[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]
THE STATUS OF INSURANCE RESTITUTION FOR HOLOCAUST VICTIMS AND THEIR
HEIRS
=======================================================================
HEARING
before the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
NOVEMBER 8, 2001
__________
Serial No. 107-47
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
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COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut MAJOR R. OWENS, New York
ILEANA ROS-LEHTINEN, Florida EDOLPHUS TOWNS, New York
JOHN M. McHUGH, New York PAUL E. KANJORSKI, Pennsylvania
STEPHEN HORN, California PATSY T. MINK, Hawaii
JOHN L. MICA, Florida CAROLYN B. MALONEY, New York
THOMAS M. DAVIS, Virginia ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
BOB BARR, Georgia DENNIS J. KUCINICH, Ohio
DAN MILLER, Florida ROD R. BLAGOJEVICH, Illinois
DOUG OSE, California DANNY K. DAVIS, Illinois
RON LEWIS, Kentucky JOHN F. TIERNEY, Massachusetts
JO ANN DAVIS, Virginia JIM TURNER, Texas
TODD RUSSELL PLATTS, Pennsylvania THOMAS H. ALLEN, Maine
DAVE WELDON, Florida JANICE D. SCHAKOWSKY, Illinois
CHRIS CANNON, Utah WM. LACY CLAY, Missouri
ADAM H. PUTNAM, Florida DIANE E. WATSON, California
C.L. ``BUTCH'' OTTER, Idaho STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia ------
JOHN J. DUNCAN, Tennessee BERNARD SANDERS, Vermont
------ ------ (Independent)
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
James C. Wilson, Chief Counsel
Robert A. Briggs, Chief Clerk
Phil Schiliro, Minority Staff Director
C O N T E N T S
----------
Page
Hearing held on November 8, 2001................................. 1
Statement of:
Brauns, Dr. Jack, Covina, CA; Mr. Israel Arbeiter, Newton,
MA; Mr. Arthur Falk, Boca Raton, FL; and Mr. Danny Kadden,
Olympia, WA................................................ 44
Eagleburger, Lawrence, chairman of ICHEIC, former U.S.
Secretary of State; Ambassador J.D. Bindenagel, U.S. State
Department Special Envoy for Holocaust Issues, U.S. trustee
for the German Foundation, and U.S. observer to ICHEIC;
Peter Lefkin, senior vice president, government and
industry affairs, Fireman's Fund Insurance Co., Allianz
Group; Nathaniel Shapo, chairman of the International
Holocaust Commission Task Force of the National Association
of Insurance Commissioners, NAIC representative to ICHEIC;
Gideon Taylor, executive vice president of the Conference
on Material Claims Against Germany, accompanied by Israel
Singer, vice president of the Claims Conference, chairman
of Negotiating Committee; and Roman Kent, chairman of the
American Gathering of Holocaust Survivors and ICHEIC
Members.................................................... 67
Letters, statements, etc., submitted for the record by:
Bindenagel, Ambassador J.D., U.S. State Department Special
Envoy for Holocaust Issues, U.S. trustee for the German
Foundation, and U.S. observer to ICHEIC, prepared statement
of......................................................... 76
Clay, Hon. Wm. Lacy, a Representative in Congress from the
State of Missouri, prepared statement of................... 42
Lefkin, Peter, senior vice president, government and industry
affairs, Allianz Group, prepared statement of.............. 118
Maloney, Hon. Carolyn B., a Representative in Congress from
the State of New York, prepared statement of............... 25
Morella, Hon. Constance A., a Representative in Congress from
the State of Maryland, prepared statement of............... 20
Schakowsky, Hon. Janice D., a Representative in Congress from
the State of Illinois, prepared statement of............... 39
Shapo, Nathaniel, chairman of the International Holocaust
Commission Task Force of the National Association of
Insurance Commissioners, NAIC representative to ICHEIC,
prepared statement of...................................... 92
Shays, Hon. Christopher, a Representative in Congress from
the State of Connecticut, prepared statement of............ 5
Taylor, Gideon, executive vice president of the Conference on
Material Claims Against Germany, prepared statement of..... 109
Tierney, Hon. John F., a Representative in Congress from the
State of Massachusetts, prepared statement of.............. 30
Towns, Hon. Edolphus, a Representative in Congress from the
State of New York, prepared statement of................... 162
Waxman, Hon. Henry A., a Representative in Congress from the
State of California:
Letter dated September 18, 2001.......................... 160
Prepared statement of.................................... 14
THE STATUS OF INSURANCE RESTITUTION FOR HOLOCAUST VICTIMS AND THEIR
HEIRS
----------
THURSDAY, NOVEMBER 8, 2001
House of Representatives,
Committee on Government Reform,
Washington, DC.
The committee met, pursuant to notice, at 10:10 a.m., in
room 2154, Rayburn House Office Building, Hon. Christopher
Shays (acting chairman of the committee) presiding.
Present: Representatives Gilman, Morella, Shays, Ros-
Lehtinen, Horn, LaTourette, Waxman, Maloney, Norton, Kucinich,
Tierney, Schakowsky, Clay and Lynch.
Staff present: Kevin Binger, staff director; James C.
Wilson, chief counsel; David A. Kass, deputy chief counsel;
Mark Corallo, director of communications; Chad Bungard, Pablo
Carrillo, Randall Kaplan, Matt Rupp, and James J. Schumann,
counsels; Robert A. Briggs, chief clerk; Michael Bloomrose and
Michael Layman, staff assistants; Robin Butler, office manager;
Josie Duckett, deputy communications director; Joshua
Gillespie, deputy chief clerk; Nicholas Mutton, assistant to
chief counsel; Leneal Scott, computer systems manager; Corinne
Zaccagnini, systems administrator; Phil Barnett, minority chief
counsel; Kristin Amerling, minority deputy chief counsel;
Michelle Ash, minority counsel; Ellen Rayner, minority chief
clerk; and Jean Gosa and Earley Green, minority assistant
clerks.
Mr. Shays. Good morning. A quorum being present, the
Committee on Government Reform will come to order.
I ask unanimous consent that all Members' and witnesses'
written and opening statements be included in the record.
Without objection, so ordered.
I ask unanimous consent that all articles, exhibits and
extraneous or tabular material referred to be included in the
record. Without objection, so ordered.
I ask unanimous consent that questioning for panel two of
the hearing proceed under clause 2(j)(2) of the House rule 11
and committee rule 14 in which the chairman and ranking member
may allocate time to a committee member as is deemed
appropriate for questioning, not to exceed 60 minutes between
the majority and minority in alternate 10-minute rounds.
Without objection, so ordered.
I ask that the requests for information the committee has
sent out in this matter as well as the responses received be
placed in the record. Without objection, so ordered.
I understand, Mr. Waxman, that you have a motion.
Mr. Waxman. Yes. Before we begin the hearings on the topic
today, I would ask unanimous consent that Representative
Stephen F. Lynch of Massachusetts be appointed to the
Subcommittee on National Security, Veterans' Affairs and
International Relations and the Subcommittee on the District of
Columbia.
Mr. Lynch is a new member of the committee. We want to
welcome him today to our committee. He has been a member of the
Massachusetts Legislature since 1994, and he has an interest in
long-term care and prescription drugs. And when it comes to the
issue of post office reform, he has a family connection because
his mother has been a postal clerk.
We are delighted to have him join us on the Democratic
side, and I would request that he be placed on the
subcommittees, as I have indicated in my request for unanimous
approval.
Mr. Shays. Your question is noted. It is part of the
record.
Mr. Lynch, we are delighted to have you as a member of the
committee. Very delighted.
Mr. Lynch. Thank you.
Mr. Shays. And by unanimous consent, it is approved; and
you are, in fact, a member of the committee. That is a lot of
power that I have here.
I would like to welcome our witnesses, I would like to
welcome our guests, and I would like the record to note that
this hearing is at the request of Mr. Waxman, eagerly agreed to
by our chairman, Mr. Burton, who is not here because his wife
is ill. He is with his wife and deeply regrets that he is not
here, and I am reading his statement that I concur with, so the
ayes are from him.
He wishes us good morning and acknowledges we are here
today to discuss the International Commission on Holocaust Era
Insurance Claims [ICHEIC].
The Commission was created in 1998 to assure that the
Holocaust survivors and the families of Holocaust victims
receive payment on insurance policies they owned before the
Second World War. The United States played a major role in
creating the Commission. So did Germany. So did Israel.
The hope was that we would resolve these issues once and
for all by providing restitution to those who deserve it. Today
we want to find out if the process is working or not.
Families face serious obstacles in seeking restitution.
When the Nazis hauled Jewish families off to concentration
camps, their personal documents were confiscated or destroyed.
There are no death certificates for millions of people who were
murdered at concentration camps.
After the war, the new Communist government in Eastern
Europe expropriated insurance companies and destroyed large
volumes of records. The challenges that these families face are
substantial. The Commission was created to try to head off
years and years of civil litigation.
Former Secretary of State Lawrence Eagleburger was asked to
head the Commission. This is a Herculean task, and it has been
a frustrating process. He deserves to be commended for taking
it on. I appreciate the fact that Secretary Eagleburger is
going to be here today.
All parties involved in ICHEIC--the Jewish organizations,
the insurance regulators and the insurance companies--believe
that legitimate insurance claims should be paid. But at this
point nobody is very happy with the process or the results.
There are a number of serious concerns that we are going to
examine today. Very few claims have actually been paid since
the ICHEIC process was initiated. Less than 2 percent of all of
the claims submitted to the Commission have resulted in offers
from the insurance companies. That is something that we are
concerned about.
We are fortunate to have with us several survivors who have
been through this process and can shed some light on the
problems that people face. I am eager to hear about their own
personal experiences.
One of the biggest issues that remains unresolved is
whether insurance companies should publish lists of all of
their unpaid policyholders. European insurance companies agreed
to review their files for all insurance policies held by
Holocaust victims. The insurance companies were supposed to
publish the names of people holding unpaid policies. However,
to date, very few names have been published. As a result,
families that have no documentation have very little to work
with.
To be fair, I should point out that what we are asking
these insurance companies to do is very difficult. We are
asking those companies to search through archives that go back
60 or 70 years. Those files have been through war, Communist
control, and the passage of 60 years. But it simply has to be
done.
The insurance companies want legal peace. If they want to
escape litigation, they have to leave no stone unturned. The
families deserve it. Justice requires it.
Another issue of great concern is the fact so many European
insurance companies aren't participating in the process at all.
Only five large companies have joined ICHEIC. These are
companies with subsidiaries in the United States. These are the
companies that face liability problems in the United States.
Many other German insurance companies have resisted joining
ICHEIC for too long. By refusing to participate in ICHEIC,
these companies are denying Holocaust victims and their heirs a
fair shake.
Secretary Eagleburger is working hard to try to get these
companies to participate. It has been a very frustrating
process. I would like to see our State Department communicate
to the German Government how important this is. We need to
bring closure to this issue. We can't do that unless every
company participates. I urge those companies to join the
Commission and bring some measure of justice to Holocaust
victims and their heirs.
There is also the question of who should pay for ICHEIC
operating expenses. German insurers have proposed that they
should be reimbursed for their administrative expenses. This
reimbursement would come from funds that are supposed to go
toward paying policyholders. We are talking about tens of
millions of dollars that could be used to pay deserving
claimants. The reimbursement issue is obviously significant.
One final issue that merits our attention is the deadline.
Should it be moved back? The Commission deadline for submitting
claims is early next year. If there are other valid claims out
there that have not yet been filed, the deadline should be
moved back. That is why this hearing is especially timely right
now.
The U.S. Government plays an important role as an observer
of ICHEIC. Ambassador Bindenagel, the State Department
authority on this issue, is here to give us his perspective on
whether ICHEIC is accomplishing its goals.
We have an important stake in this issue. We have many
Holocaust survivors living in this country. They are our
constituents. They deserve to be treated fairly. We have an
important foreign policy interest. We have a very strong
relationship with Germany. We have worked together for decades.
Bringing closure to this issue will make that relationship even
stronger. It will also strengthen the ties between Israel and
her European allies.
But one point has to be perfectly clear. There is only one
way to achieve closure. That is to make sure that every family
that deserves restitution gets restitution. We have to make
sure that every Holocaust survivor feels like he or she is
getting a fair shake.
A lot of work has been done. Progress has been made. But we
are not there yet. My hope is that this hearing can shed some
light on whether ICHEIC is working. If not, we need to find out
how to fix it. Congress and this committee in particular need
to play a productive role in making sure that all Holocaust-era
victims are paid what rightfully belongs to them, and we should
do everything we can to encourage the German Foundation to
participate fully and meaningfully in the claims process.
I want to thank all of our witnesses for being here today.
I thank Mr. Waxman for his dedication to resolving this issue.
This is something that he has been following for a very long
time, and now I yield to him for his opening statement.
[The prepared statement of Hon. Christopher Shays follows:]
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Mr. Waxman. Thank you very much, Mr. Chairman. I want to
thank you for chairing this hearing and Congressman Burton for
calling this hearing today so that we can air what I think is
an important issue.
Holocaust-era insurance restitution is an emotional and
complex subject, and I appreciate that we are getting an
opportunity to look at it and the work of ICHEIC, the
International Commission on Holocaust Era Insurance Claims.
It was 63 years ago this week, in November 1938, that the
Nazis' violent and pervasive persecution of Jews was launched
with Kristallnacht. For those who do not know, Kristallnacht
was a massive pogrom organized by the Nazis against Jewish
synagogues, schools and shops. For 3 days, rampaging mobs
freely attacked Jews in the street. It was known as
Kristallnacht, the night of broken glass, because of the mass
destruction left in its wake. By an official Nazi count, during
Kristallnacht more than 1,000 synagogues were burned, almost
7,500 Jewish businesses were destroyed and numerous others were
vandalized. In addition, thousands of Jews were rounded up and
sent off to concentration camps.
The repudiation of valid insurance claims started with
Kristallnacht. In the days following it, the Gestapo issued an
order requiring Jews to be billed for the damage and that any
insurance money due them would be confiscated by the state.
The Kristallnacht order largely concerned property
insurance. But the failure of survivors to receive compensation
also occurred with other popular types of insurance like life,
health, education and dowry insurance.
Jewish families paid premiums for years. Insurance
companies prospered from these payments. But when Jews were
killed or their property was confiscated or destroyed in the
Holocaust, their insurance policies went uncompensated.
The situation is especially poignant today. For decades,
families have been seeking compensation for those insurance
policies. Now they are reaching the ends of their lives, and
they may never see justice on this matter.
ICHEIC was created in 1998 with the hope that it could help
resolve the insurance claims of Holocaust-era survivors and
their families who face long-term intransigence by companies
that held their policies. But ICHEIC is simply not working very
well. The system has failed to ensure thorough identification
of policyholders, a dismally low percentage of the claims filed
through ICHEIC have been approved, ICHEIC standards have been
ignored, the majority of German insurance companies have not
even agreed to follow the ICHEIC procedures, and questions have
been raised regarding whether ICHEIC has been responsible with
its own expenditures.
The experience of Judith Steiner is representative. She is
a Holocaust Survivor from Los Angeles who contacted me in
despair over the rejection of her ICHEIC claim by RAS, a
subsidiary of the big German insurance company Allianz. Mrs.
Steiner filed her claim with a copy of the receipt for the last
premium payment her grandfather paid before the family was
taken from Hungary and sent to concentration camps. The company
insignia was on the receipt. Yet RAS responded that her claim
was denied because the existence of the policy could not be
corroborated in the company's files.
Some of the concerns that have been raised about the ICHEIC
system involve the administrative management of ICHEIC itself.
ICHEIC's purpose is to facilitate the compensation of
claimants, yet it has spent on itself twice as much as has been
offered to survivors and their families. ICHEIC has spent $40
million on salaries, conferences, marketing, and administrative
expenses, but only $20.9 million has been offered to survivors,
and even less has actually been paid out.
An even bigger problem is the actions of the insurance
companies. The ICHEIC process imposes a February 2002 deadline
for submitting claims applications. It appears that both member
and non-member companies are engaged in the strategy of
dragging their feet until the deadline has expired or potential
claimants have died off.
Most of the German companies have refused to join the
ICHEIC process. They have spent months offering various
proposals that condition the terms under which they would join.
For example, media accounts report that such companies are
demanding that a significant portion of the funds set aside for
insurance claim reimbursement be refunded to those companies as
a condition of joining.
As a result, families of survivors are caught in a catch-
22. They are facing an imminent deadline to file claims, but
they cannot file effective claims without information from
these companies about the policies they issued.
Most companies that have joined have not vigorously
participated. Unfortunately, it appears that, 3 years after the
funding of ICHEIC, an exhaustive policyholder list by member
companies has yet to be published. One study by a state
insurance commissioner estimated that, of a pool of 3 million
Holocaust-era policies issued, member companies had produced
only 9,000 names by the end of last year.
Further, since the establishment of ICHEIC, its member
companies have approved survivor claims at an alarmingly low
rate. This problem persists even where survivors were able to
identify the companies that held their families' policies. To
date, less than 2 percent of claims presented to companies have
resulted in offers. That really is quite remarkable. Less than
2 percent of the claims presented to the companies have
resulted in offers. Thousands of other applications are still
in limbo because the survivors who filed them cannot name the
company holding their assets.
Allianz has been sent approximately 15,000 claims and has
made only 4 offers. Winterthur has been sent approximately
6,500 claims and has made no offers at all.
ICHEIC established relaxed standards for assessing
insurance claims to help Holocaust survivors reclaim their
policies and set forth guidelines to help ensure appropriate
valuation of policies. Often, however, their claims have been
unfairly rejected, undervalued, or issued with confusing
explanations. Individuals who have received compensation have
often received minimal amounts, some totaling less than $2,000.
Time is running out for resolving all of those questions
and concerns, as the current ICHEIC deadline for accepting
claims is February 2002.
I am hopeful that we can accomplish two major goals with
this hearing. First, we must assess the concerns raised
regarding the ICHEIC system; and, second, we must help
determine what remedies may be appropriate to improve the
ICHEIC system.
At a minimum, one remedy deserves our immediate attention:
extending the February 2002 deadline for filing claims.
Fundamental reforms to the ICHEIC process would be integral to
such a step.
I am looking forward to today's testimony. The U.S.
Government has played a vital role in pressing for the equity
Holocaust survivors and families deserve, and today we will
hear from Ambassador Bindenagel.
In addition I look forward to the testimony of our other
distinguished witnesses. I am pleased that ICHEIC Chairman
Lawrence Eagleburger is with us today to help us look into
these matters. I want to thank him for making the effort to be
here during his recovery from surgery.
I also want to welcome the other organizations
participating today which, as members of ICHEIC, have
tirelessly advocated for the rights of survivors. The National
Association of Insurance Commissioners has tried to make sure
that European companies and subsidiaries operating in the
United States have dealt with Holocaust-era insurance issues
openly and honestly. The Claims Conference has been pressing
this issue for the 50 years of its existence. And Roman Kent,
chairman of the American Gathering of Jewish Holocaust
Survivors, has been a strong moral voice on this issue.
Finally, I especially want to welcome the Holocaust
survivors who have traveled from around the country to share
their stories with us. The whole process was set up to help
you. Unfortunately, it appears that others are benefiting
before you.
Mr. Chairman, I appreciate this opportunity for an opening
statement, and I look forward to the hearing.
Mr. Shays. I thank the gentleman.
[The prepared statement of Hon. Henry A. Waxman follows:]
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Mr. Shays. If the members don't mind, Mr. Foley is here
just to make a very brief introduction of one of our witnesses.
I would like him to be able to do that so he can get on his
way. So, without objection, if we can just recognize Mr. Foley.
Mr. Foley. Thank you very much, Mr. Chairman. Those of us,
in Ways and Means Oversight, are investigating the Red Cross
and September 11th Fund, and how they have used their money. I
think it is analogous to the conversation today. It goes to
integrity of the system.
I am pleased to introduce, Mr. Chairman, a constituent of
ours, Arthur Falk, from Palm Beach County, FL, who is now 80
years old. He was present in 1936 when his mother, Elsa Falk,
purchased 100,000 Swiss Franc life annuity policy from
Winterthur Insurance Co. in Geneva, Switzerland.
After his mother was murdered by the Nazis, Mr. Falk came
to America and served in the U.S. Intelligence Section of the
Bomber Command of the 8th Air Force Station in England. He
participated in 20 missions in the Flying Fortress over Germany
and occupied Europe. After the war ended, Mr. Falk found
documents showing that the Winterthur policy had in fact been
issued to Elsa Falk and that the Winterthur was aware of the
policy. The company continues to deny its obligations to this
day.
Mr. Falk tried repeatedly to get Winterthur to honor his
mother's policy. The company stiffly refused for years, using
all of the same excuses: There is no death certificate; you
don't have a copy of the policy; even if the policy is or if
there was a policy, it lapsed because your loved one stopped
paying premiums during the Nazi period.
Mr. Falk was in his late 70's when he found information in
Germany that the company claimed it could not find which proved
that the company indeed sold his mother the policy and revealed
for the first time a policy number. Winterthur continued to
refuse, even after Mr. Falk's own research provided that the
company has indeed sold his mother a policy. The company still
denied payment.
Mr. Chairman, I didn't fight to include insurance policies
in the Holocaust Commission law 3 years ago to watch insurance
companies continue to thumb their noses at Holocaust survivors.
That is morally deplorable and reprehensible. While CEOs of
these companies are sitting back on their billions, Holocaust
survivors and their families are being denied what is
rightfully theirs.
Mr. Falk not only survived the Holocaust, he was a hero of
World War II. To deny this man his benefits is atrocious and
should sicken anyone with a conscience.
I thank the chairman.
Mr. Shays. I thank the gentleman. I also thank the members
for allowing us to go out of order. So you can get on your way,
sir.
I would now like to recognize Mrs. Morella.
Mrs. Morella. Thank you, Mr. Chairman.
I also want to thank Congressman Burton for this hearing,
and I want to thank Mr. Waxman for the incredible work that he
has done on it. It was a privilege to hear our colleague, Mark
Foley, with his articulation also of the problem before us.
So this is a very important issue, whether the families of
Holocaust victims are being fairly compensated for insurance
policies that they held during World War II. It is a very
difficult problem in cities across Europe. As they were swept
away to concentration camps, their personal papers were lost or
destroyed. Families were separated from their loved ones, never
to be seen again. Families scattered and resettled in countries
all over the world.
Under these circumstances, how do families collect on life
insurance policies? There are many cases where children of
Holocaust victims remember that their parents had life
insurance policies, but they don't have the documentation. In
some cases, they recall the name of the insurance company
involved, but in many cases they don't.
These are very trying issues. These disputes have been
going on for more than half a century. But for the sake of
families that suffered through the Holocaust we need to bring
this matter to closure.
That is why the International Commission on Holocaust-era
insurance claims was created. This Commission, chaired by the
distinguished former Secretary of State, Lawrence Eagleburger--
he has been working on this for the last 3 years trying to
solve these problems, and he will be here on our second panel.
I also want to welcome the witnesses who have assembled on
our first panel, Holocaust survivors. Thank you very much for
coming. Thank you for your commitment through the years. They
are here to tell us about the problems they faced in this
process.
We also have several other Commission members whose
testimony will be very valuable.
One of the real frustrations with this process is that an
extremely low number of claims have been settled. According to
the most recent numbers that we have, about 40,000 claims or
inquiries have been submitted to the Commission. Some of these
families have documentation. Many of them don't. But less than
2 percent of those claims have been settled by the companies--
less than 2 percent.
In a situation like this, the only way to resolve these
cases is for the insurance companies to publish their lists of
unclaimed policies. These companies have been reluctant to do
that.
The process of getting lists from the companies reviewing
them and posting them on the Internet has been extremely slow.
I think it just stands to reason that when you have thousands
of families who lost everything they had, the only way to
resolve these cases is for the companies to publish those
lists. The companies are in the best position to produce
documentation on unpaid claims, and they have a moral
responsibility to do so.
Another disturbing issue is that many of the German
insurance companies are not participating in this process.
Right now, five of the biggest European companies are working
with the Commission. They are doing that because they were
facing lawsuits in the United States. But many smaller
companies have resisted cooperating, and that is just plain
wrong. Just because these smaller companies aren't subject to
lawsuits in the United States doesn't mean that they shouldn't
be held accountable.
It is a very difficult process. It is time consuming. It is
expensive. But every company that wrote insurance policies to
people who died in the Holocaust should do everything humanly
possible to resolve those claims.
I know that Secretary Eagleburger and other members of the
Commission, like Mr. Taylor, Mr. Kent, and Mr. Shapo, have been
working very hard to solve those problems; and I know it has
been the source of frustration.
One of the things I would like to know today is how we can
help or what we can do to prod the German insurance association
to take part in the process. What can we do to try to get these
lists published more completely? My point is that there is a
deadline. You have heard this mentioned by the other members
who have spoken. The deadline is in January or February for
people to submit claims. That is really just a couple of months
away.
There is a lot of confusion. Many companies aren't
participating yet. Complete lists haven't been published. I
certainly think the Commission ought to take a serious look at
extending that deadline. I know that everyone's goal is to
bring closure to this matter, but if there is an arbitrary
deadline, if all of the issues haven't been resolved, then many
families of the Holocaust victims aren't going to have any
closure.
So, again, I want to thank all of our guests for being
here. I look forward to hearing the testimony.
Thank you, Mr. Chairman, for the courtesy to give an
opening statement.
Mr. Shays. I thank the gentlelady.
[The prepared statement of Hon. Constance A. Morella
follows:]
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Mr. Shays. I recognize Carolyn Maloney.
Mrs. Maloney. I would like to thank the chairman and
ranking member for holding this important hearing and
especially thank the witnesses, Dr. Brauns, Mr. Arbeiter, and
Mr. Kadden for coming to share your stories with us today.
I would also like to recognize one of my former
constituents, Neil Levin, who was head of the Port Authority,
and who tragically died in the World Trade Center disaster.
Neil Levin was one of the founding members of ICHEIC. He was
last seen on the 63rd floor helping others during the World
Trade Center disaster and crash. His courage and compassion at
a time of crisis was a wonderful measure of his strength and
humanity.
As Superintendent of Banks for the State of New York, he
created the Holocaust Claims Office within the banking
department of New York. He was instrumental in persuading the
insurance companies to enter into a memorandum of understanding
that led to the creation of ICHEIC.
ICHEIC, for all of its faults has enabled Holocaust
survivors to receive more money in less time than the Swiss
settlement. In many ways, ICHEIC is part of Neil Levin's
legacy. More than 50 years ago, we witnessed one of the most
tragic episodes of man's inhumanity man, the slaughter of 6
million Jews and millions of others in Eastern and Central
Europe during World War II. Some were able to hide or escape
death, many with lingering memories and medical conditions that
will be with them for life.
There are currently 280,000 Holocaust survivors and family
members in the United States alone. It is these survivors who
in many cases are still struggling to live out their remaining
years with dignity.
Many of them have contacted the Claims Conference which is
located in the district that I represent. Many have come to my
office for help to receive the benefits they are rightfully
owed, and I would like to cite two examples that have come to
my office.
One woman made a claim based on the deposit receipt issued
by a bank. Before her parents were deported, they went to a
bank and put all of their valuable documents in a deposit box.
They received a receipt listing the contents, including a RAS
policy, which is an Italian subsidiary of the German insurance
company Allianz. During the war, the box was looted and the
contents taken. The insurance company says that the bank
receipt doesn't prove that the policy existed.
Another survivor who came to my office and into the claims
court had a diary that survived the war. In the diary an
insurance policy and number is listed. The insurance company
says that the diary could have been forged and that this isn't
sufficient proof that the policy ever existed.
It is for these people and too many more that I and many of
my colleagues request--demand that the insurance companies
publish all of the information regarding policies issued to
people before and during the war where no claims were made.
So far, the insurance companies have given only partial
information. We need a list of thousands and thousands of
policies that were issued during that era where no claims were
paid out and the names of the policyholders.
We owe it to the past. We owe it to the truth. With every
year that goes by, more and more survivors pass away. They
cannot wait any longer. Time is of the essence. Those who are
alive now were young then. Many of them did not know what
financial arrangements their parents or other relatives made.
Not surprisingly, more than 80 percent of all applicants
filing with ICHEIC could not name the company holding their
assets. Now they are in the twilight of their years. If the
insurance companies would publish the names of policyholders,
survivors could check to see if their families are listed.
Under the current system, they are left guessing, filling out
applications, waiting and wondering but, more often, being
denied.
To date, almost 40,000 claims have been presented to
companies, but only 545 offers have been made, while 92,295
claims have been denied. This system is simply unfair to the
survivors. It needs to be streamlined, and the list must be
published.
