At the invitation of myself and Minister Bodo Hombach, who is the
Minister of the German Chancellery, we held all-day discussions today,
beginning, actually, last night, about an envisioned foundation
initiative of German enterprises.
The initiative aims at material relief for forced and slave
laborers and other victims of Nazi persecution that involved German
industry. The foundation initiative also envisions the creation of a
future fund. The participants also discussed the essential problem of
legal closure for the German companies.
The participants in the discussions were the German and U.S.
Governments, the governments of Russia, Poland, the Czech Republic,
Belarus and Ukraine, as well as the reconciliation foundations in
these same Central and Eastern European countries, representatives of
key German companies and their lawyers, the Conference on Jewish
Material Claims, the Israeli Government and attorneys representing
Holocaust survivors in class action lawsuits filed in the U.S. against
German companies.
Reaching the stage of today's meeting and getting everybody under
one tent required a great deal of work and flexibility on everyone's
part. The participation of all those who attended is a significant
accomplishment in moving the process toward closure.
The participants had a constructive discussion on some of the
difficult issues related to the foundation initiative of German
enterprises. The goal of this important initiative is to provide
victims with payments through a cooperative, fair and non-bureaucratic
arrangement without regard to nationality or religion. In this
connection, Minister Hombach and myself expressed our understanding of
the concern of German enterprises to achieve legal closure with
respect to current and future lawsuits. And we all understand that
legal closure is the sin qua non of making this initiative work.
We were also joined by members of each of the four parties in the
German Bundestag, and it is the intention of the coalition partners in
the Bundestag to establish a federal foundation to cover those who are
not covered or may not be covered by the industrial foundation
initiative; in other words, a federal foundation. It is also
envisioned that there would be a future fund for humanitarian-oriented
and Holocaust-related projects.
The participants in the discussions are committed to meeting in
working groups in Washington and Bonn, and to making recommendations
within the next 90 days. There was an agreement on an ambitious work
program to reach that goal and to developing a legal protection
working group, a slave and forced labor working group, and in dealing
with the issues of banks, Aryan-ized property, and insurance, the
necessary legal framework with the hope that the process can be agreed
to by September 1, 1999, which is the date set by the German
Government, as it is the 60th anniversary of the commencement of World
War II.
In terms of the key issues that have to be determined, there are
many: how to bring legal closure in ways that marry the German
initiative with the class actions. This is complicated by the
different legal cultures that exist in Europe and in the United
States. The decision of who should be the beneficiaries; how we should
define key issues like slave labor, enforced labor; how the new fund
would be operated; how claims would be processed; and the relationship
of all of that to the class actions.
We will now begin this accelerated process. We feel that we got off
to a good start in which everybody put their positions forward. This
was not intended to be a negotiating session, but everybody laid their
cards on the table in terms of their positions. I think everybody now
has a clear understanding of those positions. And what I got a sense
of, frankly, even while everybody was stating their positions, is a
sense of a potential historic effort and historic enterprise, which
will require flexibility on everyone's part. One began to see the
struggle of how one can accommodate different legal cultures and
different legal systems to bring that about.
I'll be glad to take your questions on this.
QUESTION: If any of the class action attorneys chooses not
to go along with it, could that not put a fatal end to this whole
process?
UNDER SECRETARY EIZENSTAT: One of our accomplishments was
that the attorneys were grouped into three groupings, and they
represented all of the class action attorneys. There was one group
that we called the Hausfeld Weiss group, the second group, which is
the Urbach-Whinston group, which represents the Orthodox Jewish
community, and the third group, which is the Swift-Fagan Group. So I
think the fact that we had all the potential parties together,
committed to this type of process, is a positive sign. Obviously, we
do need the agreement of everyone.
It's very important to also understand the parameters of the class
action relative to the German initiative; because in many respects the
German initiative is actually a much broader initiative, in that it
seeks to cover industrial forced laborers and industrial slave
laborers. The class actions, by definition, can only represent those
laborers who worked for companies subject to the jurisdiction of U.S.
courts.
Now, the fact is that the great majority of companies for whom
other victims worked either are nonexistent, they were SS companies,
private companies that had no legal continuity, or companies that
still are in existence but which are not subject to the jurisdiction
of the court. At this point, the German initiative is supported by 16
German companies, and there was the clear commitment by the German
companies, which we appreciate, and the German Government that if a
means can be found to achieve this kind of legal closure, that many
more German companies would be willing to participate in this effort.
