Holocaust Reparations: The Back Story

By Michael Pinto-Duschinsky
Monday, August 13, 2012

On July 10th, dignitaries from the U.S., German, and Israeli governments attended a curious ceremony at the U.S. Holocaust Memorial Museum in Washington.  The gathering marked the 60th anniversary of the first agreement by the West German government with the Israeli government and the Jewish "Claims Conference" to grant modest financial compensation for the Holocaust.  Some of the Jews in the room had spent the years since the agreement in seemingly interminable haggling. 

The event had the character of a celebration and an exercise in self-congratulation.  Ambassador Stuart Eizenstat, a prominent Jewish corporate lawyer who currently holds the offices of Special Advisor to Secretary of State Hillary Clinton on Holocaust Issues and Special Negotiator for the Jewish Claims Conference, was in top form.  In the 1990s, as a sub-cabinet official in Bill Clinton's administration, Eizenstat headed the talks between class action lawyers for Holocaust survivors and German corporations that were accused of using slave labor during the Second World War.  Bodies such as the Conference on Jewish Material Claims Against Germany, the "Claims Conference," and the German government also participated.  Eizenstat subsequently wrote a self-praising volume about his role and went on to receive the "Great Negotiator" award from his alma mater, Harvard Law School.

At the ceremony, Eizenstat declared that "the Claims Conference vision, we hope, of meaningful compensation and reparations during the last 60 years has truly brought a reconciliation between Germany, the Jewish people, and the state of Israel."

But was Eizenstat justified in claiming this?  As a Holocaust survivor and British academic, who acted as honorary advisor to a group of former slave laborers in London during talks in the 1990s, I have my doubts.  The oft-cited statistic that Germany has given payments amounting to over $60 billion since the War to Nazi victims is disingenuous.  Much of this consists of pensions and related social security payments to former German citizens living in Western countries whom Hitler forced to leave but who would have received the payments in any case had they remained in Germany.  

While I appreciate the dilemmas faced by Eizenstat and the Jewish bodies that participated in the negotiations of the 1990s, my firsthand experiences have led me to be critical of them.  In particular, the emphasis on haggling for money—admittedly a valid aim in view of the poverty of some Holocaust survivors in Israel and the former Soviet Union—led to unseemly sacrifices of historical truth for cash.

Eizenstat's view was that he could win some money for elderly survivors while they were still alive.  This would be better than pursuing lawsuits which could be lost and which, in any case, were likely to drag on until what the German side menacingly called a "biological solution" to the claims issue: by the time the lawsuits were over, the claimants would all be dead.  On this basis, the several billions of dollars pledged by the German side made it worthwhile to persuade the lawyers for the survivors to settle out of court.

But there were several problems with the settlement won by the "Great Negotiator."  Former slave laborers of the Nazis would each receive the insultingly small sum of $7,500 or less.  This was hardly the "modest but significant" amount suggested by Eizenstat's deputy, Ambassador J. D. Bindenagel.  For this, not only would they be required to sign away all future legal rights but there would be no admission on the German side of legal liability for the atrocities of the Nazi "Vernichtung durch Arbeit" (Death through Work) program.  The German President would offer an apology but on condition that the Clinton administration signed an agreement that German corporations and the German government would be assured of "legal peace." 

The refusal by German industry and by the German government to acknowledge that Holocaust slave labor was illegal continues to have a huge symbolic importance.  For how can there be true reconciliation, let alone a humanitarian order in Europe and in the world as a whole if modern Germany continues to deny legal liability for the unspeakable actions of Nazi Germany?  I remember a moment in the slave labor talks when I accompanied two of the survivors to a meeting with the German ambassador to the United Kingdom.  When one of them described his experiences as a slave laborer in Buna-Monowitz, a sub-camp of Auschwitz, the Ambassador turned to me to explain that "strictly speaking" Germany had done nothing illegal there.  Subsequently, the late Otto Graf Lambsdorff, a corrupt ex-minister who was the chief German negotiator in the talks organized by the U.S. Department of State, stressed that the settlement carried no legal admission.

To make matters worse, German denials of legal responsibility for the Holocaust have been accompanied by historical spin-doctoring.  The German authorities even went to the length of organizing a conference at a former concentration camp to establish that the term "slave labor" be abandoned in favor of the less harsh-sounding "forced labor."  German banks and corporations financed a mini-industry of historians to write accounts of their records under the Nazis.  Such sponsored histories have tended to be exercises in "gray-washing": works that make small admissions alongside denials of guilt on large matters. Sometimes Jewish historians have been employed in order to add credence to the corporations' defenses.  The late Professor Gerald Feldman of Berkeley became a particularly notorious defender of the interests of the German bodies that sponsored his work.

Apart from payments by individual German companies to chosen historians, the German negotiators in the legal negotiations of the 1990s insisted on reserving a proportion of the settlement offer for so-called "remembrance" projects.  In practice, this meant that a German-dominated committee would act as a major source of research funds for Holocaust studies.  Such German research funding tends to have corrosive effects on the Jewish institutions and the Holocaust museums that accept it.  Far from assuring "remembrance," it distorts it.  One particularly worrying German policy has been to restrict archive access to its chosen historians.  I myself have been denied access to key archives held by Deutsche Bank and Volkswagen.  

There are other reasons why the many rounds of talks over Holocaust compensation and restitution are no cause for satisfaction.  Inevitably, the long years of dealings with the German authorities have tended to affect the small circle of employees and board members of the Claims Conference and isolate them and their interests from those of the wider Jewish community.  In 2006, the London Jewish Chronicle revealed that, while Auschwitz slave laborers had been offered a maximum of $7,500, the chief official of the Claims Conference had received an annual salary and pension contribution of $437,811. 

Some of the class action lawyers representing Holocaust survivors were prepared to settle on terms which were arguably highly disadvantageous to their clients in return for multi-million dollar payouts for themselves.  Some of these lawyers had led me and members of the London-based survivor body Claims for Jewish Slave Labor Compensation to believe that they were acting pro bono for various family reasons.  One of the lawyers told me over a meal in the State Department cafeteria during a break in the negotiations that he had spoken to a psychiatrist who had assured him that it was better that the survivors should die happy rather than be told that they were receiving a raw deal. The firm of the lawyer in question received several million dollars. 

There have been repeated financial scandals involving the Claims Conference.  The United Kingdom Jewish Board of Deputies has been in serious conflict with the New York-based Claims Conference over its handling of claims for Jewish property in the former East Germany. Then there is the matter of some $57 million in payments reportedly granted by Claims Conference officials in exchange for kickbacks.

In my opinion, world Jewry has three responsibilities to Holocaust survivors.  The first is to ensure that all compensation available goes to them and is not diverted to "remembrance" projects for museums and for academic research financed by German authorities.  Certainly, Holocaust museums and Holocaust research both are vital; but they need to be funded from Jewish contributions in order to avoid the distortions and propaganda that come from German money.  Second, so far as remembrance is concerned, the core Jewish objective must be to ensure that archives in German hands relating to the Holocaust are freely available and are not restricted to select groups of historians sponsored by the very corporations which are accused of using slave labor under the Nazis.  Third, though symbolic, it also is vital to secure German admission of legal liability.  Only then can there be a genuine reconciliation between Germany and the Jewish people.

Dr. Michael Pinto-Duschinsky is a British political scientist who was appointed in 2011 by Prime Minister David Cameron to the UK Commission on a Bill of Rights. A Holocaust survivor, he was honorary academic advisor to the London-based Claims for Jewish Slave Labor Compensation.


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