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BRIA 18 3 c Compensating the Victims of War

CONSTITUTIONAL RIGHTS FOUNDATION
Bill of Rights in Action
Summer 2002 (18:3)

Victims of War

BRIA 18:3 Home | Wartime and the Bill of Rights: The Korematsu Case | The "Rape of Nanking" | Compensating the Victims of War

Compensating the Victims of War

World War II war victims have sued banks, companies, and governments to compensate them for lost money, forced labor, unpaid insurance benefits, stolen property, and human rights violations. Some lawsuits have resulted in multimillion dollar settlements.

When Hitler took power in Germany in 1933, the persecution of Jews and other minorities began. The Nazis confiscated their property and valuables, forced them to work as virtual slaves, and finally murdered millions in the death camps.

To protect their financial assets, those persecuted were sometimes able to put money into foreign bank accounts, especially in neutral Switzerland. Some also purchased life insurance policies from German and other European companies. In the chaos of the Holocaust, however, records often disappeared, and stolen property passed into the hands of others.

The trials at Nuremberg, Tokyo, and elsewhere after World War II focused primarily on punishing top military and political leaders for war crimes and murderous crimes against humanity. Most of these trials did not prosecute banks, companies, and governments that benefited from the theft, economic losses, and other abuses suffered by war victims.

In 1953, the new democratic government of West Germany agreed to pay billions of dollars to Holocaust survivors, Jewish communities in Europe, and the Jewish state of Israel. West Germany did this to try to help compensate the Jewish people for the suffering and economic losses caused by Hitler's government.

Over the next 40 years, Jewish survivors and the heirs of those killed began to make additional claims against private European banks and companies. Many suspected them of holding money and benefits belonging to Holocaust victims or of having taken advantage of Nazi forced labor during the war.

Surprisingly, most of the Holocaust economic claims ended up in American courts in class-action lawsuits (which involve large groups). Jewish survivors and heirs (the plaintiffs) sued European banks and companies (the defendants) for various kinds of economic compensation.

The suits were filed in the United States under the authority of the Alien Tort Claims Act of 1789. Passed originally to combat piracy, this 1789 law permits foreigners to sue other foreigners for wrongful acts (torts) that violate international law. Other laws passed in the 1990s also allow U.S. citizens to sue foreign individuals and countries for human rights abuses.

Swiss Banks and Nazi Gold

Before World War II began, Martin Friedman sent his 17-year-old son, Jacob, to Zurich, Switzerland, several times to deposit money in three Swiss banks. Fearing the worst for his Romanian Jewish family, Martin wanted to protect his family savings. Martin and his wife later perished at the Auschwitz death camp, but Jacob survived. After the war, Jacob tried to locate his father's Swiss bank accounts. But the account numbers had been lost, and without them the banks said nothing could be done.

In 1996, Jacob joined with other plaintiffs in one of three class-action lawsuits against several Swiss banks. The plaintiffs, representing thousands of Holocaust survivors and heirs, filed their lawsuits in a New York federal court. They argued that the banks should hand over millions of dollars remaining in Holocaust-era "dormant accounts" that had not been active for many years.

The defendant banks resisted turning over any account records, claiming that they were secret under Swiss law. The defendants also argued that identifying most of the accounts would be impossible because some had been closed due to inactivity and others lacked documents to trace them.

The Swiss bank case was at a standstill in 1997, when the U.S. government made public a shocking report. According to this report, U.S. investigators after the war discovered that Swiss banks had knowingly received gold looted by the Nazis from the countries they conquered. The banks also took in melted-down gold from jewelry and dental fillings that the Nazis had taken from Holocaust victims.

The Swiss banks profited by converting this Nazi gold into national currencies, which the Nazis used to pay for their war effort and their program of Jewish extermination.

In the report, the United States estimated that the Swiss banks had received about $200 million in looted gold, plus an uncertain amount of "victim gold." After World War II, the report revealed that following a long period of negotiations, the Swiss agreed in 1952 to return $58 million. A special fund distributed this money to 10 nations that Nazi Germany had occupied. But nothing went to the Holocaust victims.

Some historians had written about the Swiss banks receiving Nazi gold. But the public—including politicians, journalists, and even those suing the banks—did not know about it. The release of the report in 1997 created a storm of publicity and criticism against the Swiss banks. American politicians began to threaten Switzerland with a trade boycott unless the banks turned over money still held in the dormant accounts.

