A Numbers Game

Commentary from Leo Rechter, President of National Association of Jewish Child Holocaust Survivors (NAHOS) from August 17, 2009 NAHOS Newsletter:

JTA managing editor Uriel Heilman sat recently down for a question & answer period with Greg Schneider, the newly promoted executive Vice President of the Claims Conference. During that interview, Greg Schneider recognized that among Holocaust Survivors “the suffering is tremendous” and there “are people who are desperately in need.” Yet, when asked why – in the face of such desperate needs – the Claims Conference still allocates 20% to ‘Holocaust education, documentation and research’, Schneider’s answer dodges the question by declaring that the amount allocated for Social Welfare had been increased to $116 million and that therefore the split was no longer 80%-20% (but about $84%- 16%). Schneider does not clarify that the same $18 million are still being allocated for questionable, non-social purposes. Percentages are meaningless in this case. Survivors cannot go into a store and buy groceries or medication for ‘four percent’ (the reduction in non-social allocations); merchants want actual dollars, not a numbers game.

The Claims Conference does not permit the Selfhelp organization (the largest Social Services organization in N.Y. for Survivors) to assist destitute survivors with more than $2,500 per year. (the money is not given to the survivors, but is being paid to providers: landlords, dentists; health-supplies, etc…). $18 million could have paid each year for an additional 7,200 cases, or 1,500,000 hours of home care, or have the $2,500 annual limit increased. To the question: “Why not give all of it to social welfare needs, especially if survivors are, as you say, in desperate need?”, Schneider answered that the money “ is from people who were murdered, and the board feels that there’s an obligation to remember who they are, how they lived and how they died.”

Later during the interview – in contradiction to his defense of non-social allocations – he envisions: “If allocations for social welfare were to drop off steeply, the result would be far too catastrophic to even contemplate. Not having that money would affect people’s lives – how long they live and how they live. This is unconscionable and cannot be allowed to happen.”

We are not faulting the professional Mr. Schneider for the contradiction between words and deeds; we are keenly aware that it is chairman Julius Berman who holds sway over the JCC board members.

In the spring of 2005, Mr. Roman Kent, the treasurer of the JCC-Claims Conference wrote: “Responsibility for educational projects, with the exception of a few primary institutions, should be borne by Kol Am Yisrael, the entire Jewish community, which in the last fifty years acquired tens of millions of dollars from Holocaust survivors. They also used the Holocaust as a fundraising tool for campaigns that had nothing to do with the survivors or our causes. Now is the time for the Jewish community, including Mr. Berman and the board of the Claims Conference, to take a step back and allow us, the Holocaust survivors, to decide how we use our money to take care of ourselves.”

Here is part of what I wrote on this subject in the March and April issues of 2005: “Mr. Berman fails to divulge the multitude of allocations to projects – sponsored by JCC board members- that have hardly any connections to the Holocaust. We published lists of some of these allocations in past issues.” Several years ago, the JCPA – the Jewish Council of Public Affairs, a coalition of 123 local and 13 national American Jewish organizations approved – at their annual Plenum in Baltimore – a resolution recommending to the JCC to cease diverting 20% of its discretionary funds for projects other than Social Services for Survivors. But Mr. Berman and the 22 non-survivors organizations on that board pretend to know better.

As a Survivor, I consider it the height of arrogance of any non-survivor to arrogate himself the right to surmise what the last wishes of Nazi-victims might have been. My martyred father, uncles, aunts, dozen of cousins are being remembered and honored in my heart and mind by me, my children and grandchildren. We don’t need outsiders, nor Mr. Berman to decree how the victims ought to be remembered.

Survivors are wholeheartedly committed to the notion of Shoah education and commemoration. Survivor volunteers have spent, and are spending, thousands upon thousands of hours in classrooms, before Jewish or non-Jewish audiences and in other public forums, to attest to the barbaric consequences of racism run amok.

