Q: Why did you write The Victim's Fortune?
A: We were fascinated by the pursuit of compensation for Holocaust victims and the unexpected moral challenges it posed. Here you had a small group of Americans fighting against seemingly impossible odds to re-open the history books and extract huge amounts of money from powerful European governments and corporations. It seemed like a hopeless task.
But a curious cast of characters class action lawyers, politically-minded rabbis, the Clintons, New York politicians, U.S. officials came together to exert unprecedented pressure to win billions of dollars for survivors and their families.
At the same time, the moral questions were extraordinary. You couldn't imagine a more deserving group of people for compensation people who had suffered the worst crimes of the 20th century. Yet when it came to the question of money for survivors, there was little moral clarity. The countries and companies involved said they had already paid compensation. The war criminals themselves were almost all dead. So who should pay? And how much should they pay? How can you put a price on such suffering? And who should receive the most?
Q: So who ended up paying the money?
A: It varied country by country. In Switzerland, it was just three banks the government refused to take part. In Germany, it was a country-wide effort, placing thousands of companies alongside the government. In France, the big banks pushed forward a process which the government began. While in Austria, compensation was dominated by a government which included a far-right party that flirted with the country's Nazi past.
Q: Who received the money?
A: In most cases it was the survivors themselves or their immediate family. Because of their elderly age, that meant most of them were children in the concentration camps or hidden from the Nazis when their parents were deported. In some cases, such as life insurance policies, the victims themselves died in the camps and the ones receiving the compensation are their families.
But not all were Jewish. In fact in the case of Germany, which paid the slaves and forced laborers who toiled for German industry, most of the victims were Central and Eastern Europeans. In the Swiss case, there was strong disagreement over who should receive compensation. They made payments to Romani gypsies, Jehovah's Witnesses, homosexuals and the disabled, but they decided against making payments to political prisoners or "Righteous Gentiles" who suffered for coming to the rescue of Jews.
Q: Why weren't all these debts of the Holocaust settled decades ago?
A: The most important reason was the Cold War. At the end of the Second World War, many Holocaust survivors were caught on the communist side of the Iron Curtain. The US was never going to campaign for money to be sent to people in the Soviet bloc. The same applied to Switzerland and Austria, which were buffer states against the Soviets. So the issue was quietly dropped after the war.
Then there was disagreement in the Jewish world. Many Israelis found the idea of accepting money from Germany repugnant, and the Holocaust survivors themselves did not want to push the issue. Many were starting families and building new careers for themselves in new countries in the 1950s. They wanted to get on with life as best they could, without dwelling on the Holocaust.
Where compensation was paid, it was often a token gesture that came nowhere near a full recognition of the victims' losses. While the Germans paid out billions of dollars, others such as the Swiss and French largely avoided their responsibilities.
Q: So why now? Why the sudden attempt to find justice half a century later?
A: The collapse of the Soviet Union was crucial. With America as the world's only superpower, it was much easier for U.S. politicians to push for settlements with Holocaust survivors. And the views of the Holocaust survivors themselves were central. They were nearing the end of their lives, many were widowed, and they wanted some justice and some recognition of their losses. For many facing poverty in old age, the money itself was an issue.
Finally, a new generation including the children of survivors was ready to lead a campaign which they believed in passionately. Many of them were veterans of other international struggles, including the fight against Apartheid in South Africa, and the campaign to free Soviet Jewry.
Q: How did the survivors win their compensation?
A: It was a mixture of public threats and private negotiations, involving a stubborn combination of politicians, business executives and lawyers. The victims' side had four weapons at their disposal. One was the overwhelming public sympathy for the victims. The second was the power of the US government both in Congress and the Clinton administration to bully and cajole European allies and companies. Third was the costly legal threat posed by an aggressive group of class action lawyers. And the final, most dangerous weapon, was the threat of economic sanctions against companies which refused to pay out.
Q: According to your own title this was an epic battle. We've heard about the Swiss banks, but who else was involved?
A: The Swiss banks were the first to face a reckoning in the modern era, and their case generated the most acrimony. They laundered gold stolen by the Nazis either looted from the countries they defeated, or sometimes even wrenched from their victims' bodies. They also failed to refund accounts which Jews had opened before the war in an attempt to protect their assets from the Nazi threat. It took three years for the Swiss banks to agree to pay $1.25 billion to survivors.
In other cases, even involving banks, the crimes were more domestic. In France, the banks were complicit in stealing money from their own customers and failing to return it after the war's end. In Germany and Austria's case, the issue was not about financial assets but about unpaid wages. Millions of Europeans were enslaved or forced to work for German industry. The workers were drawn from what the Nazis' defined as inferior races the Jews, and the Slavic people from Central and Eastern Europe. Most of the companies which profited from their free labor never paid compensation after the war, relying instead on the German government to pay for them.
Finally in the case of life insurers, the companies simply failed to live up to their obligations. Life insurance was the investment of choice for millions of poor Jews in pre-war Europe, most of whom did not own any kind of bank account never mind one with an exclusive Swiss bank. Their life policies were supposed to pay out when they died, but many families received nothing for the lives of those who died in the camps.