Finally, in 1998, the Swiss banks agreed to a settlement of $1.25 billion. The money would go to several classes of war victims, including persons claiming ownership of dormant accounts and others demanding compensation for stolen property and forced labor. The job of estimating the number of dormant accounts became easier when a special American-led investigation of the Swiss banks identified up to 54,000 of them.

Forced Labor

The Swiss bank settlement opened the floodgates for many other war victims' class-action lawsuits. Among them, plaintiffs filed suits against German companies that profited from Nazi forced labor.

Hundreds of companies cooperated with the Nazis. Some of them are well-known companies today like Siemens, Volkswagen, and Daimler-Benz (now DaimlerChrysler) In turn, Nazis provided the companies with 18 million Holocaust victims, other civilians, and prisoners of war to work under near slave conditions.

In July 2000, the United States mediated a settlement to the forced-labor lawsuits. The government of Germany and 12 large German companies agreed to create a fund of $4.6 billion. This money will compensate civilian forced labor survivors and help educate young Germans about the Holocaust.

Life Insurance Benefits

Before the war, some Jews (and other persons who were later persecuted) purchased life insurance policies from German and other European companies. The heirs of those who died in the Holocaust found it almost impossible to collect on these policies. Often, the policies themselves had disappeared. But even if a policy existed, the insurance company still required a death certificate. Of course, the Nazis never issued death certificates in their extermination camps.

Those claiming insurance benefits for Holocaust victims also filed class-action lawsuits against European companies in U.S. courts. In 1998, the parties in these lawsuits formed a special international commission to develop a "just process" for paying off the insurance policies. OneItalian company has agreed to settle for $100 million. Although several other companies have agreed to establish a settlement fund, they have been slow to accept and pay claims.

Other Holocaust related lawsuits have included the recovery of stolen art, and the return or compensation for confiscated Jewish-owned buildings and land. Another suit secured compensation for U.S. citizens imprisoned in Nazi concentration camps.

Japanese Comfort Women

Some World War II victims have also filed lawsuits against Japan. When the Japanese invaded China in 1937, the military established a system to satisfy the sexual needs of its soldiers. Eventually, the military forced up to 200,000 women in Japanese-occupied countries into official brothels. The so-called "comfort women" often died of beatings, disease, and suicide. Only about 25 per cent survived.

After living in silence and shame for many years after the war, a few of the exploited women recently sued the Japanese government. They demanded an apology and compensation for their suffering. A Japanese court ruled against their case on the grounds that the 1951 peace treaty between Japan and the Allies settled all wartime claims. Other victims, however, filed a lawsuit against Japan in a U.S. federal court in 2001.

The Compensation Controversy

Some have criticized the war victims' lawsuits, especially those related to the Holocaust. American journalist Charles Krauthammer calls the entire Holocaust lawsuit movement a "grotesque scramble for money." He and other critics say that it is unfair to sue and punish companies today for the wrongdoing of previous corporate leaders over 50 years ago. They point out that some of the plaintiffs in these cases are not even Holocaust victims, but their children or grandchildren. The critics wonder when the demand for money will ever end.

In many cases, they argue, the lack of documents after all this time often makes it impossible to prove individual claims. Consequently, they say, politicians sometimes have threatened banks and companies with bad publicity to force them to agree to multi-million dollar settlements without going to trial. A Swiss leader once called this "extortion and blackmail."

Class-action attorneys traditionally get a percentage of a civil court judgment or settlement. Some lawyers in the Holocaust cases have reaped millions of dollars in legal fees. For example, in the forced labor lawsuit against German companies, one attorney received $6.3 million, and the most any plaintiff got was $7,500. Elan Steinberg, a leader of the World Jewish Congress, charges that "Holocaust survivors are being exploited by a feeding frenzy of fee-grabbing lawyers."

Finally, some Jewish leaders today flinch from the idea of reducing the suffering of millions of Holocaust victims to a matter of money. Abraham Foxman, a leader of the Jewish Anti-Defamation League and a Holocaust survivor, worries that the lawsuits will convince many that "the Jews died not because they were Jews, but because they had bank accounts, gold, art, and property."

Defenders of war victims' lawsuits disagree with these arguments. Author Itamar Levin says, "The fact that the Holocaust was the worst crime in history does not mean that stolen property should remain in the hands of those to whom it does not belong."

Defenders also point out that most of the living Holocaust victims are in their 80s and are dying off at a rapid rate. Therefore, they argue, now is the time to secure economic justice for them before they are all gone.

