June 6, 2012
Holocaust insurance claims divide the Jewish community
Hardly a day goes by where Renee Firestone isn’t asked by some school, museum, reporter or filmmaker to talk about the Holocaust.
“Somebody has to tell the story,” she said. “I am fortunate enough, at my age, to still be able to walk and talk. So I have to do it.”
Firestone is 88, with pale blue eyes and a warm, Cheshire cat smile. She manages a 24-unit apartment building in Beverly Hills, where she lives with her daughter, Klaire.
Renee was born in Czechoslovakia and was taken to Auschwitz-Birkenau at the age of 20, during the last years of the war. Her mother was sent to the gas chambers immediately upon arrival. Her brother was a partisan. Her father actually survived internment, only to die of tuberculosis four months after being liberated.
In the 1990s, the Firestones began seeing stories in the news about litigation aimed at recovering assets from the Holocaust—compensation for slave labor, return of looted art, recovered funds from Swiss bank accounts and, finally, money for insurance claims. In the late 1990s, Renee’s cousin, Fred Jackson, was among the first people in the United States to sue the Italian insurance giant Assicurazioni Generali for payment on an old policy taken out before the war by his mother, whose brother was Renee’s father.
Renee’s father, who owned a textile and tailoring business, was the patriarch of the family, and although no policy documents exist today, Firestone is certain that if her father’s sister had insurance, then he must have it as well.
“Because my father was the adviser of the family,” she said. “For sure the home was insured, and for sure the business was insured.”
In Eastern Europe before the war, insurance and annuities were common investment techniques, especially for Jews, many of whom worked in the industry, and who, in turn, sold policies to Jewish customers. After the war, it was standard practice for insurance companies to pay claims only when relatives could produce the original policy documents and a death certificate. Needless to say, not many Holocaust survivors or their families had either.
In 2003, the U.S. Supreme Court ruled that when it came to foreign insurance companies, state law was preempted by federal policy. That was interpreted by lower courts to mean that survivors, like Renee Firestone, cannot sue insurance companies like Generali, because the federal government participated in negotiations with other countries and formed a commission to evaluate claims—a process that many Holocaust survivors were dissatisfied with.
A bill now making its way through Congress would change that, giving survivors the right to settle with insurance companies on their own and, if no settlement can be reached, take them to court. H.R. 890, also known as the Tom Lantos Justice for Holocaust Survivors Act, is written specifically to allow survivors with unpaid insurance claims to sue insurance companies—and perhaps more importantly, would force those same companies to release a full list of unclaimed policies from that era.
The bill is named for Congressman Tom Lantos, a Hungarian Jew who escaped from a Nazi work camp and fought in an underground resistance group. He became friends with Renee Firestone when they both participated in the Academy Award-winning documentary “The Last Days” in 1998. Lantos sponsored an earlier version of the bill, which Klaire Firestone had been lobbying for, in 2007, a year before Lantos died.
This week, a number of Holocaust survivors were planning a Washington, D.C., rally—scheduled for June 7 as of press time—to support the legislation, which was approved by the House Foreign Affairs Committee in March and is scheduled to move to the Judiciary Committee later this month.
“I’ve personally heard from dozens of survivors and children of survivors,” said Sam Dubbin, the Firestones’ lawyer and one of the rally’s organizers. “And in many cases, they’re reaching out not only out of a sense of injustice, but because they’re living in financial desperation.”
But the bill has encountered heavy resistance from the most unlikely of sources: a host of Jewish organizations, including the Anti-Defamation League, B’nai B’rith and the American Jewish Committee (AJC).
“There are negotiations that have resulted in hundreds of millions of dollars toward the needs of survivors worldwide,” said Rabbi Andrew Baker, director of International Jewish Affairs for the AJC. “It’s not at all clear that these negotiations would be able to continue if this bill passed.”
It is a strange divide within the Jewish community, one that is both material and ideological—that is, should victims of the Holocaust be treated as individuals or as a collective? Both sides of the argument have merit, but the substance of those arguments has been masked by ad hominem attacks. Each side is accusing the other of being driven by greed.
“We don’t think their heart is in the right place,” Baker said, speaking of a group of survivors that are in favor of the legislation. “It’s more pocket book than heart.”
Renee Firestone, meanwhile, becomes enraged when talking about organizations like the AJC: “After what we went through—how lucky we were to even survive, and how we struggled to again become human beings. And then our own people are stopping us from getting what belongs to us, what’s ours?”
“There are multiple interests at stake, and there is a tension,” said Holocaust expert Michael Berenbaum, a professor of Jewish studies at American Jewish University. “It does not bring about the finest discourse.”
Indeed, Holocaust reparations have divided the Jewish community from the very beginning. In the early 1950s, negotiations with West Germany ignited violent protests in Israel. An iconic photograph shows Menachem Begin speaking at a rally in March 1952, with a banner below him reading: “Our honor shall not be sold for money; Our blood shall not be atoned by goods.”
Much of the negotiating was handled not by the Israeli government, but by the newly formed Conference on Jewish Material Claims Against Germany, better-known as the Claims Conference, a group formed by the leading Jewish organizations of the day. They became a sort of conduit for reparations payments from the German government to survivors.
Today, the majority of compensation for victims of the Holocaust flows through the Claims Conference, which, according to a 2010 report by Jeffrey Gruder to the British Board of Deputies, holds close to $3 billion in assets stolen by the Nazis from German Jews. Their approach to distributing funds to survivors and their heirs is top-down, like a government agency. Survivors can apply for various funds, such as the Hardship Fund, the Fund for Victims of Medical Experiments and Other Injuries, and Program for Former Slave and Forced Laborers.
