News Analysis: Holocaust issues still unsettled despite Swiss banks agreement

WASHINGTON — An agreement by Switzerland's three largest banks to negotiate a global settlement of Holocaust-era claims marks a partial breakthrough, but leaves many thorny issues unresolved.

The settlement, to be worked out in coming months, would involve a compensation fund for Holocaust survivors to cover all victims' assets that ended up in Swiss banks, and possibly other assets as well.

But in the days since a possible settlement was announced on Tuesday of last week, there have been indications that Switzerland and Jewish groups are poised for a major conflict.

The agreement to negotiate a settlement was reached after months of intensive bargaining involving the World Jewish Congress, lawyers who have filed a multibillion-dollar class-action lawsuit on behalf of Holocaust victims and their heirs, and representatives of Credit Suisse, Swiss Bank Corp. and Union Bank of Switzerland. The bargaining was conducted under the aegis of Stuart Eizenstat, U.S. undersecretary of state for economic affairs.

At issue are claims for dormant bank accounts, Nazi-looted gold that was purchased by the Swiss central bank, Swiss companies that used slave labor during the war and stolen artworks that wound up in Switzerland.

But it remains unclear whether the Swiss banks will negotiate anything except the dormant accounts.

An agreement to seek a settlement finally came in a dramatic turnabout last week, just minutes before U.S. public finance officials meeting in New York were set to recommend a boycott of Swiss banks after the expiration Tuesday of a moratorium on such punitive measures.

A first round of talks regarding a settlement is scheduled to take place Friday, April 24.

New York City Comptroller Alan Hevesi, who leads the panel of public finance officials, said a final deal could be worked out within 90 days of that session.

But after last week's accord, confusion abounds as to what has been agreed to and how things will progress.

In a letter to WJC Secretary-General Israel Singer, the banks' chief executives said the talks aim for "an honorable and moral conclusion through a global resolution of Holocaust-era issues directly related to our banks."

But WJC officials see last week's accord as an agreement in principle with the Swiss to negotiate a settlement to all Holocaust-era claims — not just an agreement with the banks on settling bank-related matters.

"There is a whole array of Holocaust-related claims that we want satisfied," said Elan Steinberg, the WJC's executive director. "How the Swiss choose to deal with that internally is for them to decide."

But the banks insisted after last week's meeting that only claims against banks themselves be on the table.

The agreement provides a framework "to go ahead and discuss details of the bank-related issues. It is not a global settlement in the common sense of the word," a spokesman in Switzerland for Credit Suisse was quoted as saying.

The agreement does not involve the Swiss National Bank — Switzerland's central bank — or the Swiss government, which informed the banks last week that they are on their own in seeking a global settlement of Holocaust survivors' claims.

Indeed, Swiss politicians have been at pains to state that a settlement would not involve Swiss taxpayers' moneys or the reserves of the Swiss National Bank.

Jewish officials in Switzerland, however, expect their government to offer compensation on one issue — the treatment of Jewish refugees during the war.

Switzerland expelled more than 30,000 Jews during the war, most of whom died.

At the same time, however, the country was a haven to some 25,000 Jewish refugees, who survived together with Switzerland's 20,000 Jewish citizens.

But those refugees were accepted on condition that Jewish groups pay in advance for their support — a sum estimated at $40 million.

This policy did not extend to the 300,000 non-Jewish refugees who flocked to Switzerland and whose needs were paid for by the wartime Swiss government.

In the global negotiations, the Swiss government's involvement will likely be key in reaching a final settlement of claims that remain beyond the banks' purview.

But a spokeswoman for the Swiss Embassy in Washington said the Swiss government is "not involved and does not intend to be involved" in the settlement talks.

For now, this appears to leave the banks negotiating with Jewish representatives on a settlement to only one component of the larger series of claims stemming from Switzerland's wartime activities.

"If they only agree to a partial settlement, they have partial closure," Steinberg said.

The question, he added, is "whether the principle" of a global settlement to all claims "will become a reality. If it does, everybody wins. If it doesn't, we lapse back into a crisis."

Other Jewish officials reacted soberly to last week's developments.

Rabbi Abraham Cooper, associate dean of the Simon Wiesenthal Center in Los Angeles, characterized the agreement as a "small step," saying that remarks from Swiss bank officials backing away from a global settlement show that "this is not as crucial a development as one would have hoped for.

"It also points to the fact that the Swiss government is going to have to take a much more direct role."

In Israel, Avraham Burg, chairman of the Jewish Agency for Israel, said the agreement would not satisfy Holocaust survivors.

"The principles in the agreement may be acceptable to the U.S. government, but they are contrary to the interests of the survivors," Burg said in a statement.

As for the amount of any settlement, the banks, WJC officials and lawyers representing Holocaust survivors in a $20 billion class-action lawsuit filed in New York have not reached a consensus, though some sources have said it could range between $1 billion and $3 billion.