 9 years, ICHEIC closed its doors, and
    the results are terrible. It paid less than 3 percent of the
    amount of the insurance owned by European Jews in 1938, now,
    conservatively estimated to be worth $17 billion. Those of us
    who personally experienced ICHEIC inefficiency and arrogant
    behavior were certainly not surprised at this.
        My experience is typical, and shows why H.R. 1746 is so
    important. In the fall of the year 2000, I learned that the
    creation of ICHEIC--I applied for a claim form, filled it out
    and sent it in. I soon received a--
        The Chairman. Mr. Arbeiter, we are going to need you to
    move towards a close.
        Mr. Arbeiter. I soon received a letter with the claim
    number 00067890, which stated that all member companies will
    investigate my claim, and they will report their findings
    within 90 days. A year after I filed, I had nothing. In 2001, I
    was asked by Congressman Henry Waxman to testify before the
    U.S. House of Representatives. I explained about my family
    history, my ICHEIC application, and the commission's failure to
    even follow on its rules.
        Time, we all agree, was of utmost importance. I listened to
    ICHEIC Chairman Lawrence Eagleburger, government officials, and
    other members of ICHEIC who promised quick action--a process
    where rules are enforced and everyone gets a fair share. We
    were told to be patient, that the system was new, and would
    improve. Congress chose not to take any action in 2001, to give
    ICHEIC a chance to work. Ultimately, in 2003, I found myself--
        The Chairman. I just want to update, get to a conclusion on
    the bill, we are running late.
        Mr. Arbeiter. Okay. Some say that we should accept what
    ICHEIC gave us, because there was a deal to limit our rights to
    whatever ICHEIC decided. This is simply not acceptable. Ladies
    and gentlemen, no survivor I know asked anyone else to make any
    deals about our insurance policy, and no survivors I know were
    asked if he, or she agreed to any such deals. How did anybody
    presume to deny the history I am certain about, because I lived
    it?
        I know my father had insurance, but whatever deal was made
    by ICHEIC failed to produce the fact, and I know that happened.
    So, it is not disrespectful to say I am entitled to the truth.
    I am entitled, as a Holocaust survivor, to any information that
    these companies have, or that any other company has, that is
    relevant to our past.
        Now, there is no more time to deny me the history, nor the
    histories of thousands of families. I will finish with this,
    and I thank you very much, Mr. Chairman.
        [The prepared statement of Mr. Arbeiter can be found on
    page 63 of the appendix.]
        The Chairman. Thank you, and your entire statement will be
    in the record.
        Mr. Eizenstat, we will give you some extra time here.

    STATEMENT OF STUART EIZENSTAT, FORMER SPECIAL REPRESENTATIVE OF
       THE PRESIDENT & SECRETARY OF STATE ON HOLOCAUST-ERA ISSUES

        Mr. Eizenstat. I have an amended statement that I'd like to
    put in the record.
        The Chairman. The record is open, for anybody who wants to
    put something in.
        Mr. Eizenstat. My capacity as Special Representative of the
    President for Holocaust Issues during the Clinton
    Administration,--
        The Chairman. There are going to be a series of votes. We
    will finish Mr. Eizenstat's testimony, and then we will break
    for vote. There are four votes, so we may be gone for the
    better part of the hour. Mr. Eizenstat, please go ahead.
        Mr. Eizenstat. I negotiated agreements with the German,
    Swiss, Austrian, French and other European governments,
    resulting in payments of more than $8 billion in compensation
    to 1.5 million Holocaust survivors, their heirs, and heirs of
    those who did not survive, including Jews, and non-Jews, for
    slave labor, real estate, insurance claims, and art claims.
        I testified time and again before this committee and others
    on these agreements, including the legal peace that was part
    and parcel of it, and got bipartisan support. None of the $8
    billion would have been paid, or would have been possible,
    without in return, providing legal peace to the companies who
    paid it. These agreements were reached, not just on a bilateral
    basis between the U.S. Government, and the governments of these
    other countries. They were done in a complex set of
    negotiations with private sector representatives and
    corporations abroad and with the plaintiff's attorneys, class
    action lawyers who brought the bulk of these suits.
        And with the World Jewish Congress, and with the Jewish
    Claims Conference, and in full recognition by the Congress,
    this committee, this chairman being ranking member, and with
    Chairman Leach. The bill that is currently drafted threatens
    the integrity of the U.S. Government's long-standing policy of
    resolving Holocaust-era claims through negotiation and not
    litigation. I want to explain why that was our principle. The
    reason was that we wanted to have flexible rules of evidence.
    We wanted to have ICHEIC, which was created by the insurance
    regulators, do the research, not lawyers, for the claimants.
        We wanted to have low burdens of proof, not the high
    burdens of proof that would exist in courts. The ICHEIC process
    emerged from the impetus provided by insurance regulators in a
    number of States. In the spring of 1998, those commissioners,
    and Holocaust survivor organizations, invited the
    Administration to support an international commission to
    resolve unpaid Holocaust-era claims, and asked us to use our
    diplomatic efforts with European governments and companies, to
    bring them into the process.
        We agreed, ICHEIC was created, and the Administration had
    an observer on ICHEIC. We were not full members, because it was
    a State-led process. Our support for ICHEIC was premised on our
    interest in obtaining justice quickly. We knew that there was a
    time window, that litigation would be costly, uncertain, and
    subject to all sorts of defenses--statue of limitations, post-
    war agreements, and rules of evidence. And that this would
    consign Holocaust survivors to an endless and fruitless search
    for justice.
        And so what we did, whether it was slave laborers, people
    who had their properties taken, people whose art was stolen, is
    to adopt administrative processes that could move quickly in
    the lifetime of these people, and that is what the ICHEIC
    process was all about. It was done, by the way, also not only
    with the participation, all these negotiations, with Jewish
    organizations, and Holocaust organizations. It was done with a
    representative of the state of Israel, and with the prime
    minister of Israel being directly involved, and informed of the
    negotiations.
        We had to involve, and perhaps, the most difficult part of
    the process was the insurance issue, because insurance was
    regulated at the State level, and yet, we had to merge our
    broader negotiations with Germany over slave labor and other
    issues, with this issue. We felt that to ensure the inclusion
    of the broadest possible number of companies, and countries,
    that State insurance regulators had influence only over those
    European insurers who could be subject to the jurisdiction of a
    U.S. court. And that meant only those doing substantial amounts
    of business here. We wanted a broader universe of insurers
    involved.
        And therefore, the ICHEIC process allowed us to get
    insurance companies engaged in paying into this process, who
    were not subject, and wouldn't today be subject to the
    jurisdiction of these courts. We took a number of steps to
    support the ICHEIC process. I testified in 1999 before this
    very committee, saying that we continued to believe ICHEIC was
    the best vehicle for resolving Holocaust-era claims. We
    reiterated that numerous times, and I wrote a letter to Mr.
    Eagleburger, who is chairman of ICHEIC, stating ``that it was
    the foreign policy of the United States that ICHEIC should be
    recognized as the exclusive remedy for resolving all insurance
    claims relating to the Nazi era, because courts were not a
    satisfactory, timely and appropriate way to do it.''
        Now, it is very important to understand what was done, and
    what wasn't done in the negotiation with the Germans. We
    created a German foundation, funded with 10 billion Deutsche
    Marks, half by the German government, half by the private
    companies. The private companies included thousands of German
    companies, including insurance companies. The insurance piece
    was the most difficult piece to negotiate because the German
    insurers, led by Allianz, said that they would not contribute
    to our overall 10 billion Deutsche Mark pot, unless they, along
    with all other German companies, including the Daimlers, and
    the Siemens and the others who were slave labor employers got
    their legal peace.
        Now, what did legal peace involve? It is very important to
    understand. We had this 10 billion Deutsche Mark. We had to
    divide that 10 billion Deutsche Marks between slave laborers
    and forced laborers, who got 8.1 billion. A future fund for
    tolerance programs got 700 million. More went to property, and
    we agreed after very difficult negotiations, to pass through to
    ICHEIC 550 million Deutsche Marks to ICHEIC, for them to
    administer. But the condition of that was that Allianz, and the
    German insurance companies, as the other German companies, the
    slave labor employers needed to have legal peace. What did
    legal peace involve?
        They demanded, initially, a piece of legislation of
    Congress to cut off the rights of people to sue. We said that
    is not possible. They wanted an executive agreement that would
    cut off the rights of people to sue. We said that was not
    possible. What we did agree to was a statement of interest. To
    say that it was in the national security interest of the United
    States that the cases be dismissed, in return for the payment
    of 10 billion Deutsche Marks. And that statement of interest
    simply said it was in the interest of the United States, the
    U.S. Government, with the full understanding of the Congress,
    to promote that dismissal.
        If there were valid legal grounds found by a court to
    dismiss the case, that was the single most contentious part of
    the negotiation. They said, ``Well, that leaves a huge
    loophole, the courts have to find a valid legal ground for
    dismissal.'' And we said, ``That is exactly right, that is the
    most we can give, and that is what legal peace is going to
    mean, in return for your 10 billion Deutsche Marks.'' And that
    is what ended up happening.
        The Chairman. You need to wind it up.
