LOS ANGELES — As news of the $1.25 billion settlement between Swiss banks and Jewish groups spread around the world, California officials reacted with satisfaction and feelings of pride.
Foremost among them was Matt Fong, the state treasurer who was the first state official to impose economic sanctions on Swiss banks.
“With this agreement, the Swiss banks have restored what was taken 50 years ago, and in the process restored my confidence and trust in these financial institutions,” said Fong, who announced the immediate lifting of all punitive measures.
Speaking at a press conference at Los Angeles’ Simon Wiesenthal Center on Thursday of last week, Fong gave major credit to a “California-New York coalition” of finance officials for hastening the settlement.
Last year, Fong imposed a four-month moratorium on investment in Swiss banks, lifting it in December when he found little support from the Jewish community and the U.S. government.
Several times during the following months, Fong applied pressure, saying that sanctions would be reimposed if he did not see progress on the issue. And last month, after Swiss officials made an offer of $600 million — a figure Jewish officials said was “insulting” — he reimposed the sanctions.
“Some, including the U.S. State Department, have criticized my tactics,” Fong said. “To those critics, I say, they worked. Pressure works.”
He added: “While today we rejoice, we must never forget the 6 million. It is my sincere hope that history will not record this as a day of ending disputes and discord; rather this day should be remembered as a step toward restitution and justice.”
Sen. Barbara Boxer, in a letter to Jewish leaders, lauded the agreement.
“The settlement,” the Democrat from Greenbrae wrote, “helps bring closure to a sad chapter of the Holocaust and forces the world to recognize the critical role that Switzerland and other `neutral’ nations played in financing the Nazi war machine.”
The first $250 million, to be paid by two leading Swiss banks within 90 days, should go directly to Holocaust survivors, urged Rabbi Marvin Hier, the Wiesenthal Center’s founder and dean.
Among the survivors, first in line should be those from the former Soviet Union and other Communist countries, who have never received any compensation, he said.
Reacting to press reports of widespread criticism in Switzerland of the settlement as giving in to “extortion” and “blackmail,” Hier said that “no one has taken a penny that legitimately belongs to Switzerland or the Swiss banks. Every penny belongs to the Holocaust victims.”
The same point was made in stronger language by Si Frumkin, a leader of the survivor community in Los Angeles. Asked if he was “grateful” to the Swiss banks, he responded, “No, I’m not grateful. I am gratified that the thieves were finally forced to give back what they have stolen.”
Rabbi Abraham Cooper, associate dean of the Wiesenthal Center, endorsed the efficacy of the pressure campaign, comparing it to the victories scored against South Africa’s apartheid policy and the Soviet Union’s barriers to Jewish emigration.
“This is an American success story,” he said.
Claims against Swiss and other European insurance companies are not covered by the settlement. Hier said he hoped that the bank settlement will serve as a “wake-up call” for the insurance firms.
Boxer added in her letter: “The settlement…is a strong step in the right direction, but our work is far from over. We cannot call our efforts a success until all assets — gold, bank accounts, insurance policies and art — have been returned to their rightful owners.”
The complex mechanism and policy for disbursing the $1.25 billion will be assigned to a committee to be appointed to U.S. District Judge Edward L. Korman, who presided over three class-action suits filed against the Swiss banks, Hier said.
The lead Jewish organization in the three-year confrontation with the Swiss banks and government has been the World Jewish Congress, but the Wiesenthal Center backed one of the class action suits. The center also released two reports highly critical of the Swiss government’s wartime regime.
Although the Wiesenthal Center was not among the Jewish organizations asked to participate in last year’s high-level London conference on Nazi gold, Hier said he had no doubt that his center will be part of the committee to oversee disbursement of the $1.25 billion bank fund.
Meanwhile, Michael Bazyler, a professor of international law at Whittier Law School in Costa Mesa, said the settlement is of historical importance as the largest disbursement in a human rights case in world history.
In addition, he said, the settlement sets a record in American litigation for the longest elapsed time, more than 50 years, between “the wrongful act and the filing of a lawsuit.”
Bazyler reached his conclusions after questioning legal experts across the country immediately following announcement of the settlement last week.