Thank you very much, and thank you for coming.
Mr. Shays. Thank the gentlelady.
[The prepared statement of Hon. Carolyn B. Maloney
follows:]
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Mr. Shays. At this time, I recognize Mr. Gilman from New
York.
Mr. Gilman. Thank you, Mr. Chairman, and thank you once
again for conducting an important hearing.
Mr. Chairman, today's hearing on the status of insurance
resolution for Holocaust victims is extremely important and
necessary since it examines the efforts of the International
Commission on Holocaust Era Insurance Claims, the ICHEIC group,
and whether the Commission that is chaired by a devoted public
servant and our good friend, former Secretary of State Larry
Eagleburger, is ensuring timely, efficient and appropriate
resolution of Holocaust-era claims.
It is the responsibility of the International Commission on
Holocaust Era Insurance Claims, a nonprofit entity comprised of
survivors, representatives, United States and European
insurance regulators, the Israeli Government----
Mr. Shays. Would the gentleman suspend just a second? I
would welcome any other member who would like to go now to
vote, and I will let them convene if I am not here to convene
and start so we can continue the statements without having to
hold our guests.
So if anyone would go and vote now, you can come back and
just convene and give your statements. Thank you.
Mr. Gilman [continuing]. Also comprised of Allianz, AXA,
Winterthur, Zurich and Generali insurance companies, to make
public the names of policyholders, developing and enforcing
relaxed standards of proof for resolving claims and overseeing
audits of member companies to assess their compliance with
ICHEIC rules.
Pursuant to the rules, the deadline by which all claims are
going to have to be filed is fast approaching. And while there
appears to be some dispute regarding whether the date is
January 31, 2002, or February 15, 2002, what is not in dispute
is that after those dates the insurance companies will no
longer be obligated to accept and process new claims.
We are here today to listen to our witnesses, and we thank
them for taking the time to be with us, and to determine how
ICHEIC and the insurance companies are dealing with this
particularly painful period in not only our Nation's recent
history but a period in the 20th century that ranks among the
world's most barbaric periods of humanity.
During this time, not only did the Nazi regime murder more
than 6 million of Europe's Jews, but they also stole their
property, and those who survived and their heirs saw little or
nothing of what property remained or received any compensation.
In fact, following World War II, many Holocaust survivors and
their heirs contacted European banks and insurance institutions
to seek compensation on their claims but were turned away due
to a lack of documentation.
The treatment that our survivors received as they sought to
rebuild their lives is reprehensible, and our Nation and its
allies must work diligently to try to right this terrible
wrong. We have to right these wrongs and do it while there is
still time, and ICHEIC cannot perform its job without the full
cooperation of its participating insurance companies.
A recent article from the May 14th issue of Forbes magazine
quotes Herbert Hansmeyer, the managing director of Allianz,
which is charged with overseeing the insurance giants, Western
Hemisphere operations and an ICHEIC participant, as stating,
regarding those claims, ``ultimately, it is an act of public
appeasement. I cannot become emotional about insurance claims
that are 60 years old,'' said Mr. Hansmeyer.
I find that particularly distressing, particularly because
while, as Allianz pocketed insurance premiums and enjoyed a
special relationship with the Nazi regime, its policyholders
were being exterminated in death camps with names like
Auschwitz, Bergen-Belsen and Dachau, to name a few.
Managing Director Hansmeyer is wrong! There is a lot to
become emotional about regarding Holocaust-era insurance claims
and about the untimely settlement of them.
I have been actively involved in making certain that our
survivors and their heirs receive due financial compensation in
a manner that is expeditious and painless as possible for them.
My State of New York is one of the few States that has enacted
a law that penalizes companies that fail to report the name of
any Holocaust-era policyholder to either the State insurance
office or to ICHEIC.
What is troubling to our committee is the rate at which the
claims are being processed and the number of claims rejected
versus those accepted and paid, as well as the issue of
publishing the names of all potential Holocaust-era
policyholders.
I understand the difficult task that Secretary Eagleburger
and his team have and the time constraints all of us are
operating under. Rather than sit here and point fingers at
ICHEIC, I feel it is more productive to ascertain what they are
doing to expeditiously process the claims and respond to the
needs of all prospective claimants and what all of us can do to
make certain that all of those entitled to compensation will
have their claim applications filed prior to the January or
February 2002 deadline and that the Austrian and German
Governments abide by their agreements entered into to
facilitate the publication, processing and payment of
Holocaust-era insurance claims in full accordance with ICHEIC's
rules.
I understand that these agreements were entered into after
ICHEIC was established, but, nonetheless, a solution must be
found to honorably settle all of the outstanding Holocaust-era
insurance claims for our survivors and for their heirs.
I thank the witnesses for appearing before us today. I
thank our chairman for conducting this hearing, and I will look
forward to their remarks on this important, sensitive issue for
Holocaust survivors and their heirs.
Mr. Shays. I thank the gentleman.
We are going to try to recognize Mrs. Norton and Mr.
Tierney. Mr. Tierney, do you have a short statement?
Mr. Tierney. So short it is amazing, as I really want to
hear from the panel.
Mr. Chairman, I thank you. I think what we are trying to do
here is the right thing to do, to assess the performance of
this and to move forward on that.
I will submit my statement for the record and allow you to
move on and to allow these gentlemen to be heard today.
Mr. Shays. Thank you, Mr. Tierney.
[The prepared statement of Hon. John F. Tierney follows:]
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Mr. Shays. Ms. Norton.
Ms. Norton. Thank you, Mr. Chairman.
Here we are in the midst of another war of fanaticism with
ethnicity and religion at its center and we are still trying to
resolve claims from the last World War. It is insult on top of
injury that the ICHEIC remedy has been so ineffective. I don't
think that we can let this matter stand without trying to find
out what happened.
The bottom line, as far as I can tell, is that ICHEIC has
not worked. It has been like Sisyphus rolling a stone up some
hill. The remedies do not come forward. Time is running out, or
somebody is trying to run the time out.
It seems to me, Mr. Chairman, that we will have no
alternative but to see that there is an extension of the
deadline for ICHEIC so as not to let the forces that were
involved defeat the very claims for which they are likely
responsible.
I thank you, Mr. Chairman.
Mr. Shays. I thank the gentlelady.
What we are going to do, as far as the first member who
comes in, Democrat or Republican, we are going to hand them the
gavel, and they can start their statements. We are adjourned
until they call us back into session.
[Recess.]
Mr. Waxman. Now we will continue with the opening
statements for members of the committee.
And I want to recognize the gentleman from Ohio, Mr.
Kucinich.
Mr. Kucinich. I thank you very much, Mr. Chairman. I want
to tell Mr. Waxman how much I appreciate his work to make sure
that the International Commission on Holocaust Era Insurance
Claims [ICHEIC], is proceeding along a path of effective
resolution of the claims, and I want to thank you for your
dedication in that regard.
I have to say, Mr. Chairman, I am very concerned about the
pattern of facts and evidence laid out before us today. It
strongly suggests that the German insurance industry has little
intention of restitution. The credibility of any insurance
company rests on trust.
In case anyone didn't hear that I will go over that again.
The credibility of any insurance company rests on trust
that when people pay premiums up until their death, that their
survivors, their beneficiaries, are entitled to payment.
Holocaust survivors and their families have had their suffering
compounded, and I hope this hearing will add to the momentum to
creating relief for these families. When you go over the record
and you see that people were denied claims because their
documents were confiscated in the ghettos or concentration
camps, because they didn't have documents because their family
members were murdered in gas chambers or murdered by Nazi death
squads, I have to tell you as someone who looks at this, that
on its face it cries out for justice.
There is a time when insurance companies have to stop
acting like insurance companies and start beginning to act like
they have some connection with the rest of the human race. When
a person harms another person, they really have three options.
The first is to feel honest sorrow and to make amends, or, in
this case, restitution. The second option is to defend your
actions. Thankfully that's not the case here. The third is to
admit your wrongs and to make amends and to pay a penalty. Now,
this insurance industry seems to have admitted its wrongs and
made available funds; however, it's been suggested that the
industry is withholding key evidence and therefore limiting its
liability.
My message today, then, is very simple. The insurance
industry here can heal these wounds or they can let the wounds
linger. It's a matter of moral responsibility as well as smart
business to make amends now. Efforts for insurance restitution
are important for those who suffered in the Holocaust. But it's
not just important for them, I submit it's important for the
world. We must not and we cannot forget the Holocaust, and we
must never forget its victims. And I would submit that as long
as uncompensated claims of the Holocaust remain unsatisfied,
justice remains unsatisfied.
So while this hearing will proceed, I expect, and in a very
gentlemanly tone, do not mistake that for a lack of commitment
that Members of Congress have to pursue this issue, to not let
it go. And I want to again thank Mr. Waxman for his dedication
on this and to let him know that he has allies all over this
country. Thank you.
Mr. Waxman [presiding]. Thank you very much, Mr. Kucinich,
for your very powerful statement. The Chair wants to recognize
Ms. Schakowsky for opening comments.
Ms. Schakowsky. I want to be on record as thanking Chairman
Burton for convening this hearing today and to express my
gratitude to our ranking member for the outstanding leadership
he has demonstrated on behalf of Holocaust victims and
survivors. He and his staff should be commended for the
substantial time that they have invested in this issue.
My District includes Skokie, IL, home to perhaps the
largest concentration of survivors in the country, and this
hearing means a lot to them. I appreciate the committee's
willingness to focus members' attention on this subject. We're
fortunate to have with us today extremely distinguished
witnesses; a lot of friends and familiar faces are here with us
today. I want to extend a special welcome to Nat Shapo who is
director of the Illinois Department of Insurance and has been
extremely helpful to my staff and me and has spent a lot of his
time focusing on issues of importance to survivors.
The most important voices we'll hear today are the
survivors who have traveled here today to help us understand
the devastating impact of the Holocaust and the subsequent
decades of frustration working for some small measure, some
semblance of restitution.
Today we're focusing on ICHEIC, on the organization set up
to resolve insurance-related issues. I have numerous concerns
about the process, the lack of cooperation by insurance
companies, the length of time it's taken. Survivors are an
aging population, and the fact that so many issues remain
unresolved and so many survivors and heirs have yet to receive
a dime is simply reprehensible. On November 10, 1997, I
participated in a hearing in Skokie that was convened under the
leadership of Deborah Senn, who at that time was Washington
State's Insurance Commissioner. Danny Kadden, who is here today
was there as well. We heard compelling testimony by people like
Erna Gans, a leader in the survivor community who never
received payment for the dowry insurance her father purchased
for her when she was born. Unfortunately, Erna and so many
others have already passed away.
There are still some 10,000 survivors in Illinois, and it
is my understanding that roughly 1,100 of them have filed
claims for insurance. To my knowledge only a handful, 14 have
received offers for payments.
I understand there is a deadline for filing claims and I'm
aware that serious outreach was conducted, but I have a lot of
concerns about this deadline. It's unfair, if only
symbolically, to give survivors such a short time to apply when
these companies have been stalling for a lifetime.
This is an issue that goes beyond urgency. There are
serious problems that need to be resolved, and Congress has a
responsibility to make sure that it's done so that those who
have lived to recall the Holocaust may also have some measure
of justice and dignity paid to them.
I have a number of specific questions for our witnesses,
and I look forward to the testimony and again thank Mr. Waxman
and the Chair for this opportunity. Thank you.
[The prepared statement of Hon. Janice D. Schakowsky
follows:]
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Mr. Waxman. Thank you, Mr. Chairman, Ms. Schakowsky. And I
do want to acknowledge the fact that one of the reasons we're
holding this hearing today is you have been adamant in trying
to get to the bottom of this whole issue and I thank you for
your leadership.
Mr. Clay, do you wish to make an opening statement?
Mr. Clay. Mr. Waxman, good morning, Mr. Chairman and
members of the committee and the panel of witnesses. Today this
hearing will scrutinize the efforts the International
Commission on Holocaust-Era Claims and whether ICHEIC is
efficiently resolving the insurance claims.
We have several issues, problems, and questions that need
to be addressed. The rate of claim approval is unacceptably
low. The failure of companies to publish policyholders' names
are subjected to privacy laws in other countries. However, when
there are over 3 million Holocaust-era policies and only 9,000
names have been published, we have to address this. We have to
address the problem of a January or February deadline.
Why do we have an imminent deadline and we do not have the
names of all policyholders and, additionally, all insurance
companies have not finalized the terms of their participation?
It appears that efforts are being made to terminate a process
before the logistics are in place to implement it. This is just
not right.
Why has there been 10 times more money spent on salaries,
meetings, and expenses than on claims? For the survivors it is
not just the closing of the business end of the estates in
question. Rather, it is the emotional closing of decades of
anguish and angst over the inability to have a final settling
of affairs of so many family members. This for many is an open
wound that never heals. Let us assist in bringing relief to the
surviving families that allows them to have a more peaceful
existence. We must find ways to exponentially raise the 2
percent settlement rate for submitted claims. I know that it
isn't easy for the various countries, insurance companies, or
the families, for everyone involved in the process. We simply
have to get the job done.
Mr. Chairman, I ask to submit my remarks for the record.
Mr. Shays [presiding]. That will be done.
[The prepared statement of Hon. Wm. Lacy Clay follows:]
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Mr. Shays. Well, I want to thank the patience of our
witnesses and just say that in speaking with other members,
it's a very important issue and members did want to address it
before you spoke.
We will now hear testimony from the first panel which
includes Dr. Jack Brauns, Israel Arbeiter, Arthur Faulk, and
Daniel Kadden. And I would ask that you stand and we administer
the oath as we do in this committee, and then we will hear the
testimony. If you will stand and raise your right hands.
[Witnesses sworn.]
Mr. Shays. Just note for the record that we have sworn in
all of our witnesses. The only one who has never been sworn in,
and chickened out, was Senator Byrd.
We will start with Dr. Brauns.
STATEMENTS OF DR. JACK BRAUNS, COVINA, CA; MR. ISRAEL ARBEITER,
NEWTON, MA; MR. ARTHUR FALK, BOCA RATON, FL; AND MR. DANNY
KADDEN, OLYMPIA, WA
Mr. Brauns. Thank you very much for inviting me. I'd like
to take the opportunity of giving you the mosaic of the
situation of my tragedy, and I would also ask you to give me 2
extra minutes. I time myself and----
Mr. Shays. Well, we'll hit the clock and then we will roll
it over for 2 extra minutes.
Mr. Brauns. OK. Thank you very much. Now, the mosaic of
life in 1930, Europe was already in turmoil and most of the
parents tried to do one thing: to get an insurance for the
education of their children because this was extremely
important, and my father was not a pioneer. There were many
other people who turned to insurance companies. This was the
only way of providing, the funds for the education of the
children. So my father turned to Riga Insurance Co. and
Assicurazioni Generali. Why Assicurazioni Generali?
Assicurazioni Generali was one of the biggest companies in
Europe and they enticed people with two items. The first item,
that the premiums have to be paid in dollars. That was the
requirement, to have the maturity of the insurance to be paid
in dollars, and my father got this special permission of the
Lithuanian--where I was born, I'm Lithuanian by birth--to get a
special permission to obtain dollars to pay the insurance
company.
The second enticement was that during the war the premiums
didn't have to be paid. They kind of abolished the premiums to
be paid during the war. So the premiums were paid until 1940,
when the Russians came and occupied Lithuania. That was a year
after the war already started. The war started in 1939. So the
premiums were paid. This enticement in the insurance that I
know that I had was for my education. Nobody had to die. I
didn't need a death certificate.
Now, I was liberated after 4 years of concentration camps.
I was liberated in Dachau on April 29, 1945, by the Third
American Army. My father went back to Lithuania to look for my
mother and my brother. He found my mother and my brother was
unfortunately killed in Stuttgart Concentration Camp.
Before he went to look for my mother, my father told me
``Go to Italy. Your education is paid in Italy.'' And it was a
very difficult time after the war to go to Italy. We had to go
to Hungary, and then we had to go to Austria and cross the
border. It was a nightmare, but I got to Italy and I enrolled
in the University of Medicine at the University of Torino,
Faculty of Medicine. The problem was my whole income was $10
which was given by UNRA, United Nations Refugee Administration.
And this $10 I learned to live on, but it was not enough as
soon as I joined the faculty of medicine.
In the policy--and I'm one of the fortunate. I have the
policy with me here, I will show you a little later. At that
time I didn't have the policy. My father went back to Lithuania
and he--it was buried, and fortunately he found it and it had
only the number 332, and with this number I went to Rome and
visited the Assicurazioni Generali headquarters on Piazza
Venetia. When I got there, they looked at the number and said,
``Well, we will look at it. Give us your address, you're
studying in Italy. We will contact you as soon as we found
out.'' I never heard from them.
In 1960 I was very fortunate that Vice President Nixon gave
a letter to Mrs. Kruschev to let my parents out of Lithuania.
Maybe some of you know, maybe you don't. And in 1960 my parents
were the only people who left Lithuania. And my father and
mother came to live with us in California. He brought with him
the original policy. So I'm fortunate that he had the foresight
to bury it and that it wasn't found by people who were trying
to look for peoples buried things in the ghetto.
Well, in 1960, I went back to Italy, I went again to the
Assicurazioni Generali the original policy. They looked at it.
They were very excited to see it. The policy was issued in
Triesta and has a stamp of Triesta--I mean the original was
issued in Triesta. They shook their head. They took my address
in California. I never heard from them.
Then I was very fortunate that Rabbi Cooper, the dean of
the Weisenthal Center in Los Angeles, went to Triesta and I
asked him personally to stop at the headquarters of Triesta.
He's a good friend of mine and he did it. He went down and he
presented them a copy of the original. He didn't want to take
the original. And they shook their head and said they will
contact us. Well, 2 years later, we didn't hear anything. Two
years later, I got the letter from ICHEIC, and this is the
biggest tragedy. You're talking about ICHEIC. In the policy--
and you will read it, how it's written, not only in numbers but
only spell them out. It's only a $2,000 policy. That was the
money that they were supposed to pay me.
Now, I want to tell you that I was starving in Italy as a
student because $10 was not enough for me. So the money that I
had to substitute for books and other things came from my food.
And after 4 years of camps, it was not a big pleasure to cut
the amount of food that was available to me. But anyhow, Rabbi
Cooper went, and 2 years later I got a letter from ICHEIC with
a big explanation.
Please help me to understand the letter. It says that my
policy basically is worth nothing because it was written in
Lats, which is Latvian money, and Lith, Lithuanian money; but
they haven't read my policy, because I would like you to read
it today and see what it says. My conclusion is that ICHEIC
never read my letter and made a judgment somehow saying--and
they offered $5,000, said that would be enough because it's
worth nothing. And I didn't even get it, Rabbi Cooper got it.
Anyhow, the maturity in the policy is written and we will see
it, that on September 25, 1945, the policy is mature, and the
value of $2,000 will be paid in dollars. See, the Italian
company is counting on not to have a lawsuit. I have lived in
Italy for 6 years and I got to know a lot of very important
people.
And just to make an answer to the comment that I heard
before at Generali's headquarters which is in Triesta. They
have a building for records. There were no floods there, no
earthquakes, and no fires. And I was told by a very close
friend of mine, the director of Generali who just finished his
duty of being director 2 years ago, not one document is
missing. Why did they deny me when I was so hungry? I mean,
$10; I mean, it's hard for you to understand to live on $10 and
go to school. But I finished. In spite of that, I finished by
determination. Maybe later I'll give you more answers if you
ask me, but anyhow----
Mr. Shays. Let me just encourage you to kind of wrap up
because we're almost going into 10 minutes.
Mr. Brauns. Yeah. What I'm asking is ICHEIC has interfered
in my lawsuit. I filed a lawsuit, and I cannot pursue it
because ICHEIC said it would interfere in the commerce between
Italy and United States. And the insurance company broke the
trust that my father took on himself. He trusted them. He's not
the only one, and this is a big trust breaking by an insurance
company.
In my family alone, there were four physicians and two
doctors in chemistry. I know they had insurance, but I cannot
prove it. With my parting from this world, the insurance
company is the winner. They have never released the name, and
they engaged in fraud. What did they do in fraud? Because they
gave the list to Yad Vashem and Yad Vashem, a clause that
says--they had to find the Jewish names, but they couldn't
release the names because they paid them for the contract. The
contract says you cannot release the names. So they go around
and say, well, we gave the names to Yad Vashem. But you call up
Yad Vashem now, they say, yes, we have the names but we cannot
release in the contract.
So I beg you not to interfere in the lawsuit. Let me sue
them. And the reason they're afraid from a lawsuit because
Generali has just applied and has gotten from them, Italian
Government, the funds for retirement that they administer, and
they didn't want any lawsuit or any negative feelings. And I
feel that ICHEIC has contributed for them achieving something
which is fraud.
And I want to say one more thing. My father said a woman
can either be pregnant or not. There is nothing in between. And
the same thing goes with honesty. Either you're honest or
you're not honest. You cannot be honest in the morning and
dishonest at night or vice versa. Thank you very much.
Mr. Shays. Thank you very much, Dr. Brauns.
Mr. Brauns. I will be glad to answer any questions.
Mr. Shays. And I think you will have an opportunity to make
any other point you wish. The committee really values your
testimony and----
Mr. Brauns. I did it in 5 minutes.
Mr. Shays. No, you did it in 10. And I was thinking you did
a perfect job, and we were delighted to hear from you.
Mr. Brauns. Thank you very much.
Mr. Shays. And we think of your being in a concentration
camp for 4 years, and it takes our breath away. You honor us by
being here.
Ms. Ros-Lehtinen wants to just make a very brief
introduction of someone----
Ms. Ros-Lehtinen. Thank you so much, Mr. Chairman. I
appreciate the time. I'd like to welcome my congressional
constituent and my dear friend, Mr. Samuel J. Dubbin to our
hearing today. Sam has and should be recognized for the work
that he's done for many years for our country and especially
for survivors of the Holocaust. In 1993 Mr. Dubbin served as
special assistant to Janet Reno and as deputy assistant to the
Attorney General for policy development. Sam served on the
Florida Transportation Commission and has more recently served
an appointment on the Miami Dade County steering committee.
Mr. Dubbin is a committed member of several Jewish
community groups in my area of south Florida and is a strong
advocate for Holocaust survivors, not just in our community but
throughout the United States. He has defended members of the
State Holocaust Education Task Force and has worked to
establish a Hate Crimes Act which would toughen criminal
penalties.
Sam Dubbin currently serves on the Board of Directors and
the Executive Committee of the Greater Miami Jewish Federation.
He's the chairman of the Community Relations Committee of the
Federation's Jewish Community Relations Council. In 1992, Sam
received the Federation's Stanley C. Myers President's
Leadership Award, and in 1993 he received the Partners with
Israel Award from the new leadership of Israel bonds. Sam has
distinguished himself as an outstanding member of our south
Florida community, and I welcome him here to our hearing today
because he has a lot to offer on this subject, and I thank you,
Mr. Chairman, for the opportunity.
Mr. Shays. I thank the gentlelady----
Ms. Ros-Lehtinen. He's the good looking guy there with the
red tie and the mustache.
Mr. Shays. We welcome you here. Thank you. I just also want
to thank again Mr. Waxman for allowing us to go out of order
but also for his request that we have this hearing. I am just
so grateful that you made that request.
Mr. Arbeiter.
Mr. Arbeiter. Mr. Chairman, members of the committee, I
would like to thank you for inviting me to testify today
regarding a matter that is of great importance to my fellow
Holocaust survivors, and I appreciate being given the
opportunity. And with your permission, Mr. Chairman, I would
like to express my most sincere thanks to the staff of this
committee for their hard work and for the help and assistance
that they gave me in coming here and being able to appear here
today. Thank you very much.
I was born in Plozk, Poland, one of five sons of Isaac and
Hagara Arbeiter. My father was self-employed as a custom
tailor. In addition, he employed two other tailors and an
apprentice. As such, my father made a comfortable living. He
was considered to have a middle class income. In order to
protect his family in case that something were to happen to
him, my father purchased a life insurance policy. However,
unable to pay premiums a year in advance, my father
periodically made payments to the insurance company. Every
week, an agent of the insurance company would call up on our
house and collect the premiums. He wrote the date and amount in
the booklet that was given to my father for that very purpose.
I remember distinctly when my siblings and I asked my father
why this man was coming every week to collect money, we were
told that payment was security for your future.
Unfortunately, our future was anything but secure. In
September 1939, World War II broke out and Nazi Germany
occupied Poland. On February 26, 1941, in the middle of the
night, following the orders of SS storm troopers, we were
ordered out of our homes and required to leave virtually
everything behind, including the life insurance policy
paperwork and the booklet in which the agents of the insurance
company recorded my father's payments.
From there we were taken to concentration camps. My parents
and my younger brother were later gassed to death in a camp at
Treblinka. Two of my brothers and I spent the next 4 years in
various concentration camps, including Auschwitz. Then by some
miracle the war ended and I was liberated.
While living in Germany, once a semblance of normality had
returned, I attempted to pursue my father's insurance policy. I
tried to find out whether the policy could be cashed in, since
my father had perished a few years before. However, my efforts
were unsuccessful.
Soon thereafter, I moved to the United States. In 1986, I
traveled to Poland and visited the house in Plotz in which we
lived, hoping to find any items that used to belong to my
family. However, the people who then occupied the house told me
that there was nothing remaining. It was not until the fall of
the year 2000 that I was informed about the existence of the
International Commission of Holocaust Era-Claims, ICHEIC, and
the availability of claims forms.
Upon learning of the commission, I obtained a claim form
and filed a claim. I then received a letter dated December 7,
2000, with the claim No. 00067890, in which it was stated that
all member companies will investigate your claim and report
their findings within 90 days.
Now, almost a year since the claim was filed, I have yet to
hear back one way or the other from ICHEIC. I called the
Commission several times; however, each time I've been told
that the Commission has not heard back from the member
insurance companies.
I'll read a letter that I have received from the
International Commission of ICHEIC.
Dear claimant, thank you for sending us your claim. We have
passed your claim to all member companies of the Commission
that could solve the insurance covered in the information you
provided. The companies will investigate your claim and report
their findings within 90 days. If a member company traces a
policy mentioned your claim and decides either to make an offer
or to decline your claim, they will write to you directly or
send a copy to us. Member companies that find no trace of any
policy mentioned in your claim will inform us. If no member
company finds any policy mentioned in your claim, we will write
to advise you as soon as all member companies complete
investigation. Please bear in mind that unless the companies
find a match, their findings need to be passed to us and we
cannot respond to you until we hear from all the companies. We
hope to be able to advise you within 90 days, but this could
take a little longer if any one company takes the full 90 days.
We have assigned the following number to your claim. Please,
will you keep a record of this and quote in any future
correspondence of this. Your claim number is 00067890. If you
have any further inquiries, please do not hesitate to call our
help line.
Mr. Chairman, I am 76 years old. I don't have much longer
to go nor do many of my fellow survivors. As such time is of
the essence, I appeal to you and to the members of this
committee to assist us. Please, please, do not allow the
insurance companies to retain that which rightfully belongs to
us. We cannot allow others to profit from what has been one of
the greatest atrocities in human existence.
Thank you for your time, and I appreciate being given the
opportunity to speak to you regarding a topic of great concern
to many Holocaust survivors. Thank you very much.
Mr. Shays. Thank you Mr. Arbeiter.
Mr. Kadden. Mr. Falk. We'll go on to Mr. Falk. You were
next on our list, but you were fourth on the table.
Mr. Falk. Good morning.
Mr. Shays. Good morning.
Mr. Falk. I want to express my thanks to the committee for
holding these hearings, and especially to Chairman Shays and
Congressman Waxman and Congressman Foley for assisting me in
telling the Congress about my insurance with Winterthur Life
Insurance Co. and with ICHEIC.
I was born in Hanover, Germany in 1921. My parents owned a
very successful cattle brokerage business as well as a very
substantial amount of valuable real estate in and around the
city of Hanover. Throughout my childhood, our family had a very
high standard of living. My brothers and I attended private
schools in Europe. When in 1936, around September, when I was
15 years old, my mother and I packed up a very large amount of
money, German mark bills, tightly rolled up into a thermos
bottle. We traveled to Geneva, Switzerland, to the home office
of Mr. Siegrist, a Winterthur insurance agent. At Mr.
Siegrist's insistence, my mother exchanged the marks into Swiss
francs in order to be able to buy a Swiss franc policy. I
witnessed my mother hand over a great deal of money to Mr.
Siegrist and sign some papers. She told me after we left that
she had bought insurances which would pay out money to her when
she left Germany.
