background memorandum on
Swiss Compensation to Jews and
Restitution of Property up to 1997
by Salman Abu-Sitta

The Issue
The World Jewish Congress (WJC) accused Switzerland of financing the Nazis and prolonging WWII by buying "Nazi Gold", most of which, it is claimed, belonged to Jews.  Jewish organizations have applied considerable pressure, through the US Government and the media, on Switzerland and other European countries to pay compensation and restore Jewish property, including unclaimed money kept in Swiss Banks.

The Swiss Position
According to the Swiss-American Chamber of Commerce:

1. Dormant accounts, "Nazi Gold" and looting are three separate issues.  To combine them is to confuse the issue. The Swiss agreed to publish a list of dormant accounts and explain what is meant by "Nazi Gold", but rejected responsibility for "looting".
2. Dormant Accounts: According to a Swiss Federal Decree of 1962, dormant accounts were identified, and $1.0 million was paid to relatives of Nazi victims; $3.6 million was handed over by banks to individuals; and, $2.12 million was handed over to the Swiss Federation of Jewish Communities and the Swiss Refugee Council for heirless properties.  Other claims were rejected due to insufficient proof of ownership.
3. Nazi Gold: During WWII, the German Reichbank sold the Swiss National Bank gold in exchange for Swiss Franc 1.7 billion ($1.13 billion).  This gold consisted of monetary reserves and a smaller amount of confiscated property.  It is not clear how much of this gold is individual property, Jewish or not.  In 1946, Switzerland paid the Inter Allied Reparations Agency (IARA) SF 250 million ($167 million) in gold of all gold collected from many countries.  IARA allocated US $337 million to the banks for losses suffered.
4. The Swiss appointed an Expert Commission to investigate the matter and a diplomatic Task Force to monitor world reaction.  The Swiss Bankers Association (SBA) also established a central information office for dormant accounts.
5. SBA and the World Jewish Restitution Organization (WJRO), the World Jewish Congress (WJC)  and the Jewish Agency signed a joint memorandum on 2.5.96 to appoint an "Independent Commission of Eminent Persons" with 3 members (and 2 replacements) chaired by Paul Volcker, former chairman of the US Federal Reserve.  The Volcker Commission in turn mandated Arthur Andersen, KPMG, and Price Waterhouse to audit the dormant accounts by 1998 at SBA expense.
6. The US Senate Banking Committee, chaired by Senator Alfonso D'Amato, is also conducting an investigation.  Under-Secretary of Commerce Stuart Eizenstadt, appointed by the White House, presented a first historical report on 7.5.97.
7. The three major Swiss banks announced on 6.2.97 the establishment of a humanitarian fund in the amount of SF 100 million.  Other parties contributed SF 65 million while the Swiss National Bank (SNB) contributed another SF 100 m., totalling SF 265 million ($185 million).  This "Special Fund for the Holocaust Victims" is chaired by Rolf Block.  The fund has 4 Swiss members and 3 Jews (Edgar Bronfman, Josef Burg and Avraham Hischson).  Beneficiaries of the fund shall be persons persecuted by the Nazi regime or their descendants to the extent they are in need.
8. On 6.3.97, Arnold Koller, President of the Swiss Confederation launched the idea of a "Swiss Foundation for Solidarity" to provide relief for people in need.  The Capital is SF 7000 million with annual yield of SF 300 million ($200 million per year).

Jewish Efforts
1. Edgar Bronfman, 67, (Chairman of Seagram, an alcohol and nightclubs company with 30,000 employees and $11 billion in annual revenue) is President of World Jewish Congress (WJC) with organizations in 80 countries and also Chairman of World Jewish Restitution Organization (WJRO), set up in 1992, to recover (not compensate for) Jewish property in Europe. In the last 15 years, he has met 55 heads of state. The WJRO executive vice-chairman is Naftali Lavie.
2. Bronfman and Israel Singer, Secretary-General of the World Jewish Congress, met with Senator Alfonso D'Amato in December 1995, and convinced him to investigate the case of Jewish assets in Switzerland.
3. Bronfman met US First Lady Hillary Clinton for lunch and convinced her to set up a meeting with the President.  Having known of D'Amato's involvement, Clinton agreed to appoint Stuart Eizenstadt, US Under-Secretary of Commerce to investigate the matter with Europe and NATO.  Clinton requested 11 US agencies to look into the matter.
5. Eizenstadt presented his first report in May 1997, and convinced Europe to cooperate in restoring Jewish properties.  D'Amato threatened to organize a boycott  of Swiss banks if they did not cooperate.  The mayor of New York did the same.

