Deal Agreed in Holocaust ‘Gold Train’ Case Against U.S.

MIAMI (Reuters) — The U.S. government and lawyers for tens of thousands of Hungarian Holocaust survivors have agreed to settle a lawsuit seeking compensation for a trainload of gold, jewelry and other property seized by the U.S. Army at the end of World War II, lawyers for both sides said on Monday.

A lawyer for the plaintiffs, Sam Dubbin, said the agreement, which still has to be worked out in detail, would apply to between 30,000 and 50,000 Hungarian Jews whose property was stolen by the Nazis.

Does this mean they’re anti-Semitic?

Israeli banks profit from Holocaust

Investigations by the Israeli parliament have dug up disturbing evidence that Israel has been profiting for decades from vast sums invested in local banks by European Jews who died in the Nazi death camps.

And even now the banks are delaying returning the money to their heirs.

But unlike a similar scandal that hit European banks in the mid-90s, almost no pressure is being brought to bear on the Israeli banks by the Israeli government or by Jewish reparation organisations representing Holocaust families, who were the main critics of the European banks.

The Israeli government is believed to be keeping quiet because it is deeply involved in the local banking scandal itself, and the Jewish organisations are reported to be concerned that exposure of the story will damage Israel’s international reputation.

Instead the Knesset committee which unearthed the shocking revelations has been forced to sit on its unpublished report for the past 18 months as the banks dictate terms to the inquiry, largely supported by the government.

One dissenting voice has been Tommy Lapid, who this month left his post as justice minister. He called Bank Leumi, the bank believed to hold the lion’s share of the Holocaust accounts, “the last bank in the world that refuses to pay money to Shoah survivors”.

The Knesset committee was established under the chairmanship of Colette Avital in February 2000, in the wake of a settlement in which the Swiss banks agreed to pay $1.25 billion to Holocaust survivors and Jewish organisations.

After the Swiss affair, questions were raised about the difficulties faced by Holocaust families in tracing money deposited in Israeli banks before the second world war.


At the time, the banks fiercely denied that they held any money from Holocaust victims but after three years of auditing the banks’ accounts, led by a former police anti-corruption officer, Yehuda Bar-Lev, the committee found thousands of dormant accounts, estimated to be worth some $220 million.

Bar-Lev has said that he cannot be sure if there is more money because the banks have been obstructing his team’s work. “There are still documents that the bank doesn’t agree to show us,” he said. “According to the bank, they’ll not be shown to us as they are against the bank’s interests.”

The banks have also refused fully to finance the audit. The Swiss had to pay about $400 million to finance the work of the investigating accountants, whereas the Israeli banks have agreed to pay only $3 million, less than half the amount demanded by the Knesset committee.

“We’re in a bind,” said committee chairman Avital in September when the banks contested the report’s publication yet again. “The banks can keep delaying again and again and again.”


The banks have defended their position on several grounds, including the claim that exposure will harm Israel’s image.

At one closed meeting in December 2003 between the committee and Bank Leumi, the company’s lawyer, Ram Caspi, warned that Israel would be painted as a hypocrite.

“The Wall Street Journal will say the Israeli banks also hide money, not just the Swiss,” he told the committee members.

More recently the bank has been citing its commercial interests and secrecy rules. “Bank Leumi is a publicly traded company,” Caspi told the committee in November. “It has to answer to stockholders. It cannot simply pay as a result of a committee’s recommendations.”

Victim’s story

His statement came during a meeting at which one woman identified only as “K” told the committee that her uncle, who lived in Bucharest, deposited £1,000 in 1940 in the Anglo-Palestine Bank, which later became Leumi. When Leumi finally admitted it still held the money in 1979, she received a tiny fraction of the original deposit.

An Israeli lawyer, Roland Roth, said he was representing more than a dozen families with similar stories. He has threatened a class action against the Israeli banks in the US courts. An earlier legal campaign he waged in the Israeli courts was rejected.

Jewish groups which support Holocaust families, however, have mostly chosen to remain silent. Israel Singer, chief negotiator of the World Jewish Restitution Organisation, who campaigned against the European banks, said his group would not be publicising the case. Unlike the Swiss banks, which he called thieves, Israel’s banks had got hold of the Holocaust accounts “incidentally”, he said.

Secretive past

The bank’s refusal to accept responsibility for the accounts is based on the murky period before and after Israel’s founding in 1948.

It is known that thousands of wealthy European Jews stashed money away in the country during the 1920s and 1930s, as it was then Palestine and under British rule, in an attempt to hide it from the Nazis. They also invested heavily in land and property to bring nearer their dream of a Jewish state.

During the war, Britain confiscated all assets belonging to citizens of enemy territories, including Jews living under Nazi occupation. The assets were handed back after Israel’s creation in 1948, with an official in the Israeli Justice Ministry known as the custodian-general charged with tracing the heirs.

Hidden sums

However, the Knesset committee found that the banks, particularly Leumi, had managed to hide many of the accounts from British officials and so were able to keep the money. The investigators believe the banks have been profiting from the money ever since.