My mother sent a letter to my brother in the same year, in
1936, in which she reported her efforts to provide for her
future. It mentioned all kinds of ways she was getting money
out of the country and specifically mentioned the insurance
from Winterthur. My brother saved the letter for his entire
life. The letter was dated December 1936, and it said: ``I'm
paying a life insurance which I made in Geneva. In case of my
death, get in touch immediately with Siegrist in Geneva.
Insurance is Winterthur. I also get a payout during my
lifetime. That at least is something from which I can live at a
later date in a foreign country. You see, I'm constantly
working at it.''
My mother sent me to live with my brother in New York when
I was 17 years old, in 1938. We stayed in touch with my mother
who was trying every possible way to leave Germany. This became
more urgent after Krystalnacht in November 1938, for which we
have just witnessed the 63rd anniversary. Unfortunately, she
never made it to safety. After Pearl Harbor in December 1941,
we never received any more information--communications, rather,
from my mother. I never saw her again.
During World War II, as a citizen of the United States, I
served in the intelligence section of the Heavy Bomber Command
of the Eighth Air Force. I served 4 years in the service, and I
was stationed in England most of my time. I flew 21 missions in
a heavy bomber, B-17, a flying fortress over Europe.
When the war ended, I joined the military government in
Germany around 1945-46, and I was stationed in Germany. My
first goal was to find out what happened to my mother. It was
not easy. Eventually the allied military authorities informed
me that she was deported by the Nazis from Hanover to Latvia,
to a death camp in December 1941. While I was in Europe, I took
the opportunity to try to deal with my family's affairs. In
1946, I personally visited Winterthur's Geneva office and tried
to redeem my mother's insurance policies. The company only
confirmed at the time that it had a record of policy, but
refused payments because I could not produce a death
certificate of my mother.
I visited other Winterthur offices in the 1940's, but the
company still refused to pay. I even mentioned this to
Siegrist, but it didn't help at all. The company even refused
to accept the Allied Military Government records documenting my
mother's fate. The company also refused to provide me with any
information about my mother's policies.
In the early fifties, the German Government instituted a
program to provide monetary reparations for Holocaust victims
known as the BEG law. Because of Winterthur's denial, I applied
to the German Government for compensation for my mother's
unpaid Winterthur policy of 1961. The German Government denied
my request in around 1963, but we did not appeal because we had
many other claims for our property in Germany.
For the next 35 years, I occasionally approached Winterthur
for payment of the policy, for copies of the policy, of any
kind of information in its files concerning the policy, but
Winterthur continued to deny my mother's policy. I really did
not press the matter because, quite frankly, it was becoming
very painful.
In 1997, I restarted my efforts to collect the Winterthur
policy after I saw the news about the bank guard who found a
Swiss bank shredding records relating to Jewish accounts. I
thought this is exactly what must have happened to my mother's
policy.
I began correspondence with Winterthur, and the company
continued to deny all my requests. They were very polite about
it, but they still denied everything. After several months I
contacted the Florida Department of Insurance which assisted me
in pursuing a claim under the ICHEIC.
In late 1998, through a record request which I made to the
German Government, I obtained copies of materials contained in
the German BEG file. For the first time I saw some of the
material Winterthur presented in the early 1960's which
acknowledged that Mrs. Falk had indeed purchased a policy in
Geneva, Switzerland in 1936, with a policy number of 46593.
That was the first time I learned about my mother's Winterthur
insurance policy number, and I immediately notified Winterthur
of my discovery.
Once I showed Winterthur the records I found, Winterthur
finally admitted that, yes, there was at least one policy sold
to my mother. A few months later, the company also confirmed
that Mr. Siegrist was their employee and that the policy was in
fact underwritten. But they have now asserted two new grounds
for denial: The premiums lapsed and the policy was illegal
because German law forbade German citizens in 1936 to purchase
insurance in Switzerland. The most recent offense was actually
asserted to an employee of the Florida Department of Insurance
in March 2000.
Of course, this did not stop Winterthur from taking my
mother's money in 1936. Winterthur's 1961 correspondence does
indicate that my mother's policy lapsed because she did not pay
the premium through January 1938. And Winterthur's position:
She only paid five quarters' worth of premiums. I find this
explanation very odd because she paid Siegrist a lot more than
2,100 Swiss francs. Winterthur claims it's all that they paid.
And when I say ``a lot more,'' I mean a lot more. She smuggled
thousands and thousands of German marks for the purpose of
buying that insurance. Still Winterthur says they're sorry, but
they don't owe anything if the premium was paid before the 3-
year minimum before the policy converts into an annuity or
fixed obligation.
Mr. Shays. Mr. Falk, if I could ask you a question, you've
been 10 minutes, and your testimony is essential. I'm just
curious how much longer it will be.
Mr. Falk. Mr. Chairman, can I ask you for 1 minute, please?
Mr. Shays. I will definitely give you that. Is that what
you can do? You can finish up in a minute.
Mr. Falk. I beg your pardon?
Mr. Shays. Do you think you can finish up in a minute?
Mr. Falk. Yes.
Mr. Shays. Why don't we do that?
Mr. Falk. Thank you.
So even though Winterthur now admits what they previously
denied about my mother's policy and Mr. Siegrist, that they
still turned me down, I was shocked because the whole purpose
of ICHEIC was for the companies to apply relaxed standards of
proof. In addition, Winterthur's denial, based on a lapse in
policy premiums occurring in 1933, is a violation of Chairman
Eagleburger's ICHEIC ruling. Winterthur turned me down under
ICHEIC in 1999. The ICHEIC rules said if I used ICHEIC's appeal
process, I would have to waive my rights in the courts or to
the courts.
Since Winterthur, as a board member of ICHEIC, had
basically ignored my whole premise of ICHEIC, I didn't see any
purpose of giving up my legal rights for an ICHEIC appeal.
Therefore, I hired an attorney and filed a lawsuit in Federal
court in south Florida. Now we are litigating Florida's
jurisdiction over Winterthur. I really can't see when we will
have a decision on the merits. But Winterthur ignored ICHEIC
and there was no remedy except for me to go to court.
Mr. Shays. Thank you, sir. I appreciate your testimony.
Mr. Kadden.
Mr. Kadden. Thank you very much, Mr. Chairman, Congressman
Waxman, members of the committee. I will attempt to be succinct
in the interest of time, although the subject matter as you can
see is a very complex one and we all struggle with it.
My name is Danny Kadden. From 1997 until early this year, I
staffed the Washington State Holocaust Survivors Assistance
Office, a special project under the direction of the Insurance
Commissioner of Washington State. In that capacity I had
personal contact with hundreds of Holocaust-era insurance
claimants in my State, other States, and from around the world.
I have heard their stories, reviewed details of their claims,
participated in the formal negotiations that led to the
creation of ICHEIC, and have closely monitored ICHEIC up until
the present time.
Thank you first and foremost for your interest in this
issue and for dealing with a topic that is both important and
unfinished. I appreciate the opportunity to share the knowledge
that I have developed over the last few years, and I'm
especially happy to sit next to these survivors with me today
in support of their efforts.
I'm also mindful of the 63rd anniversary of Krystalnacht,
which Congressman Waxman alluded to. It's profoundly relevant
to our discussion here today, because history notes that in the
aftermath of the violence, Jews in Germany lost their right to
insure their lives and property and to receive insurance
benefits owed to them. The issue of property insurance in
Germany looms large today, and I will refer to it in just a
moment.
I'm here to communicate today a simple yet sobering
assessment of the Holocaust insurance claims process. It is not
working. After over 3 years of struggle, the International
Commission has simply not taken care of the business it was set
up to do. For the survivors in the public, what matters most is
the bottom line. This is the bottom line. Over a 3 period and
after over 75,000 claims submitted, only 500 and some-odd
settlement offers have been made. The denial rate, as has been
mentioned, approaches 98 percent.
This is not what survivors expected in 1998 when ICHEIC was
formed. At that time there were hopes on all sides this matter
would finally be put to rest in dignity. As revelations grew in
1997 about the scope of unpaid insurance policies, and as the
threats of class action lawsuits began to be felt by the
companies, public officials began to take action.
Washington State Insurance Commissioner Deborah Senn
proposed a special working group under the National Association
of Insurance Commissioners, and she chaired in 1997 and 1998 a
series of public hearings across the country, in which
survivors and heirs movingly told of their efforts to recover
insurance proceeds from European companies. Legislation was
adopted in several States requiring companies to divulge the
names of Holocaust-era policyholders so that families could
learn that a relative had insurance and that a claim might be
pursued.
The creation of ICHEIC was really the product of these
lawsuits, hearings, and legislative efforts. The idea was to
create a voluntary process to handle worldwide claims according
to clear and consistent standards that took into account the
special historical circumstances of the Holocaust. Claims would
be determined using relaxed standards of proof, and there was a
clear recognition that the names of policyholders located in
the extensive records and archives of the European insurers
would be published.
That vision has not come to fruition, and here are just a
few of the problems we see: First, the claims denial. As I
noted, denied claims outnumber offers 19 to 1. Under ICHEIC
rules, claims are decided directly by the companies themselves,
which are responsible for interpreting and applying the relaxed
standards without any oversight at present. From the outset,
the ICHEIC process has been seriously compromised by a lack of
accountability and independent oversight. After arduous
negotiations, a complex set of rules and guidelines were
adopted to govern the validity and value of claims. These have
been applied by the companies inconsistently and arbitrarily,
allowing the burden of proof to be shifted back to the
claimants. Relaxed standards have become an insurmountable
burden that survivors cannot meet. Rulings by the chairman to
correct some of these problems have met with stiff resistance
by the companies, and it is unclear when and if they will abide
by the rules as interpreted by the chairman. In short,
survivors are getting a sense that the process is increasingly
stacked against them. That may be a reason why two thirds of
those who have received offers have not decided to accept them
or not.
Another issue of claims in limbo. Literally thousands of
claims have been submitted in good faith and are sitting with
nowhere to go. A significant number of these have remained in
limbo for well over a year, because the German insurers in
particular have not agreed to join ICHEIC. And I believe that
at the next panel that will be addressed in more full.
Math and validations are a problem. Whole categories of
claims, including the enormous unpaid property losses suffered
in the tragic events of Krystalnacht, have not been accepted by
ICHEIC and have been invalidated. For these people, ICHEIC is
not an available option.
Finally, a growing number of claimants are unable to get
responses from ICHEIC about the status of their claims. Some
call a right, as we have heard, pleading for answers. To them
ICHEIC looks like a bewildering bureaucracy which assigns
people a number and doesn't answer at all. Unlike Mr.
Huntsmeyer, it is a very emotional issue for the claimants.
Finally, for survivors, the ICHEIC process simply cannot be
considered valid without the publication of comprehensive lists
of policyholder names. And I want to explicitly link the issue
of deadline with the publication of names.
Let me focus the remainder of my time on this issue and why
it is so vitally important. Persons making claims today, with
very few exceptions, are not the original policyholders. They
are primarily survivors who experienced the Holocaust as
children and are the legal beneficiaries of policies purchased
by their parents or other adult relatives before the war. They
did not know details of their parents' finances. They did not
inherit well-kept files and documentation. But they do have
memories, as we have heard.
It's not at all surprising that up to four out of five
claims submitted to ICHEIC do not name a company. Most
claimants simply do not know. But they have a high degree of
certainty that coverage did exist and that their father and
mother's name and other details lie today in the files of an
insurer. They simply want to review lists submitted by the
insurers to confirm the existence of the policy and to go
forward.
The companies have all along been resistant to the
publication of names. This issue lies at the heart of contested
State laws. It is the focus of H.R. 2693, the proposed
Holocaust Victims Insurance Relief Act. It has been debated
endlessly within ICHEIC. The primary bone of contention
concerning the German insurers from joining ICHEIC is the
requirement of publication of names. Rather than actively
challenging company resistance to publication, ICHEIC has
attempted to work around the companies and locate policyholder
data in public archives in Europe. The names found on the
ICHEIC Web site today are almost all the product of this costly
research rather than from company sources. It is a welcomed
public resource that has proven the value of publishing names,
but the research remains unfinished.
Many more archival sources remain untapped due to lack of
funding. Archives, while valuable, are not the most effective
sources of lists. For every name unearthed by the hired
researchers of ICHEIC, there are likely 100 in company files
which have not seen the light of day.
I would like to add, if I may, a brief personal note which
illustrates this issue. My grandfather, Hermann Motulsky, was a
German Jewish merchant in a small town, who was imprisoned in a
concentration camp but was able to leave Germany safely before
the war started. But he lost everything. After the war, he
applied to West Germany for compensation for property and other
damages suffered due to persecution. On his application, he
left blank a section dealing with unpaid or confiscated
insurance, suggesting that he had no policies to claim. Earlier
this year his name appeared on the ICHEIC Web site, indicating
that a public record had been found of insurance policies he
owned in Germany before the war. In fact, I learned he owned
three insurance policies in 1938, which he was forced to cash
in just weeks before he left the country. The proceeds went to
pay exorbitant taxes applied by the Nazis to fleeing Jews, a
form of stealing. Years later he did not seek compensation for
these policies, no doubt because he thought they were
officially cashed in and no longer valid. Our family records
did not indicate any record of these policies.
Now we know better, and we'll be pursuing what appears to
be three valid insurance claims.
The lists work. As we sit here today, we're just a few
weeks away from the 2002 ICHEIC claims deadline. Unless the
lists are released, the process will fall far short of dealing
with the problem and then the problem won't go away.
Let me conclude by saying survivors and the public are
increasingly doubtful that some meaningful measure of justice
will be achieved through ICHEIC. The hope they felt that an
honest, fair, responsive and transparent system to handle
Holocaust-era insurance claims can be achieved is quickly
vanishing. They know time is running against them, and it
appears they have few places to turn for help. They want to see
justice in their lifetimes. They want to have options to pursue
what they feel is right.
When they see their own executive branch of our government
pledged to defend German companies in the U.S. Courts against
lawsuits seeking redress, they are frankly dumbfounded and
angered. How, they ask, can legal peace be awarded to the
Germans or any company when they have not delivered on their
promises to settle insurance claims? Coming after so many
decades and so late in their lives, it is a particularly cruel
and difficult disappointment for them to feel again victimized
and without a voice in the process.
Mr. Shays. Thank you, Mr. Kadden.
Mr. Kadden. Thank you.
Mr. Shays. Before I recognize Mr. Waxman for 10 minutes,
I'm not sure I will be here when the next panel comes up and
given the introduction of two other witnesses, or at least one
and a guest, I wanted to acknowledge the presence of a friend
and a neighbor and someone who has been very helpful to me on
these issues and other issues--Roman Kent, who is the chairman
of the American Gathering of Holocaust Survivors and an ICHEIC
member--and just point out that he was born in Lodz, Poland and
during the war years from 1939 to 1945--this blows me away--he
spent that time in the Lodz ghetto and in Auschwitz and Dachau
and Flossenburg concentration camps, and he arrived in the
United States in 1946 under the auspices of the children's
quota of U.S. Government's displaced persons.
He started a very successful international trading company
in Atlanta and moved to New York in 1953, and has lived in
Stamford for a number of years. I will say he has a tennis
court, and we are neighbors, and he's never invited me to play
tennis with him, and that's the only negative that I know about
him. Thank you for that opportunity to introduce you. And,
Roman, it's nice to have you here.
Mr. Kent. Thank you.
Mr. Shays. Now, Mr. Waxman, you have 10 minutes.
Mr. Waxman. Thank you, Mr. Chairman. I appreciate the
testimony that each of you has given. It's remarkable that
after all these decades have passed that there seems to be no
acknowledgment by the insurance companies to the claims, even
when you have such clear information about the insurance. And
not only are the insurance companies refusing to acknowledge
it, the question in my mind is whether the ICHEIC process is
working, because that process was set up to streamline the
ability for people to receive compensation for insurance
policies that they had. Do any of you feel that the ICHEIC
policy has been helpful, or do you feel that it has been
ineffective? Dr. Brauns.
Mr. Brauns. ICHEIC has--first of all, they made a judgment
on my insurance company I'd like to show you, written in
dollars, that say that it's not a dollar insurance, they have
to do it in Lats. But the main thing that bothers me, they
interfered with the right of a person to sue the company. They
have advised the Justice Department that stopped all the
lawsuits for Generali--and I'm sure the German, too--the other
insurance company, but this is the problem. Because when you
can sue, you can bring all kinds of evidence.
I will tell you something that surprised many people who
have forgotten. In the Nuremberg trial it was brought out that
the first minister of Hitler was the president of the German
insurance company, and he cooperated with the Gestapo and gave
the names of the people who had 50,000 or 20,000----
Mr. Shays. Just move the mic a little further away.
Mr. Brauns. OK. Who had insurance and they were--he was
reported to the Gestapo. The Gestapo went and killed the people
and the German Government shared the money with the Gestapo.
But this is on the official record of the Nuremberg trial. So
we have forgotten what really happened. It was incredible, and
many people who are historians have forgotten that or
overlooked it, but this is--and I can provide you, I mean----
Mr. Waxman. I would like to get that information, so you
can put it in the record. But I want to ask about ICHEIC of the
other witnesses, because what I want to find out is what we can
do now to----
Mr. Brauns. Please let them sue, let them----
Mr. Waxman. So you feel you should not be barred from your
lawsuit?
Mr. Brauns. Exactly.
Mr. Waxman. OK. Mr. Arbeiter.
Mr. Arbeiter. I don't think that ICHEIC is of any help at
all. The only thing that I think they are good at is spending
the money.
We understand that out of the very few claims that have
been settled with the help of ICHEIC, they spend about $30
million for those few settlements. I have personally called
ICHEIC several times and I get the same response, the same
answer.
Mr. Waxman. I gather the problem with your claim is that
you didn't know the insurance company name?
Mr. Arbeiter. Yes.
Mr. Waxman. So ICHEIC doesn't know to whom to send it, to
which company to send your claim?
Mr. Arbeiter. I don't know if they are doing anything. We
didn't hear from the insurance companies. When we hear from the
insurance companies, we will get back to you. I don't know
whether they are doing anything on it or not, because I get
every time the same answer.
Mr. Waxman. Mr. Falk, do you want to add anything on the
ICHEIC issue?
Mr. Falk. It is very hard for me to judge. Perhaps it is to
see to it that perhaps ICHEIC gets to the funds that was
promised to them, the funding.
Mr. Waxman. They are frustrated. I am sure that we will
hear later that the companies are holding back.
Mr. Falk. Well, I am talking about the funding that was
coming to them and never got there.
Mr. Waxman. Yes.
Mr. Falk. And the funding--the members of ICHEIC should not
be able to decide on an independent committee to be established
and to pay out the fund at their discretion, meaning whoever
presents whatever they have, that is the way to do it. That is
the way to wind down, the way I see it.
Mr. Waxman. Yeah.
Mr. Falk. There is no other way that I can see it. It is
very hard.
Mr. Waxman. Let me ask Mr. Kadden questions. All of you, I
appreciate what you had to say. Mr. Kadden, you have been
representing other people as well as your own family situation.
What suggestions do you have to us to improve this whole
situation in the time that we have available to close these
cases?
Mr. Kadden. Unfortunately, I think we are in a very
difficult position based on the whole structure of ICHEIC. And
I don't want to be sanguine about it, there are those who argue
with some force that the whole way ICHEIC was created, its
charter, is very hard to overcome.
More than one person has used the expression the fox
guarding the hen house. The role of the companies in the
government structure of ICHEIC is very troubling. That was
certainly not the vision of a number of the State regulators
when the first discussions occurred. But that is what was done.
That is how it was formed.
We can speak all day, as I have on other occasions, on
other days, all day about this. From the point of view of where
we are now, I believe there has to be some sort of creative
public accountability. It may not be done through any formal
legislative or legal structure, but there has to be some sort
of openness.
Mr. Waxman. On whose part?
Mr. Kadden. Well, I think there are a number of parties in
the public, including the public in the business world, in the
Jewish community, in government, who might be willing to step
forward and serve as an advisory board to getting ICHEIC's
house in order, working closely with--Chairman Eagleburger has
worked tirelessly to try to balance the different forces on the
ICHEIC. As a private entity, I am not sure what kind of reach
other than the voluntary advisory commission could have to
address some of the issues.
There are pure business issues involved here with
management and accountability of finances and the claims
process itself.
Mr. Waxman. Management issues within ICHEIC or within the
companies?
Mr. Kadden. Now within ICHEIC. Coming most recently from
the point of a State regulator, we always approached this as a
regulatory issue. I think I was going to say my final thoughts
were, we have 50 State insurance regulators in this country who
are well equipped to handle companies. There are some serious
legal issues involved. I am not going to address those today, I
am not competent to do that. But I think there are a number of
regulators who would like to see this logjam lifted, and will
provide resources to do that within the different State laws
regarding regulation.
Now, I do believe, though, in all honesty, that this has to
be done on--as ICHEIC was created--on a voluntary basis. The
solution has to be reached on a voluntary basis. The public has
to be informed. Your help is very important. This hearing is
part of that process.
Mr. Waxman. Thank you. I hope so. Some have suggested that
claims for the types of insurance processed by ICHEIC may not
be appropriate because victims of Nazi persecution were
compensated by the German Government, that a lump sum payment
was made to Israel. How do you respond to that assertion?
Mr. Kadden. The fundamental issue here is a contractual
agreement, relationship between families who purchased
insurance and the companies or their successors. In the large
scale of things, collective compensation has had a place. But
insurance was probably the most widespread form of family asset
that was systematically looted by the Nazis.
Not everyone had Swiss bank accounts, but just about
everybody had some kind of insurance, modest as it was, and it
meant something to them, as we heard.
That was the basis of the original agreement between the
company and the families. That should be the basis of the
solution. Families should benefit. The children of survivors
who are with us today should personally benefit during their
lifetimes and have the satisfaction to close the book.
Other forms of creative compensation may be useful in other
venues, but not in this. I think insurance is a very personal
issue, and I don't think there is any way around that.
Mr. Waxman. Do you think that the U.S. policy should
continue to be to advocate dismissal of lawsuits against German
and Austrian insurance companies regarding Holocaust-era
insurance claims?
Mr. Kadden. As I said, I think I can speak for survivors on
this most comfortably. There is a reaction of being dumbfounded
by putting literally the cart before the horse. Fix the problem
with unpaid claims before you close out people's options to
pursue justice in our American court system.
Now, again, I can't address the complex legal issues, but I
know from a moral point of view and from the point of view of
survivors, it makes no sense whatsoever that their options are
closed to them in the interests of economic policy and world
trade.
That may be an argument that some can have on governing
levels, but for the survivors in the street, so to speak, there
is no understanding whatsoever of this. We see people today who
are really exceptions. They have had the courage to step
forward and speak out, to allow themselves to continue to
pursue these claims for 50 years. Most give up. Most haven't
made it to this point.
I think I speak for them when I say they don't understand
how the policy of legal peace can be put before resolution of
the choice, or at least a process that gives them a fair shake.
Mr. Waxman. So it is your position that we not have the
current deadline, and that the deadline should be tied to the
publishing of the lists, and separately we not have any kind of
efforts by the U.S. Government to stop lawsuits until we have
got this whole system worked out?
Mr. Kadden. Well, if the deadline is extended, I think the
same argument can be used to apply to other actions which
affect the claims process on behalf of individuals.
And I think there would be strong support for tying kind of
suspension of all of the doors closing until we see some
movement on getting claims paid and think there is a
relationship there that can be extended not just to the claims
line, but also to allowing people to at least walk their way
through our American justice system in order to get some sort
of justice.
Mr. Waxman. Thank you. Thank you, Mr. Chairman.
Mr. Shays. I am going to recognize Ms. Ros-Lehtinen in just
1 second. I would like, Dr. Brauns, for you to hold up a
document that is priceless.
Mr. Brauns. It bothers me that ICHEIC has interpreted----
Mr. Shays. Hold on 1 second. We have one problem. We have
someone that has to translate.
Mr. Brauns. It is in English.
Mr. Shays. No, the reporter. You just left the mic. I want
you to go back to that mic, and I want you to hold those
documents up for me to see, sitting down right over there.
Bring both documents there. And I would like you to hold those
documents up so Mr. Waxman and the rest can see that. I want
you to describe to me what that document is.
Mr. Brauns. Well, there are two documents. One is the Regal
Union Insurance Co. And then I have a reinsurance from
Assicurazioni Generali. And it is written here, $2000 and then
in dollars--it is printed out in dollars, $2000, New York Bank,
to be paid or something like that. So it is documented, and
that is why we need a court.
Mr. Shays. Compounding $2,000, it would become a noticeable
amount of money.
Mr. Brauns. It was interpreted that it is worth nothing.
Mr. Shays. I understand probably more than the money,
obviously more than the money is the principle of the thing.
Mr. Brauns. The principle. It was a trust that many people,
not just my father, my father was a very well-known physician.
But there were other people that were not. My father was a
pioneer in doing it. What the community was doing to provide
for their children like anybody here is providing for their
children, education somehow, some way, and in the proper
circumstances that was the only circumstance we could provide,
because money in the bank meant nothing. And the houses meant
nothing for education, because the war was already--it was
1930. I was 6 years old. It is tragic, because I feel--the
organization like ICHEIC, and I have nothing. I mean you cannot
call them. They don't answer.
Mr. Shays. We get the point very clearly. I will be
leaving, and I just want to thank each one of the witnesses for
their participation. I thought we had a problem with overseas
banks and investment houses, and the stealing of money. We know
that we have slave labor, but I have never really given the
kind of focus on this issue. It just blows me away.
At this time I recognize Ms. Ros-Lehtinen.
Ms. Ros-Lehtinen. Thank you very much, Mr. Chairman. I
appreciate the time, and I am also very surprised by the
testimony here today. We thank each and every one of you for
coming today and sharing your story.
I would like to ask about the secrecy and the transparency
of the ICHEIC meetings.
Are ICHEIC meetings open to the public? Are ICHEIC meetings
open to representatives of grass roots Holocaust survivor
organizations? Does ICHEIC disseminate publicly the transcripts
of its meetings? And how are survivors supposed to find out
about ICHEIC proceedings?
And anyone may answer. Mr. Kadden.
Mr. Kadden. The answers to your questions are: No, no, no,
and no. I had the opportunity to attend ICHEIC plenary meetings
on an extraordinary basis through the permission of the
chairman as a representative of one of the State regulators.
There are formal members of the Commission who are State
regulators, elected officials and appointed officials of State
governments, and also the State Department is represented in an
observer capacity.
But, in terms of their interaction with the public, it is
unfortunately a series of no answers. There are no records of
the meetings available to the public. From time to time I am
aware of groups asking for some sort of explanation, and these
are generally not available as far as I have been told. There
are groups that have asked to attend just as an observer
status. I believe these have been unfortunately turned down.
Ms. Ros-Lehtinen. They have been turned down. What reasons
have they been given for being turned down?
Mr. Kadden. I am not certain what the specific reasons
were, except that the ICHEIC meetings are conducted on
sensitive matters and that some of the members of the
Commission would be uncomfortable with members of the public
being there.
Ms. Ros-Lehtinen. Would any other panelists care to answer
that?
Mr. Brauns. As far as I know, I could never get in touch,
and I tried to see Eagleburger and Eizenstat and I couldn't get
through to them.
Ms. Ros-Lehtinen. They would not respond to your requests?
Mr. Brauns. No.
Ms. Ros-Lehtinen. Thank you.
Are there any representatives of survivors or claimants who
have a vote on ICHEIC? Is the claims conference what you would
call a Holocaust survivor organization? Is it really fair to
have a commission where the companies have half of the votes
and the claimants have no votes? What would you say about a
structure that would apply for any other subject matter?
Mr. Kadden. Well, such a structure was the result of
intense negotiations by a very small number of people trying to
create a forum where the various parties could participate with
some comfort level. There is indirect representatives of
survivors on the ICHEIC through an appointed representative, as
you will hear later, of the claims conference.
Also the State of Israel has a very active role on the
Commission and uses it vigorously at times to advocate for
survivors and claimants. However, my own observations, being at
the meetings, are that because ICHEIC operates on a strict
consensus basis where one party can actually effectively block
decisions being made, there are no votes. I have never seen a
vote being counted at ICHEIC, in the Commission proceedings.
Ms. Ros-Lehtinen. Have you ever seen a vote conducted?
Mr. Kadden. I don't believe a counted vote is part of their
procedures. And so there is a lot of talk and survivors'
concerns are laid on the table from time to time and heard by
the others and make it into the record of the meeting somehow.
But this is not really reflected in any kind of formal vote. If
so, they would be heavily outnumbered, as you suggest.
Ms. Ros-Lehtinen. Let me followup with something that was
brought up before. Do you believe that we should create an
express right of action in U.S. Courts for Holocaust victims
and heirs to recover those policies?
