Although Israel holds more Shoah assets than Switzerland, the international media was eager to publish a peculiar mixture of true and fictitiousaccusationsagainst the Swiss banks, but remained rather silent on the well-founded charges against the state of Israel. This issue is relevant to the question of Palestinian refugee assets and suffering. It also demonstrates once again the callous attitude of Israel towards Jewish victims of the Nazis. In order to understand the mechanisms at work it is interesting to compare restitution campaigns in Switzerland and in Israel.

Until 1995, the Jewish Agency (JA) and the government of Israel led a rather discreet campaign to obtain unclaimed Jewish assets in Switzerland. According to Akiva Lewinsky, the Jewish Agency treasurer who led the campaign, in 1995 these unclaimed assets did not exceed 50 million Swiss Francs (SFr). The sum was not spectacular and did not make international headlines.

All this changed as a new generation of officials came to power in various Jewish organizations, and especially after journalist Itamar Levin published an article in the Globes, an Israeli financial paper, in April 1995, in which he revealed the discovery of an important official Swiss document from 1946. In this document, Swiss authorities allegedly admitted that at the time heirless Jewish assets amounted to 300 million SFr. According to Levin’s calculations, the 1995 value of these assets was $6.4 billion.

But the scoop had a “small” flaw. The document was not official; it was written by a Swiss refugee welfare organization. Nor did the document refer to Jewish assets. It described an agreement between Switzerland and Western allies under which the Swiss were obliged to pay 250 million SFr for gold reserves in Switzerland looted by the Nazis. An additional sum of 50 million SFr. was to be paid in advance for other German assets in Switzerland. Ninety-five percent of the latter amount was to go to the Jewish Agency for the rehabilitation and resettlement of non-repatriable Jewish refugees. In July 1947 Switzerland gave the Jewish Agency only 20 million SFr which was most likely used to finance the war and not for Jewish refugees.

Before publication of the article I warned Levin against his incorrect reading of the document. Levin published the story just the same. This journalistic goose made international headlines and brought Levin an Israeli prize. According to a subsequent book by Levin, Avraham Burg, the head of the Jewish Agency at the time, was impressed by the fantastic figures and passed on the article to then Prime Minister Yitzhak Rabin. Rabin told Burg to contact Edgar Bronfman, President of the World Jewish Congress (WJC), to launch a campaign to reclaim the assets.(1)

The WJC and the JA managed to launch a successful campaign despite the fact that it was based on faulty historical research. They exploited the arrogance and anti-Jewish prejudice of negotiating officials from the Swiss banks for their own purposes. Effective lobbying in the US and a well-orchestrated international media campaign caused bank officials to totally over estimate the strength and influence of so-called ‘JewishPower’ and overlook flawed allegations leveled at the banks.(2)

In 1998 the Swiss banks agreed to pay a $1.25 billion global settlement, much more than the actual size of the heirless Jewish assets. The banks, nevertheless, brokered a favorable deal as the agreement excluded the Nazi loot that the Swiss had refused to return after WWII. Assets of IG Farben, a large company deeply involved in the Auschwitz project, for example, were appropriated by the Swiss Bank UBS with the support of the Swiss government. These assets alone are estimated to be around $3 billion.

Jewish organizations claimed they had pressed for a quick deal with the Swiss banks because Shoa survivors were passing away. Seven years later, however, only about half of the sum, around half a billion dollars, has been distributed and this is only due to very generous eligibility criteria. The fate of the rest of the money is still an object of dispute. It is quite clear that these Jewish organizations and Israel calculated (and still do) that they could profit from the arrangement, since it was unlikely that heirs would be found for the majority of the unclaimed assets in Switzerland.

The issue of heirless Jewish assets, however, is not just a Swiss problem. In 1997, i.e. two years after Switzerland, the same problem came to light in Israel itself. Information about the scope of these assets was more reliable, but, unlike Switzerland, it was mainly the state itself - and affiliated organizations- that had taken over these assets.

In 1996 professor Yossi Katz from Bar Ilan University, like Levin, discovered an interesting document. This time there was no misinterpretation. The document from the Central Zionist Archives in Jerusalem clearly indicated that state-controlled Bank Leumi’s predecessor held dormant Shoah assets. A year later Katz published the first results of his research in the daily Ha’aretz. His well-researched scoop did not make many international headlines, even though the assets were considerably greater (up to $20 billion) than those in Switzerland.(3)

The Israeli Administrator General, who holds unclaimed assets in trust, subsequently announced that he had unpublicized information about more than 11,000 unclaimed plots of land in Israel. Professor Katz continued to investigate the subject. In 2000 he published a book which made the dimensions of the scandal even clearer. “The worst thing about it”, says Katz, a religious Jew who lives in the West Bank settlement of Efrat, “is that it is precisely the state of Israel, which accuses all European nations of committing this sin, that is committing this sin itself.”