QUESTION: Two questions -- first one, you're talking about
the positions, like working groups and so on, but I'm interested
whether any decision have been already made or are going to be made
today about these groups - when, how, they should meet? And the second
question is, what are the main differences, at the moment at least,
between the side of -- you're representing victims and the German
side?
UNDER SECRETARY EIZENSTAT: First of all, in terms of the
working groups, the working groups will be broadly representative of
all the interests that were in the room - the governments involved,
the attorneys and the like. The Czech and Polish Governments presented
a joint paper. And I think importantly, the Belarus and Russian and
Ukrainian delegations, while they did not sign the joint paper,
mentioned very positive things about it and ascribed to much that was
in the joint paper.
In terms of the kinds of issues which are dividing us, there are,
of course, many because the process is now just formally gotten kicked
off. But it was clear that the Central and Eastern European countries
want to make sure that their citizens, most of whom were forced
laborers -- that is to say they were conscripted to work in Germany
during the war -- as opposed to slave laborers, who were generally in
concentration camps or ghettos and the purpose of their work was to
work them to death rather than to be an asset of the state during the
war effort. I think that there's also recognition that different
circumstances might permit different levels of compensation. But what
was important is everyone was saying that this should be done without
respect to religion and nationality. I think this was a positive
development.
QUESTION: Did the German concern about future liability and
immunity come up; and if so, how did you address that? I understand
that they're concerned that if they start compensating now, that they
may leave the door open to future. Was that one of the differences?
UNDER SECRETARY EIZENSTAT: Yes. A number of the German
companies mentioned that going back 30 or 40 years, they had actually
reached an agreement with the Jewish Material Claims Conference to
compensate many of these laborers. Now, it was only a selected number
of companies, but several major companies. They thought they had
achieved finality through that process by the agreement that was
reached. So having gone through that experience, they want to make
certain, before they pay into this new German industrial fund, that it
brings finality from future claims and future suits.
Everyone agreed - all the plaintiffs' attorneys agreed -- that was
a completely legitimate concern. The question is how to achieve that
while keeping the German fund and foundation under German control but,
again, marrying it with the class actions which are pending. So this
was a constant refrain and, indeed, we have a single working group
working just on that We've got, again, working groups that will be
dealing with insurance, Aryan-ized property, slave and forced labor;
but there's one specifically called the Legal Protection Working
Group. That is a German title. Every one of the plaintiffs' attorneys
agreed to participate in that and to try to be as creative - and I'm
now quoting them, "creative and flexible," that is the
plaintiffs' attorneys, as they can to make the closure work.
We all know that that is the key that unlocks the door to this
foundation initiative.
QUESTION: What are the legal guarantees to the U.S. or the
governments of any of those countries can give to Germany that there
will be no future claims?
UNDER SECRETARY EIZENSTAT: First of all, if we can handle
the class actions appropriately, that itself provides very strong
protection because class actions, by definition, if they're properly
disposed of, can provide legal closure. The plaintiffs' attorneys went
into some great length to try to explain how the system works with
respect to class actions.
Second, we have made it clear that within the context of our own
legal system, that the U.S. Government is willing to look at certain
government-to-government assurances; and, indeed, the fact that we had
six governments -- five from Central Europe and Israel being the sixth
and then the German and U.S. Governments being seven and eight -- was
itself indicative of the fact that there may be some need for, at the
end of the process, some government-to-government agreements that, in
effect, give the (inaudible) on the agreement. But that has to be done
in the context of our own legal structure and our own legal system.
QUESTION: A follow-up question to my colleague's question -
when are these working groups going to meet, actually? Has it been
decided? And have the procedure proposals presented by the Czech
Republic and Poland, have they been accepted by the --
UNDER SECRETARY EIZENSTAT: Well, the proposals by the Czech
Republic and Poland were just presented us to us last night. We're
studying them now. We know that a lot of hard work went into them and
we very much appreciate it, and I specifically recognized that
contribution.
In terms of when the working groups will meet, we all have to look
at our schedules, but we really believe that within the next two weeks
or so that we can begin getting this process moving. We have a lot of
schedules to coordinate, but we want to operate on an accelerated
basis in order to try to achieve an agreement on the process by
September 1.
QUESTION: And could you just clarify something? The working
groups concentrate on the slave and forced labor issue and on the
legal closure issue. Are you still aiming to sort out the Aryan -ization
and the insurance claims by September 1, as well?