Mr. Brauns. I tell from you experience, and I mentioned to
Mr. Kadden before, we had a commissioner in California, you
know his name, Quackenbush. And he was very strong in stopping
the insurance companies doing business in California.
As soon as they found out about it, there was a big turmoil
and they even--my letter--not my letter it was decided--I mean
an answer to my questions of course, and other people I know
responded to it. I think the same companies like the German
company now there does a lot of business in California. They
have just went to the schools and offering for a few dollars
insurance for the children, school insurance, and getting out
and pushing out of the business the American companies. So they
are very active. A little threat to them is very effective. A
threat to them is very effective. But who will do the threat? I
don't know.
Ms. Ros-Lehtinen. Does anyone else care to comment?
Mr. Arbeiter. I was looking for a document. In which year--
I believe it was in 1997, the Commonwealth of Massachusetts
established a commission to handle claims, insurance claims
from Holocaust survivors, and they got involved. But the State
Department interfered with it and I think ordered that there
should be no claims brought forward.
You see, I am the president of the Association of Holocaust
Survivors of Greater Boston. I have a very difficult time
explaining to my fellow survivors that the U.S. Government is
preventing their citizens from claiming something which belongs
to us, which is legally taken away from us. Why the U.S.
Government, the State Department is not allowing the States to
do what we think would be the appropriate thing, to be able to
say to the insurance companies: If you don't settle the claims,
all of those that belong in the legal claims with Holocaust
survivors, you will not be allowed to do business in these
Commonwealths.
And this was the proposal in Massachusetts, and I
understand it is the same thing in other States, except that we
understand the State Department came in and interfered and is
blocking that effort.
Ms. Ros-Lehtinen. Thank you. Madame chairman, if I can
maybe just ask one more question as sort of a wrap-up of what
we have been talking about.
Would it be a good idea to try to strengthen ICHEIC for
claimants who don't want to go to court, but also guarantee a
viable right to go to court for claimants who want to have a
real judge and a real jury consider their claims?
Mr. Brauns. Can I answer it? The question is every American
citizen in this great country of the United States has the
right of protesting through court.
A certain amount of Americans have been deprived of suing
any pretense. How can the American--how can we sue Generali? It
will interfere in commerce--can you explain it to me? Maybe I
am not intelligent enough to understand it--in the commerce
between the United States and Italy. This is the answer.
Because when you put pressure, you will get an answer.
It is beautiful that you take the people and you get the
settlement, but it belongs to the people who paid the money.
They saved the money. They paid premiums. My father, for
example, gets a special dispensation of the government to pay
in dollars. He wanted me to get an education.
And this is a question of trust that has been broken. Not
only by my father, there were thousands of other people. One
asks, how do you provide for your son? Oh, I took Generali.
That is why it was popular. It was not popular because they
just advertized in the newspaper. It is word by word. And then
for them to deny the list. In my family alone, I know they had
insurance. I cannot prove it. When I am gone, and I am now in
my late 70's, and they are free. They have won. They have won
the battle.
Thank you. Thank you very much, all of you, to listen,
because this is the issue.
I think that American courts most of the time are just.
Sometimes some things happen, but basically it is just. And
this is the big privilege of American citizens to sue and
recover what is owed them. And why is it taken away from the
people who paid the moneys in?
If anything is fraudulent, the courts will find out. We
have witnesses. We have things. But I have here original
documents. They didn't read my documents. And made a judgment--
they made a judgment without looking at my documents.
Ms. Ros-Lehtinen. Any others?
Mr. Kadden. Representative Ros-Lehtinen, if you surveyed
survivors individually, I believe that they would strongly
favor what you are suggesting.
In fact, some of the State laws that have been passed that
mainly focus on the publications of names do have an extension
of the statute of limitations for private actions. Those laws
are somewhat up in the air at this point. But the principle is
recognized by a number of State legislatures in this particular
regard.
And I believe they would support such a right as intrinsic.
A lot of them may not take advantage of it, because that is not
their cup of tea. They don't want to engage in contention that
way, but the right to do it is very important. Plus there is a
very savvy recognition that when there are active lawsuits, it
is a form of pressure that gets a message across in a forum
that individuals sometimes can't.
Ms. Ros-Lehtinen. Of course. Well, I thank you very much
for your testimony. Thank you, Ms. Chairwoman.
Mrs. Morella [presiding]. Thank you, Ms. Ros-Lehtinen. I
know that we have had you here a long time. I know Ms.
Schakowsky would probably like to ask a question.
Just picking up on what was already discussed--let me just
simply ask you, Mr. Brauns, did Generali ever explain how they
came up with that $5,000 figure?
Mr. Brauns. They didn't. They decided, Assicurazioni
Generali did. They said $2,000 50 years later would be worth
$5,000, which is not true. You go to any bank you find--but
they--the letter that I got, that Rabbi Cooper got, they didn't
even communicate with me because he was the last one to see
them, was written that the policy is worth nothing, because
lots and lists don't exist any more.
This is a pity, because read the policy. It is right here.
I mean, written in numbers. And this is what upsets me, because
it was easy. Maybe a clerk saw it there and decided to write,
OK, we decide that it is worth nothing, but we will give you
$5,000. The tragedy is another one.
I lived in Italy. I went to school there.
I met and I am very close friends with top people in Italy.
And I found out that all the records are there. They are in
Trieste. Nothing is lost. And the reason they don't even want
the lawsuit is because they applied and have gotten from the
Italian Government the privilege of handling all of the
retirement funds or something like that, and they got it.
If I would have applied the lawsuit at the time, they would
have given anything to me just to get rid of me. But they
didn't have to.
Mrs. Morella. Thank you very much. I want to recognize Ms.
Schakowsky if she has any questions to ask.
Ms. Schakowsky. I can't hardly articulate my frustration
after listening to you and having dealt with this for a couple
of years now myself, and it is remarkable. Danny, you told me
that Representative Holmes-Norton was saying essentially in
light of the September 11 terrorist attacks, where frustration
is already being expressed, criticizing that for the lack of
speed to compensate the people who were killed, injured, etc.,
in that incident. Here we are talking about half a century
later.
And we still can't get any small modicum of retribution and
are running into all of this continuing red tape. What I think
we need to do is just to stop talking about this and figure out
what the plan that needs to be implemented, what do we need to
do regarding lawsuits? Is it a matter of ICHEIC oversight? What
do we do about the publications of lists and in that context
what does this Congress do?
I think we need some help from those of you who have dealt
with this issue personally and professionally now to give us
very concrete guidance, at least your suggestions. I mean, we
will do with it what we can. What are the next steps now?
I don't think we need to accuse anybody of ill will, but I
think we need finally to say this is it. You know, we have
tried this. It hasn't worked. This is the better way to go. And
so what I am really asking for is a blueprint, a set of
concrete proposals that we can be considering. There were some
suggestions. I heard what you said about the lawsuits. But
maybe we could even just make a wish list of things that we can
then proceed from.
If any of you on the panel want to respond with concrete
suggestions, then we would be happy to hear it.
Mr. Brauns. You know, insurance companies base everything
on money. If you write a letter--Congress write a letter that
everything will be terminated. Any business in the States of
the United States, if a list is not provided, you will have the
list within a week. I can guarantee that. We had a similar
thing in California. Suddenly they changed everything for a
week or two until unfortunately our insurance commissioner had
to leave, for a reason that is not for me to judge.
But what I am saying, insurance companies appreciate money.
I was in a meeting with Governor Davis one day, and there was
the representative who had--you probably know who I am talking
about. I don't know his name. He is the representative of the
Jewish Agency for Davis. But anyhow he had a collection--I
don't know how many apartment buildings. He wrote a letter to
the German insurance company that he is canceling all of the
insurance with them. Within 1 week the President flew down to
California to talk to him and see how can we remedy that, and
how can we do whatever. Insurance companies understand money
and a threat.
And if a threat--I do it in a threat, they laugh about it.
If a threat comes from Congress, they will listen.
Ms. Schakowsky. Along with that, we would have to extend
the deadline, don't you agree?
Mr. Brauns. Whatever. They would not be able to work here,
to sell.
Ms. Schakowsky. For claims to be made.
Mr. Brauns. Forget about the claims. If you talk about the
list, to get the list, you say if you don't provide the list in
2 months you will stop--revoke all of the licenses to work in
the United States, you will have it within a week. There is no
question about it, because that is their business.
Am I correct?
Mr. Arbeiter. Yes, of course you are.
I believe that the list is of greater, utmost importance,
because we don't even know who is on the list and who isn't. In
any case, I cannot get an answer whether the name of my
parents, my father is on that list or isn't.
Ms. Schakowsky. How long have you been waiting for a
response? Even though they said 90 days or a little longer, how
long have you been waiting?
Mr. Arbeiter. Since December of the year 2000.
Ms. Schakowsky. So it is almost a full year?
Mr. Arbeiter. A year, yeah. But I get the same answer every
time. Just wait another 90 days? We don't know. I don't even
know whether they stuck it to the insurance companies or they
didn't. I just get the same answer. We didn't get an answer
yet. We don't know. I don't know whether it wouldn't be better
and more important that we deal directly with the insurance
companies. And if we don't get the right answer, as U.S.
citizens we should have the right to sue the insurance
companies. And I fully agree with my friend here, that if we
would tell the insurance companies you cannot keep the money
which is illegally yours, there is--what I understand 2 million
policies outstanding, and the money is not theirs. The policies
were paid for by our parents, by our grandparents. Why should
the insurance companies be allowed to keep that money?
We were--our properties, our freedom, our lives were taken
by the Nazis. And what is difficult, very difficult for me, and
again for my fellow survivors, to understand is why the U.S.
Government, instead of helping their citizens, which we all are
citizens of the United States for the past 50 years, instead
they prevent us from claiming that which belongs to us.
We all think that this is a very great disservice to the
U.S. citizens. And again, I say, if we put to the insurance
company the same thing that was handled in the case of Swiss
banks, you settle those claims. You look into this case and
settle it to the best satisfaction possible or you don't do
business in these Commonwealths. There is many States in the
United States that they are willing to do that. But the U.S.
Government is interfering with it, is not allowing the lawsuits
to go forward.
Ms. Schakowsky. Mr. Kadden.
Mr. Kadden. Those of us on the advocacy side have
constantly tried to figure out what practical solutions are
available to us.
It is a quandary. I will say again, the issue of lists is
the linchpin. I believe many survivors will feel that the
process has been mainly fair and successful if comprehensive
lists are disgorged.
Who can compel the European companies to do that other than
a fit of conscience or processes within these countries which
we are not really directly related to?
The regulators, the State legislatures have in some States
attempted to address this by putting forward--or legislatures
have passed legislation. It is another conversation, I think,
to kind of summarize what we may hear from Director Shapo later
about where that is at. It has been a frustrating legal
process. If Congress can help to clarify and strengthen if
necessary, States' right to regulate on this specific matter,
it would be an enormous help.
The idea here is to disgorge the names, serve the public
interest, and to show what companies are responsible for in
this economy, in this society that operates in our country.
Short of that, I think for Congress to take an interest in
how ICHEIC is operating, to try to streamline the claims
process, would go a long way toward making survivors feel that
they are at least getting a fair shake.
Ms. Schakowsky. Before my time totally expires, does
everyone agree that this deadline that is rapidly approaching
has got to be pushed back? Is there anyone who disagrees with
that?
Mr. Brauns. I want you to understand. I filed the lawsuit
in California against Generali. Do you know what the government
did with my lawsuit? They transferred it to New York. And in
New York the judge said, well, we will interfere. I don't know
who told them. Was it ICHEIC who was responsible for it or was
it some other person? But it was transferred to New York. All
of the suits that Generali had are now in New York. They are
cold.
Ms. Schakowsky. Mr. Kadden, I interrupted you with a
remaining couple of seconds. Go ahead.
Mr. Kadden. The deadline, as I said, is linked
intrinsically to the lists. Fix the process before you close
it. Give the tools to the public to take advantage of the
process. There is a fear among some that publishing names will
create a cascade of improper claims that will flood in and be
impossible to handle.
I don't share that concern. I think a claims process has to
be a claims process. It has to be accountable, successful and
has to work for people. Because of the special nature here, the
only way we can do that is through lists. And for that reason
alone, I think there is very strong support for extending the
deadline. That is also contingent on ICHEIC fixing its process.
And particularly I want to note, not just the personal
experiences of people with silences and lack of responses, but
the way that the claims are handled, the way that they are
judged and decided yea or nay, or forced to be put on hold
because there is no place to direct them because ICHEIC doesn't
have that kind of spread, has to be addressed, the way the
criteria are put into effect by the companies and interpreted.
But without the list this whole thing is really an exercise in
rejecting 95 percent of the claims of the people who have the
gumption to come forward. There are many who don't because they
are confused or they simply don't trust us.
Mrs. Morella. Thank you, Ms. Schakowsky.
I am now going to, Mr. Falk had a brief statement.
Mr. Falk. I believe the names are important. But, the
claims process is unfair because the companies control it.
The ICHEIC appeal and having to give up your right to sue
in the U.S. court is totally unacceptable. Just because they
did it to close out the bank deal, they want to push it on the
insurance people, the same kind of situation.
We didn't have in this process at all the niceties that the
banking committee had where they send in their accountant to
look over the bank accounts. We didn't have anything like that.
Who was judge and jury on this thing? Only the committee. What
is the committee? ICHEIC. That is all.
It is ridiculous, this whole process is ridiculous.
Mrs. Morella. The information you have given us has been
very valuable, and as you know, in our next panel we will have
ICHEIC here, and you have fortified us with background to try
to correct this historically inequitable situation. Final word?
Mr. Brauns. Final word. The tragedy is that ICHEIC is
funded by the insurance companies completely. Not 50 percent,
not 80 percent, 100 percent. Now, they can do anything they
want with ICHEIC. They are funded. Thank you.
Mrs. Morella. Well, we will get to the root of that with
the next panel, too. I just want to give the final word to Mr.
Waxman.
Mr. Waxman. Thank you very much. You have been a terrific
panel. I think you have set the issue clearly before us. Each
one of you is so much more sophisticated, and you are able to
articulate your frustration and show how unjust the situation
is in each of your cases, and I know there must be so many
others who don't have the ability that you have to come
forward.
And so we are not only going to fight for you, but we are
going to fight for them as well and try to figure out how to
make this whole process work.
I am looking forward to the next panel and hearing their
testimony and seeing if we can make some progress in this whole
area.
Mrs. Morella. I also want to thank the panel.
Mr. Brauns. We need you very much, and thank you.
Mrs. Morella. Mr. Waxman has been terrific. Thank you, Dr.
Brauns, thank you Mr. Arbeiter, thank you Mr. Kadden, and thank
you Mr. Falk. Thank you very much. We are really going to try
to remedy the historically long problem that we have faced that
has been so unjust, inhumane. Thank you very much.
The committee is going to recess now until 1:15, give you
all a chance to move around a bit.
[Whereupon, at 12:40 p.m., the committee was recessed, to
reconvene at 1:15 p.m., this same day.]
Mrs. Morella. I'm going to reconvene the Government Reform
Committee on the status of insurance restitution for the
Holocaust victims and their heirs. I want to thank you all for
being so patient on this second panel, as we are all in
congressional session. I think you heard all those bells and
knew that we had two consecutive votes, and so I appreciate
your being here, and in the interest of the policy of the
Government Reform Committee and all its subcommittees, I will
ask the panelists if they would stand and raise their right
hands so I may swear you in.
Secretary Eagleburger, that's terrible to give you so
little space there, too.
Mr. Eagleburger. That's OK.
[Witnesses sworn.]
Mrs. Morella. The record will indicate the affirmative
response. So I'm really pleased to have the Honorable Lawrence
Eagleburger, Ambassador J.D. Bindenagel, Peter Lefkin,
Nathaniel Shapo, Gideon Taylor, and Roman Kent. Thank you very
much. I'm going to have your entire testimony included in the
record and you may certainly give a synopsis of it. We'd like
to ask you if you could try to keep your comments to about 5
minutes so that we'll have an opportunity for questions.
Again, I thank you for your patience. I thank you for being
here for this very important hearing. So Secretary Eagleburger,
I will start off with you then, sir, and again, I particularly
want to thank you again for coming. I know you had an operation
not too long ago and it was a real sacrifice to be here, but
it's your sense of commitment. So you may proceed when you
want.
STATEMENTS OF LAWRENCE EAGLEBURGER, CHAIRMAN OF ICHEIC, FORMER
U.S. SECRETARY OF STATE; AMBASSADOR J.D. BINDENAGEL, U.S. STATE
DEPARTMENT SPECIAL ENVOY FOR HOLOCAUST ISSUES, U.S. TRUSTEE FOR
THE GERMAN FOUNDATION, AND U.S. OBSERVER TO ICHEIC; PETER
LEFKIN, SENIOR VICE PRESIDENT, GOVERNMENT AND INDUSTRY AFFAIRS,
FIREMAN'S FUND INSURANCE CO., ALLIANZ GROUP; NATHANIEL SHAPO,
CHAIRMAN OF THE INTERNATIONAL HOLOCAUST COMMISSION TASK FORCE
OF THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS, NAIC
REPRESENTATIVE TO ICHEIC; GIDEON TAYLOR, EXECUTIVE VICE
PRESIDENT OF THE CONFERENCE ON MATERIAL CLAIMS AGAINST GERMANY,
ACCOMPANIED BY ISRAEL SINGER, VICE PRESIDENT OF THE CLAIMS
CONFERENCE, CHAIRMAN OF NEGOTIATING COMMITTEE; AND ROMAN KENT,
CHAIRMAN OF THE AMERICAN GATHERING OF HOLOCAUST SURVIVORS AND
ICHEIC MEMBERS
Mr. Eagleburger. I thank you for the comments, Mrs.
Chairman. When I was in the government, when I had to testify
before Congress, I studiously avoided coming to a committee
hearing and saying how much I appreciated being there. I did
not think it was wise to lie to the committee before I ever
even got to the testimony. So I will leave it at that. But I
will try to be very brief and then we can go into questions
later, obviously.
I think in looking back on my own experience with the
ICHEIC issues and ICHEIC--you need to understand ICHEIC had
been created before they came to me and asked me to chair it.
So I really was getting into something that was already in
existence, but I think it's important for this committee to
recognize that we started from whole cloth, we started from
scratch. There was no experience like this about this kind of a
subject, and therefore a great deal of the early times, at
least for experimentation, and there is no question we made
some mistakes, and I will talk about those in a minute.
But please do try to understand this, that there was not
some pattern out there that we could follow. It's taken too
long and it's cost too much. I don't argue that. But again,
another thing that needs to be remembered is that there were
two fundamental, I think, weaknesses in this whole concept, and
we have, I think, by and large, managed to work through them,
but you need to understand that when this issue was first
developed, when the Commission was first developed--how do I
put this nicely? The companies that joined, joined because they
knew that if they did not, there would be consequences for
their business activities in the United States. So there was no
question there was resentment on the part of the companies for
the fact that they were brought to this commission the way they
were.
The second issue that has, I think, plagued us, and me
particularly, is that the concept of the ICHEIC was that
decisions would be made by consensus, and I have to tell you,
particularly if you start by understanding that there were
these differences between the parties in terms of their
willingness to join and willingness to be involved with the
State insurance regulators and the Jewish groups obviously,
clearly in favor of the process, and the companies, shall we
say, to put it mildly less than enthusiastic, that it was
almost inevitable that if you had to make decisions by
consensus it was going to take a very long time to get
decisions on tough issues where there was a real difference
between the parties so that for about the first year, I guess,
I tried to live with consensus and did live with it.
But at some point after a great deal of frustration, I
finally decided and told the companies that we were going to
have to make some decisions on the basis of the chairman's
decisions, that I would try to make those decisions after
having heard all of the parties and trying to think through
what would be fair, but that we could go on no longer with this
issue of trying to decide everything by consensus.
Again, the companies particularly thought this was a
terrible idea, but then they have thought most of my ideas were
terrible, so it didn't surprise me much. But having said that,
I do think it has moved things along a good bit faster, but at
the same time it has also meant that when it comes to
implementing those decisions, I can't be sure with what
enthusiasm the companies will implement them.
So, let me just give you a couple of examples of what I
mean, because we've done a little checking on the policies that
have been put forward in which the companies have tried to
reply. Claimant lived in Hungary and died in July 1944. The
evidence of a $1,500 policy with Ross included a receipt
confirming a deposit of the policy at the savings bank, so
forth and so on, on May 10, 1944, which included the policy
number, premium receipts and the sum insured. The receipt of
quarterly premium payments of $45.45 was for the period
starting on March 16, 1944, and thus this insured person paid
his premiums through July 1944 when he died.
In denying the claim, Ross told the claimant that no
evidence of a contractual relationship with the company could
be found. Now, I have several others. I won't waste your time
with them now, but thanks to some serious detective work on the
part of some sincerely productive people in ICHEIC, we have
discovered that there are a number of these cases, which
doesn't surprise me. As a consequence, one of the things I have
decided to do which also will not--the enthusiasm of the
companies in this regard won't be great either, is that I'm
going to put together what I would describe in more positive
terms than I should, but perhaps as a policing team of some
sort that can, on a basis of, if nothing else, dipping into
files, can check to see how well the companies are doing in
terms of keeping to the decisions that I've made and how
policies should be valued, what kind of evidence is necessary
to make--to pay the policy and so forth.
So we're going to start that early next year, and I would
suspect that we will find that there are any number of these
cases where there is a disparity company to company on how they
have determined the chairman's decisions. Some of that may be
legitimate, but I suspect some of that is less than that.
Now, let me just very briefly go on for just another minute
or two. There's no other way for me to start this than this
way. For the last 40 years of my professional life, I have felt
very strongly when I was in the State Department and so forth
that the U.S. Government, in the period of the Holocaust, had
performed abysmally, that we ourselves deserved some
substantial criticism for the way we had conducted ourselves.
And I decided long ago that to the degree I was able to do
anything to make up for that, I was going to try to do it. And
I would think most people would say that--who have seen me in
the State Department and so forth, would say that I have tried.
And I viewed this ICHEIC request that I become chairman, I
viewed this as maybe the last opportunity I'd have to do that
sort of thing.
So I took it. I must say, I learned, as after I took it
that it was not the bed of roses that I might have thought it
might be. In fact, it's been a monumental pain in the neck for
the last 2 years. That's a diplomatic way of saying I didn't
like it much, Mrs. Chairman.
But having said that and with all of the things that can be
said against ICHEIC and the way it's worked, I would say to you
and to all of those who say it's been a failure, I'd say two
things: First of all, you tell me since we have laid out
somewhere around or made offers on somewhere around--not we,
but the companies, somewhere around $20 million, paid out
something like $12 million or whatever that is. That's $12
million more than was the case 2 years ago when ICHEIC first
began, and I consider that success, not failure. And I cannot
tell you the degree to which I find it frustrating that the
very people that this process has been trying to accommodate,
the very people that know that these are claims that ought to
be paid, spend their time knocking us around the head all the
time.
That is not to say we don't deserve criticism. I'm not
arguing that at all, but I will say this to you. First of all,
what we have accomplished is a lot more than people will give
us credit for. We have spent a lot of money, but the majority
of that money spent has been spent to establish a means of
getting to the world Jewish community the fact that this
commission exists, and that here's how you go about making a
claim, and it is as well moneys hard--very definitely spent to
some degree, I think, more than probably, I think in
retrospect, we should have spent, but spent on paying an
organization in the United Kingdom to deal with handing the
claims out to whatever company they ought to be the recipients,
and something to everybody when they don't know which company
it should be.
And I need to say at probably the end of this set of
comments that a thing that needs to be understood as well and
something that the evidence over time is, I think, made clear
is that the expectations at the beginning of this process as to
how many claimants there would be and how much money would be
paid and so forth were probably exaggerated.
First of all, 25 percent of the--I'll call them claims sent
to the ICHEIC don't relate to ICHEIC at all; 80 percent don't
name the companies because the claimant probably doesn't know
which company it should be sent to if any. So we're dealing
with a situation, one, where you tell me trying to make this
kind of a process work before where we were starting from
scratch and with all the best will, in the world, were dealing
in a structure which had two fundamental limitations.
As I said, this question of resistance on the part of the
companies and the issue of consensus, this doesn't even get me
to the point of talking about the Foundation, which is
purportedly what these hearings are about. I will only say to
you we are in negotiations with the Foundation now. We have
been for some time on all of the same critical questions that
have concerned the Jewish community for--in dealing with ICHEIC
as such--lists, audits, appeals, decisions of the chairman, how
the claims will be paid and so forth.
Those are all issues that we're trying to deal with the
Foundation, and I must tell you, in my judgment, and I need to
start by saying that the gentleman who is representing the
Foundation in our negotiations, Ambassador Brautigam, is one of
the finest, most serious diplomats and negotiators I have ever
run into. So this is not criticism at all of him, but I will
tell you, from starting below him and I know Ambassador
Bindenagel is going to have a heart attack when I say this, but
better he than me, that the Germans have been--some of them in
high places--have been totally unprepared to be cooperative.
There is an institution in the German Government called the
BAV, which is in essence the--it's a regulator of what, the
insurance companies? And the deputy there, he ought to be
encouraged to be a little bit more careful about the things he
says in letters.
And I want to end by just quoting from one those letters,
if I can find it, just to tell you--give us, again, a sense of
what we're dealing with in Berlin, and it's not that he's
representative of the total attitude of the German Government.
He's certainly not. But he is in a position where he can and
has slowed things down substantially. Let me just read you part
of a letter that he wrote. Wait a second, I will find it here.
``I would like to point out that in connection to reflections
made in their preliminary remarks on compensation for interest
and loss due to inflation, Mr. Sunbar and Mrs. Saunbladoff''--
this is a paper they wrote which talked about valuing German
policies.
But anyway ``here a grave mistake becomes obvious. It was
the Nazi regime that robbed the Holocaust victims of all their
property and assets, including their life insurance contracts.
The Nazi regime was the culprit, and also the only one gaining
by this crime, not the insurers. They did not benefit from it.
They do not bear the responsibility for it. After the
liberation of Germany from the Nazi regime, it was the German
Federal Republic, which as an adequate response, took over the
responsibility for compensation and restitution so----
Mrs. Morella. Secretary Eagleburger, may we include that
the record?
Mr. Eagleburger. You certainly may, since it's public.
Mrs. Morella. Thank you.
Mr. Eagleburger. But my point here is the mindset that this
demonstrates, and please don't misunderstand me. I am not
saying that across the board, the problem is within the German
Government or anything of the sort, but I am saying there is
enough resentment, there is enough antagonism to this process
that I cannot tell you with absolute certainty that we will
succeed in the negotiations with the German Foundation. There
are a series of issues, some of which--well, you know them all.
As I said, lists and so forth. Some of them we can
probably--well, almost certainly succeed and Ambassador
Bindenagel will tell you, in fact, he's totally confident we
can succeed, but that's because he doesn't have to do the
negotiating. But if this kind of an attitude of this gentleman
sits astride one of the bureaucratic institutions that can
block this whole thing, and with this kind of attitude, I have
to tell you we'll never get an agreement on audits, which are
absolutely critical to the Jewish community.
I have wandered on too long and I will stop. I will only
say to you one more time, by no means have we been perfect, but
I would suggest to you all that we have been substantially
better than I gather was the characterization this morning, and
some of it from some of the testimony I heard, some of these
people were just confused about some things. For example,
someone who contended that ICHEIC sent a letter refusing to pay
a policy is incorrect, because ICHEIC doesn't send those
letters. The insurance company did I'm sure. But not ICHEIC. We
don't get into that business.
But again, to close, there is a lot yet to be done. There's
a lot yet to be cleaned up. And let me answer the question
before you ask it. Assuming we succeed in getting more names,
the lists, I see no possibility personally that ICHEIC could
terminate its existence without first accommodating and
extending its existence to give fair time for those new
potential claimants to make their claims.
Now it's not a decision for me to take alone. I have to
discuss it with the whole ICHEIC, and there will be some
disagreements, I'm sure, but I think I can say to you all
fairly confidently that we will extend if we get agreement, and
we will extend a fair amount of time so that people can have
that chance to make their claims. I cannot tell you we're going
to get an agreement, and until that is settled, I'm less than
confident of what we will do.
I want to end by saying there are two companies that--I
have been less harsh on the companies in general than I would
be if I weren't in a good mood, but there are two that I want
to highlight as having been cooperative, and they deserve, in
my judgment, some praise for that. The first is Generali who is
a target of many, I know, but who, after a while, being very
difficult finally realized that if they were ever going to get
out from under this business, which I wish the other companies
had recognized early on, they recognized that the only way to
get this settled was to settle it.