World Jewish Restitution Organization - WJRO
1. The purpose of this organization extends beyond the recovery of Jewish gold or money in dormant accounts.  The purpose is to restitute (recover, retake possession of) Jewish property in all of Europe.
2. WJRO has headquarters in Jerusalem and has listed 14,083 Jewish properties in Europe on computer for recovery.
3. The WJRO and Israel (represented by the Minister of Finance) signed a memorandum in November 1992 stating that: "the State of Israel considers itself to be the natural and principal heir to Jewish public property and where there is no other heir".
4. The White House has supported WJRO efforts.  In a letter to the WJRO dated Sept. 8, 1995, Clinton wrote:
"As the democracies of Europe and America seek to build a new and better world for the 21st Century, we must confront and, as best as we can, right the terrible injustice of the past".
5. The WJRO was to distribute money from the special Swiss Fund on the basis of need, not suffering, and shall not wait for the settlement of dormant accounts.  The WJRO insisted on having a majority on the Fund board but the Swiss refused.

Restitution of Property in Europe
1. The US Congress "strongly endorses Jewish efforts to retrieve the legacy of Central and East European Jewry".  President Clinton has even advocated a probe of the Vatican.
2. Poland:  Agreed to return property in a deal in which the WJRO will support Polandís application to NATO.
3. Lithuania: Will continue the process of property restitution to Jews (even non-citizens), within the limit of the constitution
4. Norway, Sweden: Had 1400 Jews in Norway in WWII.  Sweden was neutral.  Claims are laid.
5. France: Has 3000 accounts of about $175 million in addition to property.  Claims are laid.
6. Belgium: Former governor of the national bank, Jean Godeaux, is chairing a Committee to investigate Jewish property and liason with the WJRO.
7. Romania, Hungary, Slovakia: Recognized the rights of Jews to communal and individual Jewish property and recognized the WJRO as the legitimate claimant.
8. Similar response in Italy, Spain and Portugal.
9. The European Parliament passed this Resolution:
"Calls on all countries of Central and Eastern Europe, which have not done so, to adopt appropriate legislation regarding the return of plundered property, so that the property of Jewish Communities may be returned to Jewish institutions in accordance with the principles of justice and morality".
The EP hinted they may not accept into the European Union countries who do not comply.

Further Developments in 1998
A Deal Struck
1. A trio of US lawyers, Melvyn Weiss, Robert Swift and Michael Hansfeld, took up the task of extracting money from the Swiss with the threat of a boycott of US financial institutions.  The trio plainly demanded payment from the Swiss or vowed to continue "the unprecedented interventions by the US State Department and the Chairman of the Senate Banking Committee; a threat to block the largest-ever banking industry; and a threat from the largest pension funds in the US to divest their shares in all Swiss companies".
2. The value of disputed dormant (not necessarily all Jewish) bank accounts is now calculated at SF 100 million ($71 million), far from the billions of dollars originally claimed by Jewish organizations.  The estimate was made by detailed audit of Swiss bank records carried out under the auspices of a committee chaired by Paul Volcker, former head of the US Federal Reserve Board.  Earlier, the Swiss banks published the names of unclaimed foreign accounts, worth about SF 70 million, of which 10-15% may have belonged to Jews.
3. Eizenstadt, the Jewish-American Under-Secretary of Commerce and a former ambassador to the European Union, was greatly distrusted by the Swiss.  He was closely identified with Rabbi Israel Singer, Secretary-General of the WJC and Edgar Bronfman, WJC President.  Eizenstadt's role was "most unusual [as] the US government would not normally intervene in a private lawsuit."  Another Jewish-American official who played an important role was Richard Holbrook who secretly mediated between  Jewish organizations, the Swiss President and the chairmen of Swiss banks.
4. In August 1998, it was finally agreed that the Swiss banks would pay a lump sum settlement $1.25 billion, including the small present value of the unclaimed accounts, found by Volcker committee to be $71 million.  The original Jewish claim was $18 billion.
5. Senator D'Amato played a key role in the threat to apply sanctions, in order to "earn political credit from New York's influential Jewish community".  Again, "intervention by a US senator in pending litigation was almost unheard of".  It was D'Amato who later announced the deal to the world.
6. Immediately thereafter, there were differences between the Jewish organizations about the distribution of the money.  The Czech community accused WJRO of not consulting them and demanded direct payment to them.   The Swiss community did the same and complained that the WJRO exaggerated the claims and harmed the position of Jews in Switzerland.  French Jews disputed their share of the gold.
7. The Swiss government declared it was not a party to the deal and that the question had been settled under a 1946 international agreement.