UNDER SECRETARY EIZENSTAT: Absolutely.
QUESTION: But you don't have any working groups to deal with
that issue.
UNDER SECRETARY EIZENSTAT: Well, let me talk about that. I
brought together today, also - and he participated in a smaller
meeting and then joined a legal closure afternoon session -- Senator
D'Amato, who is a special master appointed by the U.S. courts in the
Austrian and German bank cases. We had a meeting in my office with
representatives from the Dresdner Bank, the Deustche Bank, Minister
Hombach and Senator D'Amato to talk about how to structure a closure
on this particular issue. Now, some of that will clearly be taken up
in the context of the overall working groups because one of the claims
against the German banks is on slave and forced labor. But on Aryan-ized
property and dormant accounts, that is a separate issue. I think that
we will try to handle that through a process involving Senator D'Amato,
the banks, Mr. Hombach, myself, and ultimately the plaintiffs'
attorneys who are involved in those cases.
With respect to insurance, we also had a meeting today in my office
with former Secretary of State Larry Eagleburger, who chairs the
Insurance Commission. Mr. Hanzmeyer, from Allianz, Mr. Hombach and
other German representatives. We are going to try to use the
international commission process, which is now well on its way, which
involves all the major players, and use that as the major vehicle. We
will keep it as we have already. In fact, JD Bindenagle, on my staff
attends all the negotiations, including the one in London. But we're
going to use that process to try to resolve the bank cases, and then
fold that into this overall German industrial initiative.
QUESTION: There were new cases filed -- new law suits filed
this week on behalf of Israeli survivors, and some of the plaintiffs'
lawyers are saying they are preparing yet more cases for other
survivors and their heirs. Does that trouble you in terms of reaching
a September 1 deadline?
UNDER SECRETARY EIZENSTAT: Well, I will simply say factually
that a number of the German companies expressed concern at the filing
of those in terms of the spirit we're trying to enter into in the
working group. I can't comment on the filing of claims. People have a
right to file claims. What I hope is that we can focus on this process
at this point; and that, I think, is the best way to do justice.
QUESTION: Mr. Eizenstat, what do you think is the position
of the class action lawyers? Do they just want to get involved into
this negotiating process, or do they want any legal steps to be taken
in order to withdraw their cases?
UNDER SECRETARY EIZENSTAT: What they made clear is that they
believe that the class action structure provides a great deal of
flexibility within which legal closure can be obtained. The question
of how those cases would relate to this German fund, which would be
outside of the court -- it would be a German fund, run in Germany with
a German process -- is one of the challenges that we have. But the
plaintiffs' attorneys indicated a willingness to try to be creative in
looking at that within the context of the class actions.
The class actions are a reality. Whether one likes class actions or
doesn't like class actions, they're a reality. What the plaintiff
attorneys said is that for German companies that want genuine closure,
that they believe that there are ways within that class action
structure to provide that while trying to accommodate the interest and
concerns of the German companies. That's where we have to be very
creative and really stretch our imaginations, because this is a very
unique and unusual situation in which it's not just companies who are
subject to the jurisdiction of the court. We have many other German
companies who aren't and they're proposing to create a voluntary fund
-- and they stressed that it was voluntary, done as a humanitarian
gesture - but they won't contribute as much to that fund unless they
know at the same time they're not going to pay a second time to the
court. So again, we know the difficulties, but we're committed to try
to find the most creative solutions to it.
QUESTION: You've spoken of the German foundation initiative,
of material relief and of a future fund. Does the U.S. Government
recognize any legal claims for forced labor, or is this really a moral
affair?
UNDER SECRETARY EIZENSTAT: Well, there was a great deal of
discussion, actually, by both sides on the issue of moral and legal.
The plaintiffs' attorneys, as you would expect, talked a great deal
about the legal nature of claims. Interestingly, a number of the
survivor groups stressed the fact that it was the moral issues that
were involved. The German companies and the German Government talked
about a moral contribution, a voluntary contribution.