And so we--the Jewish groups Generali and ICHEIC made an
agreement with them and things have been moving along. They
have paid a substantial amount of money. There are a number of
cases where I'm not happy with some of their rejections, but
we'll go back and look at those. The other place I would like
to be complimentary is that the Dutch Insurance Federation,
which joined ICHEIC rather than a single Dutch company, has
also been very cooperative and very supportive, and in fact,
without them, we would have run out of money a long time ago.
And during the question and answer period, I'd be happy to talk
some more about the fact that the companies, all of the
companies, MOU companies, seem to have lost the key to their
bank balances. And I have had a terrible time with them for the
last 6 months trying to get more money out of them to continue
this process, and so far without success, but here's the last
point I want to make, which is, please understand that if we
extend the life of ICHEIC, it's going to cost more money, and
as of this stage, I can't tell you with any confidence that I
can squeeze that money out of the company.
Thank you, Chairman.
Mrs. Morella. Secretary Eagleburger, you have been very
candid in your comments and have anticipated a few of the
questions we'll be posing to you.
I am now pleased to recognize Ambassador Bindenagel.
Mr. Bindenagel. Thank you, Madame Chairman and
Representative Waxman and members of the committee. I will say
that as a member of the State Department, I do believe what I'm
about to say, despite what the good former Secretary had to
say, I appreciate the opportunity to appear before you today to
discuss policy concerning----
Mr. Eagleburger. Only in the State Department are they that
wimpy.
Mr. Bindenagel. We live up to our reputation. We're dealing
here with unpaid Holocaust insurance claims, ICHEIC, and as
they are included in the bilateral agreements with Germany and
Austria. Of course, the U.S. Government recognizes the
importance that unpaid insurance policies issued in Europe
during the Holocaust era are honored, and honored
expeditiously.
At the outset, I'd like to say that given the commentary
this morning, we have not waived the rights of American
citizens to sue. Rather, we have sought to create a new and
effective remedy for those who wish not to sue. In the spring
of 1998, the U.S. State Insurance Commissioners and the
Holocaust Survivor Organizations invited the U.S. Government to
support an international commission to resolve unpaid
Holocaust-era claims and asked us to use diplomatic efforts to
bring the affected European governments and companies into the
process. We agreed to support this effort and to become an
ICHEIC observer although not a member.
The initiators of this effort were Neil Levin, at that time
the supervisory authority in the State of New York, and the
vice chairman of the National Association of Insurance
Commissioners and North Dakota Commissioner Glen Pomeroy. They
met with Holocaust survivors as you did this morning, who also
told their stories of purchasing insurance policies as part of
their dreams of future, of deaths to family members, of their
own survival, and of their unsuccessful attempts to receive
just compensation under those policies.
Mr. Levin once described a theme of the effort to establish
ICHEIC as ``voluntary action based on a moral foundation.''
Although Neil Levin died in the September 11 attack on the
World Trade Center, his respect for human dignity through this
historic effort continues to inspire us to finish his work. Our
support for his vision to resolve these issues amicably and
cooperatively is one in which we remain firmly committed. The
policy of the U.S. Government with regard to claims for
restitution or compensation by Holocaust survivors and other
victims of the Nazi era is motivated by the twin concerns of
justice and urgency.
And as Mr. Shays stated on behalf of Mr. Burton this
morning, our support too for ICHEIC is based on U.S. interest
in obtaining a measure of justice for victims, including many
U.S. citizens who are Holocaust survivors and also to enhance
our political and economic relations with European friends and
allies as well as with the state of Israel.
We've done several things to support ICHEIC. In August
1998, after the MOU was signed and the International Commission
was begun, the State Department organized a seminar in Prague
to help spur international cooperative efforts to translate
these international communities interest in research and
historical acts into action. The U.S. Government publicly
supported this new International Commission in 1998 at a
meeting of the National Association of Insurance Commissioners
in New York City. The State Department organized that the
Washington conference in Holocaust-era assets held in November
and December 1998, the proceedings of which were published and
are here for the committee, if they would like.
The participants urged the resolution of insurance issues,
but they also noted historically important German Governments
efforts to compensate the victims of Nazi persecution with
payments amounting to some 100 billion marks. These were talked
about in this morning's panel several times in reference to the
so-called BEG, or the German Federal compensation programs.
These compensation programs also included some compensation for
some confiscated insurance policies. The U.S. Government has
actively encouraged other governments to seek observer status
in ICHEIC and as a result the governments of Belgium, the Czech
Republic, France, Germany, Italy, and Poland became ICHEIC
observers and joined this international effort.
The U.S. Government strongly encouraged all insurance
companies that issued policies during the Holocaust era to join
ICHEIC and participate fully in this program. We worked with
representatives of the Dutch Government, insurance industry,
and survivor organizations to incorporate the Dutch companies,
as Mr. Eagleburger said, into ICHEIC. And through these
agreements that we made with Austria and Germany, the United
States brought the entire German and Austrian insurance
industries into the process through international agreements.
This came about because in the fall of 1998 the German
Government and German industry turned to us, the Federal
Government, for help in facilitating the resolution of class
action lawsuits brought against German companies. Germany
proposed the creation of a foundation to make dignified
payments to force laborers, to resolve property and insurance
issues, and we agreed to work with them. After 18 months of a
very difficult negotiation on July 17 last year, the United
States and the Federal Republic of Germany signed an executive
agreement which committed Germany to operate a foundation under
the principles to which the parties in the negotiations had
agreed, and at the same time, committed the United States to
take certain steps to assist German companies in achieving
legal peace in the United States.
Victims' interests were broadly and vigorously represented
throughout the negotiations, and in the end, all the parties
accepted the Foundation ``Remembrance, Responsibility and the
Future'' as a worthy result. The U.S. Government has filed
interest--statements of interest recommending dismissal on any
valid legal ground in court cases brought against German
companies for wrongs committed during the Nazi era and its
commitment to do so in future cases that would be covered by
the Foundation agreement.
However, as I said at the outset, the United States has not
extinguished the claims of its nationals or of anyone else.
This Foundation which was created as a result of our
negotiations was capitalized at 10 billion marks with the
German Government providing 5 billion marks, and the German
industry providing another 5 billion marks, plus 100 million
marks in interest. A board of trustees oversees the
Foundation's operations which are managed by a three-member
board of directors.
The 26 members on the board of trustees include
representatives of the German Government, the U.S. Government,
the State of Israel, German companies, but also victims'
organizations and plaintiffs' attorneys. The Foundation is
subject to legal oversight by the German Government and is
audited by two agencies of the German Government. If you look
at the U.S./German executive agreement of July 17, 2000, you'll
find that it provides a framework for the treatment of claims
made against German insurance companies but with the details of
implementation left to the responsible parties.
I'd like to emphasize that the executive agreement provides
that insurance claims that come within the scope of the claims
handling process of ICHEIC adopted as of July 17, 2000, and are
made against German insurance companies, shall be processed by
the companies and the German Insurance Association on the basis
of procedures and on the basis of such procedure, agreed
procedures, and on the basis of any additional claims handling
procedures that may be agreed among the Foundation, ICHEIC, and
the German Association.
It is that portion of the agreement that we're now talking
about. The additional claims handling procedures are under
negotiation by the parties and the parties have--and the
government--I must say, are the Government of the United States
and the Federal Republic of Germany are not part of those
negotiations. We do not advocate positions of any one side, but
have rather taken a position to facilitate and encourage all
sides to come together to resolve----
Mrs. Morella. Ambassador Bindenagel, I'm going to ask you
if you could try to wrap up.
Mr. Bindenagel. Yes.
Mrs. Morella. Thank you.
Mr. Bindenagel. I will be delighted to do that. Let me just
turn to a closing remark, if I may. These negotiations need to
be brought to conclusion, and given the advanced age of
Holocaust survivors and the need for them to receive a measure
of justice in their lifetimes, the U.S. Government is concerned
that the provisions for insurance under the German Foundation
are not yet operational.
It is distressing that more than a year after the law
creating the German Foundation took effect, and some 5 months
after the Bundestag declared adequate legal certainty had been
achieved for German companies operating in the United States,
thus allowing payments to force the slave laborers, the
insurance negotiations on additional procedures, have not been
completed. We would like to call on the German Foundation, the
German Insurance Association, and all the parties of ICHEIC,
those represented here, the insurance companies, the
representatives of the Jewish organizations, and the U.S. and
State insurance regulators, to come together in the spirit of
cooperation that was envisioned by the initiators of this
worthwhile effort, and reach agreement now on these outstanding
issues.
Holocaust survivors and their families deserve at least
some measure of justice that's been too long denied, and only
by bringing the aspects of this Remembrance, Responsibility and
the Future Foundation into full operation, can this be
achieved. Madame Chairman, thank you very much.
Mrs. Morella. Thank you, Ambassador Bindenagel.
[The prepared statement of Mr. Bindenagel follows:]
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Mrs. Morella. Mr. Shapo.
Mr. Shapo. Good afternoon, Madame Chair. I'd like to thank
you, Representative Waxman, and your committee for your
interest in this very important matter. I'd be remiss if I
didn't also say hello to my Congresswoman Representative
Schakowsky. She and I are both from Evanston, IL which is right
next door to Skokie, a community with one of the highest per
capita concentrations of Holocaust survivors in the United
States. She's a tireless advocate for these constituents, and
I'm lucky to work with her to that end.
I'd also like to reiterate comments by others about my
friend, Neil Levin, who died in the World Trade Center while
displaying the same commitment to public service, that was also
at the heart of his work in establishing ICHEIC while he was
the New York superintendent of insurance.
Time is short in this hearing, and I have previously
submitted lengthy written testimony. I'll briefly describe the
involvement of the National Association of Insurance
Commissioners in these proceedings and also give my views on
the ongoing German Foundation negotiations. I have a
fundamental interest in this matter, the fulfillment of the
insurer's obligation to its consumers who entered into a
contract, paid premiums and expected themselves or their
beneficiaries to receive the benefit in the case of an insured
event.
What we are talking about today is not really reparations,
as I understand it, but rather the long, overdue, simple
fulfillment of a contract which is, of course, a core
regulatory goal. State insurance commissioners thus take great
interest in this matter, particularly because many consumers
who had Holocaust-era policies now live in the United States,
and many of the insurance companies have American subsidiaries
or corporate relatives. State regulators were leaders in the
effort to identify and insure payment of Holocaust-era
policies. NAIC formed a Holocaust working group and held
extensive hearings throughout the country in 1997 and 1998.
Following these hearings, State regulators helped persuade
several European insurers to sign the memorandum of
understanding that formed the International Commission on
Holocaust Era Insurance Claims in August 1998. Five insurance
commissioners are currently ICHEIC participants: California
Commissioner Harry Low, Florida Commissioner Tom Gallagher, New
York Superintendent Greg Serio, Pennsylvania Commissioner Diane
Koken, and for the last year, myself. I chair the NAIC's
Holocaust task force, and I represent the regulators in
ICHEIC's negotiations with the German Foundation. I'd like to
go right ahead and talk about the German Foundation initiative,
which contains at least 550 million Deutsche marks for
insurance purposes, 200 million for claims, and 350 million for
humanitarian aid. The U.S./German executive agreement calls for
the Foundation to come to an agreement with ICHEIC on the
disbursement of funds in accordance with ICHEIC standards. The
Foundation agreement covers the whole German market, including
those companies who are not members of ICHEIC to the payment of
claims and humanitarian aid. The Foundation negotiations have
dominated ICHEIC activities during the last year and a half,
diverting attention and resources from the Commission's basic
task of implementing the MOU. This has delayed many important
aspects of ICHEIC business, including the development of a
mechanism to process the so called 8a1 claims, which refers to
the specific humanitarian Section of the MOU that calls for
relief for those with claims that either cannot be attributed
to a particular insurance company, or are attributed to a
particular company no longer in existence.
Since over 80 percent of ICHEIC claims do not name a
specific company, I pushed repeatedly for the adoption an 8a1
process, but the difficulties posed by the German Foundation
negotiations have been the main roadblock to substantial
progress on this matter. Major points of the Foundation
negotiation are the publication of lists, audits of company
records and processes, appeals of adverse decisions and
reimbursement of company costs from foundation funds.
The executive agreement was signed 16 months ago, July 17,
2000. In my opinion, ICHEIC should have an agreement with the
Foundation by now. Funds should already be flowing to aging
claimants. Survivors like the heroic Erna Ganz, who
Representative Schakowsky mentioned earlier, have died in the
meantime.
While ICHEIC is probably not blameless in these lengthy yet
unsuccessful negotiations, I believe that the German companies,
both the original ICHEIC companies and those now brought into
the process by the Foundation, have been primarily responsible
for the delay. The affected companies have a heavy and
affirmative burden to meet basic ICHEIC standards, because
these processes bring legitimacy to our endeavor. The executive
agreement specifically calls for the Foundation's cooperation
with ICHEIC, and upon its signing, Secretary Eizenstat stressed
that ``it is critically important that all German insurance
companies cooperate with the process established by ICHEIC.
This includes publishing lists of unpaid insurance policies and
subjecting themselves to audit. Unless German insurance
companies make these lists available through ICHEIC, potential
claimants cannot know their eligibility, and the insurance
companies will have failed to assume their moral
responsibility.''
I will not comment on the details of the negotiations over
lists, audits, and appeals as they were ongoing. I will,
however, stress the basic characteristics of ICHEIC methods
must be incorporated into any agreement with the Foundation.
Public confidence in our work rests on the integrity of these
processes. Although progress on these issues has been slow and
disappointing, recent negotiations have been more productive,
as Dr. Hans Otto Brautigam has taken over for the Foundation.
As Chairman Eagleburger mentioned, Dr. Brautigam is a
straightforward and experienced diplomat. His professional
manner is reflected in his substantive approach to disputed
issues.
He has put forth proposals on lists, audits, and appeals
that while not yet agreeable to ICHEIC, serve as the basis for
reasonable negotiations. We can resolve these claims-related
issues in the next several weeks if the companies make the
necessary final basic concessions in the interest of justice
and fair play. Unfortunately, we are much further away from a
common understanding on costs and company reimbursements. No
final agreement between ICHEIC and the Foundation can be
reached until the Foundation drops its plan to reimburse tens
of millions of dollars out of foundation funds to ICHEIC
companies for their previous payments to ICHEIC. The NAIC has
unanimously adopted a resolution, which I authored, objecting
to the size and scope of these diversions of foundation assets.
I'll provide a copy of this resolution for the record should it
please the Chair.
Mrs. Morella. Without objection, so ordered.
Mr. Shapo. The Foundation proposal presented in June calls
for a total of $76 million in payments and expenses to be
covered out of Foundation insurance funds, $51 million from the
claims money and $25 million from humanitarian. These
reimbursements would swallow up over half the 200 million
Deutsche mark claims fund. Furthermore, $36 million of these
reimbursements are retroactive payments to the original ICHEIC
companies for their past ICHEIC assessments.
The largest recipient of retroactive relief would be the
German insurer Allianz, the corporate parent of Fireman's Fund,
which stands to gain well over $10 million from this plan. The
companies argue that these payments are required, every dollar
and Deutsche mark, by the German law that sets up the
Foundation. I disagree. I believe that while there is a legal
basis for a much more modest prospective cost plan, the
Foundation's current proposal is unacceptable legally,
politically, and morally.
My written testimony details at length how the company's
plan is contrary to the U.S. German executive agreement and a
reasonable interpretation of the German law. In the interest of
time I will not recite these details, but will rather simply
state that the NAIC will never stand for a $76 million
diversion of funds from survivors and claimants to insurance
companies which would violate the letter and spirit of the
controlling laws. It would also be a moral affront to every
Holocaust survivor.
I'd like to conclude by saying that I welcome your interest
in these issues. Congress has a legitimate and necessary
oversight role to prod all of us involved in seeking justice in
Holocaust matters to keep the interest of survivors front and
center in our work. The German people and the post war German
Governments have repeatedly shown a genuine commitment to make
amends for the horrific crimes committed by that country during
the National Socialist era. Well over $50 billion in
restitution has been paid over the years. The current
foundation effort, whereby German industry for the first time
acknowledges and offers recompense for its untoward gains
during the Holocaust, is a necessary step in providing a
modicum of justice for those who survive and for honoring the
memories of those who perished. It is my high personal priority
to make sure that State insurance commissioners are doing
everything reasonably within our power to aid this process.
I, therefore, thank you, Madame Chair, for the opportunity
to share my views with you today.
Mrs. Morella. Thank you, Mr. Shapo.
[The prepared statement of Mr. Shapo follows:]
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Mrs. Morella. Mr. Taylor, we've been generous with the
time. I'm going have you kind of look at our color coding here;
otherwise we'll be here all evening.
Mr. Taylor. Thank you, Madame Chairwoman. We appreciate the
fact that the committee is holding this hearing, and I would
also like to acknowledge the tremendous role of Chairman
Eagleburger in addressing these issues. In addition, the
constituents and----
Mrs. Morella. Would you press your mic.
Mr. Taylor. I would also like to acknowledge Ambassador
Bindenagel and his staff for their most important work in the
field of Holocaust-era insurance and other forms of
restitution. The statement is made on behalf of myself, Gideon
Taylor, and Israel Singer, vice president of the Claims
Conference and chairman of the negotiating committee. To quote
Elie Wiesel at the opening of the Washington Conference on
Holocaust Assets in November 1998, he said as follows: ``Thus
it is really a matter not of money but of moral demand and of
commitment to conscience and memory. Memory is our shield,
memory is our fortune, our only fortune; so let us remember not
only the big fortunes, palaces and our treasures, let us
remember also the less wealthy families, the small merchants,
the cobblers, the peddlers, the school teachers, the water
carriers, the beggars. The enemy robbed them of their
poverty.''
The Claims Conference was one of the negotiating partners
in the establishment of the German Foundation and was the
primary negotiating partner with German insurance and
negotiated the funds to be allocated to the insurance component
of the German Foundation. The Claims Conference is one of the
member organizations of ICHEIC together with the State of
Israel, the World Jewish Restitution Organization, the
insurance companies who are signatories to the MOU, and the
National Association of Insurance Commissioners in the United
States.
The issue of the administrative procedures of ICHEIC has
been raised by a number of individuals. It has been the
experience with the Swiss banks and other programs, the cost of
carrying out outreach to find claimants, operating call centers
and handling applications is expensive. We and other members of
ICHEIC are working with the staff of ICHEIC in an effort to
reduce these expenses to the greatest extent possible.
Regarding the claims process in our view, it is the
responsibility of ICHEIC to the claimants to ensure that every
appropriate step is taken to inform potential claimants of the
process by undertaking outreach, to inform potential claimants
of the existence of unpaid policies through the publication of
lists, to require to companies to assume responsibility for
their policies, including nationalized policies and confiscated
policies and policies that were issued by their branches and
subsidiaries, to process those policies in a transparent manner
that recognizes the suffering and destruction of the Holocaust
in the passage of time and to ensure that the costs of the
claims process are borne appropriately.
While some progress has been made, we must unfortunately
conclude that we have not yet achieved the success we would
have desired. Prior to the signing of the German Foundation
agreement, we hoped that the process would work as smoothly.
Deputy Secretary Eizenstat, as we noted, said it is critically
important that all German insurance companies established by
the International Commission on Holocaust Era Insurance, and in
his speech to the Claims Conference Board of Directors on July
18 this year, Deputy Secretary Richard Armitage, on behalf of
the new administration, reaffirmed the importance of dealing
with these critical issues.
After over 15 months of negotiations with German industry
and then the German foundations, the current state of affairs
is not at the moment encouraging. The German insurance
companies are yet to agree in principle to implement some of
the ICHEIC standards, and in cases where companies have agreed
in principle, we are not yet confident that the interpretation
of these standards always meets the spirit that lies behind
them. Regarding claims processing, firstly, it was our clear
understanding that the claims processing by Germany would
comply with the standards and burdens of proof, evaluation, and
decisions of the chairman of ICHEIC, cases have been
highlighted to this committee, which illustrate the problematic
manner in which some of these cases have been handled. We
believe that in order for the claims processing to be
successful, a systematic monitoring of offers and rejections is
most important.
In addition, we believe that a system of valuation of
insurance claims to bring the value of policies to today's
value is critical. We await confirmation by the companies, the
decision of the chairman of ICHEIC in this regard will be
implemented. Regarding lists, there is not yet an agreement on
the question of a comprehensive publication of lists of
policyholders' unpaid policies. We believe that the process to
identify such policies must be one that will be as flexible as
possible to enable the lists to be complete. Regarding audits,
an audit of the claims process is, in our view, most important
to enable claimants to have confidence in the process. And Mr.
Shapo has addressed very clearly the issue of the costs in his
remarks. We too are disappointed with the proposal made by the
German Foundation.
Concerning Austrian insurance policies, the agreement in
January 2001, provides for $25 million of the Austrian
agreement to cover insurance policies not covered by the German
Foundation and ICHEIC. It was the intention that the sum of $25
million to be provided by the Austrian Government and industry
would pay for policies issued by Phoenix, Der Anker, and other
companies. It's our understanding after some discussion that
the Austrian companies that issued the policies will assume
full responsibility for the period irrespective of the
ownership of the company and/or its assets during the Nazi
period.
In conclusion, we believe that it should not go unrecorded
that the German Foundation has had some major achievements. As
the partner organization responsible for making payments from
the funds of the German Foundation to most Jewish former slave
and forced laborers, we are pleased to report that the Claims
Conference has already distributed some 434 million Deutsche
marks equal to $202 million to 43,423 Holocaust survivors in 47
countries. The German Foundation has succeeded in bringing
together the parties and in implementing a speedy and effective
way to make payments to former slave and forced laborers.
We hope and believe that this success can be replicated in
the area of Holocaust-era insurance. With some showing of
flexibility, this can be achieved. We must resolve these
outstanding matters immediately. As Deputy Secretary Eizenstat
stated last July, we all now bear a heavy responsibility to
implement this historic agreements. The victims have waited 55
years for this day. We cannot let them wait longer. Thank you.
Mrs. Morella. Thank you very much, Mr. Taylor.
[The prepared statement of Mr. Taylor follows:]
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Mrs. Morella. I'm pleased now to recognize Mr. Lefkin.
Mr. Lefkin. I thank you Congresswoman Morella, and thank
you Congresswoman Schakowsky. My name is Peter Lefkin, and I
serve as senior vice president for Government and Industry
Affairs for the Fireman's Fund Insurance Companies. Our
company, which is headquartered in Marin County, CA, about 20
miles north of the Golden Gate Bridge, has been in business for
about 135 years. Since 1991, it has been owned by Allianz AG, a
major financial services company headquartered in Munich,
Germany. I am here today in response to a letter of invitation
from the committee. I have to state at the outset that my own
expertise is somewhat limited, since the German and American
executive agreement and the German Foundation law were
concluded about a year ago. In addition, Allianz also has had
nothing to do with the Austrian agreement. Therefore, I may
have to refer some of your questions back to my colleagues in
Germany for more detailed responses.
I'd like to say at the outset it's a particular honor for
me to be on the same panel with Secretary Eagleburger, who
chairs the International Commission. He has made a significant
contribution in this and so many other areas of our public
life, and he has assured that his work has resulted in the
fairly and timely resolution of a significant number of
unclaimed insurance policies. The ICHEIC has established
relaxed standards of proof for the processing of claims. This
acknowledges the passage of time and the practical difficulties
that people confront in locating relevant documents. The ICHEIC
has also performed valuable work on the difficult issue of
policies which may have remained unpaid as a result of
communist nationalization in Eastern Europe.
Now, before I comment on the creation of ICHEIC and
Allianz's role, I should comment on the history of the German
restitution process. After the war and with the encouragement
of the Allied governments, the Federal Republic of Germany
established a comprehensive restitution program, and this
program included insurance policies. More than 100 billion
Deutsche marks has been paid in compensation to the victims ask
of Nazi persecution. In today's value, this is far in excess of
over $100 billion.
These payments took into account all elements of properties
that were seized by the Nazis, including insurance. As a result
of restitution, the number of unclaimed insurance policy
Holocaust victims that arise from Germany is relatively small,
and, in fact, it is my understanding that in the German
Foundation negotiation, that ICHEIC stated the total amount to
be less than $30 million. In the opinion of the German
Insurance Association, this appears to be somewhat high, but
nonetheless this is a benchmark that they established.
In 1997, Allianz on its own established a 24-hour help line
to field inquiries throughout the world in which individuals
could attempt to ascertain whether or not they or one of their
relatives had a policy which may have gone uncollected. Allianz
has really always sought to be open and transparent. Beginning
in 1997, public hearings were conducted throughout the United
States by the National Association of Insurance Commissioners.
Allianz testified in most of those proceedings. They also
appeared before the House Banking Committee in 1998, and we
learned a lot from these hearings.
First thing we learned was that the history of insurance
during the Holocaust era was indeed complex. Laws, as a
practice, varied among the nations of Europe. In Germany, for
example, the majority of policies held by the German Jewish
population were surrendered before World War II began. During
the war many more were confiscated by the Nazi regime and only
a small amount went unpaid.
The hearings also revealed what former Deputy Treasury
Secretary Eizenstat has called the ``double victims of
history.'' These are people who purchased insurance policies
before World War II in Eastern Europe, and we heard from some
of those people today. The Communist regimes which came into
power after the war nationalized the companies. They seized the
assets and records and also assumed the obligations to make
payments.
While claims practices varied among governments, as a
general rule payments were denied to those who emigrated. This
effectively foreclosed indemnification to those who moved to
Israel, the United States, Canada, or any other nation where
the remnants of the Eastern European Jewish population fled.
Very early on Allianz recognized that it was important to
work with other people of good will to formulate a humanitarian
solution to benefit the elderly Holocaust victims. Among those
with whom Allianz met was former superintendent Neil Levin, who
died so tragically on September 11th. Working with Mr. Levin
and other insurance regulators, Allianz was proud to be a
charter member of the international commission, representing
RAS and all other of its affiliates.
Allianz remains steadfastly committed to justice for
victims of the Holocaust. It complies with the memorandum of
understanding, researches every inquiry it receives, and
settles all eligible claims. Over 200 claims have been settled
by RAS alone, and another 20 from other affiliates. Allianz has
also provided over 140,000 names to ICHEIC of Holocaust-era
policyholders for processing at Yad Vashem in Israel.
Now, Allianz is mindful that ICHEIC, which represents only
about 25 percent of the pre-war European marketplace, might be
inadequate to the task at hand. After all, about 75 percent of
all inquiries and claims were likely to emanate from policies
on companies that did not belong to ICHEIC. Allianz, therefore,
became a founding member and leader of the German Foundation
Initiative.
The initiative and the Government of Germany in July 2000
produced a historic agreement to fund a German public
foundation to provide the final capstone to all labor,
insurance and all other issues arising from this most tragic
period. The Foundation was created with the approval of the
Governments of the United States and Israel, several major
Jewish organizations representing Holocaust victims throughout
the world, and five Eastern European governments. The German
Government and German industry pledged 10 billion Deutsche
marks. The overwhelming amount was directed toward compensating
people who suffered as slave and forced laborers during World
War II.
Over the last year there have been ongoing negotiations
between the Foundation and ICHEIC led by the former German
ambassador to the United Nations Dr. Brautigam and Chairman
Eagleburger, and I would venture to say that no one is
satisfied by the pace of progress. And although I understand
that the ICHEIC and Foundation negotiators do have
disagreements, I still remain hopeful that they will be settled
soon.
In closing, I would like to thank you for this opportunity
to testify and for the fair treatment accorded to me by the
members of the committee. Thank you very much.
Mrs. Morella. Thank you, Mr. Lefkin.
[The prepared statement of Mr. Lefkin follows:]
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Mrs. Morella. Now I am pleased to recognize Mr. Kent.
Mr. Kent. Thank you, Madame Chairwoman. Thank you, Members
of Congress, for inviting me to testify.
I am in a difficult situation today because I heard a lot
of testimony, and instead of reading a statement, I would like
to share my thoughts with you.
I have a request to ask you, since I appear here maybe in a
triple type of a position--No. 1, I am a survivor that went
through the war in the ghetto and Auschwitz; No. 2, I am a
member of the ICHEIC Commission; and then No. 3, I am a member
of the negotiating committee of the slave and forced labor. And
there were many statements and misstatements made here which I
would like to share with you and give you my thoughts. So with
your permission, please indulge me with the extra time. Thank
you.
Mrs. Morella. We will see how long it takes.
Mr. Kent. Look, I waited 60 years for this opportunity, so
I will wait another few minutes. What can I tell you?
When I heard the morning session and so on, I almost came
to the conclusion when I heard the statement--the adage which
says, ``My mind is made up, so why do you confuse me with
facts?''