Is it morally justifiable to keep funneling hundreds of millions of restitution-dollars, during the past and over the next decades, at Shoah education efforts and various other projects – which had and have plenty of other support – while neglecting the tragic situations of thousands of survivors in need? Either way, sooner or later the entire costs of future Shoah education will have to be borne by Kol Ysrael. Why not start now and use the $18 million annually to relieve some of the misery of the victims Nazi-brutalities who deserved to be feted as heroes, instead of repeatedly running into deception and neglect?

Throughout the years, hundreds of millions have been spent on allocations of no direct benefit to Survivors, How many hardships could have been avoided? How many lives could have ended in dignity instead of despair.

Where Are They Now?

The Swiss Bank settlement brought together a fascinating cast of characters. Most have continued on with their careers. A few, like Judge Korman and various Court-appointed “Special Masters” have continued to administer the process over the years. Whether any of them now regret getting involved is anyone’s guess.

A surprisingly large number of central figures in this story, however, wound up in personal controversy. Here is a quick tour:

With ironic timing, UBS, the venerable Swiss bank company accused of Holocaust-era wrongdoing and signatory to the agreement eleven years ago, just today settled a lawsuit filed against it by the U.S. government seeking the disclosure of names of American tax-evaders allegedly sheltered by the bank.

Lawyer Edward Fagan, who played an instrumental role in advancing the original complaint against the Swiss banks, was eventually accused of mishandling Holocaust survivors’ trust money and disbarred this past June.

Another prominent plaintiff attorney and signatory to the agreement, Melvyn Weiss, pleaded guilty in 2008 to a kickback scheme and is currently serving prison time.

One of the key campaigners against the Swiss banks, Senator Alphonse D’Amato of New York, fell to defeat in 1998 in part because Jewish voters recoiled from his self-serving invocation of the Holocaust during the campaign. (also here)

Another influential New York elected official whose actions propelled the Swiss settlement, City and later State Comptroller Alan Hevesi, also saw an abrupt end to his political career when he pleaded guilty to defrauding the government.

The two organizational representatives who signed the Swiss agreement on behalf of "world Jewry" wound up traveling interesting roads as well.

Rabbi Israel Singer, the secretary general of the World Jewish Congress, was fired in 2007 (and then resigned the presidency of the Claims Conference) after a New York Attorney General investigation revealed that he had misappropriated WJC organizational funds for personal use and tried to cover it up.

Avraham Burg, former speaker of the Israeli parliament and top executive of the Jewish Agency for Israel, retired from politics and last year published a controversial book on Holocaust identity, Israel and Zionism, “The Holocaust Is Over: We Must Rise From its Ashes.”

Happy Anniversary, Swiss Bank Settlement

Another year has passed, the eleventh since the celebrated Holocaust-related agreement was forged between a consortium of Swiss banks and attorneys representing Holocaust victims, with the “endorsement” of the World Jewish Restitution Organization (perhaps the only major Jewish organization in the known world that cleverly doesn't host a website).

The $1.25 billion settlement was touted as a way to avoid lengthy and unproductive litigation that would leave masses of claimants out in the cold. The largest portion of the settlement ($800 million, or two thirds of the total) was allocated to cover claims for “Deposited Assets” – looted and dormant bank accounts owned by victims of the Holocaust. The process has been overseen throughout by U.S. District Court Judge Edward Korman.

The Deposited Asset claims process has proceeded achingly slowly, now largely forgotten and out of the public eye. As noted in a previous post, a QUARTER BILLION DOLLARS (a third of the funds originally earmarked for “Deposited Assets”) remain unspent and undistributed today.

The recent Conference on Holocaust Era Assets in Prague expressed unprecedented concern over the rising incidence of survivor poverty – some literally “out in the cold” –and carried heartfelt calls for action from Nobel Laureate Elie Wiesel and former U.S. envoy Stuart Eizenstat. In this context, the pool of Swiss “Deposited Assets” funds sitting unused raises troubling questions about the course of “justice” envisioned by the Court.

Let me share a few reflections.

