The World Jewish Congress (WJC) has sharply criticized a lawsuit filed in Los Angeles last week, which accuses the international commission charged with settling Holocaust-era insurance disputes of spending more than 10 times as much on administrative expenses than has been paid to survivors and their heirs.
According to the class action suit, the International Commission on Holocaust Era Insurance Claims (ICHEIC) has apparently paid out more than $30 million in salaries, hotel bills and newspaper ads since its founding in October 1998, while the five European companies that fund the commission have distributed only $3 million to claimants.
At issue is whether ICHEIC should have sole jurisdiction over such disputes or whether survivors can file separate class action suits in American courts.
As the primary Jewish organization serving on the international commission, the WJC is the U.S. government's designated agent for dealing with contested insurance claims from the Holocaust era, says Executive Director Elan Steinberg.
Speaking from his office in New York, Steinberg told The Jewish Journal that the intention of the Los Angeles suit "would appear to be that lawyers will be able to inject themselves in a process from which they are excluded at the moment."
William Shernoff, who filed the suit, responded heatedly that "Mr. Steinberg's comment shows a complete lack of understanding of what is really happening. He is trying to substitute the commission's secret process for the survivors' constitutional rights in court and additional rights under specific California legislation."
Shernoff filed the class action suit last week on behalf of Los Angeles resident Felicia Spirer Haberfeld. She is the 89-year-old widow of Alfons Haberfeld, who ran a profitable distillery in the Polish town of Oswiecim and served as the last president of the town's Jewish community.
Oswiecim is better known by its German name, Auschwitz.
In the fall of 1939, the couple left on a trip to attend the New York World's Fair, where the distillery had a display. They left their 2-year-old daughter Franciszka in Poland with her grandmother.
Caught on the high seas by the outbreak of war, the Haberfelds could not return to their home in Poland. Their daughter and the grandmother perished in the Holocaust.
In the mid-1930s, Alfons Haberfeld took out a number of insurance policies with the large Italian insurer Assicurazioni Generali, including one on his own life and one to provide a dowry for his daughter. After 1957, when the policies matured, Alfons Haberfeld tried unsuccessfully to collect on the policies, and after his death in 1970, his window continued the effort.
In the latest development, Felicia Spirer Haberfeld received a letter from Generali offering to settle all her claims for $500, a figure Shernoff considers ridiculously low. In addition, the suit claims, other survivors have received similar form letters, whose language implies that the memos were being sent at the direction of the international commission.
Haberfeld's suit seeks an injunction prohibiting Generali from enticing other Holocaust survivors and their heirs in California "into settling their claims for a fraction" of their true value. The class action suit seeks also to nullify existing insurance settlements induced by the Generali form letter and stop the future mailing of the letters. A first hearing on the injunction petition has been set for June 19.
Peter Simshauer, Generali's attorney in California, told The Journal that he was still evaluating the Haberfeld suit but believed that it was without merit. He said that Generali had established a $12-million trust fund for survivors in Israel some years ago and had pledged more than $100 million for future worldwide claims through ICHEIC.
While the Haberfeld suit specifically targets Generali, the Italian company also sits on the international commission, along with four other Swiss, German and French insurance companies.
In his suit, Shernoff sought to show that the commission, founded in 1998 as a private organization to quickly and fairly settle insurance disputes, has fallen down on the job.
Citing extensively from internal ICHEIC documents, Shernoff alleged that the commission had spent $30 million in administrative expenses but had distributed a mere $3 million to claimants.
One internal memo, written in January by Geoffrey E. Fitchew, the commission's vice chairman, warns that "ICHEIC is at risk of facing increasing criticism, focusing on the low proportion of our claimants who have received offers... and on the unfavorable ratio between the costs of administrating the ICHEIC claims process and the value of offers."
These offers have been as low as $500 for multiple prewar policies, as in the Haberfeld case, and more than half have been rejected by claimants, according to the lawsuit.
Former U.S. Secretary of State Lawrence S. Eagleburger, who heads the international claims commission, acknowledged some of its shortcomings in an interview with the Los Angeles Times.
He conceded that "we have spent more money getting ready than we should have."
According to the cited internal documents, the commission has had at least 18 meetings, including seven in London, one in Jerusalem, one in Rome, eight in Washington, D.C. and one in New York. As many as 100 participants attended the meetings, some held at luxury hotels.
In the commission's defense, Eagleburger said that ICHEIC had to spend nearly $9 million in newspaper ads to reach out and inform potential claimants, along with expenditures for searches of archives.
In a related development, the House of Representatives last week approved an amendment to the State Department budget that calls for the agency to review ICHEIC's procedures.
In supporting the amendment, Rep. Henry Waxman (D-Los Angeles) told news agencies, "ICHEIC is not doing the job Congress expected it to do, and I intend to ensure that it has fair procedures and is accountable to Holocaust survivors."