Testimony of David Schaecter
Before the House of Representatives
Committee on Foreign Affairs, Europe Subcommittee
On the Opening of the Bad Arolsen Archives in Germany
March 28, 2007
I would like to thank Chairman Wexler for holding this hearing today, and for inviting my colleague Mr. Rechter and me to address this very important meeting. We survivors are grateful to you, and to Congressman Hastings, for taking the initiative to accelerate the ratification of the amendments to open up the Bad Arolsen archives and make their contents accessible to survivors immediately.
Let me state this clearly and up front: providing access for researchers and historians is important, but ensuring that survivors and the families of all victims have complete access to our histories is a moral imperative for this Congress and the world.
This hearing is the first step in Congress to do what should have been done years ago. First: Demand and require a complete, honest, and transparent pursuit of the truth, and an accounting of the actions of those who abetted and profited from the Holocaust. Break down all barriers to complete accountability. There should be no compromises, no excuses, no shortcuts. There should be no statute of limitations or arbitrary cutoffs to full disgorgement of profits from atrocity. Second, it is time that all institutions, beginning with Congress, recognize and empower survivors, to be the principals in the pursuit of truth. Until today, survivors have been treated like pawns in the service of other interests. We have lived through enough not to be dictated to by others.
For the last six years, I have had the privilege of serving as the President of the Holocaust Survivors Foundation USA, Inc., or HSF. HSF is a national organization of Holocaust survivors and survivor groups from throughout the United States. HSF leaders are elected leaders of real, active, grass roots survivor groups around the country -- New York, New Jersey, California, Washington D.C., Texas, Boston, Washington State, Indiana, Florida, Michigan, and elsewhere.
HSF was created by like-minded survivor leaders who believed that the survivors needed a legitimate first-hand voice in matters affecting survivors' rights. Mr. Rechter, who you will hear from next, is the Secretary and one of the founders of HSF. Although the immediate topics concern seemingly mundane matters such as restitution of insurance policies, bank accounts, and looted assets, the truth is much deeper. Restitution has a material and a moral dimension. We pursue restitution to hold the Holocaust profiteers accountable. But, more importantly, we seek to make a connection with the tangible legacy of our families, which was violently stripped away as our very lives were shattered by Hitler.
In late 2000 and early 2001, the survivors who formed HSF agreed that it was not right for non-survivor institutions, class action lawyers, organizational operatives, and other so-called representatives not of the survivors' choosing to be making decisions about survivors' rights. The materials I am filing with my written remarks chronicle HSF's activities since the year 2001. In these years we have brought some clarity to the issues but, an overwhelming sense of frustration remains among the surviving community.
But the events of the last few years hardly tell my story. I am the only member of my family of survive Auschwitz. I lost my mother, my father, my sister, and my brother, and countless of other aunts, uncles, and cousins.
This is the truth, ladies and gentleman of the committee. It is a sad truth, and a hard truth. But the realization allowed me to face the history that befell my family and my people. It is these truths, millions of them that have been locked away at Bad Arolsen all these years. Why? We survivors cannot understand why the world powers would have made a conscious decision to withhold all of the facts about our history from us.
This is why I am here today. It is time for the full truth. It is long overdue. Your hearing today shows our Government is finally acting to allow survivors and our families the truth we have been denied for decades. This is vital as a matter of basic human justice. We also believe that there is, potentially, important information in the archive that are relevant to survivors' restitution and compensation claims. When the global settlements were made over insurance, slave labor, and bank accounts, did the negotiators know about this archive? If so, how could they have made decisions supposedly binding on survivors, without even looking at all the facts?
Unfortunately, survivors have been denied access to the necessary information required to mount full and effective disgorgement of the ill-gotten gains of the European plunderers. They have ignored the rush to judgment by representatives we didn't select to close the books on restitution. Now, with 16 miles of previously suppressed documents from the Nazi period being made public, isn't it time to halt the rush to judgment, the rush for "closure," and require the full, transparent accounting that we survivors are morally and legally entitled to move forward without any further impediments?
The "class counsel" in the Generali insurance litigation were prepared to give away the store until a group of HSF leaders objected and raised the possibility that no settlement be finalized until the public Bad Arolsen archive was accessible to survivors and heirs. On this point, the Court relented, preserving one possible source of additional information for claims against Generali.
However, even this small victory will be hollow if all eleven countries with authority over the archive do not approve its opening immediately. The window of time for Bad Arolsen information to assist Generali claims is August 2008. So, the opening and digitization and publication of all the files is urgently needed. Today. The survivors are depending on your good offices to make this imperative a reality.