In February 2000 Israel set up a “Parliamentary Inquiry Committee on the Location and Restitution of Assets (in Israel) of Victims of the Holocaust”. The Committee, headed by Labor MP Colette Avital, limited its work to unclaimed bank deposits. Moreover, Israeli banks stymied the work of committee auditors. Protocols from the inquiry reveal the heavy pressure put on the committee. The state-controlled Bank Leumi received the most media attention because of its leading role and negative attitude towards the investigation.

Yehuda Barlev, a prestigious auditor who led the investigation of Leumi claims that the bank threatened to destroy him. At the last minute, when his report was in the print shop, Barlev discovered that somebody had made an unauthorized change to neutralize conclusions that Leumi still held accounts belonging to Nazi victims. Even after publication of the report in January 2005, Leumi continues to deny the existence of such accounts. It should be noted as well that Barlev’s report is by far not a comprehensive examination of all the Shoah assets held by Bank Leumi.(4) Leumi was one of the key players responsible for the repeated postponement of the publication of the Committee’s report and for diluting the findings and recommendations.

The crucial question of how the current value of the unclaimed deposits will be assessed has yet to be settled.(5) It is estimated that Leumi will have to pay between $8-69 million depending on the number of heirs located. Furthermore, the state of Israel will have to pay between $29-131 million for unclaimed assets transferred from the British Custodian of Enemy Property to the Israeli Custodian of Enemy Property and Administrator General. A mechanism to identify heirs still needs to be set up. Experts are skeptical that serious efforts will be made because the process is complex, costly and neither the banks nor the state are interested in paying the higher sum. If they do not find any heirs, or if they wait long enough, most of the survivors will die and the lower payment will simply be a transfer from one state pocket to the other.

It is even more scandalous that there has yet to be a formal investigation to locate real estate in Israel belonging to Nazi victims. Only a few preliminary steps have been taken. Moreover, in June 2005 the Knesset speaker Reuven Rivlin (Likud) called off the parliamentary inquiry into this issue. He declared that the investigation was the responsibility of the government. Knesset spokesman Giora Pordes explained that the reason for Rivlin’s position was that a government-sponsored bill on restoring property had already passed its first reading. Professor Katz, meanwhile, said that government handling of the search for unclaimed real estate was tainted by a conflict of interest, because a considerable portion of these assets is government owned.

While it is obvious that the Israeli government refuses to restitute billions of dollars of assets owed to Shoah survivors there is another reason for this reluctance. According to Speaker Rivlin, “a Knesset role in locating and restoring land properties belonging to Holocaust victims could serve as a precedent for Arab-Israeli and Palestinian demands for the restoration of their property in Israel transferred to Israeli hands after 1948. Efforts have already been made to locate property originally owned by Arabs, including property entrusted to the Custodian General.”(6) Rivlin is not the only politician who is afraid that restitution of dormant Jewish assets in Israel might be a precedent for Palestinian demands, which are even higher.

The government stance demonstrates once again the callous Zionist attitude not only towards legitimate Palestinian demands but also towards Jewish victims of the Nazi regime. The latter were abandoned by the Zionist leadership during WWII, which repeatedly sabotaged rescue plans that would have endangered the Zionist project in Palestine. Resettlement of Jews elsewhere would have destroyed the basis of the Zionist demand for political and financial support. Already during WWII plans were drafted to “inherit” Nazi victims and use their suffering to further national goals. David Ben-Gurion referred this policy as “Catastrophe [Shoah] is Power”.

Most of the survivors living in Israel have experienced the heartless approach of their government and affiliated institutions for years. Official reluctance to restitute victim’s assets comes as no surprise. Nevertheless, their loyalty to Zionist ideology is stronger. They still believe in the myth that the establishment of Israel was their rescue. This is the main reason why their protests against state organized embezzlement started only recently and have remained rather limited and cautious.

A former Israeli minister who survived the Nazis in Hungary, Yosef Tommy Lapid has repeatedly launched verbal fireworks which make media headlines in Israel but lack substance. Recently, for example, he called the treasury officials“bloodsuckers”becauseoftheirShoahassetspolicy.

Avraham Roet, head of the umbrella organization Forum for Restitution of Shoah Victims’ Property in Israel, declared that if the government did not settle the property claims it would be a “stain on the country.” He said Israel should be a “light unto the nations.” His organization, which focuses its public activities against Bank Leumi, has demonstrated in front of the bank’s head office and has accused the bank of waiting until all the survivors were dead. At the end of June they threatened to launch an international campaign to “undermine the financial stability” of the bank unless it grants complete access to all documents about unclaimed accounts.

Until now nothing has happened publicly and Roet, who is over 70 and one of the younger survivors, says that he is looking for a pragmatic solution that will help needy survivors soon. He does not expect full restitution, neither from the banks nor from the state, and says that anyway he would not know what to do with billions of dollars.