Swiss banks make offer Settlement proposal falls far short, Jewish leaders say

'Rough justice' fund

Holocaust victims and banks both wish to avoid lengthy suit


WASHINGTON -- Switzerland's three biggest commercial banks made a public offer of $600 million yesterday to settle claims from Holocaust victims who have charged that their families' assets were stolen. Jewish leaders immediately rejected the offer as "humiliating" and said negotiations had broken down.

Credit Suisse, Swiss Bank Corp. and Union Bank of Switzerland stopped short of saying that the offer was final, but in a statement insisted that they "would not entertain unfounded and excessive demands for payments above this amount."

In addition, they said, they will pay out any amounts that an independent auditing group, led by former Federal Reserve Chairman Paul A. Volcker, determines was left in long-dormant bank accounts. While that figure is a mystery, some Jewish groups believe it will total hundreds of millions of dollars, once inflation since the 1940s is taken into account.

The breakdown in talks which led to yesterday's announcement raises the likelihood that top officials in states and cities around the United States, led by New York City Comptroller Alan Hevesi, could declare a boycott of the Swiss-owned commercial banks -- and their Wall Street subsidiaries -- when they meet July 1.

But despite the disagreements highlighted yesterday, this is a case that both sides have an incentive to settle.

Jewish groups fear that if a class action lawsuit against the banks proceeds in federal court, the issue will not be settled for years, after many of the aging victims of the Holocaust have died.

The banks, for their part, desperately want to avoid a suit in U.S. courts that would involve a lengthy discovery process -- which would force into the public arena long-secret documents detailing the banks' dealings with the Nazis.

The Swiss government is opposed to a large settlement, because it knows that the next target of suits will be the Swiss National Bank, the government-run central bank that received more than 80 percent of Nazi Germany's stolen gold.

So far the central bank has not been named in the legal actions, but representatives of the Jewish groups and other plaintiffs in the class action suits agreed yesterday to file that action next week.

Swiss National Bank president Hans Meyer has repeatedly insisted that U.S. courts have no jurisdiction over the central bank of another nation.

But he also added that the bank, which is reported to keep upward of $24 billion in gold in the United States, was "provisionally" prepared in case Jewish groups tried to freeze Swiss assets here while the cases were being resolved.

Yesterday's action came after weeks of disclosures about the progress of the negotiations infuriated the banks and the State Department, which has quietly been acting to keep the negotiations going.

The banks apparently hope to force a settlement by making their offer public.

But World Jewish Restitution Organization co-chairman Avraham Burg called the bank's offer "very humiliating."

"Our people were killed because we were perceived and accused of being the rich man of Europe," he told a television station in Jerusalem.

L "We will be robbed as rich people and paid as poor beggars."

The offer the banks made yesterday was for what has become known as the "rough justice" fund. As the name suggests, it would provide rough compensation to Holocaust victims and their heirs whose records of stolen assets -- money, art and other goods stolen by the Nazis and later sent to Switzerland -- have been forever lost.

The offer excludes $70 million that the banks have already

contributed to a humanitarian fund, to help indigent survivors of the Holocaust in their last years. So the new money on the table yesterday is actually $530 million.

That translates into roughly $53 million in 1945 dollars. But it appears that the amount deposited in the banks by the Nazis, much of it stolen, was far higher than that.

"This is like sticking up a bank for $200,000, using the money, and then offering to pay a $50,000 settlement," said Rabbi Marvin Hier, the dean of the Simon Weisenthal Center in Los Angeles.

The banks, however, insist that the offer is largely symbolic, since it is impossible to come up with anything approaching a real accounting of how much loot moved through Swiss banks.

"By all legitimate criteria, this is a fair offer," Credit Suisse, Swiss Bank and Union Bank said in their statement.

"The banks view this offer to be at the upper limit of what can be justified, based on the facts and circumstances."

Pub Date: 6/20/98

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