        Mr. Eizenstat. I'll wind it up. Here is what I would
    suggest. I have particular concerns about access to court
    issues, because it cuts directly against the understanding that
    we have reached after painful, long, difficult negotiations
    with these companies. It would totally vitiate the
    understanding that we reached in broad daylight--
        The Chairman. We have the point, but we do ask you to
    finish.
        Mr. Eizenstat. There is a part of this legislation on the
    registry that I want to talk address. I am concerned about the
    fact that people may not know, and may not be paid for their
    policies. And here is what I would suggest. Instead of a
    registry, which runs against certain privacy rules in Europe, I
    would suggest the following: That Congress pass in legislation,
    a mandated requirement that all companies doing business in the
    United States submit period reports of their post-ICHEIC claims
    processing to the Congress, and to an appropriate office of the
    Department of State, stating the number of claims submitted,
    the number granted, the reasons for refusal, the amount offered
    in compensation, to vindicate the public interests in ensuring
    that companies live up to their commitments, while still
    respecting our agreement and the privacy rules of European
    companies.
        They should do so according to the rules submitted by
    ICHEIC, the loose rules. I would go a step further, and suggest
    that all potential claimants be told that they can file claims
    through the German Insurance Association, GDV, and that
    insurance associations distribute those claims to the
    appropriate German companies. And those companies would be
    obligated to search their files to see if there was a match,
    and then to report, on an annual basis to the Congress and to
    the State Department, on their results. This, to me, would be a
    more appropriate way of dealing with it, than vitiating
    agreement--
        [The prepared statement of Mr. Eizenstat can be found on
    page 102 of the appendix.]
        The Chairman. We are over time, and we have a vote. So, we
    will recess, and come back when we are through voting.
        Mr. Eizenstat. Mr. Chairman, may I just ask, I am supposed
    to be--
        The Chairman. We are over time.
        Mr. Eizenstat. I understand. How long do you anticipate we
    should--
        The Chairman. It is going to be about 40 minutes--4 votes.
    If you have to leave, we understand that.
        [Recess]
        The Chairman. Sorry, the delay, in part, was to commemorate
    the victims of the Tennessee tornadoes, which took longer than
    anticipated. We will resume, and we are now up to Mr. Dubbin;
    is he not here yet? Then, we will move on to Ms. Koken, and we
    will get back to Mr. Dubbin.
        Ms. Koken, why don't you begin.

      STATEMENT OF DIANE KOKEN, FORMER VICE-CHAIRMAN, ICHEIC, AND
               FORMER PENNSYLVANIA INSURANCE COMMISSIONER

        Ms. Koken. Chairman Frank, and members of the committee,
    thank you for the opportunity to appear before you today. I
    appreciate the committee's efforts to examine the issues
    underlying the Holocaust-era insurance claims, including the
    work of ICHEIC, in the context of considering this legislation.
    ICHEIC's mission was to identify, and compensate previously
    unpaid Holocaust-era insurance policies. Under the leadership
    of former Secretary of State Lawrence Eagleburger, ICHEIC
    resolved more than 90,000 claims, ensuring that over $306
    million was offered to Holocaust survivors and their heirs for
    previously unpaid insurance policies.
        Of this amount, more than half went to individuals who were
    unable to provide policy documentation or identify the company
    that may have issued the policy. The commission also
    distributed more than, or nearly $200 million more for
    humanitarian social welfare purposes, largely to honor the
    memory of heir-less claims.
        I hope to help you to understand why, and how the
    commission approached its mission, and how the organization was
    structured around that mission. As a former president of the
    NAIC, and vice chair of ICHEIC, I participated in this process
    from its earliest days. I was joined in this effort by
    insurance regulators from all parts of the country who deserve
    even greater recognition for much of the work of ICHEIC. In
    particular, is the work of New York, and the late Neil Levin,
    who perished on 9/11, and Glen Pomeroy, former president of the
    NAIC and North Dakota insurance commissioner.
        Credit also goes to the NAIC for their efforts to resolve
    the complex issue of unpaid Holocaust-era insurance claims.
    Through the participation of a diverse group, ICHEIC offered
    recourse to thousands of individuals who would not otherwise
    have had the opportunity to pursue their claims. We only came
    to appreciate the challenge we worked through with the
    undertaking. We were creating a process to address claims that
    were over 70 years old, from more than 30 countries, with more
    than 20 languages and currencies with no relevant value, and
    with little documentation.
        To start, we researched the pre-war, and wartime insurance
    market, and then invested heavily in extensive global outreach.
    We utilized all means available, and emphasized that anyone,
    regardless of the documentation they possessed, who thought
    that they were entitled to a Holocaust-era insurance policy,
    should file a claim.
        We established an agreement on relaxed standards of proof,
    and created valuation standards that could be calculated
    without usual policy documentation. We also developed an
    extensive research database, and a matching system.
    Furthermore, we instituted a separate, but related humanitarian
    claims payment process for unnamed, unmatched claims, and for
    claims on Eastern European companies that had been liquidated,
    nationalized, or for which there really were no present-day
    successors.
        One of the commission's first priorities was to gain a
    clear understanding of the overall volume, and estimated value
    of potential claims. Glen Pomeroy, brother of your colleague,
    Earl Pomeroy from North Dakota, co-chaired a task force to
    explore these issues. The Pomeroy task force, utilizing outside
    experts, guided the commission in deliberation on how to assess
    appropriate settlement amounts across the markets in Europe,
    which ultimately resulted in overall settlements of
    approximately $550 million.
        ICHEIC's archival research was similarly critical to build
    on the information provided by claimants constructing an ICHEIC
    research database that ultimately could be matched with the
    company's information. As a by-product of this research, ICHEIC
    published the names of 519,000 potential Holocaust-era
    policyholders on its Web Site. Finding a name on a list,
    published by the commission, was neither necessary to file a
    claim, nor proof that a previously unpaid claim existed.
        We recognized that our credibility depended on adequate
    oversight. For this reason, ICHEIC established four important
    processes: One, a two-stage, independent, third party audit for
    the claims review processes of each participating company and
    partner entity; two, an executive monitoring group that could
    conduct real-time evaluations of companies and the ICHEIC
    claims operations; three, an in-house verification process to
    crosscheck every decision on every claim that named a company;
    and four, an appeals process that allowed for any named
    claimant to have a decision by a company reviewed.
        The successful settlement of ICHEIC claims, coupled with
    restitution efforts during the immediate post-war period, and
    the ongoing work of existing entities to resolve the remaining
    unpaid insurance policies within their respective jurisdictions
    addresses a preponderance of the pre-war insurance market. In
    addition, at ICHEIC's concluding meeting, every company that
    was a member of the commission, as well as the 70 companies of
    the German Insurance Association, through its partnership
    agreement with ICHEIC, and the Sjoa Foundation reaffirmed their
    commitment to continue to review, and process claims sent
    directly to them, which was confirmed by company letters.
        The work of the commission was unprecedented, yet we were
    able, through amicable and inclusive dialogue to voluntarily
    adopt a new approach towards the resolution of unpaid
    Holocaust-era insurance claims for the benefits of survivors,
    and their families, and those who did not survive. In the end,
    for me, it was about the people, and their stories, and about
    justice. The commission could not resolve the wrongs done by
    the Holocaust, as that debt is incalculable. However, our
    efforts could bring some measure of justice to the lives of
    thousands of survivors, their families and the families of
    those who perished. Thank you.
        [The prepared statement of Ms. Koken can be found on page
    128 of the appendix.]
        The Chairman. Thank you, Ms. Koken.
        We now go to Sam Dubbin.

        STATEMENT OF SAM DUBBIN, ESQ., ATTORNEY, MIAMI, FLORIDA

        Mr. Dubbin. Thank you. My name is Sam Dubbin, and I am an
    attorney from Miami, Florida. I would like to explain to the
    committee how I got involved in this matter.
        Mr. Chairman. Mr. Dubbin, we have a limited amount of time,
    and your background may or may not be relevant to what we do on
    the bill.
        Mr. Dubbin. I understand.
        Mr. Chairman. Use your judgement, but you don't have--
        Mr. Dubbin. I got involved because when I returned to
    practice law in Miami in the late 1990's, I was approached by a
    number of Holocaust survivors, elected leaders of survivor
    groups who were very concerned about the way deals had been
    made, and discussions were done over their rights. And many of
    them talked about insurance policies. And the survivors, and I
    went to our legislators. And in the State of Florida,
    legislation was passed that provided, based upon the testimony
    that the insurance commissioners had heard that--because
    everybody recognized that today would be difficult, or in the
    1990's it would be difficult for survivors to be able to know
    about a claim.
        The legislation in Florida, like the legislation in several
    States, required the publication of names, and it allowed
    survivors to go to court with a 10-year window. And the 10-year
    window was extremely important, because to have to litigate the
    statue of limitations under the circumstances would be an undue
    burden to impose upon people who obviously have been denied
    that information for years.
        So, it was the heartfelt outpouring of desire for truth,
    and for reconciliation for history, and the ability to
    reconnect with what their families had lost, from Holocaust
    survivors, that got me involved. I filed a number of lawsuits
    against certain insurance companies. I was one of the lead
    counsels in the Hungarian Gold Train case in which we were
    able, with the help of Members of Congress, including many
    people on this committee, to get a just resolution. And that
    was through the courts.