So, I urge you to press the hold-out governments with all your authority for a full, immediate opening of the archive. And to thank you for making this a Congressional priority.
However, there is much more to the problem of secrecy that we have faced. I urge you to use your vast authority as the representatives of the American people to open up all archives, records sites, and processes to ensure that we survivors have full access to the truth. It is 2007. The Cold War is over. The time for excuses is long past. Corporations, governments, and individuals who aided and abetted atrocity, or who profited from the horrors of the Holocaust, should be exposed. We survivors are entitled to all the facts about the fate of our families from that horrible period.
The one small success in the Generali settlement does not overcome the culture of secrecy that has dominated the restitution enterprise.
The International Commission for Holocaust Era Insurance Claims, the ICHEIC, was conducted in complete secrecy. The ICHEIC was chartered under Swiss law. ICHEIC's headquarters was located in London. ICHEIC members agree this was designed to avoid the subpoena powers of U.S. Courts and the reach of American Public Records and FOIA laws.
No survivors with claims, and no heirs with claims, were present. No chosen representative of claimants was present. Even though nearly 100 people attended the ICHEIC meetings, there was no room for those whose rights were being decided. There were two survivors allowed in these meetings, but they were in the room because they are part of the Claims Conference. They were not elected by Survivors or claimants in any way, shape, or form.
There was room in these meetings for about dozens of the insurance companies' lawyers, publicists, and lobbyists from each of the insurance companies. It would break your heart to see the line up of attendees. Lawyers like Kenneth Bialkin, former President of the Anti Defamation League, are in the meetings, representing Generali. ADL's former lobbyist ADL lobbyist Harry Wall, who has served as Generali's lobbyist, was also in the meetings. But not claimants or their representatives.
The insurance companies under ICHEIC did not open up their archives, even though that was promised before various Congressional committees in 2000 and 2001. ICHEIC only published the names of policy holders the companies wanted published. Only a fraction of the total names were published.
When a company denied a claim under ICHEIC, it had complete discretion over whether or not to provide survivors with their internal records supposedly documenting the reasons for the denial. Published criticisms have cited the insurers' routine failure to provide claimants with relevant documents. As President of the HSF, I have heard from so many survivors who trusted the process but believe it was stacked against them from the start.
The results of this secret process were, not surprisingly, terrible. At the end of the day, ICHEIC will have paid on less than 5% of the insurance policies that companies sold to Jews that were in force at the beginning of World War II. Is this Justice? No, it isn't.
And the two traits of ICHEIC that stand out to survivors are first, its secrecy, and second, the denial of survivors' rights to represent themselves.
ICHEIC even refused to provide the U.S. State Department with information that Congress mandate be collected in its oversight of the implementation of the Executive Agreement between the United States and Germany covering slave labor, insurance, and property matters.
Fortunately, Congresswoman Ileana Ros-Lehtinen and other representatives have introduced legislation to require the companies to open their records, and to open the courts to individual claims. So, as with Bad Arolsen, we are relying on you the Congress to ensure that the truth about insurance companies' theft of our families' legacies will be exposed and restitution paid.
We also view the Swiss bank proceeding as another star chamber proceeding. Some people believe that $1.25 billion was a good amount of money for the Swiss to pay for their various thefts.
In our opinion, survivors never had a real say about how the case should be settled.
At the time of the settlement, there was no way for any survivor to know how much he or she would receive in the settlement.
Survivors were required to make their decision to opt out or not without knowing what, if anything, they would receive.
One of the most troubling parts of the settlement was the way the Looted Assets funds were distributed. Based on a recommendation by Special Master Judah Gribetz, Judge Korman decided to give 75% of all those funds, which were earmarked to provide assistance for survivors in need, to agencies in the Former Soviet Union. At most, the FSU has 20% of the world's survivors.
The decision was made behind closed doors, without the notice to the class, that Looted Assets class members' recovery would be distributed according to a Judge's conception of whether one survivor was "needier" than another. The HSF opposed this because it stripped American survivors of their legal rights, and of their dignity. If you survived the camps and saw your parents and brothers and sisters murdered, and your family's possessions were looted by the Nazis and fenced by the Swiss banks, why should you have inferior rights just because you live in the United States? If you are a survivor and you are poor, sick, and hungry in New York, Cleveland, Houston, Boston, Los Angeles or Miami, are you less entitled to benefit from the settlement of your legal claim than someone who lives in Moscow?