The government is also accused of not having done enough to trace survivors.

It passed many of the assets of Holocaust survivors, including land and property, to Zionist organisations such as the Jewish National Fund.

To the surprise of the committee, Bank Leumi was widely reported in the Hebrew media last month as having agreed to pay less than $10 million to Holocaust families, even though it is still publicly denying that it has any such accounts. Separately, the government is also reported to be mulling the idea of paying some $15 million to the families.


The deal was struck last month by Lapid after the banks accused him of slandering them. Lapid did not consult with the Knesset committee.

Avital responded angrily: “The banks can now claim that they bought Lapid with a bit of money and, in exchange, they are exempt from returning the Holocaust survivors’ money.”

The reduction agreed with Lapid follows several objections the banks have made to the way the Holocaust assets have been calculated.


The Israeli banks have been resisting the efforts of the Knesset committee to work out the current value of the accounts using the same criteria applied to the Swiss assets. There, the banks had to adjust the money by inflation and add 4% interest.

The Israeli banks, on the other hand, want inflation not to be taken into account until after the creation of Israel, omitting the war years when inflation reached more than 300%, and will fund only 2% interest.

In Israel, there is little sympathy with the banks’ position. For many years, Israeli banks have been running a cartel-like operation where they charge the same high commissions.

They are currently being investigated by the Anti-trust Authority. In the first nine months of this year they racked up a $1 billion profit — their highest ever.

Avital suggests public pressure must be used against the banks: “If the banks don’t want to pay, we will have to launch a public campaign, perhaps legislation. It won’t be easy. The Knesset and government have done nothing about this for more than 50 years. The heirs will have to go to court.”


by Jonathan Cook in Jerusalem
Tuesday 07 December 2004 12:34 PM GMT

Swiss bank accounts for Jews a myth

Swiss Holocaust cash revealed to be myth

MOST dormant Swiss bank accounts thought to have belonged to Holocaust survivors were opened by wealthy, non-Jewish people who then forgot about their money.

The announcement marks the end of a four-year independent investigation into the archives and vaults of the world’s most secretive banking system. It will come as a disappointment to many Jewish families, who were sure that their dead relatives left behind fortunes in Switzerland.

A 17-member tribunal based in Zurich was set up in 1997 to investigate the identities of 5,500 foreign accounts and 10,000 Swiss accounts that have lain dormant since the end of the Second World War.

The tribunal said that it had processed about 10,000 claims in response to the list of dormant account names published by the Swiss Bankers’ Association five years ago. Only 200 accounts — containing £6.9 million — could be traced to Holocaust victims.

“It was a very difficult and often sad process,” Alexander Jolles, the secretary-general of the Independent Claims Tribunal, said. “When we first set up the tribunal, we were sure that nearly all these accounts would be those of Nazi victims. But few were.”

Seventy-nine per cent of the accounts declared dormant by the Swiss banks were traced to wealthy families who had lost trace of their money.

One French family told researchers that they had simply forgotten about the SwFr200,000 placed in a Swiss account before the war.

Mr Jolles said that many of the accounts were small, with only 5 per cent containing more than SwFr100,000 (£42,300). About half contained less than SwFr1,000 and a third held less than SwFr100. The smallest contained SwFr0.08.

“I would guess that the holders withdrew money from them during the war and then left a small sum in them, which was subsequently forgotten about,” he said. “These people were not poor. They were pretty much the same sort of people who would put their money in Swiss bank accounts today.

“The biggest groups were French and Americans, but there were also Italians, Germans and others. Some were no doubt aristocrats, but by no means all.”

The biggest account was a securities investment containing SwF4 million that was handed to a wealthy southern European family. “Two generations had gone by and the descendants who are alive today had lost trace of this money. It had just gone on growing in the meantime.”

Many of the accounts were opened in the 1920s when Switzerland was seen, as it still is, as a haven in a troubled world. In 1936, a large number of French aristocrats and industrialists placed money there after a radical left-wing Government came to power. At least one account dated from the 19th century.

Claims were filed for about half the 5,570 foreign-owned accounts discovered. “In prewar days, a hotel address was sufficient to open an account,” Mr Jolles said. “So finding the truth was extremely difficult.

“We had claimants from 70 different countries speaking more than 15 different languages, and co-ordinating these people and drawing up their family trees has been a complicated business. Sometimes we had 125 people claiming the same account. Since there was no way of distinguishing between them, the banks had to pay out to all of them.”

Switzerland came under heavy criticism in 1997-98 for its reluctance to consider wartime claims. The United States threatened it with sanctions and relatives of Holocaust victims launched class action lawsuits in the US.

The Swiss banks agreed to a settlement of $1.5 billion (£1.03 billion) on the understanding that they would be spared further Holocaust claims. The banks say they will pay the costs of tracking down the dormant accounts from their own coffers.


Times of London | OCTOBER 13 2001