Because she worked as a slave laborer in Auschwitz, Renee Firestone was a beneficiary of one of these programs—she received $2,000 from the Claims Conference in the early 2000s.
“They negotiated my claim,” she said, a tinge of anger in her voice. “Why? Who gave them the right to go to Germany and negotiate in our name?”
“How paternalistic do you want to be?” added her daughter, Klaire, even angrier. “They pay out in dribs and drabs, as if the survivors are not qualified to decide how to use the money.”
In the 1990s, it became clear that European insurance companies like Generali of Italy, Allianz of Germany and AXA of France were withholding payment on insurance claims on policies taken out by Jews in the decades preceding the Holocaust. In light of these reports, several states, including California, passed laws requiring insurance companies doing business in their state to disclose the names of policyholders. It also gave survivors a 10-year window from 1999 to 2009 to sue if the companies would not settle.
In response to the pressure from states, six insurance companies entered into negotiations with the Claims Conference to create a voluntary forum for resolution of victims’ insurance claims. The result was the International Commission on Holocaust-Era Insurance Claims (ICHEIC), formed in 1998.
It had been more than 50 years since the camps were liberated. In that time, international borders had been redrawn, governments had collapsed, insurance companies had been bought and sold and merged, records had been transferred from warehouse to warehouse. It was, in short, a mess. But even setting aside those difficulties, companies were reluctant to release the records they did have.
“Even though ICHEIC tried to get them to do it, some of the companies never published the full names of policy holders,” said Sidney Zabludoff, an economist who worked as a consultant to the Claims Conference in ICHEIC.
By the time ICHEIC closed its doors in 2007, less than 3 percent of more than 550,000 outstanding policies sold to Holocaust victims were paid, and Zabludoff estimates that in today’s dollars, there remains roughly $20 billion in policies still owed to European Jews and their heirs.
“ICHEIC did not work well,” said Michael Bazyler, a professor of law at Chapman University. “It was basically an organization run at the mercy of the insurance companies. ... There’s injustice in every one of these [Holocaust restitution] settlements. But this one sticks out like a sore thumb, because of the low percentage of payouts based upon the number of claims.”
Douglas Davidson, the State Department’s Special Envoy for Holocaust Issues, disagrees. In a November 2011 memo to the House Foreign Affairs Committee, he wrote, “ICHEIC engaged experts to investigate the incidence of life insurance policy ownership in prewar Europe. These experts concluded that the number and value of polices issued prior to World War II was far less than previous estimates had suggested.”
In the United States, insurance is regulated at the state level, and many state insurance commissioners were involved in ICHEIC. John Garamendi was California’s insurance commissioner, and he was not happy with how the process unfolded.
“The fundamental flaw was that it relied on individuals to place a claim,” he said. “The way that they should have done it was to force the insurance companies to divulge all unpaid claims and policies.
The California state law, meanwhile, was overturned by the Supreme Court in a 5-4 vote in 2003, giving Holocaust survivors no avenue to sue insurance companies in the United States.
Garmendi is now a U.S. congressman, and he’s one of 88 co-sponsors of H.R. 890, which still faces an uphill climb, especially in the Senate, where opposition from the State Department may carry a bit more weight.
“The State Department believes this intrudes on their turf,” Garamendi said.
In his memo to the House Foreign Affairs Committee, the State Department’s Davidson wrote, “This bill would undermine commitments made by the United States in bilateral agreements, creating significant problems in our foreign relations.”
Jewish organizations—many of which sit on the board of the Claims Conference—take exactly the same stance.
“The Claims Conference wants to be negotiating with the Germans every year to expand the range of payments and to get additional compensation,” Chapman University’s Bazyler said. “Their fear is that the Germans will say, “Well, if a deal’s not a deal, what are we doing here?’ “
The survivors, meanwhile, just want what’s owed to them.
“If somebody stole my wallet 40 or 50 years ago, and they’re still sitting there with what they stole, then I as an individual have a right,” said Richard Weisberg, a lawyer currently involved in suing Hungarian railroads for Holocaust-related theft. “And although groups may play a part, it’s completely appropriate to look for a remedy as an individual.”
On one level, it is a simple argument over money: Both sides want it, and they want the law of the land to favor their right to get it. But the divide is also an ideological one. That is, how should genocide restitution—money that everyone agrees can’t even begin to make up for the harm caused by such unspeakable acts—be divided? Should it be distributed by Jewish organizations, based on need? Or should it be dispersed individually, in some cases by courts, based on merit, based on what was actually taken away?
Berenbaum of American Jewish University is inclined to side with the former, especially considering just how many Holocaust survivors are still living in poverty.
“I always thought that, although the claims were individual, the reason the claim -is being brought is the moral stature of the Holocaust itself,” he said. “And that’s a collective, non-individual thing.”
Renee Firestone doesn’t understand reasoning like this.
“We were on our own,” she said. “Each individual was a prisoner. I wasn’t even in a family. Not even a family was considered as a group. Everybody was on their own.”
The same argument could be held over the very nature of the Holocaust itself. Was it one abominable act? Or millions of crimes?
Answers to these questions don’t come easy.
“The Holocaust is an ongoing wound, and you can’t bring it to conclusion,” said Berenbaum. “The further away we are, the larger it looms.”