That allocation left only 4 percent of the funds for needy Survivors in the United States, even though at least 20% of the world's survivors live in America.
The 4 percent figure amounts to about $750,000 per year from the Swiss Looted Assets settlement to help needy survivors in the United States.
Ladies and gentlemen -- this is a tragedy. There are over 40,000 Holocaust survivors living below the poverty level in the United States, and another 40,000 living near the poverty level.
Estimates show the cost of paying for the unmet needs of these American survivors at between $30 million and $70 million per year. We are not talking about luxuries here. We are talking about food, shelter, medicine, dentures, eyeglasses, heat, in-home care for elderly survivors who cannot abide institutionalization after what they experienced in the camps. With the billions that were stolen by the Swiss and others, should they not have dignity in their last years?
This result, begat in secrecy and decided by powers not of the survivors' choosing, was and remains outrageous.
Israel is receiving 12.5% of the funds even though over 40% of the world's survivors live there.
Over $16 million per year of the settlement funds are going to Russia and former Soviet republics.
Basically, the 80,000 poor U.S. Survivors received nothing for their Looted Assets claims against the Swiss. In a lawsuit in an American court based on American law started by pressure from American public officials, American survivors' legal claims against the Swiss for fencing our families' property were converted into a charitable fund for a federal judge to use according to his personal notions of who is "needier." Instead of having access to their own recovered funds, this Judge thinks the survivors here should be beggars from the community chest.
Fortunately, I would not need assistance from these funds. But I know the suffering that others around me are going through. We despair how the legal system can be used to take survivors' legal claims and use them for involuntary charity.
This is not an academic issue. There is still over $400 million remaining in the Swiss settlement that may be subject to a "secondary distribution" when the bank account claims are finished. The Courts have turned a deaf ear to the American survivors, but we hope Congress will look into this matter. After all, the inquiry into the behavior of the Swiss banks was initiated by this Congress.
To make matters worse, there was a "Lead Plaintiffs Counsel" in the Swiss bank case named Burt Neuborne who was supposed to represent the entire class. He promised, in writing, to advocate for more funds for U.S. survivors in subsequent distributions.
But when more funds became available, he broke that promise and supported the existing formula calling for 75% of the money for the Former Soviet Union.
This Lead Counsel had also stated publicly on several occasions, over a 7 year period, that he was working pro bono for the plaintiffs. However, last year Judge Korman disclosed that several years ago he "retained Mr. Neuborne" and agreed to pay him from Holocaust survivors' settlement funds. This agreement was never placed in the Court record, so survivors understandably were shocked when Neuborne asked for more than $4 million in fees.
Mr. Neuborne's records show that he met in private on dozens of occasions with Judge Korman and Special Master Gribetz to discuss the Looted Assets allocations between 1999 and 2003.
Why weren't we the Survivors allowed to participate in those talks?
Why weren't these discussions done on the public record?
Who else attended those meetings?
Anyone on this Committee would also be shocked at the lack of information about the way the $16 million per year is being spent in the Former Soviet Union. The "accounting" provided to t he public is only two or three summary charts. Who is ensuring the integrity of those expenditures of survivors' money?
In the Swiss bank case, parties' filings and court orders were selectively placed in the court record, out of sequence and without any discernable logical basis. According to some claimants for looted bank accounts, important decisions changing the rules for recovery were made without prior notice to the public or affected claimants.
Is there any subject more demanding of public accountability than the use of funds recovered in a settlement of Holocaust survivors' looted assets claims against Swiss banks or any other corporate profiteers?
We have a right to know, and we are asking Congress to hold hearings on the Swiss bank settlement and allocations process.
Unfortunately I could go on for hours but I will address one final area today, which is the role played by the Conference on Jewish Material Claims Against Germany, the Claims Conference. Once again, this is an entity shrouded in secrecy, and controlled by non-survivors. Yet it controls billions of dollars worth of real property, art, other assets, and cash that are in reality the property of Holocaust victims and heirs. There are 24 organizations on the board of directors of the Conference, but only two of these are Holocaust survivor groups. 22 board members are not accountable to survivors in any way.
I serve on the board of the Jewish Community Services of Greater Miami, which assists survivors. We receive approximately $500,000 each year from the Claims Conference. With our local funds, this only provides for less than 4 hours of home care per week for survivors who need at least 12 hours per week. Our emergency funds run out in March or April each year. It would break your heart if I told you about the poor, elderly survivors who and going without the health and home care and basic dignity they deserve, or the survivors who only get one meal per day. It certainly breaks mine. The shortfall of funds needed for minimal care for survivors in Miami alone is over $1 million per year.