New Claims
1. With the success of this campaign, the WJRO started a new battle for the return of monies and other properties from other European countries.  They demanded that Austria return 1,000 works of art, including two paintings kept by Leopold Museum (Dead City 111, Portrait and Wally).  Austrian Chancellor Viktor Klima met several times with Israeli Prime Minister Netanyahu who called for the establishment of Austrian-Jewish Committee and the return of "all private property".  Austria has adopted a law for the return of property.
2. In August 1998, the giant Italian insurance company, Generali, agreed to pay the Jews $65 million to settle claims for World War II.
3. Michael Freedman, of the Jewish Council in Germany sued Deutsche and Dresdner Banks for an $18 billion settlement.  Alliance AG, a German insurance company is expected to yield to payment of settlement as well.
4. Eizenstadt is now leading a campaign to "return stolen artwork and property" in Europe.  On 30 November 1998, a conference was held in Washington attended by representatives of 44 countries and 13 organizations including WJC.  Eizenstadt stated the goal was "to forge an international consensus on how governments and other entities can cooperate to redress grave injustices that remain from the Holocaust era". According to Eizenstadt, 17 countries have created commissions to investigate the issue of Jewish property, including Russia which resisted earlier US calls for restitution.
5. A special commission in France determined that 2058 works of art were stolen by the Nazis.
6. Poland, Lithuania and the Czech Republic have passed measures to return synagogues and other communal property back to Jews.
7. Israel criticized the Vatican, Britain's MI5 secret service, KGB and other European services for refusing to allow access to their files.
8. Israel and the US are planning a mammoth project to trace, register, and put in a database the record of millions of victims of the Nazis.  This record will be larger and more comprehensive than any in history and will be used, among other things, to determine property ownership.
 
brief notes
on what should be done by the Palestinians

Amira Hass (see page 1) noted the irony of the two conferences held in Washington at the same time at the end of November 1998.  One was a world conference to discuss ways to restore Jewish property.  The other was a beggerís appeal to encourage donor countries to contribute to the Palestinian Authority. Azmi Bishara, Arab Member of the Knesset, has asked Israeli officials for an accounting of the property, money and funds in Arab religious endowments, all taken over by the Israeli government.  The Israeli governmentís response was that "we don't know".1 The answer is patently false.  In fact, Palestinian property is well-documented - in British Mandate documents, in Jarvisí 450,000 records of Palestinian owners prepared for UN Conciliation Commission for Palestine, and in the records of Israel Land Administration, which holds and rents every plot of Palestinian land.

Therefore, it is suggested that:
1. Legal opinion should be sought from Switzerland to apply an injunction on the $1.25 billion Jewish settlement until compensation for Palestinians is made.  Switzerland must know that Palestine is a legitimate claimant.
2. A petition should be circulated to highlight the contrast between generous compensation to Jews and the denial of the same to Palestinians.  The petition should also call for the Palestinians to be beneficiaries to the Relief Fund set up by the Swiss.
3. Use should be made of the well-known UN Resolution 194 calling for the Palestinians' return and compensation.  Compensation is estimated at $510 billion for the destruction and use of Palestinian property and the Palestinian suffering for 50 years.  Compensation here does not include land and homes; these are not for sale.  Note should be made of the recent UN resolution on 3 December 1998 "reaffirming the entitlement of the refugees to their properties and revenue from them".  Emphasis should be made on 'restitution' of property, i.e., restoring property to owners, not compensation.
4. Efforts should be made to establish a "Palestine Land Authority" and create a detailed database for Palestinian property and a legal structure to restore it.2
5. Diplomatic efforts should be taken to put into effect the Arab League resolution of 16 September 1998, urging the UN "to send a fact-finding mission to report on the status of Palestinian property in Israel and to appoint a Custodian of this property" who shall determine, document, preserve and collect revenue from the use of this property.
Salman Abu-Sitta is a Palestinian refugee, an engineer and researcher living in Kuwait.



1The Post Star, USA, September 26, 1994, p. A4.
2For details, see al-Hayat, London, 9 November 1998, p. 8 or contact the writer.
 
 
index
issue no. 26