Building in Cyberspace

by Julia Collins

Stuart EizenstatIn 1995 the trickle began: scattered news accounts of dormant Swiss bank accounts belonging to Jews murdered in the Holocaust. Then two U.S. State Department reports documented for the first time ever the trail of gold looted by Nazi Germany, and the role of neutral nations in stoking its war machine. And the stories kept coming: of Jews seeking the return of confiscated family homes, of disputes over stolen art hanging in museums, of lawsuits against German businesses that profited from slave labor. As 50-year-old Nazi crimes make news all over again, international efforts to acknowledge and redress old wrongs - and remove old stains - have intensified.

In all these matters, Under Secretary of State for Economic, Business and Agricultural Affairs Stuart Eizenstat ’67 has been a constant catalyst. While his portfolio is full of issues of the moment - social fallout of the global financial crisis, U.S. sanctions on foreign administrations, the economic dimensions of U.S. foreign policy - for several years now Eizenstat has also been deeply involved in what he calls "the unfinished business of the twentieth century." For him that business is accounting for the astonishing array of assets looted by the Nazis, and securing some long-delayed justice for Holocaust survivors and victims’ families.

On January 19, a New York Times editorial praised the under secretary’s efforts "to explore the dark corners of history." The Times cited Eizenstat’s crucial role in talks that led to the recent $1.25 billion settlement by private Swiss banks to compensate Holocaust survivors, and his efforts to unearth the truth about the looting of Holocaust-era assets and their present location. During the contentious negotiations, Eizenstat was the intermediary between the Swiss banks and Swiss government, and Jewish organizations and plaintiffs’ attorneys representing class actions by Holocaust survivors and victims’ relatives.

"In the end, we got the parties together, developed the settlement structure, and narrowed the differences significantly. But quite frankly it took Judge Korman [Eastern District of New York] and the threat of sanctions to get the banks over the top," Eizenstat says. "A court-approved special master is now figuring out the distribution." The bulk of the extraordinary settlement, he points out, will actually go to needy Holocaust survivors who have no connection to the dormant accounts.

At the request of President Clinton, Eizenstat also directed the massive investigation that culminated in his 1997 report detailing how Nazi Germany looted some $4 billion in gold from the central banks of the countries it overran. "This included gold from individual victims in the form of gold teeth and jewelry, which Germany re-smelted and transferred to Swiss banks for conversion into hard currency," says Eizenstat. His second report, published in June 1998, chronicled how neutral nations provided the Nazis with crucial raw materials and minerals in exchange for Swiss francs.

As for the fate of looted property after the war, the 1997 report examined how post-war negotiations, led by the U.S. and other Allies, failed miserably in the recovery of assets and restitution to countries and individuals, many now refugees. "We documented hundreds of millions [of dollars] in German gold and property never returned because the neutrals were recalcitrant negotiators."

Together, the reports reveal harsh truths that had been neglected for half a century. Their preparation resulted in declassification of more than one million pages of documents, and indexing of 15 million pages of documents by the National Archives.

Eizenstat’s work on Holocaust claims began in 1995, when he was U.S. ambassador to the European Union. Richard Holbrooke, then assistant secretary of state for European affairs, asked if Eizenstat would take on the role of special envoy for property claims in Central and Eastern Europe. "The Cold War was over. The former Eastern bloc and Soviet countries were moving to democracy," recalls Eizenstat. "Requests for property restitution began coming in from U.S. citizens and religious groups."

Ignoring his staff’s urging that he turn down so monumental a task while still a full-time ambassador to the EU, Eizenstat decided to pursue it with all possible zeal. "This is an area I’ve been long interested in," he says. "I lost relatives of my own in the Holocaust, and I have strong identification with the Jewish community. I felt if the U.S. government wanted to initiate a historic effort to do justice, however belated, in this area and I was being asked to take a leadership role, I could not turn down the opportunity."

Even after his appointment as Under Secretary of Commerce for International Trade, Eizenstat continued his special envoy duties. In the course of a little over one year he visited 11 countries in Central and Eastern Europe and the former Soviet Union. He focused on the issue of returning properties owned communally by religious groups—such as churches, synagogues, cemeteries, community centers, and day schools—that had been confiscated by the Nazis and later claimed by communist regimes. In Poland alone, three to five thousand properties are at issue. He also promoted the return of confiscated personal property that belonged to survivors who are now American citizens.

"The restoration of communal property is providing infrastructure for the reawakening of Jewish and Catholic communities," says Eizenstat. But serious barriers exist: many properties are now in use by others, and the sheer devastation of Jewish communities leaves scant numbers to manage those that are returned.

Eizenstat emphasizes the importance of turning "examination of old facts" into "new realities." One example is the creation of the $60 million multinational Nazi Persecutee Relief Fund. This resulted from his office’s documentation of Nazi "victim gold," which led nine countries with claims to the remaining six tons of gold captured by the Allies after the war to instead donate their shares to the fund. Eizenstat worked to secure a $25 million contribution to the fund from the U.S. Congress.