There were two main questions which I heard: Why does it
take so long, and why is so little paid out? And then, of
course, was the question of ICHEIC. And let me make a flat
statement, and I know, Congressman Waxman, I heard you a number
of times on the television. You made sometimes very blunt and
proper statements, and I would like to make a statement here,
too. ICHEIC is not the criminal. It is the insurance companies
and the German Foundation that are the criminals. They are the
ones that are delaying the process.
So let me just give you a little elaboration why. If you
are going to compare ICHEIC, compare it to construction of a
building. When you want to construct a building, you don't see
anything. You don't see the building. First you have to buy the
land, then you have to make the blueprints, then you have to
lay the foundation, and then after a while you can see the real
structure of the building.
Here in ICHEIC, the situation was more complicated than in
building the building, because you were dealing with five
companies, right now actually we have six, because you have the
Netherlands. But you were dealing with five companies. All of
them had diverse interests except for one interest which they
had in common: None of them wanted to pay anything out.
The rest of the issues were diverse. For example, it was a
question of the market share. It was the question of the
currency evaluation of policy then and right now. There were
the lists of unpaid policies. There was the appeal process.
There was the audit process. There was the expenses.
And in all of these things, I would say the biggest
criminal was Allianz and the German Foundation, because when we
are talking right now about the German Foundation and the so-
called cooperation or noncooperation or the negotiation with
ICHEIC or not ICHEIC, it has no relevance at all. The German
Foundation should not, cannot, be a part of any negotiation
with ICHEIC. They either belong and adhere to the rules of
ICHEIC or they don't.
The insurance issue was forced on us. To use plain
language, I am not a politician, I would say it was a
blackmail. It was a blackmail by Mr. Lambsdorff who said
openly, if the insurance companies are not included in it, we
have no deal on the German Foundation.
The issue came to a head even when the Under Secretary,
Deputy Secretary Eizenstat, said, ``you don't want to scuttle
the German Foundation,'' to which I know I replied to him,
``no, we don't, but we don't want to scuttle ICHEIC.'' And the
agreement was that the insurance companies would be subject to
ICHEIC rules. The money which they are going to put to the
Foundation will be a pass-through, nothing more, nothing less.
And I don't want to hear--and I expressed myself this to
Mr. Hansmeyer and everybody else, I am sick and tired of the
negotiation about the Foundation. They have no place, they
should not be taking place, because they are outside of the
German agreement.
Now, maybe by coincidence 2 days or 3 days ago I met Mr.
Geier, who is the Minister of the lower department. He told me
a very funny story. He asked me if I am going to be at the
hearing, and I said yes. And I asked him, will you be there?
And he said no. And I said, why not? Oh, because we don't
consider Congress to be part of the government. This was news
to me, that Congress is not part of the government. But if he
said so, OK, it is a free country. He can say what he wants. So
then he tells me, and after all, the agreement is between the
two governments so that they are subject to the rules. So I
said, if this is the case, if you say the agreement is between
the governments and Allianz should obey the rule of the
agreement, why didn't they pay the next 850,000 Deutsche marks
which they were supposed to pay? After all, if they are subject
to the agreement, and if they broke the agreement the next day,
what would they fall back for the agreement?
So what is the sense of talking about the expenses? The
expenses are subject to the MOU. Allianz signed the MOU. They
are responsible for the MOU. They are not responsible for any
executive agreement which was made between our government and
the German Government, which, by the way, specified that the
insurance issues are subject to ICHEIC.
So to negotiate for a year and a half, 2 years, when we are
asking why does it take too long, if somebody will put an 800-
pound gorilla in front of me and ask me to move it, it will
take me 10 years to push it. So this is one reason why.
Now, and the same problem is with the so-called GVD, they
want their own rules. ICHEIC is handling six different
insurance companies, all different countries. And to give to
Germans a different negotiating point, it would be criminal. As
a matter of fact, I wrote to Judge McCasey. I wrote to him on
December 6th, and I will quote you part of it. And the question
of insurance and how it fits into the overall picture of the
settlement under the German Foundation agreement must be
clarified; otherwise justice and survivors' interests will not
be properly served.
And I must bring to your attention that ICHEIC was
established to resolve insurance issues in general and the
German insurance companies in particular. It is important to
note that ICHEIC was established approximately 2 years prior to
the German Foundation. Therefore, to include the German
insurance company in its present form in the framework of the
German Foundation agreement would benefit the insurance
companies to the detriment of the victims that they are
supposed to compensate. This is particularly true of the GDV,
since GDV has not yet signed it.
If the terms of the German Foundation agreement pertaining
to insurance are to be considered, then all of the conditions
of the MOU agreement with ICHEIC must be included. There should
be no exception to the German insurance agreement.
And I expressed this thought a few times to our meetings of
ICHEIC, and I have told them that I want to have the issues
settled as fast as possible while I am still alive. You, ladies
and gentlemen, heard the statement by the few survivors. We are
not youngsters, so that there is no question that a lot of
insurance companies were out again, they are out again, and
unless we are going to put some brakes on them, they will not
back down.
There was a mention here by Mr. Hansmeyer and his quotes in
the Forbes Magazine. I must tell you that since the time of the
Forbes Magazine, Mr. Hansmeyer did not show up on any of our
meetings, otherwise he was there all of the time. And I must
tell you that after the statement was made, I have here a
letter of May 18 which I wrote to Mr. Eagleburger pertaining to
these remarks, and let me just read you a couple of sentences.
If the statement made by Herbert Hansmeyer in Forbes was
not enough, the remarks by Hans Sauering, representing Allianz,
substituting for Hansmeyer, made on Thursday, May 10th added
insult to injury when he quoted Mr. Hansmeyer and said that
Allianz would be happy to approve payments for all insurance
claims where the individuals can present them with the policies
involved.
I don't know whether or not you were present in the room at
the time, but my reply to him, which still rings in my ears,
was, how dare you make such a statement in this room when you
know perfectly well that those who survived Auschwitz or any
other concentration camp left with absolutely nothing. Only a
few percent actually left with their lives instead of as
corpses.
I could speak on and on, but I----
Mrs. Morella. I bet you could.
Mr. Kent. I tell you, I want just to end up one thing. That
the statement made by the survivors before, and I accept them
as facts, but ICHEIC to me was more than just individual cases,
because you see those people that were here, first of all they
were lucky enough that they survived. Few of us survived. But
the second thing was very lucky that they had proper
documentation.
But ICHEIC is also working and trying to compensate people
that don't have the proper documentation. How many of us could
have it? And, therefore, the list of the people, the list of
the names which we are fighting from the very beginning, and
that was easy for the companies to do, only if they wished,
only if they wanted to, because when we are talking about the
date, what is the date? What meaning has the date of filing the
claims if we don't have the list? So unless they will give us
the list, there is no sense even talking about the date,
because it is meaningless. If I postpone the date another 4
months, and I will get the list 8 months from now, the date is
meaningless. And this is what they are doing to companies.
And that is why I made this statement at the beginning:
ICHEIC is not the criminal. The companies, the German
Foundation, they are the criminals.
Thank you. I am sorry if I took too long.
Mrs. Morella. Thank you, Mr. Kent. We appreciate your
passion and indeed your directness.
I just want to mention and acknowledge that we have sitting
there at the table, too, Israel Singer, vice president of the
claims conference and chairman of the negotiating committee. I
know, we hadn't planned that you were going to speak. If you--
you are here for answering questions, Mr. Singer, right?
Mr. Singer. That is fine.
Mrs. Morella. I know that Mr. Taylor gave comments on your
behalf.
Mr. Singer. He represented both of us. I just wanted to add
one word.
Mrs. Morella. Yes.
Mr. Singer. Mr. Kent spoke with great passion. He did so
because he sat for hundreds of hours, volunteer hours, during
ICHEIC. We listened to Chairman Eagleburger make many
decisions. I negotiated the original settlement with the
chairman of German industry Dr. Genz and Mr. Hansmeyer. I flew
at my expense by Concorde back and forth the day before this
almost became the deal-breaker.
The terms for that agreement were made by the three of us.
The terms are included in the GDV. Those terms are not being
listened to because Eagleburger isn't being listened to,
because those terms included the chairman's decisions.
We are making Eagleburger's job impossible. And they agreed
to make that difference. I think what we are doing now is we
are dragging our feet on something that has already been agreed
to that should be said here. It should be said again and again,
and it should be said by everyone to anyone who will listen.
There is 550 million Deutsche marks available to settle
claims. It is unacceptable to hear that out of 15,000 claims
that were made to a German company, only 4 were settled when
the money is available.
I would like at this time to say, but also suggest, that
there are some companies like Generali, that was said before by
the chairman, that paid 548 through offers that were made. And
I would like to include in the record the fact that they have
paid close to $12 million. That is not enough, but it is a lot.
They have their representatives, director, advocate Barak who
is sitting here today. We need more cooperation from them, but
more like the kind that they have given us so far. Thank you.
Mrs. Morella. Thank you, Mr. Singer.
I guess I will start off the questioning. We will probably
get to some of the questions that you have been posing in your
declarative statements to Secretary Eagleburger.
I understand that only five insurance companies have joined
the Commission. Allianz is the only German company, and they
only represent about 15 percent of the German market. Do you
think you are making any progress in getting the other German
companies to commit to this process?
Mr. Eagleburger. If you mean are we making any progress in
getting the other German companies to join ICHEIC, no. They
have made it very clear that they don't want to join. They
won't join. The concept of the Foundation is in essence if that
works, if that agreement works, then the non-MOU German
companies are brought into the process through the Foundation.
And then we would--for example, if ICHEIC--we have to work
out the details yet, but ICHEIC--I am about to be corrected. We
would have to work out the details, but then ICHEIC would be
responsible for seeing that the claims against those non-MOU
German companies were paid. So then ICHEIC would be in the
process, but never will they join ICHEIC as such.
And as I have been reminded by my good friend to my rear
here, the MOU companies, you should remember, also have their
German subsidiaries, and they are involved, but that is all.
Mrs. Morella. Do you think the German Government is doing
enough to help in the negotiations? Then I am going ask you
about Congress' role.
Mr. Eagleburger. That is a good question. I guess, Mrs.
Chairman, I would say--the trouble, as I see it, this is only
my own prejudiced view, but, as I see it, the introduction of
the German Government into this process and indeed the
introduction of the U.S. Government into this process has in
one way at least complicated things.
And is the German Government doing enough? The answer is
they are doing all I think we can expect them to do. But it is
not enough. In fact, to a degree, and again I know that the
Ambassador to my left won't necessarily agree with this, but to
a degree I think the rigidity that we have seen on the German
side in these negotiations on the Foundation is to some degree
a creation of the fact that the Foundation is created by German
law.
There are certain things laid out in the law that they must
do, so that in effect, to some degree, I am negotiating with
somebody who is bound by German law to which I am not bound.
But how do you get a negotiator to change a position if, in
fact, he is told by the legislature to do it? So there is no
answer to your question.
Mrs. Morella. Well, actually it is. But if you can go a
little further about what role do you see that we in Congress
can play to help you in your efforts to try to convince the
German insurance companies to participate in ICHEIC?
Mr. Eagleburger. That is the one question, Chairwoman, I
wish you never asked me, because it is a tough one for me to
deal with. I devoutly believe and have from the beginning that
with all of the difficulties that have been dealt on this
morning and I am sure will be this afternoon, with all of the
weaknesses and imperfections of ICHEIC, I have always believed
that if the governments would just stay out of it, in the end
we would do better.
And let me give you an example of what I mean, at least a
partial example. Before the German Foundation, before the
American Government and the German Government put their heads
together and came up with this Foundation, within ICHEIC we
were dealing with the problems of the five companies. And it is
easy for me to say it now, but I will tell you that I happen to
believe that if it had stayed this way, and the Foundation had
not become an issue, we would probably be pretty well through
most of this now.
What has happened is because of the involvement of this
German federation is that we have not only bifurcated, we have
trifurcated--if there is such a word--the negotiations. We have
to carry on. One, we have got the Foundation. Two, we have got
the non-German MOU companies like Generali, where we made an
agreement, again, much because of Mr. Singer over there. And
then third, I have got three companies that haven't yet come to
grips with the fact that they better settle some one way or
another. That is XSA, Winterthur, and Zurich. So at one point
we were going to be dealing with all of the companies. We would
have one set of rules for everybody. Now, because of the
Foundation, we have one set of rules for the Germans, for those
German companies. We have got another set of rules for
Generali. We are going to have a third set with AXA,
Winterthur, and Zurich at some point, and, therefore, in my
judgment, my job at least would have been a good bit easier if
we hadn't had the involvement of the U.S.-German agreement.
But I must say, on the other side of that argument, if this
negotiation with the Foundation succeeds, we will have brought
into the process a number of German companies that otherwise
would not have been involved. So that is the payoff. And I
suppose, in that sense, the Foundation is a good idea. It has
made my life more complicated. That is not necessarily a
particularly important question. And it is a long answer to--
attempt at an answer to your question.
I must say to you I still believe that we would be better
off if ICHEIC--and I know a number of you here think that
ICHEIC is a total failure. Well, I can't argue with you other
than to say what can you do to substitute for that failure I
have yet to see.
Chairwoman, I haven't given you an answer, but I would
prefer that government stay out of it.
Mrs. Morella. I think that is a good answer. You reached
that point to--you were giving us some of the complexities.
I note I have a copy of an AP report of the speech that you
made, and you were asked the question about Allianz. You didn't
really refer to them that much in your response to the
question, the large German insurance company, of failing to
compensate a single claim of the 4,800 claims submitted by the
International Commission, and when you were asked that, how
much have they paid by July 3rd, you said, ``A big fat zero,''
zero. And I found that to be kind of interesting.
Mr. Eagleburger. So did Allianz.
Mrs. Morella. I know my time has just about expired. I will
just try, in response to that same question, to give Ambassador
Bindenagel--it seems like the German Government should be able
to exert some pressure on the German Insurance Association to
join ICHEIC. Has the German Government done so?
Mr. Bindenagel. Madame Chairwoman, in fact, before I get to
that direct answer, I would like to say that the purpose of the
two governments dealing with the insurance was in the context
of dealing with all of the claims that were arising out of the
Nazi era and World War II. So from the beginning, part of the
discussion, when ICHEIC was approved at the very early part, we
asked them to become part of this process of negotiation
because the beneficiaries of ICHEIC and those who were not in
ICHEIC would really be the same. We wanted the victims to be
treated the same in fairness.
We also had the view that insurance companies shouldn't
have to pay twice. So underlying that, we felt it was very
important that we continue the support that we had for ICHEIC
from 1998 through the agreement in July 2000, and to
incorporate the most difficult issue that Mr. Eagleburger has
already pointed out: How do you get the 300 or 400 other
companies in Germany that may have had policies during this
period to be part of the process?
The idea would be have them all join ICHEIC. They would not
do that. The governments were very active in making--putting
pressure. If you were putting the issue to the German Insurance
Association that they should join with those German companies
subsidiaries, as Mr. Eagleburger has pointed out, plus Allianz
to join this process, it was a compromise. It was not easy. It
is difficult, as we can see; is today still. They have not come
together to deal with the additional claims-handling procedures
to free the 550 million marks.
Now, for the next phase indeed the government has been very
active in encouraging the companies to be forthcoming in these
negotiations. Both governments have tried to ensure that
negotiators are focused on the issues and deal with the issues
of appeals, audits, lists, and ultimately the issues of cost.
Both governments are very engaged, but we are not the actual
negotiators themselves. We leave that to Mr. Eagleburger and
ICHEIC itself to deal with the negotiator Mr. Brautigam.
Mrs. Morella. Is the State Department doing anything to try
to get an agreement for the insurance negotiation?
Mr. Bindenagel. Yes. The State Department, under the
direction of Deputy Secretary Armitage, has been very, very
actively engaged with the German Government throughout the last
15 months, particularly since the change of administration. Mr.
Armitage has been very active in dealing with Count Lambsdorff
and has instructed me to be actively engaged. I have met with
all of the parties repeatedly. I have been on the phone with
them in conference calls. I have met with them here in
Washington and in Europe, and we have tried very hard to ensure
that the parties are focused, moving forward on the issues, and
being helpful whenever we can as governments to try to resolve
issues that the governments can resolve. But, again, the
negotiators themselves are the ones that need to come to the
answers that are necessary to get this money freed up for
ICHEIC.
Mr. Eagleburger. Madame Chairman?
Mrs. Morella. Yes.
Mr. Eagleburger. It occurred to me as I was listening here,
a specific answer to your question would be, yes, the German
Government, particularly with regard to its own entities, like
the BAV, the institution that handles the insurance, that when
those institutions become excessively negative, as this one is,
it would be a wonderful idea if the German Government could
tell them to straighten up and fly right.
Mrs. Morella. My time has expired, and the Chair will now
be--Mr. LaTourette will take my place.
I am very pleased to recognize Mr. Waxman for his
questioning. As you all know, Mr. Waxman has been the leader in
this entire issue.
Sir.
Mr. Waxman. Thank you very much. And I appreciate the
testimony of all of our witnesses today to help us try to
understand how we have gotten into the situation we are in and
how we can move forward in a constructive way.
ICHEIC was established to facilitate compensation of
individuals for their Holocaust-era insurance policies, and
these are people who have not yet been paid. So I want to start
my questions by examining whether ICHEIC has succeeded in
meeting this goal.
Mr. Eagleburger, according to the data you provided in your
November 7, 2001, letter to the committee, to date 77,800
claims have been received by ICHEIC, yet member insurance
companies have made offers on only 758 claims. That is a
minuscule compensation rate of less than 1 percent.
And I would like to have you take a look at that chart. It
breaks down the statistics by each member company. Allianz, the
German insurance company, has been sent 15,000 claims and made
4 offers. Allianz's subsidiary, RAS, has been sent over 25,000
claims and made 183 offers. AXA of France has been sent 16,000
claims, and has made 13 offers. Generali of Italy has been sent
over 40,000 claims and has made 548 offers. The Swiss company
Winterthur has been sent 6,500 claims and made zero offers. And
the Swiss company Zurich has been sent 9,000 claims and made 10
offers.
Mr. Eagleburger, would you say that this rate of claims
approval is satisfactory?
Mr. Eagleburger. Of course not, Mr. Waxman. But I would
also say, don't get trapped by the figures too much here in the
sense that, as I tried to indicate, in terms of the number of
claims that are made, where you can clearly identify a company,
it is substantially less than the numbers we are now talking
about.
Having said all of that, there is no question it is not
satisfactory. I would only say to you this. Those 500 and
whatever that have been paid by Generali or whatever, that is
500 and some more than were paid in the preceding period, but
it is not satisfactory.
Mr. Waxman. Well, I would like to have a second chart put
up, because according to the data you provided the committee,
even if you look at only the claims that named companies, the
member companies have approved less than 10 percent of those
claims.
Now, Dr. Brauns testified earlier today, and he highlighted
this issue. He said in the few cases where offers have been
made, not all claimants have found the offers acceptable. Dr.
Brauns had a situation where he had a policy with Generali. He
had a copy of the policy, and it took him decades before
anything was acknowledged. And then when they acknowledged it,
after 50 years of pursuing the claim, he was offered $5,000.
That doesn't really seem like a very sincere approach from a
company that has been held up to date by a number of witnesses
as one of the best.
Mr. Eagleburger. Several points I would make there, Mr.
Chairman. Again, I am not going to get into the business of
defending the companies for things I think they have done
wrong. But having said that, and you said it yourself, after 50
years you finally at least got an offer. It is inadequate, I
assume. I don't know enough about the case, but it is
inadequate. But at least ICHEIC has forced attention on the
case. He has a right of appeal.
In the specific case, I can't judge, nor I suspect, sir,
can you, the merits of the case until I look through the entire
file. I will tell you that I think, and I tried to indicate
that much earlier--I think the companies, some more than
others, are, in fact, playing fast and loose with the decisions
I have made on how the claims ought to be treated.
I can only tell you this, and I recognize the question of
time and age, but I can only tell you this game isn't over
until--if you don't mind my saying--until I say it is over. And
I mean by that if I have to get somebody to go back six times
on a meritorious case to get the companies to recognize their
responsibility, I will do it. Now----
Mr. Waxman. Well, let me interrupt you.
Mr. Eagleburger. I can't get into all of these cases.
Mr. Waxman. Well, you can't get into them, but we can see
the results. I know you are saying that if it weren't for
ICHEIC, there wouldn't have been some successes, but it doesn't
look like there are very many successes.
Let me give you another case from a constituent of mine,
Mrs. Judith Steiner. She had her claim rejected by RAS, which
is a subsidiary of Allianz, and she filed her claim with a copy
of the receipt for the last premium payment her grandfather
paid before the family was taken from Hungary and sent to the
concentration camp. The company's insignia was on the receipt,
yet RAS responded that her claim was denied because the
existence of the policy could not be corroborated in the
company's files. So what would you do about that if she came to
you, and she probably has?
Mr. Eagleburger. She has not, not as far as I know. But I
suspect that is, in fact, the case I just mentioned earlier.
Let me just finish. The fact of the matter is in that case,
and in any number of these other cases, as we find them, we are
going to go back to the companies again, and we are going to
tell them we want an explanation of why the decision was made
this way. And if I have to go back to them 16 times, I will do
it.
Now, the problem here is that this takes time, I know that.
That is awkward. The other side of the problem is that, as I
indicated to you, I am going to put together a policing team
that will try on a basis of sampling at least to keep checking
on how well the companies are doing.
The best I can tell you, Mr. Waxman, is that we will do
what we can to force those companies to perform as they are
supposed to on the treatment of these claims.
Mr. Waxman. Mr. Eagleburger, I know you will do what you
can. It may be that you don't have the authority to tell these
companies what to do. That is a fundamental problem. But what
we have are people who have clear documentation, and they can't
get any satisfactory results.
Mr. Eagleburger. So far.
Mr. Waxman. Well, this is 50 years.
Mr. Eagleburger. I can't be responsible for that.
Mr. Waxman. ICHEIC has been in operation for 3 years, and
you spent approximately $40 million, yet despite spending $40
million, ICHEIC has resolved only 758 claims out of 77,800.
This seems like an extraordinary expenditure of funds for a
very meager result.
One of the main functions of ICHEIC is to publish the names
of Holocaust-era insurance policyholders so that individuals
can learn whether they or their family may have a claim. And
according to data provided to the committee by ICHEIC, the
insurance companies provided only the names of 9,000
policyholders to ICHEIC.
Mr. Eagleburger, after working with these companies for
years, ICHEIC has been able to persuade--you have only been
able to persuade them to list 9,000 eligible claimants. Is that
a satisfactory result?
Mr. Eagleburger. You know, having worked for them for
years, 2 years is not a decade, it is 2 years of which a fair
amount of time, at least in the beginning, was trying to get
things structured. And, yes, it costs a lot of money.
In the process, however, we have, first of all, established
a fairly substantial list, and I would say to you, no, it is
not adequate. This is an ongoing process. This is not something
that stops tomorrow morning. It is fairly clear that there is
still a great deal that has to be done.
Having said that, I will come back to you one more time and
say it is more than was done before, and I am not going to
accept responsibility for the last 50 years. I am going to
accept it for the last 2. And I would only say to you, sir,
that while I have heard a great many complaints about what we
have and haven't done, we are certainly not by any means
perfect, I haven't heard anybody come up with any suggestions
on how to do it better. And, in fact, I would point out to you
that until ICHEIC was, in fact, established, nobody, including
members of this committee, was out there talking about some
system that would be put into place to accomplish what we are
now trying to do.
So, we haven't done it perfectly, but we have done more
than was done in the past by anybody.
Mr. Kent. Congressman, can I throw my 3 cents on that?
Mr. Waxman. No. Just a minute.
You say that progress is being made, but no names have been
added since April to the list of people who have insurance
claims. There is already----
Mr. Eagleburger. What?
Mr. Waxman. No names have been added since April, I
understand.
Mr. Eagleburger. That is not true at all!
Mr. Waxman. They are not on the Web site. ICHEIC has had
$40 million--Mr. Eagleburger.
Mr. Eagleburger. Yeah, go ahead.
Mr. Waxman. You have had $40 million to spend money to tell
the world, come to ICHEIC if you have got a claim. And you have
translators and Web sites and radio stations and all sorts of
expenditures. Then people call ICHEIC and they send in their
claim, and then they never hear from anybody because you send
it on to the company, and then there is no response. And we
don't even have the lists.
Now, it is not just your fault, but I can't say that this
system is working for the people who are to be helped. And if
the system is not working, we've got to try to make it work or
change it and do something else, because time is running out
for so many of those people.
Mr. Eagleburger. The Congress of the United States, the
U.S. Government, other than this exercise of Bindenagel, had
nothing to do with the establishment of ICHEIC.
Now, if you people want to get into the middle of this
thing, as you now sit here and sound as if this is something
that you have been responsible for, or you are about to be
responsible for, be my guest. If you want to pass laws and do
all of that sort of thing, you go right ahead and do it, and
then you see how successful you will be.
You won't be successful. We have been more successful than
anybody in the last 60 years on this issue. And you expect in 2
years that we are supposed to make up for 60 years, and I am
telling you that is nonsense.
We have not been--we are not perfect. We have spent a lot
of money. I think the Jewish community would say to you that
one of the reasons the money was spent was, in fact, so we
could get to the Jewish community and tell them what the
possibilities now were. But I am not going to argue that we
have been greatly successful, but when you sit there and throw
back at me the $40 million, and we have only produced so much
in the way of results, No. 1, you don't understand what the $40
million was spent for, and No. 2, you expect that we are going
to accomplish in 2 years what nobody, including this body, was
able to accomplish in 60.
Mr. Waxman. Well, we have asked you in questions that we
sent in advance of this hearing for how this money was spent.
This $40 million on administrative expenses is twice as much as
the money that has been offered to survivors under the process.
And we asked you, for example, the level of ICHEIC's officials
salaries and expenditures on international meetings.
For example, you are aware of this, I am sure, one article
reported participants in ICHEIC conferences for the most part
traveled in business class, stayed in hotels that cost over
$500 a night, and under these circumstances, I think it is
reasonable for Congress to ask for a precise accounting.
Mr. Eagleburger. Why? What has that got to do with your
oversight responsibilities on the Foundation? Not one thing,
No. 1. No. 2, I will be happy to answer the questions, and, in
fact, we gave you this because I am not trying to hide
something. But I am not about to accept for 1 minute that this
committee has oversight responsibility on what ICHEIC has done
outside of the Foundation.
And if you want the figures, and want to do it in a way
that doesn't ask me to produce 100 copies of something in 2
days with questions that are none of your business, I would be
happy to do it. But I am not going to sit there and try to
answer some of the questions you have asked, like how many
meetings have there been? How much did they cost? I haven't
even the vaguest idea on some of this. We would have to pull it
together.
But I am prepared to tell you how much we spent. I told you
a great deal about it here, but I am also not prepared to
accept that I am going to have to sit there and defend to you
when we have flown business class, what kind of hotels we have
stayed in, and so forth. I will give you the figures, but I am
not going to sit here and spend my time trying to tell you
something that frankly is none of your business.
Mr. Waxman. Well, I thank you very much for telling me it
is none of my business. I do want those figures. And we will
insist that you send them to us.
Mr. Eagleburger. Well, you don't insist to me. If you want
to subpoena them, go ahead.
Mr. Waxman. We will insist that you give it to us. And let
me tell you----
Mr. Eagleburger. I am not going to do it!
Mr. Waxman. Let me tell you why I called you here. I have a
constituent who has got a claim for 60 years. She has got the
receipt from the insurance companies, and she goes to ICHEIC,
and she gets a blank form letter, and you are out spending
money telling her to come to you. And the companies don't care.
And you tell us it is none of our business, and you talk----
Mr. Eagleburger. No, no.
Mr. Waxman. Wait a second. I didn't interrupt you. When you
had these panelists early this morning and you came in and you
said these people this, these people that, you people this, you
people that, those people that testified in the morning session
lived through the Holocaust, had claims for insurance payments.
They had pretty substantial claims. They have been ignored, and
they have been lost in the process. You may think that they are
mistaken in one place or another in the way that they have
expressed themselves, but I think you are a little disdainful
of them and us.
Mr. Eagleburger. Oh, for heaven's sake! That is the dumbest
thing that I have ever heard! I am disdainful of them? I have
spent 2 years trying to get this thing to work, and I am
disdainful? I may not have done it well, but don't you tell me
for 1 minute that I am disdainful of these people who have
suffered the way that they have. What do you think I tried to
say today but that I am devoted to this?
Mr. Kent. Mr. Congressman, I have got to interrupt for a
second, because I don't like what is going on. Sir, I have told
you at the beginning of my remarks, ICHEIC is not the criminal.
