Central Europe Review: politics,
society and culture in Central and Eastern Europe
Vol 2, No 7
21 February 2000

Arbeit Macht Frei: The gates of Auschwitz C O M P E N S A T I O N  C L A I M S:
Nazi Slave Labor Talks Spark Disagreement
Will the proposed USD 5 billion fund compensate all survivors?

Karen M Laun

Negotiations this week in Berlin about the issue of compensation for slave and forced labor during the Nazi era have failed to resolve the stalemate over the issue of allocation of funds. Since the beginning of 1999, major steps have been taken by the German government and German companies to establish an historic USD 5 billion fund dedicated to compensating survivors for their labor during the war years. But the final details of implementing the agreement have stymied the participants, with Polish-American organizations, along with representatives from Central and Eastern Europe, concerned that some survivors will be excluded from compensation or paid only negligent amounts.

On 15 December 1999, after months of negotiation, the US Deputy Secretary of State, Stuart Eizenstat, informed the Polish American Congress that an official agreement had been reached on the funding to be available from the German Fund for Nazi-era Slave and Forced Laborers (also called the German Foundation). The parties involved in these negotiations were chiefly the German government, the US State Department, and delegations from Belarus, the Czech Republic, Poland, Russia, Ukraine and Israel, as well as representatives of German companies and the survivors.

In a Treasury Department statement, Eizenstat outlined the key aspects of the agreement. The most significant was the DM 10 billion (USD 5.14 billion) cap set as the total monetary amount available to resolve lawsuits against German companies and to make what he termed "dignified payments" to former Nazi-era slave and forced laborers who had worked in the public and private sector. This is a significant increase from the amount of compensation offered by the German government as recently as October - when the proposal was only USD 2.4 billion.

Another significant achievement in December was an agreement on legal closure. Under this provision, all cases brought against German companies for Nazi-era claims would be referred to the Fund as the exclusive remedy. To implement this aspect of the agreement, an Executive Agreement between the German and US governments will be signed, and a Statement of Interest will be filed by the US government in all such cases in US courts.

The next steps for the negotiating parties are to reach agreement on allocation of funds, for the funds to be deposited in an account and for the Bundestag to pass the appropriate legislation to get the project underway. In December, it was hoped that final approval of allocation would be reached within 30 to 45 days, a deadline which has since passed.

Running out of time

The urgency of finalizing this agreement is apparent. As David Harris, executive director of the American Jewish Committee (AJC), pointed out in December, the survivors are almost all in their 70s and 80s. He urged the Bundestag to quickly pass legislation creating the German government and industry fund, and called for more German companies to join the fund. In early December, the AJC published a list of German firms that probably used slave or forced labor during the Nazi era, as well as a list of companies participating in the compensation fund. While admittedly not entirely accurate, its purpose is to demonstrate the wide scope of forced and slave laborers during the Nazi era.

Despite the historic importance of the December announcement, there are several issues that remain to be ironed out and not all parties are satisfied with the progress that has been made. The biggest issue that has stalled the negotiations is how and to whom the funds will be allocated. It is on this matter that the Polish-American community has been most vocal, expressing concern that many Polish victims currently residing in the US will be excluded from compensation. There are estimated to be approximately 22,000 Polish former slave and forced laborers in the United States.

This worry was behind efforts to increase the amount of funding available for payments to former slave and forced laborers. In a letter last October, President Edward J Moskal of the Polish American Congress argued that the low compensation amounts, which then stood at USD 2.4 billion, would require the omission of many agricultural and municipal workers, many of whom were Poles.

Unsatisfactory distinctions

Yet even with the available funding increased to over USD 5 billion, some of the Polish American community remains concerned about the as yet undetermined allocations. A 29 December press release by the Federation of Polish Americans (FPA) took issue with Deputy Treasury Secretary Eizenstat for implying that the Polish-American community supported the agreement. The FPA stated that they were never consulted and expressed concern that the definition of the two basic classes of claimants omitted more than half of the Polish-American survivors and placed most of those in the lower pay "forced" labor category.

The established categories of laborers currently defines slave laborers as those from concentration camps, labor camps or other types of imprisonment. Forced laborers are from countries occupied by Germany during the war and transported to Germany to work in German agriculture, mines and public works. The compensatory amounts for each category were recently reported to be around USD 15,000 for slave laborers and 3000 USD for forced laborers. In contrast to this division, the FPA asserts that, in terms of greater or lesser suffering, there is no real difference between survivors half a century later.

Other disagreements have revolved around the percentage of funding for direct payments to survivors and for all other claims and projects. This second category includes unpaid life insurance claims, property restitution, medical experimentation claims and the Future Fund - dedicated to humanitarian projects and educational programs. In January, the German government proposal stood at 80 percent for direct payments and 20 percent for other categories.

Getting the sums right

The Jewish Claims Conference supports this proposal, even advocating an increase of five percent to the amount reserved for these other claims. On the other hand, the delegations from Central and East European countries participating in the negotiations feel that this will exclude claimants and they would prefer the portion of the Fund allocated for direct payment to be raised to 90 percent. In a related statement on 7 February, FPA President Mark Lazar cited the 1998 Swiss Humanitarian Fund - which awarded indigent Polish-American victims only a few hundred dollars each - as an example of why the limited size of the fund means that most should go to the survivors rather than to education or property recovery.

In addition, the issue of insurance claims is also being handled by the International Commission for Holocaust Era Insurance Claims, which announced this week that it has begun its claims process and a massive worldwide outreach program. The existence of this separate organization could be a further argument for reducing the amount of the fund available for the second category of claims.

The FPA also objects to early indications that the categories of eligible claimants will be expanded to include those who are currently receiving compensation from other sources. After the late January meetings, the German government agreed that there will be no offsets, except in cases where victims have already received payments from the companies, either directly or through third parties.

The FPA feels that this will lower individual payment amounts and be an additional way of excluding Polish agricultural laborers and child labor survivors. In a 7 February press release the FPA stated that this would "represent a continuation of the post-war German policy of excluding Poles and Polish-Americans from reparations." Other advocacy groups for the survivors support the draft legislation as it stands.

Despite these disagreements among the Polish-American community and others, there is continued support for the process. The Polish-American Congress has followed the negotiations since May of 1999 and met with Deputy Secretary Eizenstat several times. After the eighth plenary meeting, held in Washington, DC in early February, the PAC announced its willingness to take on the administration of funds in the US and Canada, including collecting and verifying claims. Claim forms have already made available on the PAC's website.

Because of these basic disagreements, negotiations since December have ended in a stalemate on the matter of fund allocations. It was hoped that the plenary session in Berlin this week would iron out any remaining disagreements, allowing the Bundestag to pass the necessary legislation in March and payments to begin by the end of summer. However, an additional session has had to be scheduled for 7 to 8 March in Washington, DC. If the impasse continues, payments will probably not begin until next year - forcing the aging victims of the Nazi era to wait even longer for the compensation they deserve.

Karen M Laun, 21 February 2000

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