The Claims Conference would like to be congratulated for the good it does for survivors, but we say they should have no other purpose for these funds other than helping survivors.
Each year, the group wrings its hands and says it simply doesn't have enough money at its disposal to provide unmet needs of Holocaust survivors in the United States and elsewhere. But how much money does it control? No one outside the Claims Conference knows. It has never allowed its assets to be publicly audited.
We believe the Claims Conference controls at least $2-3 billion of dollars of Holocaust victims' property. It has another $1 billion in cash reserves on hand, as we speak today. This does not include the claims to assets that are still open, so it is likely to receive billions more.
Why is this important? Because with hundreds of millions of dollars in the social service deficit for Holocaust survivors' basic services everywhere, including between $30 and $70 million in the U.S. alone, the Claims Conference is the logical source of funds to help survivors.
Each year it dispenses only about $100 million in discretionary funds each year, with less than 15% for social services in the United States. With over a billion dollars in the bank and more undisclosed, what is it waiting for? All the survivors to die?
One of my low points as the President of HSF was when Claims Conference President Israel Singer wrote an article effusively describing all the projects his organization would fund with Holocaust restitution funds "after the survivors are gone." You can't even begin to imagine the survivors' hurt and anger at this arrogance. How dare he talk about "leftover money" when thousands of survivors today are hurting and suffering? These are your constituents, ladies and gentlemen. I wrote an article with the survivors' perspective which was published as well. These are being submitted for the record. I hope you read them carefully.
This exchange occurred in June of 2002. For a while it prompted outrage in the media and in the community. The arrogance of a non-survivor planning to build a bureaucratic empire with survivors' money after allowing thousands to suffer and languish in misery in their final years. The Wall Street Journal, New York Times, National Public Radio, and other major media gave this a one-shot story.
But very little changed. Pressure from some communities has caused the Claims Conference to increase allocations here, and there, as if they were applying grease to a squeaky wheel. But how can survivors' rights be toyed with so shamelessly?
This isn't all.
The Claims Conference sets aside 20% of its annual discretionary spending for "research, documentation, and education" projects. While survivors do not object to these projects in general, there is no justification to allow Holocaust restitution funds to be used for bricks and mortar memorials and research projects while elderly survivors are suffering.
So, they are misspending money today for non-survivor projects, and they are hoarding funds for future empire building after we are all gone.
There's more.
In addition, many Claims Conference grants are given to board members. This organization entrusted by the outside world with survivors' funds, supposedly to assist survivors as a priority, engage in self-dealing among the board members with these restitution funds.
Is this legal? It certainly is indecent. And, as with Bad Arolsen, we are asking Congress to investigate the asset management and spending practices of the Claims Conference. It is unthinkable that such secrecy and self-dealing can be tolerated by any organization, especially a not for profit entity in this post-Enron era.
That the source of the funds is the Holocaust and the beneficiaries denied are survivors cries out for Congressional scrutiny and oversight.
The free market here has not worked.
You might recognize Mr. Singer's name. He was dismissed last week from the World Jewish Congress by Edgar Bronfman for alleged financial improprieties. Yet he seems to have retained his role as President of the Claims Conference. The Chairman, Julius Berman, defended his remaining as President. He said: As president, Mr. Singer "has never been involved in the financial decisions of the Claims Conference, and said he sees no reason to take action at this time." This is what the press reported last we
So the Congress might ask what is going on in an organization that controls billions of dollars of Holocaust survivors' money, conducts its business in secrecy, refuses to account for its funds, and seems to have no problem building future empires with survivor money while the souls who went through hell are suffering today while money from the Holocaust is sitting dormant for everyone else's agenda except the survivors themselves.
One would have thought that Holocaust survivors, at the end of our lives, would have been treated with the utmost respect and dignity. In reality, however, much of what has passed for "restitution" has been the opposite of what we would have expected, with catastrophic results. Instead, the process has been driven by institutional and organizational imperatives, instead of by the rights, interests, and priorities of the survivors. Too often, these forays have yielded incomplete information disclosure and absurdly low financial compensation. Instead of being principals, we the survivors have been treated as pawns. Instead of receiving dignity and respect, we have received lip service and been patronized by organizations, and judges, executive branch officials, and up until now, even Congress.
I implore you to review this entire state of affairs and bring the antiseptic of sunshine, and to restore the survivors in their proper role as the principals to control their own affairs and make decisions about their rights and interests.
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