        And that is because the survivors had the ability to speak
    for themselves. It is the denial of that ability to control
    their own rights through the courts of the United States that
    is the greatest abomination really of what has happened over
    the last 10 years. I want to remind the committee that those
    who are opposing the legislation talk about legal peace. What
    is legal peace?
        Mr. Eizenstat has said, in his book, that during the
    negotiations over whether German industry would pay slave and
    forced laborers for the torture that they inflicted on them; he
    said, in effect, that before they would make those payments,
    they insisted that the United States wrap insurance into that
    overall agreement at the 11th hour.
        Now, whether or not it is appropriate to negotiate by
    executive agreement payments about slave labor, which is a
    different kind of legal claim than a documented insurance
    claim, remember the policies, the documents are there, in most
    cases. The companies have the documents in most cases. The re-
    insurers have the documents in most cases.
        So, why there should be a legal or moral nexus between
    slave labor payments and the property claims, like insurance
    claims, is a very serious, fundamental policy issue that this
    Congress should look at. It is also clear, from Mr. Eizenstat's
    book, that the Germans demanded that the President agree to
    abolish people's rights to sue for insurance policies. It was
    equally clear that the President does not have the authority to
    do that, and that the German then, in effect, gambled that the
    so-called ``legal peace'' that was agreed to, would somehow
    prevail in the courts.
        And the Solicitor General, Mr. Waxman, evidently wrote a
    letter outlining that, under no circumstances, did the United
    States have the ability to abolish people's rights to sue for
    insurance policies. So, the agreement provided, that was in the
    ``foreign policy,'' that they would file a statement of
    interest that it was in the foreign policy interest of the
    United States, for cases to be dismissed on any valid legal
    ground.
        Today, it is the interpretation of that, in the courts,
    that has caused the problem. It is the courts' interpretation
    of the executive agreements that now bars survivors from going
    to court. They said it is not the agreements that matter. So,
    when the State Department says here that we didn't agree to
    keep people out of court, that is disingenuous, because the
    courts have said there is a Federal policy that operates
    separately from these executive agreements, from the language
    of the agreements, that they have relied upon to bar Holocaust
    survivors and heirs from access to the courts for insurance
    claims.
        So, those who now oppose the legislation want to give
    Germany more than it was able to bargain for, in connection
    with that executive agreement. Now, so, the question is who
    decides Federal policy about how Holocaust survivors' rights
    ought to be determined in the United States of America. The
    question is, did the President have the authority to negotiate
    away the rights of survivors to go to court, as a practical
    matter?
        The language of the agreement is more restrictive than what
    they have obtained today. The courts have interpreted that as
    embodying a policy. This is not about foreign policy, this is
    about international commerce, and it is about access to the
    courts of the United States. And those are areas that this
    Congress has jurisdiction over, pure and simple. And to the
    extent that there is an argument that there is a foreign policy
    element to that, there is no case, and no principle where, in
    the absence of a grave international crisis, and congressional
    authority, that based upon the President's word alone, people
    have had their rights to go to court denied.
        But that is the effect of the agreement, and the subsequent
    court decisions. That is why the access to courts provision of
    this legislation is so important. So, that leaves to the
    Congress the question of who sets policy about whether or not
    companies that do business in this country, who sold insurance
    to people who live here today--and believe me, these policies,
    as I put in my statement, they were very explicit, when
    Victoria, and Generali and the others sold insurance, it said,
    ``You can collect this policy anywhere in the world where you
    demand payment.''
        And that meant something very special to Jews in Europe in
    the 1930's, because they sure hoped they would be somewhere
    else, or thought they might be, when it came time to collect.
    So, this is not about foreign transactions, this is about
    global companies at the time. They had assets in the United
    States at the time, and people today want to redeem those
    policies. These are contract rights, and to think that there is
    one class of people in this country today who do not have the
    right of access to courts, to obtain compensation for contracts
    that were sold to their parents under, admittedly, unusual
    circumstances.
        But those circumstances, as you have heard from many
    people, shouldn't justify the denial of access. If anything, it
    should demand more favorable treatment, such as the publication
    of names, which is justified under the conditions, and the
    statutory extension of the statue of limitations. Is Congress
    willing to abide by the executive's judgement? There are two
    questions. Legally, there is no question that Congress has the
    authority. Morally, do you accept the judgment that, as a
    condition of allowing the German companies to make slave labor
    payments, that people's insurance rights should be obstructed
    the way they are? That is a decision for Congress to make.
        I would just close by saying ICHEIC, in spite of the
    accomplishments that it had, and there were some, its
    overarching purpose was to limit the financial exposure of the
    insurers, and the moral exposure of the insurers. And by that,
    I mean there are records that show what the companies did when
    the Nazis came to collect people's policies. Those files exist,
    and the survivors have a right to know what someone who sold
    their parents insurance did at the time the Nazis came
    knocking, what they did to identify their Jewish customers.
    That is as much a part of this as the compensation. And for
    that truth, and frankly, for fair compensation to be denied as
    a result of those transactions, is really a travesty, and it is
    not the kind of thing that this Congress should associate
    itself with, as far as, the policy of the United States of
    America.
        [The prepared statement of Mr. Dubbin can be found on page
    66 of the appendix.]
        The Chairman. Thank you.
        Next, we will hear from Roman Kent.

    STATEMENT OF ROMAN KENT, CHAIRMAN, AMERICAN GATHERING OF JEWISH
                          HOLOCAUST SURVIVORS

        Mr. Kent. Thank you, Chairman Frank, and members of the
    committee, for allowing me to appear here. I am a Holocaust
    survivor. I received a bachelors degree in the Lodz Ghetto, and
    I received a Ph.D. degree in Auschwitz. Presently, I am
    chairman of the American Gathering of Jewish Holocaust
    Survivors, and officer of the Conference of Jewish Material
    Claims Against Germany, known as the claims conference.
        I participated in the negotiation leading to the
    establishment, and was commissioner of, the International
    Commission of Holocaust-Era Insurance Claims, known as ICHEIC.
    I also participated in the negotiation involving the German
    foundation, and am presently also involved in the ongoing
    claims conference negotiation with the German government, which
    has provided hundreds of millions of dollars annually for
    Holocaust survivors.
        For 25 years, I fought for justice, in memory of the
    Holocaust survivors. For this reason, I believe that I have a
    unique perspective from which to comment on the issues which
    are the subject of this hearing. At the outset, I want to
    highlight three key points. First, the ICHEIC process has
    concluded, however, insurance companies which worked with
    ICHEIC continue to accept and process Holocaust-era insurance
    claim, applying ICHEIC standard in their decision, at no cost
    to claimants.
        In addition, a number of organizations, including the
    Holocaust Claim Processing Office of New York State, will
    assist survivors filing such claims at no charge. Second, H.R.
    1746 would generate huge expectations among survivors that will
    not be met. The cost in time--above everything time--and effort
    required to engage in litigation will be excessive, if not
    prohibitive.
        Even if European data protection hurdles could be overcome,
    the mandatory publication of the companys which work with
    ICHEIC, of all policyholders name will, at that point, yield
    little new information regarding policyholders who were victims
    of Nazi persecution.
        Third, H.R. 1746, by effectively reopening previous
    agreements, will certainly, and I want to emphasize the word
    ``certainly,'' damage ongoing negotiation with Germany, among
    others, and will put at risk hundreds of millions of dollars in
    crucial funding, which is required now, for the Holocaust
    survivors.
        Since the beginning of World War II, and for the next 60
    years, few survivors recovered the proceeds of their unpaid
    Holocaust-era insurance policies. They faced enormous
    obstacles, including the resistance of insurance companies to
    pay or even give a fair hearing, the virtual impossibility of
    obtaining relevant documents, and the statue of limitations.
    Moreover, many companies were no longer in business after the
    war. A communist regime banned any sort of recovery for
    survivors in many countries.
        Clearly, there was a vacuum in post-war insurance
    resolution effort. No effective forum existed. This is
    precisely why the ICHEIC agreements were reached. ICHEIC
    developed a process and methodology to identify and compensate
    previously unpaid individual Holocaust-era insurance claim, at
    no cost to claimants.
        Working with the insurance companies that had agreed to
    participate, ICHEIC made great strides to fill this void, and
    attained a measure of justice for claimants, which up to that
    point, had not existed. However, only five European companies,
    which signed the agreement to work with ICHEIC, and the German
    companies, which were part of the German foundation agreement,
    provided funding for ICHEIC. ICHEIC received no other funds
    from any companies which were part of the European insurance
    market.
        Nonetheless, ICHEIC developed a special process to make
    payment, even for policies issued by such companies. Moreover,
    many complications arose with the companies that did work with
    ICHEIC. For example, the different data protection of privacy
    law of Germany, Italy, France, and Switzerland had to be
    addressed individually. ICHEIC also developed a liberal
    approach towards evidence to make it possible, and easier for
    claimants to recover.
        Only a small percentage of claims named a specific company,
    and fewer still included any documentation linking the policy
    to the specific company named in the claim. Yet, ICHEIC did
    something no court would do, and developed a way to pay
    claimants who did not produce an insurance policy, or name a
    specific company.
        Thus, to address the ineffectiveness of lawsuits, ICHEIC
    became the first, and indeed, the only one organization to
    offer Holocaust victims, and their heirs, a way to pursue
    Holocaust-era insurance claim at no cost, without regard to any
    statue of limitation, even if the policy in issue could not be
    produced. An assertion had been made on a number of occasions
    that less than the 5 percent of the total value of Jewish
    Holocaust-era insurance policies was paid through the ICHEIC
    process. This is a figure without any solid basis.