Defenders admit that a few lawyers have made large amounts of money from the class-action lawsuits, but these lawyers would have gotten nothing if they had lost the suits. The defenders point out that this is the only way that people who are not wealthy can afford to bring a lawsuit. In addition, they say, many more lawyers have worked for reduced fees or pro bono (for free). Lisa Stern, an attorney married to the grandson of a Holocaust victim, says, "The lawsuits can restore justice and dignity and correct [a] historical wrong."

The defenders argue that suing banks, industrial firms, insurance companies, and governments hopefully will help deter future gross violations of human rights. The Holocaust, they say, began with what some have called the "greatest financial crime in history." This crime, they say, provided the first steps for the horrors that followed.

For Discussion and Writing

  1. How do war victims' lawsuits differ from the war crimes trials held at Nuremberg and Tokyo after World War II? How are they similar?

  2. How did the United States report on Nazi gold influence the settlement of the Swiss bank lawsuits?

  3. Do you think that war victims' lawsuits will help deter human rights violations in the future? Explain.

For Further Information

Overview

Overview of Major Holocaust Asset Issues From U.S. House of Representatives.

Litigating the Holocaust By Michael J. Bazyler, Professor of Law Whittier Law School, Costa Mesa, California, and Research Fellow, Holocaust Educational Trust, London.

The Holocaust Restitution Movement in Historical Perspective By Michael J. Bazyler.

California Cure for Japanese War Crimes About California law permitting lawsuits for war crimes.

A two-part article on the Alien Tort Claims Act by Anthony J. Sebok, Professor of Law at Brooklyn Law School:

Enforcing Human Rights in American Courts When the Injury Is Indirect

Should American Courts Punish Multinational Companies for Their Actions Overseas?

Holocaust Litigation and Settlements A web site from a legal firm that does extensive litigation in this area.

Chmielewska v. Siemens The complaint in a class-action lawsuit filed in federal court based on the Alien Tort Claims Act.

Nazi Gold and Swiss Banks

Flashback: Swiss Gold, Nazi Plunder An overview of the scandal and links to articles from the Atlantic Monthly.

Nazi Gold From PBS's Frontline.

Swiss kept billions in looted Nazi gold From Literature of the Holocaust. For more articles on this site, go to Holocaust Home and scroll through the alphabetical listings.

Swiss Banks and Swiss Gold Links from About.com.

PBS's Online NewsHour reports:

Swiss Accountability August 1998.

Stolen Assets June 1998

Accounting for Gold May 1997.

Swiss Accounting February 1997.

Righting Past Wrongs February 1997.

Accounts Due December 1996.

Breaking the Code November 1996.

Law-Related Resources on Nazi Gold and Other Holocaust Assets, Swiss Banks during World War II, and Dormant Accounts

Book Reviews of Nazi Gold: The Real Story of How the World Plundered Jewish Treasures by George Carpozi Jr.:

Naples News

New York Times

Holocaust Suvivor and Heir Lawsuits to Recover Swiss Bank Deposits From the Jewish Virtual Library.

Holocaust Victim Assets Litigation The official information website for the Holocaust Victim Assets Litigation against Swiss Banks and other Swiss entities.

Holocaust Assets and Reparations Links from the Jewish Virtual Library.

Switzerland & the Holocaust: Websites Links.

Forced Labor

Bibliographies of Forced Labor Brief overview and extensive annotated bibliography.

Agreement reached to compensate Nazi-era forced laborers From CNN.

Holocaust Reparations: German CEOs Unlock Their Vaults A February 1999 report from Business Week.

DaimlerChrysler Welcomes Successful Conclusion to Negotiations on Payments for Former Forced Laborers From DaimlerChrysler.

German Firms That Used Slave Or Forced Labor During the Nazi Era A list prepared by the American Jewish Committee Berlin Office, December 1999.

Nazi Slave Labor Talks Spark Disagreement: Will the proposed USD 5 billion fund compensate all survivors? From Central Europe Review.

Nazi Germany and the Corporations Links.

Forced Labor Links from the Jewish Virtual Library.

Unsettling the Holocaust Two-part article by Anthony J. Sebok on Holocaust settlements mediated by the U.S. government on forced labor in Nazi Germany.

Insurance Claims

Holocaust Era Insurance Claims: Background and Issues From the Jewish Virtual Library.

The International Commission on Holocaust Era Insurance Claims Lists of names of insured.

Two-Year Program to Resolve Unpaid Life Insurance Claims Announced February 2000.

U.S. Welcomes Holocaust Insurance Agreement From U.S. Embassy in Germany, September 2002.

Comfort Women

Lawyers Target Japanese Abuses From the Washington Post.

Japanese Comfort Women Ruling Overturned From CNN.