Larry Eagleburger is not the criminal. You have no right to
talk to him like this! I was here during the meeting. He is for
the survivors. He is fighting for them. You point your fingers
at the companies. You point the finger to the German
Foundation, just like I did. Then you will have the right to
talk to Mr. Eagleburger the way you do.
You respect. I am telling it to you. $10 million was spent
on this advertising. You know what, sir? If you would know
about it, if these companies, Allianz and the others, would
send you the list, then instead of $12 million, maybe $40, $50
million would be paid. So why don't you pass a law that they
should be thrown out from the United States if they don't
respect these policies.
This you can do, but don't come here, and I don't want to
hear the way you talk to Mr. Eagleburger. I have too much
respect for you, sir.
Mr. Waxman. Thank you.
Mr. Kent. I have respect for you, too.
Mr. Waxman. Then let's all respect each other and stop
screaming at each other. And I apologize if my voice was
raised, but I have a reaction to others who have raised their
voice to me.
Mr. Lefkin, you are here representing one of the major
companies, a company that is part of the ICHEIC funders, part
of the ICHEIC process. And I made reference to a constituent.
She has the receipt for a premium payment was made by her
grandfather before the family was taken from Hungary to the
concentration camps--this was to RAS, a subsidiary of Allianz--
and the company just said no. They can't substantiate it. We
hear other testimony that the companies--according to Mr. Kent
and Mr. Eagleburger--the companies are not doing what they
should be doing.
How do you respond to that?
Mr. Kent. Yes, I respond to that. Pass the law that they
should respond.
Mr. Waxman. Thank you very much.
Mr. Lefkin.
Mr. Lefkin. Well, thank you, Congressman Waxman. Two
things. As it relates to that particular case, I will be
delighted to review it, to make sure that it gets the
appropriate review again and get a response back to you and to
your constituent.
I would also like to put into perspective some of those
numbers. We have heard large numbers bantered about, 13,000
claims submitted to Allianz. These are 13,000 inquiries, and
they relate to the entire German marketplace. Allianz is the
only German company that is a member of the international
commission. And even the claims where they identify Allianz, a
large percentage of them identify Allianz mostly because it is
the most well known German company. They are not necessarily
Allianz claimants or Allianz policyholders, and in most
instances where they are Allianz policyholders, they have been
paid in the past.
Mr. Waxman. Well, Mr. Lefkin, according to that chart that
I put up, Allianz has received 15,000 claims and made 4 offers.
How can you say that you are serious about paying reparations
when you have recognized only 4 out of 15,000 claims as
legitimate? You say that there are valid reasons for rejecting
claims, but, again, it just seems to me a lack of sincerity on
the part of the company or an eagerness on the part of the
company not to pay anything if there are so few that have been
acknowledged by Allianz.
Mr. Lefkin. No. Again, the number I received is 13,000
inquiries that were submitted to Allianz, and we determined
about 10,400 of those, our research indicated that there was no
connection to any of the Allianz German insurance companies.
Another 1,700 cases are being actively reviewed.
But, again, Congressman Waxman, what is being labeled a
claim is more often an inquiry. This is merely anecdotal
information, sort of anticipating, my father must have had an
insurance policy with some German insurance carrier. Sometimes
they mention a policy, it could have been Allianz because
Allianz is a well-known company, but that doesn't necessarily
mean it is a claim, but we take any inquiry and every claim
quite seriously.
Mr. Waxman. I hope you will take a look at this one from
Judith Steiner, because it seems to me a clear case where she
has paid for a premium with RAS and has been quite ignored by
the claimants.
Mr. Taylor, how do you respond? Are the companies doing
what they should be doing?
Mr. Taylor. No. As I acknowledged in my testimony, I think
there are some issues of principle where we have a difference
of opinion in terms of what the rules should be. And we also
have a feeling brought out by anecdotal and individual cases
that we are seeing where we feel that the rules that are part
of the ICHEIC process are not being applied in the spirit in
which we feel that they should be applied.
And I wanted also to just come back to the earlier
question. Again, there is no system that is perfect in the
ICHEIC system. I think everyone agrees, including those
individuals in ICHEIC, it is not a perfect system. At the
moment we don't have an alternate system, and our view is that
what we need to do is try and make the system work, make sure
that we have lists, make sure that those claims that we have
received are matched to lists that we will get, to make sure
that the list is available so people will know whether they
have policies or not, and to make sure that the system works.
I think, in my view, let's take the system, let's fix it,
let's do the best that we can with it. We don't have an
alternative at the moment.
Mr. Waxman. Mr. Lefkin, Allianz is the largest German
insurance company, but you have informed the company that it
provided only 308 names to ICHEIC for publication. How can you
possibly explain publishing only 308 names?
Mr. Lefkin. Congressman Waxman, Allianz did submit 140,000
names to ICHEIC last year, which were to be turned over to Yad
Vashem for processing to cross-check, to find out which may
have been victims of the Holocaust. It is my understanding that
because of some difficulties experienced by Yad Vashem, that
those names have not been processed.
Mr. Waxman. Somebody testified earlier that there is an
objection from the companies for Yad Vashem to make those names
available. Is that an accurate statement? Is Allianz or the
other companies objecting to that?
Mr. Lefkin. Well, we have always agreed, we issued an
agreement Allianz, under the auspices of Chairman Eagleburger
about a year and a half ago that we provide these names to Yad
Vashem, they would be processed, and that they would try to
ascertain which of those might belong to Jewish policyholders,
people who were persecuted or subsequently lost their lives in
the Holocaust. We refined those numbers further. We would
investigate those. If there were unclaimed policies, those
names would indeed be published.
Mr. Kent. I want to make one correction, that they gave us
the name after 2\1/2\ years of fighting, I mean daily fighting.
It is not that they came in, opened their pocket and said,
``Here you have the names.'' They did not. It was 2\1/2\ years
of fighting.
And second, they have many more names in their data base
which they are hiding, which they are not giving to us. So this
reply is not a reply to me, because they are hiding what they
have. And they didn't give it willingly, what they are
appearing right now we gave that. They didn't give us. We
fought for it for 2 years. That is a difference. Thank you.
Mr. Waxman. Mr. Singer, how do you respond to the failure
of the companies to give out the names?
Mr. Singer. Well, I think some of the responses that have
been given have been partial truths. I think you have gotten
the full list, that is true. There were 15,000 claims, not
inquiries. Of those, there were, 8.8 percent of them, about
1,200 of them, that actually named Allianz, and of those 1,200
that named Allianz, in some cases with documentation, only 4
had offers made. That is, I think, not a good record. So let's
just respond on that point.
But if you want to go through the list itself, I think,
Congressman, you have made a point, and that point is a very,
very clear point. But I think to take ICHEIC and make ICHEIC
the whipping boy here today is an error. I say that again as
the negotiator.
And I want to do what they taught me in law school. We have
500 million Deutsche marks available to be paid. There must be
some objective reason why the companies are dragging their
feet, and I would like to posit here at this committee, if you
permit me for 1 minute, the reason. The reason for that is
because they want to claim that they had to pay protection
money. We take objection to that.
We feel that since the deal was cut, the money is there.
This is not about the money, it is about the processing. The
processing is not ICHEIC's fault, the processing is the
companies' fault. The companies aren't doing this in a
forthright manner. They have six guidelines with regard to how
to do it, and they come back each time with three no's for you.
It is Khartoum all over again.
You could do one thing. You could force them to try and be
more responsive. It is not about the money. It is about getting
your constituents the money which already exists. That is
something which is inexplicable to me except for bad faith on
their part. It is not ICHEIC's fault.
Mr. Waxman. Well, I have introduced a bill with Congressman
Eliot Engel, H.R. 2693, the Holocaust Victims Insurance Relief
Act, which would require all insurance companies operating in
the United States--because those are the only ones we have a
connection to--to publish basic policyholder information for
all policies in effect in areas under Nazi control between 1933
and 1945. The information would be publicly disseminated
through the National Archives. Companies that fail to comply
would face financial penalties.
Do any of you disagree with that idea?
Mr. Eagleburger. No.
Mr. Waxman. So, hearing no dissent.
Mr. Lefkin.
Mr. Lefkin. I would have to sort of analyze the
legislation. As you probably imagined, Congressman Waxman,
there is a fairly complex area relating to both European law,
and Congressman Clay referenced earlier in his opening
statement that oftentimes, you know, many of the European
Governments, particularly Germany, have very strong privacy
provisions. So the export of public information relating to
insurance policies is oftentimes not possible to be transmitted
outside of the country.
So I would have to reserve judgment on the legislation, but
I do know that there were very strong practical difficulties in
implementing it.
Mr. Bindenagel. Mr. Waxman, the State Department has also
discussed with your staff some of the concerns that we have
with this bill.
Mr. Waxman. What concerns are they?
Mr. Bindenagel. Some of those concerns are about
extraterritoriality, application of U.S. law.
Mr. Waxman. I couldn't understand, Ambassador, your
testimony when you said you are not interfering with people's
rights to sue, yet you are--you urge in the courts that they
not allow the lawsuits to go forward. Isn't that interfering
with the right to sue?
Mr. Bindenagel. No. That is a very, very important
question, Mr. Waxman. I am pleased that you are asking it. What
we as a government did is agreed to the creation of the
Foundation, which, as you have heard today, supports ICHEIC and
has provided 550 million for the insurance, but 10 billion
marks--rather 550 million marks and 10 billion marks over for
slave and forced labor and other issues related to the Nazi era
and German claims. In exchange for that, that is in part of the
understanding and part of the agreement that we reached, the
U.S. Government pledged, committing itself to filing statements
of interest that this Foundation, which is supporting ICHEIC,
would be, in our view, the best remedy for resolving these
issues 50, 60 years after the fact, and that we would go to
court and we would argue to the court that these cases brought
before them should be dismissed on any valid legal ground.
That is to say, it is in our policy interest that this
Foundation be successful, that they reach out to the million
survivors who have not had compensation over the last 50, 60
years, and that we resolve banking and property issues, and we
resolve insurance issues through this mechanism.
It allows, however, that if an individual claimant wishes
not to participate, that is their right, and they may certainly
sue in court.
Mr. Waxman. Now, you have already gone into court and made
this representation which is adverse to the claimant's interest
in the court case. Is that because you are satisfied that the
agreement is being lived up to and that people are getting
compensated through this Foundation that was negotiated? Do you
feel that has been a success?
Mr. Bindenagel. We do. We have gone into court several
times, and dealing with several statements of interest in 60
cases which we have asked and argued in----
Mr. Waxman. I know you are successful in stopping those
lawsuits, but are you successful in getting people compensated
through this agreement that the U.S. Government negotiated
which would set up a fund to compensate them?
Mr. Singer points out that he thinks it is a failure
because the companies haven't put up the money.
Mr. Bindenagel. We are very pleased that the German
Foundation will reach out to some 600,000 former forced slave
laborers and pay out 2\1/2\ billion marks by the end of this
year.
As I said in my testimony, we are not pleased, we are
disappointed, that on the insurance side that these issues,
procedures, the processing of claims is not yet operational.
Mr. Waxman. Well, see, slave labor payments may be made.
They didn't have to be tied together with the insurance limits,
except for the fact that Germany and Austria wanted to end it
all and say this would be the maximum liability. So on the
insurance side of things, they are not getting the money for
the insurance claims, and the U.S. Government is going into
court and saying these people shouldn't be able to pursue this
lawsuit because it is adverse to the interests of the United
States that has negotiated a treaty.
Aren't you, in effect, doing your part of the bargain and
the other side hasn't done their part of the bargain?
Mr. Bindenagel. Yes, sir. We are doing our part of the
bargain. We have not been successful in making this
operational. We have been working very actively in support of
all of the people on this panel and the others on the German
side to ensure that these issues are resolved. They have not
done that yet. And we are continuing, and we appreciate the
opportunity to raise and discuss these issues here. But, yes,
sir, we are working very clearly to that end.
Now, with regard to the lawsuits themselves, those lawsuits
were dismissed in the insurance cases, but they were dismissed
also by all sides, but with the provision that if this doesn't
work, then they can be reopened.
Mr. Waxman. Reopened where?
Mr. Bindenagel. In the same court under Federal Rules of
Procedure.
Mr. Waxman. I want to pursue the question of the audit
process. Mr. Eagleburger, I'm interested in gaining greater
understanding of that audit process.
Mr. Eagleburger. Yeah.
Mr. Waxman. Your November 7 letter says that a company can
only issue a final decision on a claim after its compliance
with ICHEIC standards is certified by audit. Is each specific
claim reviewed by an auditor?
Mr. Eagleburger. No.
Mr. Waxman. Are the audits conducted by independent
auditors and who selects----
Mr. Eagleburger. Yes. Yes, they are.
Mr. Waxman. Who selects them for each company?
Mr. Eagleburger. They have been selected from within
ICHEIC. We have an auditor from ICHEIC. They have an auditor
and the two of them then select the third.
Mr. Waxman. Mr. Shapo, is the NAIC confident that the
ICHEIC audits are independent and thorough?
Mr. Shapo. They're still in progress, Congressman. I think
that the framework of the audit process is a thoughtful one
that provides accountability to the system.
Mr. Waxman. Mr. Eagleburger, could you describe the status
for the required audits for each of the companies required by
the MOU?
Mr. Eagleburger. Would you say that again?
Mr. Waxman. The status, describe the status--I'm turning to
the audits required by the MOU. Could you describe the status
of the required audits for each of the companies?
Mr. Eagleburger. Yes. I'll have to check with my friends
here, but just a minute. AXA and Zurich have been completed.
Winterthur will be completed next week. And what about the
others? All of them will be done within the next month.
Mr. Waxman. Mr.----
Mr. Eagleburger. And I don't know what they say at this
stage.
Mr. Waxman. I'd like to have us be able to review copies of
the audits of the member companies, and we'd like to ask you to
submit those audits, provide for the committee the audit
reports upon their completion, if you would.
Mr. Eagleburger. Mr. Waxman, I will have to take that under
advisement, but my concern is I think that those audits were
all done on the basis of an agreed confidentiality. But let me
check it.
Mr. Waxman. Mr. Lefkin, in our letter to Allianz, Chairman
Burton and I requested a copy of the audits of Allianz referred
to in a July 2001 Los Angeles Times report. The article stated,
``Officials at Allianz say they had launched an internal audit
of their prewar policies even before the International
Commission was formed. The audit of a sample of policies
revealed very few that were unpaid and showed that offers had
been made on those,'' said Allaener, the company spokesman. He
added that ``Arthur Andersen, the large public accounting firm
that did the audit in 1998, concluded that completely reviewing
the company's files would have taken 1,529 person years.''
Allianz's response to my request for this audit, however,
stated that this report about this audit ``did not come from
Allianz nor our auditors and we cannot comment on it.'' I found
this strange since the article is directly quoting the Allianz
spokesperson. Can you commit to providing the committee with a
copy of the audit referred to in this article?
Mr. Lefkin. I'd be delighted to, Mr. Chairman. I think we
have provided to a number of regulators, including Commissioner
Reson and Commissioner Bernstein in Minnesota, on a
confidential basis the methodology that was used in that audit,
and I'd be delighted to share that with you and your staff.
Mr. Waxman. OK. Now I want to go into the question of the
nonmember insurance companies, most of the German insurance
companies are not currently participating in the ICHEIC
process. This is putting the survivors and their families in an
impossible situation. They can't file effective claims without
knowing which company held the policy of their families or
whether their families had a policy at all unless the companies
come forward and identify their policyholders. I understand
that there are ongoing negotiations between ICHEIC, the German
Foundation, and the German Insurance Association in an attempt
to get non-ICHEIC insurance companies that issued Holocaust-era
policies to join ICHEIC. In fact, I believe one negotiation
session occurred----
Mr. Eagleburger. No.
Mr. Waxman [continuing]. Yesterday in London.
Mr. Shapo, I understand that you flew in from that session
to attend this hearing. Could you give us an update on the
negotiations and what are the major sticking points?
Mr. Shapo. I covered this to an extent in my testimony, and
I'm uncomfortable giving a high level of detail about my
negotiations as they're ongoing negotiations. Right now we're
working on the--what I would call the claims-related issues--
list, audits, and appeals. I do think, as I said earlier, that
Ambassador Brautigam has put substantial proposals on the
table. I do not think that they are completely adequate for us
to sign off on. The appeals negotiations I would characterize
as nearly complete. The lists negotiations, we are still
waiting for some more information about the quality and the
nature of the databases that the non-MOU companies have.
Depending on the results of those inquiries, I think we've got
a decent basic framework that should provide the basis for an
agreement on lists provided that we get the types of answers
we're looking for in these inquiries.
Audits at this point are a big bit of a sticking point, and
again I don't feel comfortable giving details about what the
disagreements are about but we've got significantly more work
to do on audits. I mentioned the cost issue which, you know, as
I said, was the main issue that was raised in this resolution
that I offered at the NAIC and that's a very significant gulf
between the two sides.
Mr. Waxman. Mr. Eagleburger, do you want to comment on
this?
Mr. Eagleburger. I want to correct one thing. These are not
negotiations about bringing these companies into ICHEIC. They
are negotiations which would deal with the issues where ICHEIC
requires things like audits and so forth. In other words, if
we're going to have an agreement with the Foundation, the
Foundation is going to have to agree to a number of things that
are important to us, to the regulators, and to the Jewish
community, audits that are adequately done, appeals and so
forth, but it's not a negotiation to bring those companies into
ICHEIC. They have made it clear they won't do that.
Mr. Shapo. Congressman, I think what we would likely see
come out of this is some kind of an agreement between ICHEIC
and the Foundation and the German Insurance Association that
would be memorialized in a way that--well, if it's to succeed
and we're to sign off on it in a way that would basically
incorporate the fundamental parts of core ICHEIC processes on
all the issues we've been talking about here today.
Mr. Kent. Congressman, you were right before when you said
that the German Foundation agreement about slave and labor is
beginning to work. However, the one issue is the insurance. It
is not working. The negotiations already a year and a half.
I'll give you an example. There is the Net Alliance Association
of Insurance Companies. Then the negotiation went down one,
two, three, and they belong, they are the six members, not the
German Foundation, not the association of the Germans. And this
is not working because in the first place, as I said before,
the German Foundation was supposed to have been only for slave
and labor and then only through a blackmail, and that's the
only way I can use it. This was thrown into the insurance and
we have trouble.
Chairman Eagleburger is right. If not for the government
interference of throwing in--I mean the German Government of
throwing in and then having an ambiguity because we have to
realize that ICHEIC is a private corporation. It is----
Mr. Waxman. Thank you, Mr. Kent. I appreciate--I agree with
what you're saying. I do agree that has become a real problem.
I received a copy of the proposed agreement dated March 2000,
drafted by the German Insurance Association, and I find a
number of the German Insurance Association's suggestions
troubling. For example, the association wants insurance
companies to have a veto power over ICHEIC decisions. In
addition, it wants a German-only appeals process outside of
ICHEIC. Also it wants to limit the publications of policyholder
names and wants to have German-only auditing, avoiding true
independent auditing.
Mr. Eagleburger, can you describe ICHEIC's response to
these proposals?
Mr. Eagleburger. Yes. If there weren't ladies present I'd
even do it more clearly, but we've made it very clear we will
not accept that.
Mr. Waxman. And how about you, Mr. Shapo?
Mr. Shapo. I have the same position.
Mr. Waxman. Perhaps most troubling is the efforts made by
insurance companies to receive large reimbursements. Mr.
Eagleburger, what is ICHEIC's position on the company's efforts
to recoup expenses?
Mr. Eagleburger. To the degree we've come to grips with it,
Congressman, and we have not finally yet, we're all over the
lot within the Commission on the subject, and it's an issue
that when we have proceeded further with the negotiations on
audits and all these other issues that we are going to have to
face--well, we run the gamut now of those who are totally
opposed to anything to some who are prepared for a modest
reimbursement, nothing like the companies desire, and I don't
know where we'll come out, frankly. It's going to depend to
some degree, I suppose, on the quality of the rest of the
agreement. My personal view--and I've made it very clear, my
personal view is I think the idea is a terrible one. But this
is one ICHEIC as a whole is going to have to deal with.
Mr. Waxman. And Mr. Shapo, do you want to comment on that?
Mr. Shapo. Yes, Congressman. I think I devoted four full
pages in my written testimony to this. It's a very byzantine
and complicated----
Mr. Waxman. We'll accept that for the record----
Mr. Shapo. But the bottom line is I think that the proposal
is contrary to the letter and the spirit of the executive
agreement, and I furthermore don't think it's consistent with
the German law.
Mr. Waxman. Mr. Lefkin, what is your position?
Mr. Lefkin. Allianz has certainly fulfilled its obligation.
It has provided 20-40 million Deutsche marks to Mr. Eagleburger
and the International Commission, and it's operating under the
auspices of the German Foundation law as well and has had all
of its funding requirements there.
Mr. Waxman. Given that the majority of German insurers have
still not agreed to join ICHEIC and the questions raised
regarding whether exhaustive lists of policyholder names have
been provided by member companies to ICHEIC for publication, it
seems logical to question whether the February 2002 deadline
for filing claims remains appropriate.
Mr. Eagleburger, is the current filing deadline fair or do
you think it should be changed?
Mr. Eagleburger. Well, the answer is I personally think
it's going to have to be changed. This also is an issue that's
going to have to be debated within ICHEIC, but certainly if we
have new names, I personally believe it would be an outrage not
to give them an opportunity to file their claims in a
reasonable way. Now, whether the Commission will agree with me
or not, I don't know--well, I do know. We'll have the
regulators and the Jewish groups in favor of it, and we'll have
the companies opposed. And under those circumstances I suspect
we'll end up extending.
Mr. Waxman. Well, it certainly seems to me incomprehensible
that people should be barred from going forward with claims if
they didn't even have the opportunity to get the lists.
Mr. Eagleburger. Yes.
Mr. Waxman. Mr. Shapo.
Mr. Shapo. I'll stick up for the companies and I will
assume that they will not be so preposterous as to suggest that
a name that a claimant derives from a newly discovered list
should not merit being processed whether it takes--whether it's
received before February or after February.
Mr. Eagleburger. Mr. Waxman, this does lead to one other
comment I'd like to make which is at the heart of a lot of my
problems now and that is if we extend, it's going to cost more
money to keep ICHEIC going. And I have--at this stage at least
I've been in a running battle for some months now with the
companies to provide us with more funding. August 2000 was the
last time they gave us anything. At this point we can operate
for a while, but I will tell you now that I am going to raise
the decibel level on this issue substantially within the next
few weeks and either the companies are going to provide us with
sufficient funds to continue, or we are going to have a very
serious problem, which I can only tell you I will not take
lying down.
Now, at the moment we'll be much better off if we get an
agreement with the Foundation because then there will be
substantial moneys flowing again, but if we don't get that
agreement with the Foundation in some reasonable period of
time, we're going to have troubles, and I should say to you in
my judgment the companies, the MOU companies now, the companies
within ICHEIC are perilously close to my having to rule and
tell everybody publicly that they have not been--what's the
word we use? They have not been in compliance with ICHEIC and
under those circumstances, courts and so forth, may do whatever
they wish, but either this issue gets settled and soon or we're
going to have a donnybrook.
Mr. Waxman. As I understood, you think that we ought to
extend the deadline and connect that to the publication of the
policyholder list. Do you think we also ought to have an
extension of the deadline connected to fundamental reforms of
the ICHEIC process such as new guidelines for ICHEIC with
regard to expenditures?
Mr. Eagleburger. I hadn't thought about it and I guess the
answer is I don't know that we ought to extend the dead--if
we're going to extend it at all for the claimants, we can
certainly use that time to do whatever sort of reforms we agree
need to be done, but you haven't started beating my wife yet,
Mr. Waxman, and beyond that I really can't go----
Mr. Waxman. Do you believe, Mr. Eagleburger, that there
should be sanctions against insurers that have failed to join
the settlement process?
Mr. Eagleburger. Tough question, and I'll tell you why. The
answer is by and large, yes, I think we should. I have spent
too much time in the U.S. Government watching sanctions be of
very little use but if we can fashion the right kind of
sanctions, I'm not sure--I'm assuming your question means U.S.
Government sanctions; is that correct?
Mr. Waxman. I would think those are the only ones we'd have
access to.
Mr. Eagleburger. Well, the answer to that is in a general
way, yes, I don't object to it. We'd have to talk about the
specific circumstances----
Mr. Waxman. Anybody else----
Mr. Eagleburger [continuing]. Under which they would be
imposed.
Mr. Waxman. I'm going to ask to see if anybody else wants
to comment on the sanctions. Mr. Kent.
Mr. Kent. Yes, I believe it is correct. Because the way I
have seen what's going on right now, particularly with the
German Foundation, and the way they want to implement it,
whatever they like, Allianz wanted. Whatever they don't like
it, they don't want it. So unless there would be a strong
sanction by our government to protect our rights, not insurance
company's right, then I would say they will continue doing what
they are doing because it reminds me of the very famous story
which the Russians said to the Pope how many divisions do you
have? If you don't have something that we can hold over their
heads, then they will do what they're doing right now, and the
German Foundation is the perfect example.
You asked, Congressman Waxman, about the expenses. They had
no right to ask for it. MOU companies are subject to the MOU,
not to the German Foundation.
Before I finish I just want to mention one thing. I am
sorry, Congressman Waxman, if I raised my voice to you. I'm not
a youngster. I spent a lot of time working on the German
Foundation and I took a lot of abuse what I heard from the
Germans and other things. I don't want to see anybody being
abused. I have learned during the war that one cannot be a
bystander. You have to take sides. You cannot be neutral.
Mr. Waxman. I appreciate that and I regret that--if I----
Mr. Kent. I raised my voice but it was in----
Mr. Waxman. I regret if I raised my voice to you or to
Secretary Eagleburger, but I do believe--everybody, you should
understand--that Congress has a role to play. When our
constituents are complaining that their claims aren't being
paid and they're being ignored, then I think we have to pay
attention to it, and when we look at the data, we see the high
expenditures by ICHEIC and the meager results and I think the
committee should be investigating first and then deciding on
appropriate legislation. That's our job.
I introduced a bill that you all are aware of that would
require companies doing business in the U.S. to list their
names, list the names of the insured. I certainly don't want to
question people's motives, and I accept people's sincerity and
their intentions. But I think absolutely that's fair for
Congress to look into ICHEIC, to look into the insurance
companies, to look at the results which I have to say are very
disappointing. But let me go back to some of these other
questions.
Ambassador, I want to know, Mr. Bindenagel, under the
German agreement, the United States makes statements of
interest. Is my understanding accurate that the criteria for
receiving the benefit of the statement of interest does not
take into account whether a company has agreed to comply with
ICHEIC procedures?
Mr. Bindenagel. That's correct, Mr. Waxman. The eligibility
for the statement of interest is in the U.S. foreign policy
that the Foundation and therefore ICHEIC be the exclusive
remedy for resolving these issues and we will file statements
of interest in the U.S. foreign policy.
Mr. Waxman. Do you believe that the United States should
file statements of interest advocating dismissal of claims
against companies that refuse to comply with ICHEIC procedures?
Mr. Bindenagel. If the operations of ICHEIC are functional
and they do not work, then they have the claimants, the
plaintiffs, and others have the right to reopen the cases, as I
said before.
Mr. Waxman. Since there are concerns about the
effectiveness of ICHEIC, is the State Department reconsidering
its position?
Mr. Bindenagel. The State Department is not reconsidering
its position and I must take this opportunity to respond to
your offer to comment on sanctions. It is not in our view the
right time for sanctions at this point, as you can tell. These
issues are very emotional, contentious, and we would like to
focus all of the attention, all of the energy of all of the
parties on the resolution of these issues that you've raised
here today--audits, appeals, lists, and costs. We would like
all of the attention to be focused on those issues and the
resolution of those issues, not be diverted by issues of
threats and sanctions. They're out there. We know that.
The insurance commissioners have made safe harbor issues a
concern. There are possibilities of reopening these cases if
the legal cases don't work. All of the energy, sir, should be
directed toward the resolution of these issues. We have 550
million marks that's available to pay claims and 350 million
marks of that to make humanitarian payments for people who
waited too long for those payments.
Thank you.
Mr. Waxman. During the July 17, 2000, signing ceremony of
the U.S.-German agreement, U.S. Holocaust Envoy Stuart
Eizenstat said, ``It is critically important that all German
insurance companies cooperate with the process established by
ICHEIC. This includes publishing lists of unpaid insurance
policies and subjecting themselves to audit. Unless German
insurance companies make these lists available through ICHEIC,
potential claimants cannot know their eligibility and the
insurance companies will have failed to assume their moral
responsibility.'' If participation in ICHEIC procedures is not
a criteria for receiving the benefit of a U.S. statement of
interest, how is the U.S. Government continuing to exert
pressure on these companies and the other companies at ICHEIC
to publish policyholder names?