        As I have noticed, ICHEIC paid claimants for insurance
    policies issued by companies in Eastern Europe which no longer
    exist. Beyond that, the ultimate percentage of the Holocaust-
    era insurance market, paid through ICHEIC, depends on the
    valuation of Jewish purchases policies in question, and that,
    in turn, will vary depending on which values out of the broad
    range of possibilities, are used in the relevant calculation.
        The factors involved in the complex calculation required
    included the following: One, the total pre-war face value of
    all insurance policies in the local currency at the time; two,
    the Jewish share of such policies; three, the propensity of
    Jewish individuals to purchase insurance in greater numbers and
    at a higher value than the rest of the population; four, an
    adjustment for policies which were paid; and five, the method
    used to convert the value of unpaid Holocaust-era policies in
    today's value.
        There is no single correct measure for any of these
    factors. The final conclusion one can reach, will radically,
    and I say radically differ, depending on which values, out of
    the extensive range of possibilities, were selected for their
    relevant component factors. To summarize, was ICHEIC perfect?
    Hell no. Excuse me for saying, ``Hell no.'' Let me correct it
    by saying clearly not.
        The Chairman. I would instruct the recorder that ``Hell''
    can stand.
        Mr. Kent. Thank you, Mr. Chairman. Nothing, nothing can
    remedy the wrongs perpetrated during the Holocaust. The life of
    one child, and one-and-a-half million children, and I was a
    child, cannot be measured in dollars and cents. The most that
    can be achieved is an imperfect justice. Imperfect justice on
    this planet, we do not have a perfect justice on this planet
    yet. I hope maybe sometime we will. Yet, as imperfect as ICHEIC
    was, what it accomplished was without precedent.
        One, ICHEIC provided a forum for all of--
        The Chairman. We have to speed this up, Mr. Kent.
        Mr. Kent. Yes, one more minute please. ICHEIC provided a
    forum for Holocaust-era insurance claims where before,
    practically speaking, there was nowhere to go. Second, ICHEIC
    did not charge survivors, nor was it bound by any statue of
    limitation. Third, ICHEIC paid on policies issued by insurance
    companies which no longer exists. Four, insurance which worked
    with ICHEIC, continued to accept, and process claim, while the
    Holocaust Claim Processing Office will assist applicants with
    filing claims. Fifth, based on ICHEIC research, an archive
    consisted of over 520 most likely Jewish insurance policy
    holder, is now available to survivors, historians and other
    researchers.
        And finally, about $600 million of Holocaust-era insurance
    policy was paid to policyholders, and heirs, and to programs
    benefiting survivors, and it was paid based on ICHEIC's
    standards. ICHEIC--
        [The prepared statement of Mr. Kent can be found on page
    119 of the appendix.]
        The Chairman. That will have to do Mr. Kent.
        Mr. Kent. Yes, I just--
        The Chairman. You said another minute, and we are over
    that.
        Mr. Kent. I do appreciate, I just have to finish it though.
        The Chairman. You have 10 seconds.
        Mr. Kent. I cannot do it in--
        The Chairman. Then we will get back to you in the
    questioning. We are going way over on all these, and I did try
    to advise you.
        Mr. Kent. Can I just finish my conclusion?
        The Chairman. No, we will get to you in the questioning.
        Mr. Zabludoff?

    STATEMENT OF SIDNEY ZABLUDOFF, FORMER CONSULTANT, CONFERENCE ON
              JEWISH MATERIAL CLAIMS AGAINST GERMANY, INC.

        Mr. Zabludoff. Thank you for allowing me to present the
    facts relating to the restitution of Holocaust victim assets.
    My basic conclusion after examining the issue for more than 10
    years is that extraordinary events require extraordinary
    solutions. Clearly, the murder of two thirds of continental
    European Jewery and the compensation of nearly all Jewish
    assets by the Nazis who were collaborators was such an event.
    Despite the extraordinary circumstances, only about 20 percent
    of the stolen property and other assets has been returned, as
    of 2007. Two bold actions could be taken to rectify this
    sizeable and unconscionable shortfall. They are the passage of
    H.R. 1746 and ensuring that the remaining unpaid stolen assets
    are used to assist needy Holocaust survivors.
        In the first case, H.R. 1746 would help restore to
    Holocaust victims or their heirs the value of policies never
    paid by insurance companies or companies. This amount is
    conservatively about $17 billion in today's prices.
        The bill's important first step is to ensure the names of
    policyholders are published. ICHEIC started this process, and
    some 500,000 names were placed on its Web site. Germany
    produced about 80 percent of these policyholder names. In the
    ICHEIC context however, the German list was of little use since
    it was made public only a few month before ICHEIC's filing
    deadline. For all other countries, the number of Jewish
    policyholders published is minimal. The most notable
    shortcomings are in Hungary, Poland, and Romania, all of which
    had large pre-Holocaust Jewish populations. Even in most west
    European countries, the number of published names is
    extraordinarily small. To deal with the shortcoming, non-German
    archives need to be further examined, and most importantly,
    companies doing business outside Germany should publish the
    names of the policyholders.
        The proposed legislation also provides victims and their
    heirs a means to receive a fair value for policies taken out in
    the Holocaust period. This recognizes that there is still a
    long way to go for life insurance companies to meet their
    Holocaust era obligations. At most, about 11 percent of the
    fair value of outstanding policies was paid during the post-war
    and ICHEIC years. H.R. 1746 provides the last opportunity to
    increase that percentage.
        Again there are differences between Germany and other
    countries. Germany is the only entity that has pledged or
    continued to accept claims and pay them under ICHEIC
    guidelines. There are, however, very serious negative aspects
    of the seemingly benevolent action. The German Association will
    not accept claims that do not name companies. This is an
    enormous drawback. Nearly all the 400,000 German names of
    policyholders listed on the Web site do not indicate a company
    name, and ICHEIC experience clearly demonstrates that two
    thirds of the claimants did not know the company name. Thus
    this German action is of little benefit to the claimant.
        Also on the downside is the method Germany insisted upon in
    using in determining a policy's current value. It produces an
    amount that is only about 15 percent of similar valued policies
    paid under ICHEIC guidelines for all other West European
    countries. In special arrangements with other European
    countries ICHEIC achieved little in settling claims. A number
    of these shortcomings are illustrated in my written
    presentation.
        The chief reason for ICHEIC's problems were inept
    governance and poor management. Governance became akin to
    secret diplomacy in which those who ran ICHEIC relied heavily
    on dealing only with those who favored their views, while
    making promises to others that were not fulfilled or long
    delayed. Judge Michael Mukasey succinctly summed up the problem
    when he described ICHEIC as ``the company store.''
        But no matter what steps are taken to find claimants, many
    policies will remain unpaid. Those working on ICHEIC and other
    restitution efforts recognized this outcome from the start.
    This is because whole families were wiped out by the horrific
    events of the Holocaust, leaving only distant relatives with
    knowledge of their policies, especially when dealing with
    events over half a century ago. It is also understood that many
    records no longer exist. For example, the extensive search of
    life insurance records in Germany yielded about 8 million
    policies, or only about a quarter of the policies outstanding
    in the late 1930's.
        Recognizing this fact, ICHEIC attempted at one time to
    calculate the overall value of policies, called the top down
    approach. The companies would then pay the difference between
    the overall estimate and the amount actually paid to claimants
    to a fund that would support needy survivors and other causes.
    This approach, however, was quickly forgotten as ICHEIC
    proceeded, and relatively small amounts were provided for such
    a humanitarian fund, mostly under the accord with Germany.
    Insurance companies failed completely to deal with this issue.
        This brings me to my last point. Besides pressing
    individual claims, I would suggest an international remembrance
    fund to support needy Holocaust survivors who are in their
    autumn years. Currently, there are approximately 600,000
    Holocaust survivors worldwide, and actuarial data indicate that
    the number will decline sharply during the next 10 years.
        A review of available studies indicates that there are
    numerous survivors who lack adequate income to meet their daily
    expenses and health requirements. For example, one study of the
    United States indicates the income of more than half of the
    survivors falls within the poverty or near poverty bracket.
    Clearly, what is urgently required is an in-depth study to
    determine more precisely the likely financial requirements of
    needy survivors.
        Simultaneously, we must reach a global accord to establish
    an international remembrance fund. This will require innovative
    financial structure, but again extraordinary measures are
    essential in dealing with an extraordinary event, such as the
    Holocaust.
        Thank you.
        [The prepared statement of Mr. Zabludoff can be found on
    page 148 of the appendix.]
        The Chairman. Thank you. Before we get to the questions, we
    have received several letters. I will read them into the
    record.
        The World Jewish Congress expresses its position on H.R.
    1746--it says that negotiations in the future will be
    irreparably harmed.
        The B'nai Brith International expresses reservations and
    asks that we take these considerations into account: ``We worry
    that the legislature will unfairly raise the hopes of survivors
    without being able to satisfy the negotiations,'' It also
    expresses concerns about future negotiations.
        The American Jewish Committee says that the bill could
    adversely affect similar negotiations in the future, and says
    that it believes current measures are adequate.