Japanese Comfort Women: A Web Reference Large collection of links.

Japanese War Crimes: Comfort Women More links.

The Compensation Controversy

Cents of Outrage Visiting the death camp at Dora with his father, a reporter wonders why it took 50 years for the corporate and national beneficiaries of the Holocaust to even try paying the Jews back.

Holocaust Justice and Financial Accountability Argument in favor of Holocaust lawsuits. By Michael J. Bazyler and William Elperin

Lawsuits Pile Up, Matching the List of Atrocities Article questioning the lawsuits.

Money-grubbers Reaping Blood Money from Holocaust Column by Charles Krauthammer against class-action lawsuits on the Holocaust.

The Dangers of Holocaust Restitution By Abraham H. Foxman, Director of the Anti-Defamation League argues against the lawsuits.

A C T I V I T Y

Compensation for War Victims: A Debate

Debate Question: Should World War II victims get compensation from banks, companies, and governments today for wrongful acts committed many years ago?

  1. Divide the class into three groups:

    a. those taking the "yes" side of the question

    b. those taking the "no" side of the question

    c. those who will decide the question

  2. The two debating groups should research the article to develop arguments and evidence supporting their positions. The group of decision-makers should research the article to develop questions to ask each side.

  3. Each side will have five minutes to present its position.

  4. After both sides have presented their positions, they may together take 10 minutes to ask each other questions and argue points.

  5. After both sides have finished debating, the decision-maker group will have five minutes to ask questions.

  6. Each debating group will have one minute for a closing statement.

  7. The decision-makers will publicly discuss the debate question among themselves, take a vote on it, and give their reasons for voting as they did.


Sources

Wartime and the Bill of Rights: the Korematsu Case
Alonso, Karen. Korematsu v. United States, Japanese-American Internment Camps. Berkeley Heights, N. J.: Enslow, 1998. • "Antiterrorism Policies and Civil Liberties." 12 Oct. 2001. Issues and Controversies. Facts on File. 18 Feb. 2002 www.2facts.com • Chiou, Howard. "Internment Camp Survivor Shares Stories at Stanford." The Stanford Daily. 21 Nov. 2001. eLibrary. 1 Mar. 2002 ask.elibrary.com • Cohen, Adam. "Rough Justice." Time. 10 Dec. 2001:32-38. • Daniels, Roger. Prisoners Without Trial, Japanese Americans in World War II. New York: Hill and Wang, 1993. • Fournier, Eric Paul. "Of Civil Wrongs and Rights: The Fred Korematsu Story." PBS-POV. Public Broadcasting System. 1 Mar. 2002 www.pbs.org/pov/ofcivilwrongsandrights/storyline.html • Kido, Saburo and Wiren, A. L. Supreme Court of the United States. Brief of Japanese American Citizens League, Amicus Curiae. October Term, 1944, No. 22. Los Angeles: Parker & Co., 1944. • Korematsu v. United States, 323 U.S. 214 (1944). • Meyer, Josh. "Dragnet Produces Few Terrorist Ties." Los Angeles Times. 28 Nov. 2001:A1+. • . "Terror Bill's Effects to Be Immediate." Los Angeles Times. 26 Oct. 2001:A+. • Miller, Greg and Sanders, Edmund. "Lawmakers Say Bill Raises Concerns For Civil Liberties." Los Angeles Times. 25 Sept. 2001:A!+. • O'Brien, Ed. "In War, Is Law Silent?" Social Education. Nov./Dec 2001:419-425, SIRS Knowledge Source. SIRS Publishing. 18 Feb. 2002 sks6.sirs.com. • "PDF Version of USA Patriot Act." Alert: USA Patriot Act. 25 Jan. 2002. American Library Association. 20 Mar. 2002 www.ala.org/alaorg/oif/alertusapatriotact.html. • Rehnquist, William H. All The Laws But One, Civil Liberties in Wartime. New York: Vintage Books, 1998. • Serrano, Richard. "Isolation, Secrecy Veil Most Jailed in Roundup." Los Angeles Times. 4 Nov. 2001:A1+. • _____. "Rights Caught in Dragnet." Los Angeles Times. 26 Sept. 2001:A1+. • Stanley, Jerry. I Am an American, A True Story of Japanese Internment. New York: Crown Books, 1994. • "USA Patriot Act Boosts Government Powers While Cutting Back on Traditional Checks and Balances." In Congress. 1 Nov. 2001. American Civil Liberties Union. 20 Mar. 2002 www.aclu.org/congress/1110101a.html. • Weinstein, Henry et al. "Civil Liberties Take Back Seat to Safety."Los Angeles Times. 10 Mar. 2002:A1+. • _____. "Imprisonment of Immigrants Has Limits, Justices Rule." Los Angeles Times. 29 June 2001:A27.