The process to find legal claimants and return family assets from Swiss accounts stalled out a long time ago. When approved claims slowed to a trickle, Judge Korman in 2003 felt compelled to seek recommendations from his court-appointed advisors and then the public on how anticipated “residual” funds might best be used. The resulting crush of interest groups and organizations seeking funds for their projects – many only tenuously connected, if at all, with the welfare needs of Holocaust survivors – threatened to obscure and marginalize the very people for whom the fight for justice was supposedly waged. Korman soon put consideration of “residual fund” schemes on hold.

Over the years, the administrators of the claims process have adopted a series of confusing and generally unsuccessful mid-course corrections to try to boost payouts, including the creation of a special category of fixed $5000 payments for “plausible undocumented claims,” an unsatisfactory (and for some survivors, insulting) catch-all humanitarian-type payment not anticipated when the claims process was launched.

The quest for looser claims rules unleashed controversy. In 2002, a team of high-profile independent jurists assigned to make decisions about individual claims resigned in protest over new, streamlined payout rules, which they felt threatened the integrity of the process. (more here)

Still more public debate erupted over the Court’s decision to allocate 75% of over $200 million in so-called “Looted Assets” – another piece of the overall settlement – to programs serving needy survivors in the Former Soviet Union, leaving little left over for more numerous survivors living in poverty in the United States and elsewhere. The Judge ruled against formal objections, but the episode left a bitter taste with many in the Jewish community.

In 2006, a new controversy erupted over the request by Burt Neuborne, appointed by the Court to serve as “Lead Settlement Counsel,” to be paid substantial attorney’s fees of almost $5 million out of the settlement fund. The request was roundly decried by survivors, who felt it spotlighted what was wrong with the whole process. Neuborne had misled them, many charged, and had not represented – and at times had worked against – their interests. In the end, Neuborne’s fee was approved but substantially reduced. The issue erupted again in early 2008 when a tone-deaf Neuborne approached the Court to try to collect interest that had accrued during the initial controversy.

The claims process has continued to crawl along. During the second half of 2008, an additional 161 claimants received awards, years after their claims were first filed.

By the end of 2008, a new scheme was floated: recalculate the awards already granted to several thousand claimants and make supplemental payments to them, thereby using the remaining funds. HSF and the State of Israel have both filed formal objections to that recommendation. The idea remains under consideration by the Court.

Just last month, a bewildering controversy over claim awards came to light, involving an heir who received an award payment but is now being asked to return the funds because the claims administrators believe it was invalid. Perhaps it is surprising that this kind of thing isn’t more common.

The Swiss bank claims process has had to navigate tricky legal and political waters all along. But has justice been served? Is anyone else even asking that question anymore? With thousands of destitute survivors in the U.S., Israel and Europe, it is not an academic exercise.

(Postscript: There is a side story to tell about some of the individuals who were instrumental in the original agreement eleven years ago. I will post separately on that.)

About That Criticism...

Recently an op-ed appeared by Menachem Rosensaft, a member of the U.S. delegation to the Prague Conference on Holocaust Era Assets held earlier this summer. It was titled: "Stop Personal Attacks on Claims Conference Leaders."

I have no doubt Rosensaft, who is an active ‘2G’ (child of survivors) and serves as Chief Counsel of the World Jewish Congress, cares deeply about the condition of destitute survivors and wants to see that tragic issue addressed forthrightly. But curiously, his column – coming just weeks after the conference wrapped up – didn’t actually focus on any concrete issues emerging out of Prague, nor did it elaborate on potential solutions that will help us meet the needs of aging survivors in poverty. Instead, he chose to deliver a vigorous defense of the Claims Conference leadership, some of whom, he lamented, have been the target of unfair and “disingenuous” personal criticism (although he did not identify any critics or share any examples).