        And the Anti-defamation League says that H.R. 1746 is
    unnecessary and does not serve the needs of Holocaust
    survivors, nor answer the credibility of agreements on these
    matters.
        They will be made a part of the record. The record remains
    open if others wish to submit anything, and copies of these
    letters will be available, if anyone wishes to comment on them.
        One technical question as to timing, Mr. Eizenstat. When
    did this all finally get done? The agreement? You referred to a
    period of my being the ranking member. I became the ranking
    member in 2003.
        Mr. Dubbin. In 1998, February 12--
        The Chairman. Well, I said Mr. Eizenstat, Mr. Dubbin.
        Mr. Dubbin. I'm sorry.
        Mr. Eizenstat. I testified in September of 1999.
        The Chairman. Yes. I was not the ranking member. I just
    wanted to--I know that Mr. Leach and I--he was the chairman.
    You said I was the ranking member. I didn't become the ranking
    member until of January of 2003. Mr. LaFalce was then the
    ranking member.
        Mr. Eizenstat. You are correct.
        The Chairman. Let me raise one question for those who are
    opposed to the bill. Mr. Zubludoff referred to the fact, and
    I'm told by some of the staff, that there is a different
    response from countries. That Germany, in fact, has been more
    responsive than some of the others. If we don't do anything
    legislatively, what can be done about those countries that have
    not been responsive? I'm told the Netherlands, Austria, and
    maybe Switzerland. Is there something that can be done about
    countries which have not been responsive, even if you think the
    terms were acceptable? Any of the three?
        Ms. Koken. Well, I would only mention that with regard to
    ICHEIC, we did archival research in quite a few countries. And
    we entered into agreements--
        The Chairman. Do you disagree with the notion that there
    has been a differential level of response?
        Ms. Koken. I do believe that in many of those countries
    there are mechanisms in place--
        The Chairman. No. No. Ms. Koken, I'm sorry, but I'm tired.
    I have been here all day. That's not what I asked you. I'm sure
    there are mechanisms. Do you agree or disagree that there has
    been a differential level of response?
        Ms. Koken. I believe that some of those countries have not
    completed their work yet in their process.
        The Chairman. Okay. Is that just a timing thing? They were
    busy that day and couldn't get to it? I mean why are some
    slower than others?
        Ms. Koken. The two countries that I know that have not
    completed would be Switzerland and Austria, and they are still
    working on their processing. I would not be an expert--
        The Chairman. All right. I don't mean to be rude, but if
    you're not, don't answer the question. I was unfair to the
    Netherlands apparently. I guess the problems are in Austria and
    Switzerland. Mr. Kent, did you want to respond to that about
    Austria and Switzerland?
        Mr. Kent. Yes. I would like to first, with your permission,
    finish what you said--
        The Chairman. If you can do it in 30 seconds, Mr. Kent. You
    had over 10 minutes for a 5-minute period.
        Mr. Kent. I am extremely concerned that the legislation
    would certainly--this was your question--certainly damage
    critical ongoing negotiations, especially with Germany,
    involving hundreds of millions of dollars in Holocaust-related
    compensation, which is needed now, not tomorrow or next year,
    but now. I also feel that the support the United States
    Government provides Holocaust survivors will be undermined as
    other governments lose faith in the ability of the United
    States to keep its promises. Reimbursement--
        The Chairman. No. I'm sorry, Mr. Kent. That's enough.
    You're abusing the privilage of the committee. You had over 10
    minutes. I've listened a lot. I now want to get to the
    questions. What about Austria and Switzerland? Are they a
    problem, and if they are do we--do they get left undone?
        Mr. Kent. I cannot tell you. But Eastern European
    countries, yes. We have spent over $31 million to pay claims
    for Eastern European countries. You, as the Congress, can do
    something. You can help us to collect from them the money. That
    you, as Congress, could do.
        The Chairman. Okay. And that's an important point. But I
    still went to get back to--does anyone have any response to the
    question that even within the terms of this agreement, Austria
    and Switzerland have not been responsive, I'm told. And if
    people think that is not true, they should tell us. Can we do
    anything about it? Mr. Zabludoff?
        Mr. Zabludoff. You raised the question about Austria and
    Switzerland, and in the case of Austria, they allocated $25
    million for life insurance. That was in relationship to ICHEIC.
    Because it was only $25 million, they have just sent out
    notices--or fairly recently--that they are only going to pay 15
    percent of that, because they don't have the money.
        The Chairman. All right. Well then let me raise that
    question to people who are opposed to the bill. Where does that
    leave people who have a claim against Austria, even under this
    procedure?
        Mr. Zabludoff. People have--
        The Chairman. No. I don't mean--
        Mr. Zabludoff. I'm sorry.
        The Chairman. A strong argument has been made that Germany
    has acted in good faith and made a deal, but there are other
    countries. And the question is, what do we do about these other
    countries?
        Ms. Koken. Well, I would say that ICHEIC did pay a number
    of the claims of the Austrian, about $10 million, because we
    wanted to make sure those claimants were not left behind. But I
    might suggest that might be a level of inquiry for this
    committee, is to ask each of the countries to set out what they
    have done. I know in--
        The Chairman. That's not my question. My question, is can
    we do something to make them do it? You're saying we made good
    because Austria wouldn't. Is that what ICHEIC did? Yes, Mr.
    Eizenstat?
        Mr. Eizenstat. The issues that I have raised, and perhaps
    Mr. Kent as well, refer--
        The Chairman. Please answer my question or else we'll pass
    on.
        Mr. Eizenstat. I'm answering the question.
        The Chairman. No. I'm talking about Austria and
    Switzerland.
        Mr. Eizenstat. --Refer only to those companies that have
    participated in ICHEIC or adopted ICHEIC policies. It did
    include certain Swiss and Austrian companies. If there are
    Eastern European companies that did not participate in ICHEIC
    the legal peace issue--
        The Chairman. I understand that. But with regard to Austria
    and Switzerland, maybe again--
        Mr. Eizenstat. There are a number of Swiss companies that--
    Winterthur and Zurich, and so forth, which were part--
        The Chairman. Are there companies in Austria and
    Switzerland as a whole? And are they doing less than they
    should be under the agreement? Because the fact that some
    companies are doing well doesn't answer the question about
    others. It's not a trick question. I'm trying to get
    information.
        Ms. Koken. I guess the question is the agreement, when you
    refer to the agreement. With regard to ICHEIC, the companies
    all applied the standard equally. So to the extent that Zurich
    and Winterthur were in ICHEIC, we're very satisfied with the
    work that they did.
        The Chairman. What about all of the other companies? You
    just said that Austria was not living up to its agreement.
        Ms. Koken. To the extent that there are separate entities
    that were created, the Swiss Bank settlement, which is what the
    Swiss are participating in. And the Austrian, they haven't
    completed their settlement work, so we can't say--
        The Chairman. What's the timetable? When are they going to
    do it? We have been doing this for a long time.
        Ms. Koken. That's a good question. That's a very good
    question.
        The Chairman. Well, that sounds to me like some problem
    might be--
        Mr. Kent. Mr. Chairman, if I can say something to you.
    Several years ago, I testified here in the Congress, and I told
    them if you want to do something, that means if the Congress
    wants to do something, stop giving licenses to the insurance
    companies that do business, and do nothing to help Holocaust
    survivors. Unfortunately, I must tell you it's easier to sit
    here and hear the critics. But Congress didn't do anything
    about it. I gave them a strict report--
        The Chairman. Well, I don't remember that. I would say
    this, though. Excuse me, Mr. Kent, I'm going to respond.
    Congress doesn't license insurance companies. The States
    license insurance companies. I will look into that
    specifically. But I don't know what licensing that we at
    Congress would have been involved in. In fact, my European
    friends complain to us all the time that if they want to sell
    insurance in America, they have to go to 50-some-odd different
    jurisdictions. So I don't believe the Congress has been
    allowing that, but I will look further into what you said.
    Still, I am somewhat disappointed. I thought I was asking a
    fairly straightforward question about a differential level of
    compliance, and whether or not that's something that needs to
    be addressed. We'll now move on to Ms. Ros-Lehtinen.
        Ms. Ros-Lehtinen. Thank you. Thank you, Mr. Chairman, again
    for letting me participate. One multi-level question for Mr.
    Dubbin, if you can answer in the allotted time. Some opponents
    of H.R. 1746 have stated that it is premised on inaccurate
    estimates of the unpaid value of Holocaust victim's policies.
    Secondly, that it violates deals to provide legal peace for
    German and other insurance companies that participated in
    ICHEIC. And thirdly, that H.R. 1746 isn't likely to produce
    enough successful claims by survivors to justify the political
    cost of the ill will that it would engender among foreign
    governments whose insurance companies profited from the
    Holocaust. If you could refute those, or not refute them.
        Mr. Dubbin. On the value, Mr. Zabludoff, who participated
    in the ICHEIC group analysis--there was a consensus that at the
    time the value of--there was a consensus about what the value
    of Jewish policies was. He calculated the amount that had been
    paid after the war in various programs and then taking the
    remainder, which was slightly under $600 million, he multiplied
    that by the yield of a 30-year U.S. bond, from 1938 until the
    present. And with that he got--in 2004--$15 billion. Now it's
    $17 billion. A 30-year bond yield is extremely conservative,
    because most insurance companies invest it in stocks, real
    estate, and other much more high-yielding investments. So there
    is no dispute about the underlying numbers.