Mr. Bindenagel. I must say, as I have indicated, both prior
to the change of administration and in this administration, we
have worked very closely with all of the parties here at the
table and those not at table to do just that. You heard the
representative from Allianz Fireman's Fund say that there are
140,000 names that they have submitted to ICHEIC. That is
indeed a principal point that, yes, indeed lists----
Mr. Waxman. I think that he said he submitted to Yad
Vashem.
Mr. Bindenagel. No, to ICHEIC.
Mr. Shapo. To ICHEIC.
Mr. Bindenagel. For checking with Yad Vashem. Indeed that
is a signal that we want to have. Those people who have
potentially the ability to make a claim need to have those
lists. We have made that very clear. The parties are themselves
negotiating the details of that agreement.
Mr. Waxman. I also understand the U.S. Government is
committed to continuing to file statements of interest in cases
after the February 2002 ICHEIC deadline for filing claims
passes, yet serious concerns have been raised that ICHEIC
member companies have not yet published these lists of
policyholders that would facilitate the filing of claims and
many other insurance companies have not even agreed to join
ICHEIC procedures and haven't provided any names.
In light of this does the State Department believe that the
February 2002 deadline should be extended?
Mr. Bindenagel. Mr. Waxman, the State Department doesn't
take a position on any particular issue. I think we've made it
very clear in the first part of your question. Indeed we are
committed to filing statements of interest, and the second with
regard to publication of lists we have made it clear that is a
very important part for the public confidence that ICHEIC is
doing what it set out to do. The actual negotiations themselves
over the date and the deadline is an issue for the members of
ICHEIC to make themselves.
Mr. Waxman. One moment. I want to thank all of you. I still
have additional questions, but I'm going to ask the chairman's
indulgence to--and members of this panel--to submit questions
in writing so that we can receive responses in writing and have
them on the record. There are a number of areas of detail that
I think we ought to pin down. Rather than take the time here to
go through all of them, particularly since many of you may have
to check your records, it would be I think beneficial for us
all to get a response in writing for the record.
So with that request, Mr. Chairman, I would hope the
members of this panel will respond to those questions and
respond in writing for us and in as prompt a manner as
possible. We'll outline that in the letter to them.
Mr. LaTourette [presiding]. Without objection, the
gentleman's request will be entered into the record and the
Chair would ask for the cooperation of the panel. And I just
have a few housekeeping matters, if I could take Mr. Waxman's
indulgence, and then if you have some additional questions, we
could finish.
Mr. Eagleburger, starting with you and it stems from
questions that Mr. Waxman was talking to you about. It relates
to a letter that you sent to the committee, I think yesterday,
relative to the expenses under the MOU. In that letter you
referenced the fact that no expense money has been received
from the participating insurance company since August 2000.
Mr. Eagleburger. Right.
Mr. LaTourette. You went on for a little bit of time in
your response to one of the questions to Mr. Waxman and I think
also in the letter that you sent to us you believe that the
money, which I believe totaled $60 million if I understand
things correctly, is being withheld as some form of punishment
for decisions that you've made. Is that your belief?
Mr. Eagleburger. Yes. And it was not only withheld. We'll
never see it. But the companies first agreed--and this was the
first meeting of ICHEIC. I asked the companies to agree to in
effect a $90 million escrow account just to demonstrate their
goodwill. They finally agreed to it. They paid in $30 million
and have never paid anything since, and I was told by
representatives of the companies that they were withholding it
because they were unhappy with some of these decisions I had
made, that it is--the $60 million has not been forthcoming, and
I do not believe it will be, sir.
Mr. LaTourette. Can you give us an example for the record
of an example of one of the decisions that you made that you
think has caused them to lead to this conclusion?
Mr. Eagleburger. I thought you might ask and I've got a
list of them here. Hold on a minute. Because it's a fair number
but I will only give you a few--if I remember where I put it.
Anyway the point is, for example, valuation of Eastern European
policies. What formula do you use to value an Eastern European
insurance policy that was written say in 1935? And that has
caused--I hope I don't have to explain what the valuation was
because I couldn't. I mean what the process was. It's fairly
complicated. But the companies were very unhappy with that.
Valuation of German insurance policies, some insurance
policies, and what to do about blocked and confiscated
policies, many of which were confiscated during the Holocaust,
many of which were just blocked so they couldn't be paid, and I
issued the decision which said that in both cases those
policies should be honored by the companies and, in other
words, they would--if we found a blocked or confiscated policy
that fell within the purview of the ICHEIC process that
companies would have to pay it.
And then there was another one, for example, on what should
the companies do about paying on nationalized policies where,
for example, the company would have owned a company in Poland,
which was then nationalized by the Communists immediately after
they took over, and again I ruled that those policies should be
paid. And that also did not make the companies very happy.
There are some others if I thought more about it, but it's
those kinds of things.
Mr. LaTourette. Let me, Mr. Lefkin, to you, is it accurate
that Allianz has cutoff payment to ICHEIC since August 2000?
Mr. Lefkin. Allianz has been operating--is actively
involved working with Mr. Eagleburger and Mr. Sher on the
Financial Oversight Committee. I am not privy to those
discussions. I do know that Mr. Eagleburger--what I've heard is
there is adequate funding now and that there are a number of
issues that are being discussed, but ICHEIC is in no imminent
danger of being closed down certainly.
Mr. LaTourette. And I apologize because I got here late
because of other business and the way the Congress works is you
come late, they make you the chairman. So I got to be the
chairman, but I thought I heard Mr. Eagleburger indicate that
no money has been paid since August 2000, and while he can keep
going for a while he's not so sure, and I think he said
Armageddon is coming or some other appropriate expression. So
my specific question, and if you don't know the answer, I'd ask
that you submit it for the purposes of the record: Are you
aware as to whether Allianz has paid any money to the
Commission since August 2000?
Mr. Lefkin. I'm not aware of that. I'll investigate that
for you, Congressman.
Mr. LaTourette. Did you hear Mr. Eagleburger's abbreviated
list, he said it wasn't all-inclusive but he indicated that
there was a list of decisions that he had made in his capacity
that had frustrated or not pleased the company. Are you aware
of those decisions?
Mr. Lefkin. I'm aware of those decisions, yes.
Mr. LaTourette. And is it your understanding that your
company is one of the ones frustrated by his decision?
Mr. Lefkin. Not particularly. I mean there are five
companies part of the Commission. Some of the decisions frankly
were not that controversial. Some of them were. There's always
varying degrees of debate. Even after some of those decisions
were made the funding still continued. I believe, as Mr.
Eagleburger or Mr. Sher said, the last check was received I
think in August 2000. Many of the decisions that Mr.
Eagleburger cited as having companies' disfavor were made
before that date.
Mr. LaTourette. The specific question I would be interested
having your company answer in writing is, one, have you made
any payments since August 2000 based upon his observations and,
if not, how do you believe that complies with the MOU that was
entered into?
Ambassador, to you, there was some discussion about
sanctions and what do we do about it and so forth and so on and
a lengthy discussion about these letters of interest that are
filed in litigation. If I have that right, what happens is when
a claim is filed the government pursuant to this agreement
files a letter of interest, and these cases are then dismissed
without prejudice so that at some point there isn't a
satisfactory resolution that the plaintiff could come back and
refile in the appropriate forum.
Is that correct?
Mr. Bindenagel. That's my understanding. I do want to point
out that in the cases in which we have filed statements of
interest, the U.S. Government is not the only one who has asked
for dismissal but the plaintiffs as well, the defense, and in
some cases special masters of the court have also asked for
dismissal so that when we supported this Foundation and the
Foundation supports the International Commission here, it's
really together with all the parties. It's not in opposition.
Mr. LaTourette. I know. I understand that. But my limited
experience, I haven't practiced law since I came to Congress,
but I haven't met a Federal judge yet that wouldn't rather
clear his docket than move things along especially with the
spate of appointments by all administrations have left
vacancies all over the country for political reasons in my
opinion, and it seems to me that may be an opt out that people
are choosing. The difficulty in claims like this that are 50 or
60 years old is you have claimants who are not getting any
younger. The opportunity whereas a young person like Mr. Waxman
wanted to dismiss something without prejudice and come back and
file it later may not be available to someone in their 70's or
80's who has been waiting a very long time to settle a claim.
But the question I specifically have, though, is what is
the State Department doing? If Mr. Eagleburger's observation is
right, and I believe that it is, that Armageddon is coming and
that no payments have been made pursuant to this agreement,
which leads to our foreign policy of entering these letters of
interest, and they haven't paid any money since August 2000,
what is the State Department doing to encourage these folks to
do what it is they're supposed to do that then gives them a
benefit, I would suggest, in our legal system?
Mr. Bindenagel. In fact, in my written statement I have
outlined many things that we've been doing. Since this
administration took over and reaffirmed the position of Special
Envoy, we have engaged with all the parties in not only the
insurance issues but the whole range of issues. Mr. Armitage
has taken up these issues directly with the German Government
on a regular basis, and I have spent much of my time since the
change of administration trying to help create an atmosphere of
cooperation so that these issues could be addressed. I have
spent many times directly dealing with all the people at the
table here, trying to keep the focus on the issues.
As you can tell, it's a very emotional and sensitive issue
and very often gets off the rails, if you will. And I have
traveled extensively in Europe, meeting individuals and we have
focused on the four issues that we have been talking about here
today, appeals, audits, lists, and costs. The attention that's
been spent and the deep level of detail is for the negotiators
to deal with, but we have tried and I think so far succeeded in
increasing the pace of the negotiations.
Mr. Eagleburger has called together negotiations with the
German Foundation repeatedly. If there's a complaint it is that
it has taken up too much of the time, as you heard from some of
the other panel members. We've been very intensively operating
and trying to resolve these issues because there's--550 million
marks was negotiated, is deposited, is available for paying
claims and for making humanitarian payments.
Mr. LaTourette. If I understood, and if I haven't
understood it correctly, correct me, but the agreement seems to
be working well or at least better on the slave labor side than
it is on the insurance side. I thought I heard you say that,
and I think that I would agree with that. On the insurance
side, though, relative to U.S. foreign policy, if the companies
are not willing to honor their commitments, and that if the
commitment was made to Mr. Eagleburger to give him $90 million
to do his job and he's made them mad with some of the things
that he's done and so now they're withholding money so that he
can't do his job or they starve him out, what observation would
you like to make relative to continued U.S. foreign policy?
I mean we are basically giving these companies legal peace
in the United States in exchange for doing what it is they said
they were going to do. When do we reach the conclusion, even if
they're doing a bang-up job in the slave labor side, that
they're not doing what they agreed to do on the insurance side
and do you think that we're close, as Mr. Eagleburger
indicated, or do you think that's a ways down the road?
Mr. Bindenagel. Mr. Chairman, I think you have by holding
this hearing today brought everyone's attention to this issue,
including all of the negotiating partners. I think that's a
rather major contribution to this process. I understand Mr.
Eagleburger's concern and skepticism with the outcome. I will
confirm his comment earlier that I am optimistic that we will
achieve an agreement. The agreements that we have made are not
at issue with the exception of the fulfillment of the company's
financial commitments. That has not been done. The issue was
diverted by the Foundation and we will hold them to the
agreements that they have made.
Mr. LaTourette. Is there a trigger that you're aware of in
U.S. policy or sort of a drop dead date that, hey, if you guys
don't fork over the other $60 million, we're not going to file
these letters of intent that--I understand the plaintiff and
defendant still have to come forward and say yeah, we would
like to dismiss it at this moment too, but clearly when the
U.S. Government gets involved and files a letter of interest,
it's not like me calling up and saying I'm kind of interested
in this case, can I file an amicus brief? You bring the full
weight and authority of the Federal Government and it can't be
lost on anything that is what the government would like them to
do at that moment in time. But is there a moment in time that
you think we're heading toward that we're going to be done with
it?
Mr. Bindenagel. There's a moment in time each time there's
a case and each time the government consults obviously also
with the Justice Department as we go through this process for
each case, that is the moment where we review where we are and
whether or not they have done what they have agreed to do.
Mr. LaTourette. Mr. Kent.
Mr. Kent. Mr. Chairman, if I may throw in another halfway
educated guess why the payments are not forthcoming, and I
believe it's simply for the reason that Allianz wants to get
all their expenses paid, which is completely contrary to the
MOU. So what they are doing, they are withholding the payment
and they feel that this way they are not paying the 550 million
unless they're going to get paid their expenses. They could get
it over my dead body because they have signed MOU and they are
responsible for the expenses just like every other company.
This example also is being amplified because the other
insurance companies also say if they are not paying, why should
we pay? Very normal human reasons. So that you have a domino
effect what the German Foundation created, and Mr. Bindenagel
is correct when he stated that the slave labor part of it is
working, but the insurance which had no part to be there is not
working, and it's not working because of one company, Allianz
and the Insurance Association, because they want what they
want. They want a pound of flesh. Don't want to pay and in this
particular issue, let me tell you my own feeling. When we spoke
about slave labor. To me it was strictly a moral and ethical
issue. I never spoke during the negotiation about money. It was
only a moral and ethical issue. This particular case, the
insurance is a moral issue, yes, but it is also a monetary
issue because the insurance companies--I am a lay person. I say
they stole the money from the people that had the policies.
They kept it for 60 years. So I said it once to Mr. Hansmeyer,
I don't blame you for what your fathers did in Auschwitz and
other camps, but I am blaming you for what you're doing right
now because you know or you should know that you had in your
Treasury hundreds of millions of dollars which did not belong
to you. It belonged to the people, so----
Mr. LaTourette. Thank you. Mr. Lefkin, is there anything
you would like to say that obviously----
Mr. Lefkin. The only thing I would like to add is the
estimated size of the unclaimed insurance policies arising from
Germany is about $30 million. At least that was a fairly
liberal estimate that was agreed to during the context of the
German Foundation negotiations. There has been 550 million
Deutsche marks allocated to this. So I think there is more than
enough money in the German Foundation compensating to satisfy
the needs of all the individual policyholders. And again these
are very complex negotiations. They are operating under the
context of a German law which was negotiated in part with the
Jewish organizations and the U.S. Government. I think it's
going to work. I can tell everyone's frustration at this table
is probably shared universally, even in Europe, but ultimately
you're dealing with people of goodwill and ultimately you have
550 million Deutsche marks on the table which should satisfy
all individual insurance claimants.
Mr. LaTourette. Mr. Taylor, is there something you'd like
to say, sir?
Mr. Taylor. Yes. I just don't want to let the record show
that there was any sense of agreement from the Jewish side in
those negotiations that the exposure of Allianz or German
industry was $30 million. Without repeating the negotiations,
the argument was it was a considerably higher sum involved in
the insurance policies issued by Allianz and by the
subsidiaries of Allianz.
Mr. LaTourette. Thank you, Mr. Taylor. Mr. Lefkin, just for
the record, where did that figure that you used, $30 million,
come from?
Mr. Lefkin. It was one of the estimates that was used, and
again I was not privy to the negotiations, but what I
understand was that when they arrived at the sum as to what was
the size of the unclaimed insurance policies in Germany, and
that includes all German companies, not just Allianz, which has
about a 15 percent market share, historical market share, it
was estimated--and I don't know exactly by whom or by--but the
number was agreed to of about $30 million. The German Insurance
Association actually believed that's probably much larger than
what it really is. Nonetheless, I think the important thing is
that there is more than enough money in the Foundation to cover
the needs of individual policyholders.
Mr. LaTourette. Mr. Singer has made the point before and
Mr. Kent I think has made it again that there is a sum of money
there and the only explanation that Mr. Singer at least could
offer to the committee as to why we're not moving faster is
that the companies are dragging their feet. What would your
observation be about that?
Mr. Lefkin. Companies aren't really parties to the
Foundation negotiations. They're being led, and Chairman
Eagleburger mentioned this before, they're being led by a very
capable diplomat, Ambassador Brautigam, who was the former
German ambassador to the United Nations. So I really can't
comment beyond that. There are some very complex issues. Mr.
Bindenagel certainly referred to some of them, and perhaps I
would probably toss those questions over to either of them, who
might be able to elaborate further.
Mr. LaTourette. Let's go to Mr. Eagleburger. He had his
hand up.
Mr. Eagleburger. Well, Mr. Lefkin is a good friend of mine.
I like him dearly. He doesn't know what's going on in this
particular case. I can assure you that what happens is that Mr.
Brautigam, Ambassador Brautigam, the German negotiator, at the
end of these meetings goes back to Germany and clearly has to
brief, debrief the various insurance companies that are his
constituents and he may make suggestions to the companies about
how they ought to respond to these issues, but he is totally in
the hands of the companies as to what they will agree to. He is
not an independent operator in this regard, and so the German
insurance companies do in fact have substantial influence on
the positions taken in the negotiations and most of the time
those influences are in my judgment less than creative.
Mr. LaTourette. Mr. Shapo, what would you like to share
with us?
Mr. Shapo. Thank you, Mr. Chairman. It just can't be said
that the companies have no part in this and that they're
innocent bystanders, exactly as the chairman has described.
Ambassador Brautigam has to go back to the companies and try to
convince them to accept what we've negotiated. Precisely as my
answer to Congressman Waxman's question when he asked about how
negotiations went in London, the problem with the lists was
that we were waiting for information back from the companies
that had been raised in our previous meeting. We had asked a
series of questions and Ambassador Brautigam has been
diligently working to get back those answers, but the companies
hadn't been provided them yet, and that's why we didn't get
further on lists yesterday than we had hoped to.
Mr. LaTourette. Ambassador, I'll get to you in a second,
but Mr. Lefkin, Mr. Shapo brings up a point that I wanted to
ask you. Can you explain to the committee why it took 2\1/2\
years to--I heard you say over 100,000 names to ICHEIC and are
being examined by Yad Vashem, but is there some explanation why
it took Allianz 2\1/2\ years to produce whatever it is you did
for this?
Mr. Lefkin. Actually the sequence of events, Congressman,
was that we reached an agreement with Mr. Bobby Brown,
representing the State of Israel, and with Chairman
Eagleburger, I believe it was the October meeting of 1999, and
we submitted names over to ICHEIC for distribution to Yad
Vashem early in the year 2000, I think January or February of
that month. What we do know is that there have been processing
problems in Yad Vashem, and I don't know all the reasons why
they have not been processed, but our company has fulfilled its
obligations in transferring them over to ICHEIC to be
transferred over to Yad Vashem.
Mr. LaTourette. So the premise of my question, it took 2
\1/2\ years--you think it took a couple of months after an
agreement was reached and when I say it took 2\1/2\ years, I'm
wrong in that regard. Mr. Eagleburger.
Mr. Eagleburger. I want to explain the Yad Vashem issue and
it was something we got stuck in the middle of that we had
nothing to do with. To make a long story short, IBM had its
subsidiary along the line--had done some work for the Volcker
Commission in terms of using Yad Vashem for some of their
activity and IBM was unwilling for some period time after the--
when we wanted to--when we went to Yad Vashem and Yad Vashem
wanted to use this software, IBM was for some very lengthy
period of time totally unprepared to let us do that without a
payment of what, it was $1 million or something like that?
About $1 million. And I wasn't ready to pay $1 million. So
finally the issue was resolved with no payment but it took some
time, and that's why there was the delay and it was certainly
not--it's one of the few times I would have to tell you that
Allianz wasn't at fault.
Mr. LaTourette. Thank you. Ambassador, is there something
you wanted to say relative to our last question?
Mr. Bindenagel. I did. Thank you, Mr. Chairman. The issues
are going back and forth here and the reason that the U.S.
Government wants these issues resolved is because ultimately it
goes to the international agreement that we reached with the
Federal Republic of Germany, and the two governments are
politically responsible for ensuring that these agreements are
implemented fully.
Mr. LaTourette. OK. Thank you very much. I don't have any
more questions on this subject. I'll turn back to Mr. Waxman to
see if he has anything more in a minute, but I did promise a
constituent of mine that I would ask, Ambassador, this of you
because of what it is you do for a living and it doesn't have
anything to do with ICHEIC; so all you ICHEIC guys can sit back
and take a deep breath and I'm done with it.
There are two gentleman that live in my district that I
represent east of Cleveland, OH, places like Beachwood and
Pepper Pike and other places like that in northeastern Ohio and
they have to do with property in Poland and we've made contact
with the State Department. We've made other contacts and we
can't seem to quite crack the code and tell these folks where
to go and let me just briefly describe the two situations.
The one gentleman who was confined to Auschwitz and still
survives today. His family operated and owned a bus company in
Poland that was expropriated, and the second gentleman was a
lottery agent, a Polish lottery agent and deposited $100,000 as
a bond for the lottery tickets that he sold. He was a bonded
lottery agent. That also has never been returned by the Federal
Government. I'm aware that the Helsinki Commission provides
property claims in former Soviet Republics where property was,
but I don't know if there exists a comparable entity to assist
in these cases, and my question to you is, is there any
internationally coordinated effort by the U.S. Government to
authorize holocaust survivors to bring direct claims for
confiscated property against the Polish Government directly or
through any international organization that you're aware of?
Mr. Bindenagel. Mr. Chairman, no, I'm not aware of it, but
I'd be glad to take the question and get you an answer.
Mr. LaTourette. If you could, I have it written out and
I'll be happy to hand it to you when we're done and my
constituents would very much appreciate the guidance because
like these folks with the insurance polices they have been
waiting a very long time for an answer. I don't----
Mr. Kent. Mr. Chairman, I could answer you the question so
far to the best of my knowledge.
Mr. LaTourette. Sure.
Mr. Kent. There is no agreement between our government and
the Polish Government. I could add, however, that there are
some conversations between the--in the group, in other words,
the Jewish part in the Polish Government but they are still not
under the auspices of our government. So far they were not
successful so--but negotiations are----
Mr. LaTourette. I thank you. Mr. Taylor, do you want to
add?
Mr. Taylor. If I could just add, I think this issue of
private property restitution in Poland is one that has received
some attention but not adequate attention, and perhaps it is
something that this committee and the U.S. Congress would look
at because I think it does raise some important issues and we
do see a role for the U.S. Government and the Congress to try
to encourage this issue to be treated, dealt with in a serious
and comprehensive manner.
Mr. LaTourette. Thank you. I don't have any more questions.
Mr. Waxman.
Mr. Waxman. Thank you very much, Mr. Chairman.
Mr. Eagleburger, the insurance company Winterthur told the
committee that the ICHEIC rulings are not binding upon members
of ICHEIC. Do you agree with that position?
Mr. Eagleburger. No, I don't. And I had heard this view
expressed. This was some months ago now. I went out with a
questionnaire to each of the companies and asked, ``Do you
believe that my decisions are binding or not?'' And to the
degree I could--the responses were obviously written by someone
who was a crafty--it was very hard to figure out what their
answers were is the best way to put it, but my view is that
they are bound by these decisions and if they don't follow
them, I--and that's why I want to check on what is going on in
the various companies in terms of policy claims responses and
so forth. If they aren't following them, I will certainly make
it public and--which is about the best I can do, but at the
same time will also make it clear that as far as I'm concerned
they have not met their obligations under ICHEIC and that
anyone who wishes a quarter, whatever, can take that for
whatever they wanted to use it for.
And I should mention related to this, if I may, one of the
things I should have mentioned earlier in terms of when you
asked the question about sanctions, let us not forget--and I
don't want to put words in his mouth, but let us not forget
that we do have State insurance regulators and that depending
upon the degree of the crime, if you will, they also have
substantial authority over these insurance companies. For
example, if the companies do not follow my directives, one of
the things I'm going to do right away is turn to the insurance
regulators of the States and say I think it's time you took a
hard look at whether you want to continue to stand aside and
not sanction yourself.
Mr. Waxman. Mr. Shapo.
Mr. Shapo. Thank you, Congressman. And I'd just put out
again for the record that the resolution that I wrote and that
we passed in the United States explicitly brings up the
possibility of further regulatory actions in the resolved
paragraphs and it enumerates the types of actions that could
lead to by myself and my colleagues.
Mr. Waxman. Mr. Lefkin, what do you have to say about the
comment by Winterthur that they don't feel that ICHEIC rulings
are binding on them? How does your client respond?
Mr. Lefkin. I would prefer not to comment on a statement
made by another company.
Mr. Waxman. Does your company feel that the ICHEIC
decisions are binding on you?
Mr. Lefkin. We have always abided by all the ICHEIC
decisions.
Mr. Eagleburger. Is that a yes or a no?
Mr. Waxman. To pin you down, do we want to assume that's a
yes or a no, Mr. Lefkin?
Mr. Lefkin. That every decision he has made we have
complied with, and I cannot predict with any degree of accuracy
in the future what will transpire but we've always tried to
work in a cooperative manner.
Mr. Waxman. Mr. Shapo.
Mr. Shapo. Congressman, Mr. Hansmeyer from Allianz wrote a
letter to Chairman Eagleburger on September 18 saying that ``I
hope you understand that, under these circumstances, we cannot
abide by these decisions.''
Mr. Waxman. In closing, I want to return to Mr. Eagleburger
because we had a heated exchange earlier this afternoon when I
got to the issue of expenses, and I want to make it clear to
you that I'm not questioning your motives or intentions. You've
stated forcefully your desire to help claimants, and I don't
question that. But I do think that this committee should get
answers to some of these questions that we were going to ask of
you and have already asked of you.
Chairman Burton and I requested that ICHEIC break down its
administrative expenses by the following categories: Salaries,
office-related expenses, meetings and conferences, outreach to
Holocaust survivors, and claims processing. ICHEIC only
provided information on outreach and claims processing. At
least $12 million of the $40 million expenses is unaccounted
for.
I'm going to ask, if you would, to respond to a letter that
we will send you to further elaborate on how much is spent on
salaries, how much is spent on meetings and conferences, and I
would hope you would cooperate with us, Mr. Eagleburger.
Mr. Eagleburger. If you want a yes or a no, I'll have to
look at the letter, Mr. Waxman, and then I'm get back to you.
Mr. Waxman. Well, I will hope that you will get back to us
and give us the information that I think we are entitled to as
a committee that has legislative jurisdiction, jurisdiction to
investigate any matter that is relevant to Federal legislation.
I've indicated I've already introduced Federal legislation. We
have a clear interest in this issue, as do you and as do others
at this table. And when people are aggrieved they go to their
representatives, and as their representatives we want to get
answers and explore fully what has been going on in this whole
area. There seems to be, whoever's fault it may be, a lot of
money spent for very little results for the people who need the
results, and those are the people who are waiting to have their
insurance company claims paid for.
But I think this hearing has been helpful. I think this
hearing has been useful.
Mr. Shapo, let me ask you--my staff wanted me to request of
you Allianz's letter that you referred to so we can have that
for the record.
[The information referred to follows:]
[GRAPHIC] [TIFF OMITTED] T7710.083
Mr. Waxman. I thank you all for your participation, and
while sometimes we have been antagonistic, that is not the
purpose. I want to work with all of you to make sure we get
this job done for the people that are asking for the
assistance.
Mr. LaTourette. I thank the gentleman, and I join Mr.
Waxman. It has been a long afternoon. Thank you for your
observations to the committee. And if a request has been made
for you to followup on the record, we ask that you do that at
your earliest convenience.
And, Mr. Shapo, I guess you are going to have the final
word.
Mr. Shapo. Can I make one just very quick observation? It
has to do with the claims process and the way it has been
driven. I think it's implicit in some of the remarks, and I'm
not sure it was stated explicitly, and that is the Commission
made an explicit policy choice to encourage inquiries and
claims. The ad that was put out said, suppose your family had a
Holocaust-era insurance policy, and you just didn't know about
it. Certainly that is designed to encourage people to err on
the side of caution and perhaps to--perhaps has had the effect
of probably encouraging more claims than it would if you took
another philosophy and only encouraged people that knew with
100 percent certainty that they had a claim. And that has
certainly led to a high number of claims, but it has led to
more--gross number of valid claims being higher.
And unfortunately, some of us have been disappointed that
the companies have not been giving more of the benefit of the
doubt to claimants who have been given a basic presumption of a
claim, and that is something that we are seeking to work out.
But that is something I wanted to make sure that I had a chance
to say for the record.
And also I wanted to say for the record that the chairman
at all times fiercely and jealously insists on respect for
survivors. He doesn't always insist on respect for me, but----
Mr. LaTourette. I thank you all very much, and this hearing
is adjourned.
[Whereupon, at 4:50 p.m., the committee was adjourned.]
[The prepared statement of Hon. Edlophus Towns and
additional information submitted for the hearing record
follows:]
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