The "Rape of Nanking"
Brook, Timothy, ed. Documents on the Rape of Nanking. Ann Arbor, Mich.: University of Michigan Press, 1999. • Burress, Charles. "Wars of Memory." San Francisco Chronicle 26 July 1998, SIRS Knowledge Source. SIRS Publishing. 18 Feb. 2002 sks6.sirs.com. • Chang, Iris. The Rape of Nanking, The Forgotten Holocaust of World War II. New York: Basic Books, 1997. • "Ghosts from China and Japan." The Economist 29 Jan. 2000. • eLibrary. 4 Feb. 2002 ask.elibrary.com. • Yamamoto, Mashiro. Nanking, Anatomy of an Atrocity. Westport, Conn.: Praeger, 2000. • "Tribunal Milestones." 25 Sept. 1997. Issues and Controversies. Facts on File. 18 Feb. 2002 www.2facts.com • "War-Crimes Tribunals." 31 Aug. 2000. Issues and Controversies. Facts on File. 18 Feb. 2002 www.2facts.com.

Compensating the Victims of War
"Claims Process Underway in $1.25 Billion Swiss Banks Settlement." Holocaust Victim Assets Litigation (Swiss Banks) 17 April 2001. 2 April 2002 www.swissbankclaims.com • Eisler, Peter. "Germany to Pay U.S. Holocaust Survivors." USA Today 14 Jan. 1999. SIRS Knowledge Source. SIRS Publishing. 18 Feb. 2002 sks6.sirs.com • Gregor, Neil. "Daimler-Benz, Forced Labor and Compensation." Dimensions Vol. 13, No. 2, 1999:25-30. SIRS Knowledge Source. SIRS Publications. 18 Feb. 2002 sks6.sirs.com/ • Halevi, Klein. "The Accounting." Jerusalem Report 6 Mar. 1997. SIRS Knowledge Source. SIRS Publishing. 18 Feb. 2002 sks6.sirs.com/ • Higgins, Alexander. "Report Criticizes Swiss Banks." The Record 6 Dec. 1999. SIRS Knowledge Source. SIRS Publishing. 18 Feb. 2002 sks6.sirs.com • The International Commission on Holocaust Era insurance Claims. 2 April 2002 63.66.209.126/eng • "International Human Rights Litigation." Issues and Controversies. 9 Nov. 2001. Facts on File. 18 Feb. 2002 www.2facts.com • Jost, Kenneth. "Holocaust Reparations." CQ Researcher 26 Mar. 1999. • "Lawyers' Fees Spark Debate." Issues and Controversies. 9 Nov. 2001. Facts on File. 18 Feb. 2002 www.2facts.com • Levin, Itamar. The Last Deposit, Swiss Banks and Holocaust Victims' Accounts. Westport, Conn.: Praeger, 1999. • Pollitt, Katha. "Cold Comfort." The Nation 11 June 2001:10. WilsonSelectPlus. H. W. Wilson Co. Libraries of the Claremont Colleges. 30 Mar. 2002 www.hwwilson.com • Schenfeld, Gabriel. "Holocaust Reparations—A Growing Scandal."Commentary Sept. 2000:25-34. WilsonSelectPlus. H. W. Wilson Co. Libraries of the Claremont Colleges. 30 Mar. 2002 www.hwwilson.com • Slaney, William Z. "U.S. and Allied Efforts to Recover and Restore Gold and Other Assets Stolen or Hidden by Germany During World War II." U.S. Holocaust Museum May 1997. 2 April 2002 www.ushmm.org/assets/state/report/htm • "Slaves and Forced Labor Compensation." Claims Conference. 2 April 2002 www.claimscon.org/compensation/faqs.asp • "Suing for Reparations." Baltimore Sun 17 Jan. 1999. SIRS Knowledge Source. SIRS Publishing. 18 Feb. 2002 sks6.sirs.com • Weinstein, Henry. "Holocaust Insurance Claims Deadline Gets Pushed Back." Los Angeles Times 27 Jan. 2002. • Wiesen, Jonathan S. "German Industry and the Third Reich: Fifty Years of Forgetting and Remembering." Dimensions Vol. 13, No. 2, 1999: 3-8. SIRS Knowledge Source. SIRS Publishing. 18 Feb. 2002 sks6.sirs.com