I may be misreading his message, but Rosensaft basically seems to be saying: the Claims Conference is the eternal lead agency representing the interests of Holocaust survivors. Its leaders have really good resumès and work tirelessly. (A few are even survivors themselves!) They’re doing everything they can, and the rest of us should trust them to continue negotiating with Germany, overseeing $1.2 billion in assets and allocating hundreds of millions annually to a mix of programs they have decided are best. Above all, stop slamming them so much. Certain criticisms are OK, but not ones that are disrespectful and “illegitimate.” This distracts the leaders from their important work.

The op-ed confirms two things in my mind: Holocaust restitution issues are thoroughly enmeshed in Jewish institutional politics, and the Claims Conference has a serious legitimacy problem on its hands.

The overriding purpose of this op-ed was political. The writer could have provided a personal report on the Prague conference, laid out an action agenda and raised public awareness of the issues affecting survivors. But no, the real objective here was to voice political support for the Claims Conference, its leadership and the way it does business – a defense of political turf on behalf of leaders he is closely associated with, in more ways than one.

When he asserts that there are “legitimate” and “illegitimate” types of criticism, Rosensaft opens up a highly political question that is rarely resolved.

This is all “inside baseball” to the casual reader. (To those outside the Jewish community, it is downright baffling; when Rosensaft tried to post his article in the general blogosphere on Huffington Post, the only response was a flurry of disjointed comments that focused on the Israeli-Palestinian conflict.) Without any context or detail, one gets the impression that there is some kind of conflict going on and one side is taking pot-shots at virtuous Claims Conference leaders. Rosensaft thinks critics are “out of control” and need to tone things down. But when a columnist feels the need to attack (unnamed) critics for their perceived attacks and in the same breath suggests everyone stop attacking and get “constructive,” you know you’ve entered a ripe political zone.

That the Claims Conference (directly or through its various allies, defenders or dependents) feels the need to mount this kind of defense suggests a good deal of insecurity on its part.

Legitimacy is an essential but elusive quality in the organized Jewish community – hard to see and measure, but necessary for an organization to successfully claim it is representing the Jewish “public interest.”

In order to survive, the Claims Conference must continually justify its unelected and self-defined role as the designated representative of survivor interests. This is no easy task nowadays. Back in the 1950s it was all so much easier (see here for more background) – no one questioned the right of eminent organizational figures to assume the mantle of leadership on Holocaust restitution matters and the welfare of survivors. They didn’t have to worry about being accountable or defending their status. They were showered with thanks.

But since the mid 1990s, the role and reputation of the Claims Conference has been seriously tarnished by internal rivalries, public controversy, lack of transparency over its large property portfolio in Germany and, worst of all, a growing realization that they have failed at their central mission: taking care of needy survivors. Its legitimacy is slipping.

For the record, I disagree with Rosensaft about the nature and degree of personal attacks directed against Claims Conference leaders. It is well known that distrust of the organization runs deep among survivors, but their criticism does not hinge on personal attacks. Rather, survivors and others have raised a wide range of well-grounded and substantive critiques of the Claims Conference’s policies and lapses in accountability (which go a lot deeper than, as Rosensaft describes it, disagreements over “individual allocations and actions”). The criticism is organizational, not personal.

Those who wear the mantle of leadership, especially in such a large and prominent organization as the Claims Conference, must be accountable to the community. Sometimes that means doing without public thanks and appreciation. Sometimes that means facing criticism frankly and directly. Sometimes that means undertaking fundamental reforms.

What won’t work is open-ended appeals to simply “trust” the leaders some more, circling the wagons around the status quo, or responding to criticism with counter-criticisms aimed primarily at an audience of political insiders.

A Trip Down Memory Lane

A postscript to my previous post on Greg Schneider's recent JTA interview:

Almost ten years ago, in November 1999, the same JTA reporter, Uriel Heilman, did an analysis of the Claims Conference titled "Who controls the Claims Conf.'s billions?" Read the full JTA story from 1999 here. An excerpt:

When a small group of non-elected representatives controls the distribution of billions of dollars to tens of thousands of Jews, discord is inevitable. And when the recipients are aging Holocaust survivors and the money at issue is restitution for their suffering at the hands of the Nazis, differences of opinion carry the weight of moral debate.