Q: Did the lawyers strike gold with these cases?
A: Many were already extremely wealthy from previous large settlements, and worked in some cases for no fee. But some did become millionaires as a result of their work, especially after the $5 billion German deal.
The question of lawyers' fees was highly emotional from the outset. Many Jewish groups loathed the sight of lawyers taking any cash from the compensation destined for victims. But the lawyers argued that they needed to cover their costs and were earning far less than their usual 30 per cent contingency fees.
Q: What about the Europeans? It sounds like they felt they were blackmailed into paying up. Is that right?
A: That's how many felt, but whether that feeling was justified is open to question. This was moral blackmail at the most intense public pressure based on the suffering of victims. The Europeans' sense of injustice was based on their belief that they received no credit for paying previous compensation, and no credit for their good intentions in paying again now. Instead they felt vilified, as if today's executives were being treated like war criminals themselves.
In fact the companies were never seriously threatened. The sanctions never took effect and would have had minimal impact on the bottom line. Almost all the lawsuits failed to progress through the courts.
Moreover, the companies' defensive response made matters far worse. Most had failed to compensate the victims fully, but preferred instead to stonewall and hide behind their lawyers. The lack of sympathy was devastating to their cause. And when one Swiss bank was caught shredding documents, their credibility was lost.
Q: Did the Holocaust survivors get the closure they were looking for?
A: Sadly, no. The first survivor to sue the Swiss banks even went as far as to remove her name from the lawsuit, refuse to accept any money, and sue her own lawyer. And while that was an extreme case, many survivors felt the same way. One survivor told us that the money was "too little and too late." Certainly a check for $7,500 seems painfully low as compensation for years of slave labor in a concentration camp.
There is also a dispute over any cash left over from paying the victims. A large group of survivors in the U.S. has set up their own foundation to spend the proceeds on healthcare and sheltered living facilities, rather than leave it to the big Jewish groups and charities which won the settlements on their behalf.
Q: Are there any lessons for other victims seeking compensation for other crimes?
A: Absolutely. The class action lawyers are consulting with attorneys preparing to sue U.S. companies for slavery and segregation. The Holocaust compensation deals are being seen as a model for redressing historic suffering including slavery through American courts. Moreover, other groups such as Armenian-Americans are succeeding in winning compensation from companies for their complicity in crimes several decades old.
There seems little to stop other groups from suing international companies in US courts on other human rights issues. What is to stop a Palestinian-American from suing an Israeli bank in New York for issuing a mortgage against an Israeli home in Palestinian territory?
Q: Was it worth the struggle for compensation? Was it the right thing to do?
A: It was certainly the right thing to do for impoverished survivors, particularly in the former Soviet bloc countries of Eastern Europe, where compensation was non-existent after the war.
But the struggle also served a greater purpose to educate a new generation about the Nazis' plundering of the Jews. In many cases, governments and businesses have used part of the cash to establish educational programs designed to preserve the memory and spread the lessons of the Holocaust.
However, as the campaign wore on, the negotiations began to seem like just another business deal. On one side, the companies were desperate to head off a series of embarrassing lawsuits; on the other the class action lawyers were seeking large sums of cash. Rather than reconciling with one another, the two sides often ended further apart after years of intensive talks than they were at the outset. The moral questions were set aside as the talks descended into haggling over money.
For some Europeans the struggle reinforced their anti-Semitic prejudices. For some Americans it reinforced their view that Europe was backward in dealing with its guilt and the dark secrets of its racist past. The victims won compensation the last before they die but the bigger struggle over the war's legacy is still being fought.
Q: We've seen the rise in anti-Semitic attacks in Europe and the success of far-right parties too. Were the Europeans reluctant to pay because of anti-Semitism?
A: That's hard to say. Certainly there was a constant undercurrent of anti-Semitic criticism of the companies and governments paying compensation. In Switzerland and Austria those anti-Semitic sentiments were often voiced quite publicly. Even U.S. officials warned the Americans seeking compensation that they risked provoking anti-Semitism in Europe. Anti-Semitism has sadly survived in Europe, even in countries where the Jewish communities have been killed.
But there was as much of an anti-American response from the Europeans as there was anti-Semitism. Many Europeans hated the sight of a forceful American campaign reminding them of the 50-year-old crimes and moral failings they would rather forget. However, in most cases people were unwilling to pay out simply because they didn't want to pay for the crimes of another generation. It was a question of money more than prejudice.
Q: Has the money been paid yet? Is the issue now closed?
A: In many cases, no. The most tragic is the case of the Swiss banks. They agreed to pay their $1.25 billion to survivors four years ago, and they finished paying it into an account controlled by the court in 2000. But by April this year, only $14.5 million of that had been paid to people with a claim to a dormant Swiss account. It is proving painfully difficult to match survivors to accounts so many decades after the war, and that is what is causing the delays. But it adds terribly to the frustrations of the survivors who have already waited so long for their money.