Another example is the agreement signed by U.S. and European insurance commissioners to create a $90 million fund. This fund will redress particularly ghoulish wrongs: In the past, when Holocaust survivors or victims’ families tried to collect on insurance policies, insurers refused, claiming the premiums had not been paid by the policyholders in concentration camps, or requiring nonexistent death certificates of the murdered policyholders.

Furthermore, 17 countries have formed international commissions to examine their WWII role and relation to looted assets. Their work has already culminated in two world conferences, the first in London in December
1997 on Nazi gold. Last December Eizenstat organized and cochaired the Washington Conference on Holocaust-Era Assets, during which representatives of 44 countries and 13 NGOs discussed how to resolve outstanding claims dealing with looted art, insurance policies, and communal property, as well as how to initiate Holocaust education worldwide.

The fate of the 600,000 or so works of art confiscated by the Nazis has been particularly controversial, and Eizenstat helped develop and negotiate the Washington Conference endorsement of 11 principles to guide the return of looted art. "As Philippe de Montebello [director] of the Met [Metropolitan Museum of Art] says, ‘The genie is now out of the bottle.’ The art world will never be the same. Major museums are now reexamining their inventories," says Eizenstat.

At present, the under secretary’s efforts are focused on the issues driving another wave of class actions: slave and forced labor by German companies. An important distinction between the two must be considered in any settlement, he says. "Concentration camps worked victims, mostly Jews, to death. The intention of forced labor conscripted from countries Germany invaded was to keep the war effort going, not to kill the workers." As in the Swiss case, "we need to merge the class actions with a settlement. German companies will create a large fund, but they don’t want to pay twice. They insist upon closure from the class actions." He has already brought together plaintiffs’ attorneys, Jewish organizations, the Israeli government, and German Federal Minister Bodo Hombach, the German government’s agent for this issue, and will push for working groups to involve all parties. These working groups will deal with everything from slave and forced labor to Aryanized property and claims, German banks, and insurance companies.

The longtime government official says his lawyering skills have been indispensable in all his work. Eizenstat was a partner at Powell, Goldstein, Frazer & Murphy when he joined the Carter administration in 1977, serving as the President’s assistant for domestic affairs and policy, and executive director of the domestic policy staff at the White House. In 1981 he returned to private practice until his confirmation as U.S. ambassador to the European Union in 1993. From 1981 until 1992, while practicing law, he taught a course on presidential decision making at Harvard’s Kennedy School of Government, which frequently included HLS students.

Asked how Holocaust-related litigation affects his role as intermediary, Eizenstat says, "I tend to get potshots from plaintiffs’ attorneys, survivor groups that don’t want lawyers involved, and companies who don’t want to pay them large fees." He is urging plaintiffs’ lawyers to work either pro bono or on an hourly basis rather than for percentage fees. "After all, the U.S. government has done the heavy lifting. There has never been formal discovery taken. Not one interrogatory, not one deposition."

He adds: "The plaintiff class by definition is elderly. Each month fewer and fewer people remain who will benefit. Three to five years of litigation and appeals is self-defeating."

Eizenstat hopes that the hardest work will be over by the end of the century, and that restitution will come quickly. Asked why it has taken 50 years, he replies, "Soon after WWII, the Cold War erupted. We incorporated the neutrals back into our camp, and into NATO. Priorities changed." And as a consequence of the Cold War, "documentation in Central and Eastern Europe, behind the Iron Curtain, was unavailable." Furthermore, many Holocaust survivors were reticent about detailing the traumas they endured, even with family members. "But as they near the end of their lives, they become more willing to talk and recognize the need to talk."

Also spurring new international action is a "millennium mentality," Eizenstat says. In recent years, apologies and restitution acts by nations—including U.S. restitution payments to Japanese Americans interned during WWII—have multiplied as governments make efforts to "cleanse the wrongs of this century, to wipe the slate clean for the next."

The slate can’t be cleaned of all wrongs: anti-Semitism both insidious and overt has accompanied re-examination of the Holocaust and restitution efforts. The scrutiny of the Swiss banks in particular sparked open hostility toward Jews in that country. "Some parts of the Jewish community in Switzerland wish the settlement hadn’t happened," Eizenstat acknowledges. "It made life more difficult for them. But of the hundreds and hundreds of survivors I’ve met, the great bulk are pleased all this is happening. Even though what they will get back is a pittance, at the end of their lives at least the world finally recognized the plight they endured."

And while restitution is vital, ultimately it is remembrance of the suffering of millions, of the murdered family members and the struggling survivors—that matters most. Describing the new eight-country international task force dedicated to promoting Holocaust education worldwide that he helped organize, Eizenstat says: "It is very important that the last word on the Holocaust not be about money, but about memory."

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