        And ICHEIC never undertook to go to the next step, which
    was to take the value in 1938 and bring it up to current
    levels. So the $17 billion figure is very solid. But if you, as
    Mr. Waters said, if you accept the $3 billion level, what ICEIC
    paid out would still only be 15 percent. But under Mr.
    Zabludoff's conservative numbers, which are not challenged in
    any--I have not seen a theoretical objection, or a factual
    objection to what he said.
        The second question was legal peace. The U.S. Government
    does not have the power to waive a citizen's right to go to
    court. Germany demanded that. They were told that they couldn't
    have that. What the United States agreed to do was very
    limited, and it said that we will file statements of interest
    in court, which would say that it's in the foreign policy
    interest of the United States Government for the case to be
    dismissed on some--if there is a valid legal ground for doing
    that. And the Germans accepted that, understanding that they
    were not getting everything they asked for.
        So today to say that we agreed that survivors would not
    have the right to go to court is disingenuous. In fact, it's
    giving the Germans more today than they bargained for then. And
    the reason it's necessary is because the courts have
    interpreted that commitment more broadly than the language the
    Germans were actually able to negotiate for. Because the courts
    have said, ``It doesn't matter what the language in the
    agreement says (which is limited) we think there is, addition
    to the language--in addition to the contractual language, there
    is a `Federal policy' of the Executive Branch that Holocaust
    victims' insurance policies should be resolved in a non-
    adversarial setting.''
        So the question for you is now, because the legal landscape
    is clear, do you agree with that policy? Does Congress agree
    that someone today, who has a piece of paper from Generali or
    Allianz, which was denied through ICHEIC, do you agree that
    person should not have the right to go to court and have a
    judge force the company to disgorge all of the relevant
    information? Because I can tell you from ICHEIC experiences,
    and I can give you many examples, those companies were able to
    deny claims without providing the information to the claimant,
    so you have a star chamber system where the claims were denied.
    The rules might have said one thing, but the practical
    application was thousands of people were denied claims without
    getting any documentation, including people--
        Ms. Ros-Lehtinen. If I can interrupt you because our time
    is limited.
        Mr. Dubbin. So the last question is the cost-benefit
    analysis.
        Ms. Ros-Lehtinen. Right.
        Mr. Dubbin. I don't believe that human rights are subject
    to a cost-benefit analysis. The right to go to court, to pursue
    your documented insurance claim or to pursue a company you
    believe sold you a policy, if you can convince a lawyer to
    bring that case, in the United States of America, it is a
    fundamental human right. It is enshrined in the U.S.
    Constitution and in the constitutions of every State. And to
    say that we are not going let some people be able to avail
    themselves of that right because of what other groups did--and
    by the way, I don't care what groups sat in the room. Izzy
    Arbeiter, David Mumbelstein, Jack Rubin, Alex Moskovic, and
    hundreds of survivors whom I personally have come in contact
    with did not authorize any organization, did not authorize the
    State Department, did not authorize the Secretary of the State,
    did not authorize the President to negotiate for their
    insurance rights.
        Ms. Ros-Lehtinen. Thank you. Thank you, Mr. Chairman. And
    although I'm not a member of this committee, and you've been
    very kind to me--
        Mr. Eizenstat. May I respond to this--
        Ms. Ros-Lehtinen. Excuse me. Mr. Chairman, I will ask a
    member of the committee if they could introduce for the record
    some of the letters that I have gotten from constituents who--
        The Chairman. Yes. I have been informed Mr. Wexler will
    also be putting material into the record. Anyone who wants to
    can get it. Mr. Eizenstat?
        Mr. Eizenstat. Congressman, the good faith of the United
    States Government is at stake here. We negotiated in the open
    with congressional understanding and support $8 billion worth
    of agreements. Companies paid billions of dollars for slave
    labor payments, for insurance, for a variety of other claims,
    in return for which we gave a legal peace agreement, which the
    courts have upheld. And we did say it was in the foreign policy
    interest of the United States to dismiss claims, if there was a
    valid legal ground. That is what the Germans accepted. That's
    what we gave them. The courts in their own wisdom, including
    the United States Supreme Court, have upheld that. If we now
    try to vitiate that, the whole negotiation posture that we took
    would be undercut. The whole reliance that companies which had
    paid billions of dollars--and governments, the Austrian
    government contributed; the German government contributed,
    would be vitiated. This involved not just their private sectors

        Second, this is not an all or nothing thing. I have
    suggested in my testimony that we should hold the companies who
    have pledged to continue to honor claims on an ICHEIC basis
    with loose rules of evidence, which would not have existed in
    court. Mr. Dubbin's remedy would have left--if we would not
    have gotten this $8 billion, he would have been trying to bring
    a class action approved back under rules of evidence when they
    didn't even names of insurance companies oftentimes, let alone
    the policies themselves. That's why we set this administrative
    process up.
        What I suggested is let's hold the companies to their
    commitment to continue to handle claims in an ICHEIC-like
    process. Force them to report to the Congress and to the State
    Department. Hold oversight hearings. Get the German Insurance
    Association to submit regular reports on the number of claims
    that were filed and so forth. So there is something that can be
    done here.
        Mr. Kent. I fully agree with Secretary Eizenstat but
    Chairman Leach and Chairman Frank I will ask you to do
    something now. I really would beg you to do something. Close
    your eyes, Members of Congress. Don't see me as I look right
    now. You should see me right now, as you talk in your bill, as
    the needy survivor who needs help. This is what we talking
    about. The needy survivors who need help, and let us consider
    for a second, I am here as one of the survivors, the only one
    except Izzy Arbeiter, who happens to be a good friend of mine.
    I would like to see what is the motivation of the bill.
        The Chairman. I'm sorry Mr. Kent, that's not something that
    we're going to go into at this point. I will tell you this, I
    believe the motivation to be that members of the committee feel
    that they can do things to help people, but the motivation of
    individual members is not the subject of the hearing. I'm
    sorry, and I understand your anguish Mr. Kent, but there is a
    limited amount of time. You have had a great deal of time to
    speak but getting into an examination of the motives of the
    members is just not something we're going to do.
        Mr. Green. Thank you, Mr. Chairman. Mr. Secretary and all,
    I want to thank you for your testimony. Because time is of the
    essence, I'd like to start with you Mr. Secretary. You
    indicated that there was and is, I think, congressional
    understanding associated with this agreement. Could you please
    explain what congressional understanding means?
        Mr. Eizenstat. Yes, sir. I testified time and again before
    this committee, before Senate committees, before the House
    Foreign Relations Committee, before the Senate Foreign
    Relations Committee, and before the Senate Banking Committee
    about these and other agreements, about legal peace, about what
    we were trying to do, about what we were trying to accomplish
    in very extensive hearings. Now, no one sought legislation
    because legislation wasn't appropriate. We did this under the
    foreign policy powers of the President of the United States.
    But we did it in full consultation.
        Second, it was not done in a dark room with a few parties.
    We had plaintiff's attorneys. Not Mr. Dubbin; he didn't want to
    participate. We had dozens of plaintiff's attorneys, the best
    class action lawyers--Mel Weiss and others--around the country.
    Bob Swift in Philadelphia, people in Washington, major class
    action lawyers who decided to drop their cases because they
    realized that those cases did not have much of a chance and
    indeed the two major slave labor cases were dismissed by judges
    on the grounds of statute of limitations problems. We had major
    Jewish organizations who participated in negotiations. We had
    representatives from the State of Israel and we brought the
    Congress into it by our testimony. So this was done in very
    broad daylight. Obviously, the actual details were done in
    private negotiations, but this was not an unknown quantity that
    was just dropped on the Congress or dropped on survivor groups.
    They were part and parcel. The American Gathering, The World
    Jewish Congress, and The Jewish Claims Conference were all
    involved in every stage of the negotiation.
        Mr. Green. Did Congress ever have an opportunity to in some
    way sign off on the agreement that was--
        Mr. Eizenstat. They had every opportunity if they wanted to
    object because I testified. I laid out what the agreements
    were. If they had any criticism, they weren't heard. What I
    heard was praise and bipartisan support for doing something
    promptly. The courts wouldn't have permitted it. If you look at
    these cases, what court in the world would have granted
    jurisdiction to companies that didn't even do business here?
    What court would have allowed payment of policies when the
    claimants didn't know the names of the companies? When there
    wasn't evidence? I mean, of course the tragedy is that there
    was no evidence because it was burned along with the people.
        Mr. Green. Let me intercede for just a moment. I think you
    raised a good question. Mr. Durbin?
        Mr. Dubbin. Dubbin, yes.
        Mr. Green. Would you--excuse me, I'm sorry for--would you
    please respond to the question that was just posed about the
    courts?
        Mr. Dubbin. Of course. Well, let me address a couple of the
    points if I might. The lawyers who sued the German companies
    who were part of those negotiations had filed suits on behalf
    of individuals, so those cases had not been certified as a
    class action, and that is important. They voluntarily dismissed
    their cases, their individual cases, but they said at the time
    they dismissed them that the court should satisfy itself at the
    end whether or not the German Foundation is capable of
    providing compensation to insurance claimants.