I think that it's fine to talk in those terms. But quite frankly,
to be practical, instead of trying to pigeon-hole whether it's a moral
or legal issue, we have one basic goal in mind. That goal is to make
the German initiative work in the context of class actions which now
are preventing it from working in the sense that the companies don't
want to contribute twice, and want the class actions to be disposed
of. So whether one calls it a moral gesture, whether one calls it
legal rights, we have a fact that we have to face, which is that there
are class actions -- they're not going to go away. We have a
foundation initiative which was announced in February, which the
companies made clear would be very substantial and would be augmented
by many more than the 16 companies if we can find a way of marrying
these two legal cultures. I think, frankly, it's better to concentrate
on that rather than to talk about, at this point, whether this is a
moral or legal issue. It's obviously a combination of both, and the
two are almost inseparable.
QUESTION: Since the meeting today was primarily composed of
country delegates and NGOs were generally not invited, my question is
who is representing those refugees, displaced persons and other people
who have emigrated from Central Europe and are currently U.S.
citizens, or even those that may be found in other continents of the
world? Is there a process by which those survivor groups can take part
in these working groups, or will they have to file class actions in
order to be part of the conversation?
UNDER SECRETARY EIZENSTAT: I hope they won't have to file
class actions. We've already been contacted by the Polish-American
Congress, and we would be very transparent with them. I look forward,
in fact, to working and meeting with them.
In terms of their formal role, I think it's better at this point to
try to limit -- we've got so many parties involved at this point. Each
one of the ethnic groups has its own American association. But I
intend to fully involve them.
I like to think, frankly, the U.S. Government should represent the
interests of U.S. citizens, regardless of their original nationality.
And that is, indeed, who we are trying to represent.
QUESTION: Do you have any numbers in terms of the people who
were so employed 50 years ago -- how many survivors there are and any
generalizations you can make about how they were treated?
UNDER SECRETARY EIZENSTAT: These figures are only figures
I'm repeating. We have no U.S. Government figures, so you have to
understand these are very rough guess-timates and no one really
completely knows the universe. For those who are so-called slave
laborers, again, generally -- although not exclusively -- Jewish
concentration or ghetto survivors, my understanding is that there are
somewhere under 100,000; perhaps 70,000 to 90,000. That's a figure
that I've heard from some of the groups representing them. Again, I
have no independent way of verifying it.
With respect to forced laborers, we have a much larger number. I
think that the Polish Government itself indicates upwards of 500,000,
of whom a substantial percentage were agricultural workers. That's one
of the challenges that we have because this is a German industrial
fund. It is to match up industrial, slave and forced laborers with
German industrial companies. The question of what to do with public
employees and agricultural employees is a very difficult issue and one
that was raised by several of the Central European and Eastern
European delegations.
With respect to others, if you added Ukrainian, Czech, Belarus,
Russia all together, it would possibly be in the high hundreds of
thousands.
QUESTION: Could you tell us, for the Hungarian listeners,
please, how was Hungary represented?
UNDER SECRETARY EIZENSTAT: It was well represented.
QUESTION: Okay. Do you have any figures that you can give -
any results which came out of these discussions in regard to Hungary?
The reason I'm asking this question is because I know that the given
individuals already had to fill out forms and already submitted their
request for this process.
UNDER SECRETARY EIZENSTAT: There were no specific figures
mentioned, but Hungary, I want to say, has been among the more
creative countries in dealing with the whole survivor issue. I'm sure
that their interests will be fully taken into account. But there were
no specific references there to anything.
The governments who were invited were those governments, of whom
there were five, who had German reconciliation funds. Hungary does
not, and so, therefore, it was not represented at the conference. So I
correct that; they were not physically present.
QUESTION: The reason I ask is because there was a Hungarian
newspaper article which reported about this conference and mentioned
two lawyers' names who apparently participated in this conference,
according to the --
UNDER SECRETARY EIZENSTAT: They could well be lawyers among
the three groups that I mentioned who represent Hungarian victims.
Undoubtedly, that's the case. But the government of Hungary was not
represented, and there is no reconciliation foundation.
QUESTION: (Inaudible) -- important because you said class
actions, they are facts, yes? But I can understand that it is possible
to withdraw them from courts. But is there any way to prevent people
from filing anew? I mean a legal way, or what kind of arrangements can
you make to prevent people from filing new suits?
UNDER SECRETARY EIZENSTAT: Plaintiffs' attorneys went into
great detail to explain that once a class is certified by a court --
and there are certain opt-out provisions -- that precludes future
suits by members of that class. One of the things we're trying to do
is reach definitions of who would be claimants. So there is, under the
class action methodology, a way of solving these. But the German
companies have concerns about participating in a class action process.
