[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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