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Friday January 29, 1999

Swiss banks, lawyers sign off on settlement

MARILYN HENRY
Jerusalem Post Service

NEW YORK -- The Swiss banks, Holocaust survivors' lawyers and the World Jewish Restitution Organization reached an agreement on the details of their $1.25 billion settlement after a "three-corner" negotiating session in Brooklyn that began Thursday evening and ended in the early hours of Friday morning last week.

Meeting in an informal session with U.S. federal Judge Edward Korman, lawyers for survivors, Union Bank of Switzerland and Credit Suisse, as well as the WJRO, hammered out a definition for the classes of people who would be eligible for compensation according to the settlement.

The agreement, which one lawyer called "60 pages of dense legal language," was due to be signed this week, more than five months after the settlement was announced.

"We were all embarrassed that it is taking this long to get this thing under way," plaintiffs' lawyer Burt Neuborne said last Friday. "There are elderly people who need this money. It is not acceptable to delay. I think that sense of urgency was recognized and acknowledged by everyone."

Despite a widely held perception that the $1.25 billion is to be shared by all Holocaust survivors, the settlement terms call for the funds to be divided among classes of victims, sources said. These are: depositors and heirs of the hoarded or unclaimed Swiss bank accounts; those whose assets were looted and then laundered through the Swiss banks; two categories of slave laborers; and refugees who were turned away by Switzerland during World War II.

The beneficiaries are, for the most part, limited to Jews, Jehovah's Witnesses, the Romanis (Gypsies), homosexuals and the disabled.

The next step involves the "special master" of the case, Manhattan attorney Judah Gribetz, who was to have been appointed this week by Korman. The master's task is to hear suggestions on how the settlement should be allocated. Gribetz ultimately will recommend a distribution plan to Korman, who will make the final decision on how the funds will be divided.

There were numerous points of contention that had delayed the agreement. The WJRO had sought a special advisory role to the master. But that was opposed by the survivors' lawyers, in part because the WJRO itself is said to be seeking funds from the settlement. The banks, meanwhile, had insisted that the WJRO sign off on the agreement.

After some four hours of negotiations last Thursday night between the WJRO and survivors' lawyers, it was agreed that the WJRO should be a "party" to the settlement in recognition of its role in the Swiss banks issue.

Korman had indicated that he would not accept any special adviser to the master. "I am not going to do anything that is going to create the reality or the impression that anyone has an inside track," one source quoted Korman as saying during the negotiating session.

The agreement releases Union Bank of Switzerland, Credit Suisse and other commercial banks, the Swiss National Bank, the Swiss government and Swiss industry, other than insurance companies, from all Holocaust-related claims. The Swiss government, however, was not a direct party to the talks.

"The Federal Council expresses its hope that this final settlement will promptly benefit the victims of the Holocaust," the Swiss government said last Friday in a statement in Bern. "This settlement provides a closure of all the financial claims raised against Switzerland."

When the settlement was announced in August, it appeared to release Switzerland and its institutions, other than insurers, from all claims from all parties. However, there were serious differences in interpretation over who would be covered in the classes.

The WJRO had argued that only Jews should be included, but later agreed to include Jehovah's Witnesses, Romanis, homosexuals and the disabled, two lawyers said. The rationale was that Jewish organizations fought for the agreement, called it a "Jewish settlement," and said that if they had to share it too broadly, they would not sign it, according to lawyers from both sides.

The effect, though, is to exclude a large proportion of potential beneficiaries who are non-Jewish Nazi victims, specifically Poles and Ukrainians.

"The accounts that were dormant are a small part of the settlement," said one lawyer, who declined to be identified. "The main issue is unjust enrichment of banks from German-conducted slave labor and looting. Probably the largest group of slave labor was Poles."

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