        So now you are looking at, even those lawyers understood
    that this was still contingent on a successful outcome. Now
    several Members of Congress, 47 to be exact, wrote letters to
    the Attorney General in the year 2000 rejecting the notion that
    insurance claims estimated to be worth billions could be
    satisfied by the arbitrary $300 million Deutsche Marks set
    aside in the German Foundation Agreement. They said they were
    shocked to learn that the recent slave labor settlement between
    the U.S. Government and Germany included insurance. That's what
    members of the Congress said and what the Justice Department
    responded by saying was, ``Hey we didn't waive anybody's
    rights. We were just going to file a limited statement of
    interest.'' That's what the Assistant Attorney General for
    legislation said.
        And he also said that if this doesn't work out, we reserve
    the right to revisit our views on the constitutional issues. So
    Congress objected in the only way they could at the time. It is
    true that they could have passed legislation, but the fact of
    the matter is there were objections from Congress and the
    Justice Department attempted to solve those objections by
    saying if this doesn't work--
        Mr. Green. Let me intercede. I have one more question I
    have to ask Mr. Zabludoff. Is that correct, am I pronouncing
    your name correctly, sir? Please forgive me. You mentioned
    congressional--pardon me, that claims that do not have--can not
    name an insurance company, you spoke about that and how they
    would be rejected. Would you and this is my final question so
    could you please explain that again for me?
        Mr. Zabludoff. Sure. In the case of Germany, Germany did
    publish a lot of names; 400,000 names, 360,000 names were from
    the German Accord and was published by the German authorities.
    Another 40,000 came from ICHEIC archives, so you have about
    400,000 policies all together. Now the real problem is that
    when you look at that list, it doesn't list the company. So you
    have to name a company the GDV which is the German overall of
    regulator of companies. They basically said you have to name a
    company but the list doesn't show the company so how could you
    do that? And we know from ICHEIC experience that two thirds of
    the people who sent in claims did not--from years and years
    before--did not know the name of the company. So how could you
    expect a claimant to know the name of a company?
        Mr. Green. My time is up, sir.
        Mr. Dubbin. May I have 15 seconds? Because Congress did in
    2003 pass the Foreign Affairs Authorization Act of 2003 which
    required the State Department to get reports from ICHEIC about
    its performance, and for 4 years ICHEIC refused to provide the
    State Department anything even though statutorily mandated by
    Congress.
        The Chairman. Mr. Green, do you want to finish up with him?
        Mr. Green. Thank you, Mr. Chairman now that you're back.
        The Chairman. We have been joined by our colleague again
    from California, Mr. Sherman.
        Mr. Sherman. Thank you, Mr. Chairman. There has been a lot
    of discussion here about how we did the best we could under
    current law. We're in the business of changing laws here in
    Congress and I have approached this from a consumer protection
    standpoint. Neither the State Department nor the Jewish Claims
    Conference has a responsibility to make sure that people in the
    27th District are not sold life insurance policies by grave
    robbers, pirates, or their affiliates. That is a responsibility
    of myself and my colleagues on this committee and there are so
    many reasons why somebody might buy an insurance policy. Their
    family would be unaware of it, and they might lose all contact
    with the company, and then according to the company's own
    records, they have an insured who is 100 years old, 110 years
    old, or 120 years old, and there has been no claim.
        Mr. Eizenstat, would you ever buy a life insurance policy
    from a company that didn't have it as its policy that if there
    had been some great social disruptions so families and records
    were destroyed that they wouldn't put up on a Web site your
    name on your 100th birthday so that your next of kin could make
    a claim, but would instead want to in effect be grave robbers,
    to hope that 100 years would pass after your birth, 200 years,
    or 300 years, and there just wouldn't be any claim.
        Mr. Eizenstat. The answer is ``no'' and that is not what
    happened here, Congressman Sherman; 519,000 names were
    published on a--
        Mr. Sherman. Well I'm not just talking about the victims of
    the Holocaust here. We have the victims of the Armenian
    genocide but we have millions of people who are not targeted
    for genocide whose families were destroyed in World War II and
    you have all of the consumers in the United States. Why would
    any company not post on a Web page the name of an insured under
    the following circumstances; the insured is over 90 years old
    and the company hasn't any contact with them or their family
    for 30 years. Why wouldn't we require that of domestic
    companies, international companies, World War II companies,
    World War I companies, Ottoman Empire companies, companies that
    sold policies in Poland or Albania. Why wouldn't we require
    that of anybody who would come into my district and say we have
    clean hands, we should be allowed to do business in the United
    States?
        Mr. Eizenstat. That's certainly not what this legislation
    does. This legislation is applied to European insurers who have
    privacy laws that preclude them in their own countries from
    doing so but the way in which that was avoided to the extent
    possible was that of their 8 million--
        Mr. Sherman. Excuse me, Mr. Eizenstat. I have such limited
    time. So these companies get privacy laws passed in their own
    countries. You know, a lot of insurance companies get--
        Mr. Eizenstat. Mr. Sherman, of the 8 or 10 million policy
    holders, those were all given to the ICHEIC process. They were
    used by Yad Vashem to vet out--
        Mr. Sherman. Mr. Eizenstat, you're giving me the details of
    what was done and I'm asking a much broader consumer policy
    issue because what you're describing is a policy that did
    nothing for Albanian families or Armenian families.
        Mr. Eizenstat. Well I'm not here to--I can't answer a broad
    consumer question. I'm here to defend an agreement which got $8
    billion for survivors in return for legal peace.
        Mr. Sherman. I'm not here to--
        Mr. Eizenstat. I'm not an expert on consumer protection for
    insurance policies.
        Mr. Sherman. I'm not here to attack that agreement. I'm
    here to say that we ought to have an overall policy starting
    with the Holocaust of requiring placing on the Web the names of
    insureds whose families obviously are owed money. These are
    folks who are well over 90 years old. They have lost attention
    and your response is well, these companies might have to comply
    with privacy laws in their home country.
        I can't imagine a home country privacy law that wasn't
    there at the behest of the insurance company if its sole effect
    is to simply deny the payment to families where the insured is
    100 years old, or 110 or 150 years old.
        Mr. Eizenstat. No, sir. My response was that 519,000 names
    were supplied after they were vetted of 8 million by Yad
    Vashem.
        Mr. Sherman. I thank you for your work. I would hope that
    this would be the first step in requiring us to use the new
    technology of the Web to publish the names of those insureds. I
    can't see how a life insurance executive could go to sleep at
    night knowing that they have in their files unclaimed policies
    of insured people who obviously died in the World War II era
    and they still have not made payment.
        The Chairman. Mr. Arbeiter wanted to respond in part to
    that question.
        Mr. Arbeiter. Yes, Mr. Chairman, I keep hearing here about
    legal peace, legal peace for Germany, for the insurance
    companies. What about justice for the Holocaust survivors? What
    about the insurance policies that were written on behalf of our
    parents, our families who were murdered.
        The Chairman. Mr. Arbeiter, I appreciate that. That's
    substantial, I mean we understand that. I want to ask Mr.--if
    the gentleman had concluded--two questions, one to each side.
    The privacy issue is concerning and I would ask the proponents
    of the bill what if I am somebody in the Netherlands who
    doesn't want my family's insurance policy out there for
    everybody to see. What's our response to that? I mean there is
    a legitimate privacy concern. So as I understand it, we're
    talking about putting everybody's insurance policy on there.
    What if I had a relative I didn't like and I didn't want her to
    know that I had an insurance policy? What's our answer to that,
    Mr. Dubbin, Mr. Arbeiter?
        Mr. Dubbin. Well, this bill calls for policies that are
    over--that were issued prior to 1945 to be published. Those
    are--to think that is going to infringe on anyone's current
    privacy rights, I think, is a stretch. You know, our State
    Treasurer puts out names of dormant bank accounts and things
    all the time. I mean I think it's fatuous to make that argument
    from the other side because insurance companies control--we
    know that those privacy laws are there to protect much deeper,
    darker secrets. Mr. Eizenstat said they published 519,000
    names. They managed to publish those names, okay, even though
    there were privacy--
        The Chairman. Okay, let me ask you this, is this only
    uncollected claims?
        Mr. Dubbin. The legislation calls for all policies to be
    published. All of the policies that were sold. The reason for
    that--
        The Chairman. Including if they were collected on or not?
        Mr. Dubbin. Right.
        The Chairman. Because they might have been collected--well,
    I understand your argument but I would disagree with your
    dismissal of those as fatuous.
        Mr. Dubbin. I retract that statement, Mr. Chairman. I think
    it's not--
        The Chairman. You have retracted, my advice; leave it with
    the retraction. Don't characterize any further. But I have to
    tell you, I think that is a legitimate issue that we have to
    take into account. Mr. Kent, did you want to comment on that?
        Mr. Kent. Yes, Mr. Chairman.
        The Chairman. On the question of the privacy.
        Mr. Dubbin. I'd like to see the law.
        Mr. Kent. Just in privacy. I give you an example of the
    United States. I mentioned that we have about $30 million of
    policies that we paid out and we want to collect the money.
    Now, the privacy law in the United States is right now--we
    cannot get the names of the people because they are right now
    subject to United States privacy laws. So I cannot even collect
    the money here that we paid out, ICHEIC paid out, because of
    the privacy laws.
        The Chairman. You can't collect from Austria?