They expressed those concerns; and again, that's one of the issues
that we are going to be dealing with, and it's one of the most
difficult issues we face.
QUESTION: Could you please elaborate on this thing about the
dormant accounts, because as far as I know, the German banks have
always said that dormant accounts are not an issue for them. So could
you explain what you're referring to?
UNDER SECRETARY EIZENSTAT: Yes. The German banks have
indicated that as a result of a regulation in the 1970s, that
essentially there are no further dormant accounts. That is one of the
issues that will have to be looked at. But the bank cases also involve
contentions that the German banks participated in both slave and
forced labor programs and in the Aryan-ization of property.
So I think the dormant account issue may not be as significant as
it was in the Swiss case. That doesn't mean it's non-existent. But the
major claims seem to be on other bases. Again, I'm not dismissing this
-- it's not for me to do so -- but it does not appear to be the kind
of situation we had in Switzerland.
QUESTION: So far there have been no direct negotiations
between plaintiffs' attorneys and the corporations?
UNDER SECRETARY EIZENSTAT: This is the first time that the
plaintiffs' attorneys and the corporations were in the same room
together.
QUESTION: And so far the concentration was more on the state
level. Will that now change and will they talk more directly together?
UNDER SECRETARY EIZENSTAT: Yes, yes. That is the whole
purpose of these follow-up working groups, to bring these parties
together in a smaller group to really get down to brass tacks of
defining who gets covered, how they get covered, how the process will
work, how do you define slave labor, how do you define forced labor,
will people be paid a per capita amount, will they be paid on the
basis of the number of months that they worked, will special hardship
be considered, how will the claims process operate, who will supervise
it. All of those issues remain to be determined, and that now is not
just a government-to-government issue; it has to involve the other
parties as well.
QUESTION: Just about logistics. I mean, your new or future
capacity as Deputy Treasury Secretary -- you mentioned that you'll be
bringing this responsibility with you. Will there also be support
staff at Treasury, or how will that be handled?
UNDER SECRETARY EIZENSTAT: I have my support staff here, God
bless them, and I will be working with them here. I did the same thing
when I was at Commerce. So I'll work with the very same group of
people that we have here. I hope to have one person with me at
Treasury who is on my staff now at State, who will come over. She does
not work on this issue alone, but who will be a continuing
communications link. But we'll be working with the very same people.
I'll be putting the same time and energy into it. That was understood
as part of the bargain.
QUESTION: (Inaudible) -- issue that you have touched on,
namely the forced labor and agriculture. Has there been any progress
in that area? Would that be covered by the fund whose creation was
suggested by the Bundestag -- or the member parties of the Bundestag?
How would that be worked out? That's one of the most difficult issues.
UNDER SECRETARY EIZENSTAT: One of the most difficult issues
will be the issue of agricultural workers, who make up a significant
percentage of perhaps a million forced labor survivors. The German
companies made it clear that they do not believe it reasonable for
them to pay agriculture workers they never employed.
In establishing this whole process in February, the German
Government committed itself to establish a federal fund -- that the
Bundestag would have to approve and finance -- that would cover those
not covered by the private industrial fund. The issue of whether
agricultural workers would be covered has to be determined. That's one
of the issues that's outstanding and is most difficult.
Last question?
QUESTION: Any discussion on the size of the fund? I mean, a
ballpark estimate -- discussion on the size?
UNDER SECRETARY EIZENSTAT: No, because until we have the
definitions of who is a beneficiary and who isn't, who will be covered
and who will not, what processes will be used, I have urged the
parties not to start engaging and throwing numbers around. That's the
way we did the Swiss settlement. We first built a structure and then
went to actual dollar amounts.
QUESTION: A quick question -- do you expect there to be any
major shift in monetary policy, when yourself and Mr. Summers take
over your new positions?
(Laughter.)
UNDER SECRETARY EIZENSTAT: I had a rough day already, all
right?
(Laughter.)
I learned, when I was over here not to comment on monetary policy
and at least until I'm confirmed, I certainly don't want to; and even
then, I'm not sure I will. But certainly not now. QUESTION:
With respect to that question, are you going to conclude today or are
you supposed to continue tomorrow?
UNDER SECRETARY EIZENSTAT: No, we started last night. We
concluded late this afternoon.
QUESTION: Okay.
UNDER SECRETARY EIZENSTAT: Thank you.
Document
compiled by Dr S D Stein