Greg Schneider, then Chief Operating Officer, is quoted defending the anachronistic structure and composition of the Board of Directors, which continues to allocate full voting seats to several founding organizations even though they have shrunk dramatically into irrelevancy since the 1950s:

Is there any advantage to throwing them off?...The important thing is: Is there anybody’s voices who aren’t heard?

How about the grassroots voices of survivors, Mr. Schneider?

Time to Reallocate Claims Conference Funds

Jewish news service JTA has shared excerpts from an extended interview with Greg Schneider, incoming Executive Vice President of the Claims Conference. The takeaway from Schneider reads: "Restitution money is running out, and Europe needs to step up."

Schneider dances around it, but the picture is clear enough: the Claims Conference intends to continue allocating millions each year to something other than survivor welfare, even in the face of a growing crisis among the aging & ailing survivor population in the U.S., Israel, Europe and everywhere. The Claims Conference has, by Schneider’s own admission, sheltered these funds from being diverted to humanitarian purposes, which must be a great relief to the grant recipients involved in “education, documentation and research.” The sad fact is that needy survivors would benefit enormously by an annual infusion of $18 million over current funding. Each dollar means an extra ounce of comfort and security for these people.

Jewish social welfare agencies know precisely what that money can do. In the face of the economic downturn, they struggle to do more with less, are desperate for funding, and have almost nowhere else to turn but the Claims Conference. Funding from some future agreement with Lithuania is just a concept that does nothing to address the current emergency. In Israel, the government has been pressured to step up direct aid to survivors, but Israel is unique. Everyone else depends on the Claims Conference. And yet the shameful policy of allocating an important chunk of resources to non-welfare purposes continues. The small minority of survivors who sit on the Conference’s Board have long opposed this policy, but they are perennially outvoted by the non-survivor majority – an insular hodge-podge of establishment organizations that have long ago settled into a mutual back-scratching society.

JTA’s Uriel Heilman asked the question the vast majority of survivors and their descendants demand to know: “With the survivors in their final years, doesn’t it make sense to put the education portion on hold and give all of the money to survivors’ welfare needs?”

Schneider’s ascendancy to the top professional post of this mega-Jewish institution (the largest Jewish non-profit entity in the world, controlling over $1.2 billion in assets in 2007, larger than the Jewish Agency, the JDC, or any of the large-city North American federations) has been accompanied by a PR initiative but no sign of substantive change. The “momentum” he describes coming out of the Prague Conference – or the part of it that might benefit survivors in some tangible way – is already rapidly evaporating. The Claims Conference in the meantime has held its "Annual Meeting" -- which produced no announced changes in allocation policy -- indeed, no public announcements at all other than Schneider's promotion. Status quo seems the operating order of the day.

As we wait for Europe to “step up,” it’s time for the Claims Conference leadership to wake up and reallocate its own funds to face the humanitarian crisis overwhelming our aging Holocaust survivors.

"Repeat Performance"

Economist and Holocaust restitution expert Sid Zabludoff has published a new op-ed in New York Jewish Week, providing some critical analysis of the recent Prague Conference on Holocaust Era Assets.

An excerpt:

This conference placed much greater priority on the fact that the bulk of the stolen property will end up being “heirless” assets and these amounts should be mainly used to provide needy survivors with an adequate standard of living and necessary health care. This “new priority” has been understood for some time.

The conference’s minimal accomplishments thus include many thoughtful words on the issues. Its final pronouncement, the Terezin Declaration, acknowledges that “only a part of the confiscated property has been recovered or compensated,” that there are many difficulties ahead and that it is important to move swiftly since most remaining survivors are in their 80s. In addition, the European Shoah Institute in Terezin was formed to “promote developments in the areas covered by the Conference and this Declaration, and to develop and share best practices and guidelines in these areas ... of Immovable (Real) Property.”

At the same time, the Conference failed to take specific actions despite months of preparation work on the five key issues needed for success.