        Mr. Kent. But from Poland, from Czechoslovakia
        The Chairman. I understand, yes, from other countries. All
    right thank you. Let me now ask, on the other side if I'm not
    as--my memory is not as refreshed about law school and I
    haven't ever practiced law. But on class action suits, in
    general, in the United States, I am a member of a class that
    has suffered harm. A class action suit has been brought in
    which I have had no involvement. I have not been given the
    option of opting out, am I precluded, Mr. Eizenstat or Ms.
    Koken, am I precluded by the results or do I retain a separate
    to right to sue? Ms. Koken?
        Ms. Koken. In the ICHEIC process--
        The Chairman. No, no, no, I know my diction isn't great.
    But let me try again. In general, in the United States, if
    there is a class action suit brought and I'm a member of the
    class that suffered the harm but I was not involved in the
    suit. I was not given a chance to opt out, am I concluded under
    American law by the results of that class action suit? Mr.
    Dubbin you may be the only practicing lawyer among us, so--
        Mr. Dubbin. If the suit--if the settlement is subjected to
    a rule 23 fairness process where there's notice to the class of
    the terms of the settlement and the judge approves it as being
    fair, and then it's either appealed and the Court of Appeals
    upholds it or if it's not appealed, then if you're a member of
    that class you are precluded. Now that's what happened in the
    Swiss Bank case but that did not happen--
        The Chairman. Under the rule 23, what is the rule 23
    procedure?
        Mr. Dubbin. That's the rule that authorizes class actions.
        The Chairman. What's the procedure that they would have to
    go through? Notify me and I can opt out, is that what--
        Mr. Dubbin. The rules says that all class members who can
    be identified through reasonable effort need to be given--
        The Chairman. Right, it's one thing to get notice. What can
    I do with the notice? Can I opt out?
        Mr. Dubbin. You can opt out.
        The Chairman. Okay.
        Mr. Dubbin. It has to inform you of your right to opt out.
        The Chairman. So there is--you are concluded only if it can
    be reasonably assumed that you were notified and declined to
    opt out?
        Mr. Dubbin. And there was a full rule 23 fairness process--
        The Chairman. Mr. Dubbin, if we all knew what rule 23--
        Mr. Dubbin. --only the Swiss Bank case did that--
        The Chairman. Excuse me.
        Mr. Dubbin. I'm sorry.
        The Chairman. If we all knew what rule 23 was, we wouldn't
    be going through this step by step. Stop with the specific--I
    want to get this done clearly. In general, if you were
    notified, and had a chance to opt out, and you didn't opt out,
    you are precluded? But if you did not get that notice or if you
    opted out, you are not precluded?
        Mr. Dubbin. The law says that--
        The Chairman. But did make a good effort to--
        Mr. Dubbin. Right. If the court says the notice was
    reasonable under the circumstances, you could be precluded even
    though you didn't get notice.
        The Chairman. Right, but the error made about Mr.
    Eizenstat.
        Mr. Eizenstat. Just to clarify, as Mr. Dubbin correctly
    said here, the Swiss Bank case was such a class action
    settlement. It did preclude it. But the others did not. They're
    subject to this, but they did not preclude you--
        The Chairman. But the question then is, why should some
    Holocaust survivor who did not agree with the settlement be
    precluded from pursuing his or her rights independently?
        Mr. Eizenstat. They are not precluded. They can still sue,
    but they would be subject to the statement of interest.
        The Chairman. Statement of interest by whom?
        Mr. Eizenstat. By the United States Government pursuant to
    our agreement and--
        The Chairman. Okay, so they would be, in effect, precluded?
        Mr. Eizenstat. And the court could--
        The Chairman. Would that in fact preclude them?
        Mr. Eizenstat. It effect--
        The Chairman. Come on, yes or no?
        Mr. Eizenstat. The courts have said yes.
        The Chairman. Okay, well that wasn't so hard was it? Just
    to say yes? Okay, then that's what I disagree with, at least
    that's my other issue. That is, a government-to-government deal
    takes away my right to sue if I don't like what the government
    did and those are offsetting, troubling concerns. I do think
    privacy is real, but I also think the principle of me being
    precluded by a deal that the government set, because you know,
    when governments make deals, let's be clear, governments have a
    lot of interest at stake. We're told by the German government,
    for instance, and the State Department argued this as well,
    that what is at stake here is not this particular deal, but
    German American relations in general. That if we were to allow
    something which the Germans feel violates the deal, it maybe
    does violate the deal. Because I don't think you're not
    violating it if the people aren't bound by it, that can affect
    other things. So that's the point that I make. What's the
    justification for precluding the rights of people who didn't
    like the deal when they were part of it?
        Mr. Eizenstat. They were--if we had not done this legal
    peace in the way we did it and the limited form which we did
    it, which of course is accepted, we wouldn't have gotten $8
    billion in--
        The Chairman. And I understand that and I'm glad that you
    did but why should that stop other people from also--
        Mr. Eizenstat. Because then the companies wouldn't have
    paid the $8 billion if they had known they were going to pay $8
    billion, and they would still be subject to suit--nobody in his
    right mind would have done that.
        The Chairman. Then maybe what you should have told them--
        Mr. Dubbin. Mr. Chairman.
        The Chairman. No, I'm going to finish. Maybe their lawyer
    should have told them that there was a possibility that this
    wasn't going to be final. Mr. Kent.
        Mr. Kent. I can answer your question from a practical point
    of view. Just recently we have a recent agreement, part of the
    agreement from the German government. They are giving right now
    to survivors $150 million; 50,000 survivors are going to get
    $3,000. I have meetings with the German Ambassador and people
    who came from Germany to our office and they told me point
    blank, Mr. Kent, why should we make any agreements with the
    Jewish side for Holocaust survivors if we cannot depend on the
    word of the--
        The Chairman. I'll give you the answer that I would give
    them. I'll call them up and I'll tell them, here's the deal--
    why should you make the deal? Because your country, not you
    personally, did the most vicious thing in the history of the
    world and if I were you I would lean over backwards to fix it,
    and I must tell you this, I will live up to this agreement.
    I'll urge other people to do, but I don't speak for every one
    of the victims and I would tell you this, if you're going to
    tell me that you think this is the right thing to do but
    because 100 people or 1,000 people disagree, and you're mad at
    them--you're going to deny the money that you think you ought
    to give to these other people. That's not nice. That's what I
    would tell them.
        Mr. Kent. I talked to the German government and the German
    Foundation was not signed for a few months because I said to
    the Germans that I will not sign, as a Holocaust survivor, an
    agreement unless we will get a full apology from your
    government. So the money--I agree with you, is not the key
    issue for me.
        The Chairman. I'm not saying the issue is--I would say to
    them you do the right thing because it's the right thing, and
    you hope you get the best. But you don't say I'm only going to
    do the right thing and by that get immunity from every other
    possible victim. And you know what I think that they are
    probably in reality than they are in the negotiations. In a
    negotiation situation, we tend to be a little nastier than we
    might be in the reality. Sometimes we threaten to do things
    that we're not really going to do because you know, we'll see
    what happens. Is there any further--
        Mr. Sherman. Mr. Chairman, I do think privacy is important
    but if we were to limit this--
        The Chairman. Well, let's not debate this among ourselves.
    The committee can do that.
        Mr. Sherman. I just need 20 seconds.
        The Chairman. Very quickly.
        Mr. Sherman. Okay, if we were to limit the bill to those
    policies where the company hadn't had any contact with the
    insured or the family for 20 years--
        The Chairman. That's mark-up talk.
        Mr. Sherman. Okay, sorry.
        The Chairman. No, those are areas that with the bill and
    everybody should understand, this does not come before us as
    yes or no. This is a bill which is subject to amendment. There
    are two different sections. There are different countries. I am
    certainly convinced that further action is relevant, but we
    will have a lot of conversations with people and any of the
    issues that anyone listening feels could be further elaborated
    upon, please feel free to elaborate. Yes, Ms. Koken, you get to
    have the last word.
        Ms. Koken. I know it's risky to do this but I would say
    that I would want to point out that there was matching done of
    these records against all of the archival research so that we
    would be sure that we--
        The Chairman. You said that already. Didn't somebody say
    that already?
        Ms. Koken. I don't know.
        The Chairman. I thought somebody did. All right, go ahead.
        Ms. Koken. And that through that process we were able to
    also, in our Pomeroy report, get to these heir-less claims so
    that that was dealt with and I would also ask that I could put
    into the record--
        The Chairman. No, you don't have to ask. Anybody who wants
    to put anything into the record can put it in.
        Ms. Koken. Okay.
        The Chairman. That's the--Mr. Kent, what is it?
        Mr. Kent. I'd just like to say in many times I heard here
    reports about the 15 billion, 200 billion and so on and I'd
    like to say Willard Rogers said that there are three lies.
    There is a lie that is a big lie--
        The Chairman. Mr. Kent you already said there was no
    reality to the numbers. If this is repitition of things already
    said--
        Mr. Kent. Yes, and I'd like to add to it. I was for a few
    years with Mr. Zabludoff of the Commission. He never said to
    me--
        The Chairman. That is a whole new subject that we're not
    going to get into now and start a whole new debate. You all had
    a lot of time; nobody was held to the 5-minute rule. The
    hearing is adjourned.
        [Whereupon, at 1:44 p.m., the hearing was adjourned.]

                                A P P E N D I X

                                February 7, 2008

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