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Saving Nazi-Stolen Properties to Help Holocaust Survivors

March 15, 2016

Originally appeared in the New York Law Journal on March 15, 2016.

—by Julius Berman and Roman Kent

Hal Lieberman and Daniel Kornstein conclude their recent column about the Conference on Material Claims Against Germany with a disclaimer that they do not have any clients with claims against the conference (NYLJ, March 8). Their article also reveals that they do not possess even the most basic facts about the conference or its work.

At its core, their piece reflects a fundamental misunderstanding about the legal role of the Claims Conference regarding unclaimed, formerly Jewish-owned property located in what was East Germany. Contrary to the authors' assertion, the Claims Conference does not hold any such property as a trustee. Rather, for property seized or forced to be sold by the Nazis and not reclaimed by the end of 1992—the German imposed claims deadline—the conference had the legal right to try to recover such assets, or receive related compensation, with the mission to use what was retrieved to assist Holocaust survivors in need worldwide.

Had the authors bothered to ask, or to research the matter, they would have learned it was the Claims Conference that led the lobbying efforts to amend the pertinent German law to allow Jewish Holocaust victims and their heirs to file claims for the return of property from the German government, as well as to extend the deadlines for such claims. Indeed, conference's efforts enabled thousands of such owners or their heirs to obtain property from the German government after reunification in 1990.

Lieberman and Kornstein repeatedly assert that the conference acts as a trustee, presumably without any time limit, for former owners of any recovered property. But repetition does not make it so. And, to be clear, this trustee allegation is the mantra of the attorneys, referred to in the article as the "Claimants Representative Committee," currently litigating against the Claims Conference. It is beyond the scope of this letter to identify all cases which have rejected the very trustee allegation the authors advance. But might it not be too much to ask that two lawyers, writing in the Law Journal, would have familiarized themselves with the various relevant decisions by German courts, as well as by courts in the United States? Those courts have uniformly affirmed that the Claims Conference holds title to any of the recovered property and related compensation received; not as a trustee for the former owners of the property or their heirs, but in furtherance of its mission to assist Holocaust survivors worldwide.

In 2013, for example, the State Court in Frankfurt dismissed a lawsuit (Wolff-Stirner vs. Claims Conference) maintaining that the conference acts as a trustee. And, within the past few weeks, the second appeal of that decision was dismissed by the High Federal Court. As the Frankfurt court stated:

"According to the clear and unequivocal language of Section 2(1)(3) of the Property Law, the [Claims Conference] is deemed as a 'legal successor' with respect to the claims not filed on time by the Jewish entitled persons. The Law does not refer to a trustee or a representative but to a legal successor. As a result, the real entitled party or his heirs conclusively lose their right of restitution. ... The logic and purpose of Section 2(1)(3) of the Property Law are to 'enforce Jewish claims … for the collective reparation in favor of the Jewish People. … But the logic and the purpose were not to preserve the claims of former entitled persons despite missing the deadline pursuant to the substantive law. …' This means that not only by the Property Law, but also by civil law, there is no claim for payment against the defendant."

In addition, in its decision in Kopinski, et al. vs. Claims Conference, dated September 2008, the Frankfurt District Court endorsed what the Claims Conference may do, indicating the time constraints on what it does, with any recovered property:

"The chartered role of the [Claims Conference] … is to use the resources it receives based on its legal status pursuant to the Property Law solely for concrete projects in favor of survivors. Already for biological reasons, i.e. the survivors' advanced age, the [Claims Conference] is able to realize its chartered task, which derives from its legal status in the framework of the Property Law, only if it acts within a short time. However, the [Claims Conference] cannot act within a short time and finance projects, and at the same time be exposed to property restitution claims also after years or even decades …

The role of the [Jewish Claims Conference] is to realize restitution claims of Jewish injured parties who do not file such claims, for the purpose of collective reparation in favor of the Jewish people." (Emphasis supplied)

Further, in direct response to an effort to amend German law, to make the Claims Conference (some two decades after its designation as legal successor) a trustee of unclaimed East German property for others, the chair of the German Federal Republic's Law Committee, in a January 2010 letter to a member of the very Claimants Representative Committee referred to by Lieberman and Kornstein, wrote the following:

"[Y]ou proposed an amendment to §2 of the Property Act. As the law stands, the [Claims Conference] is the legal successor to those eligible Jewish persons or their legal successors who did not submit claims prior to the [claims] deadline[.] [Y]ou indicate that the Property Act should be amended so that the [Claims Conference] would only serve as a trustee for Jewish eligible persons or their legal successors who submit a claim after the deadline has expired.

I don't feel I can support this request. The provisions regulating retransfer of property or compensation are directly related to the reunification of Germany. At the time, the legislature was faced with the difficult problem of identifying an appropriate solution for assets that were not claimed by the eligible persons or their legal successors within a reasonable period of time. In line with the restitution concept, the legislature appointed the [Claims Conference] as the legal successor of these assets. The [Claims Conference] uses the funds to support Holocaust survivors in need." (Emphasis supplied.)

Nonetheless, through its Goodwill Fund and Late Applicants Fund—programs voluntarily established by conference—the organization has distributed nearly $1 billion in ex gratia payments to former property owners or their heirs who did not or could not comply with the legal claims deadlines.

Far more egregious than the authors' numerous errors of law, however, are their misstatements of fact. They refer to funds "not returned to Nazi victims," assert that "the money is not going to Nazi victims," and charge the conference with having "chosen which groups of Jews should receive billions of dollars," as if without basis. Nothing could be further from the truth. In fact, proceeds of the sales of the recovered assets are allocated to provide support to elderly Holocaust survivors. In particular, the conference has applied over $1.5 billion since 1995 for vital social welfare assistance, including home care, medicine, food and other aid, to the poorest and most vulnerable Holocaust survivors worldwide.

The Claims Conference board of directors has a fiduciary obligation to consider the various possible uses of the funds it holds in weighing the competing moral priorities. The board does this with a profound understanding of the need to consider the requests of former property owners or their heirs (whose legal rights lapsed years ago) and the urgent, desperate and unmet needs of Holocaust victims worldwide.

Finally, the authors' attempt to link the departure of the former conference ombudsman to these issues is similarly off-base. The ombudsman was not, as the authors aver, fired after issuing a July 2013 report; his contract was renewed months after that report. In fact, the ombudsman was not fired at all, although it is true that he did not receive a second renewal of his contract, after serving two full terms. Equally disingenuous is the authors' failure to explain that the conference was the victim of a fraud perpetrated by several former employees, which it discovered in 2010 and reported to the legal authorities, and for which Southern District U.S. Attorney Preet Bharara publicly praised the conference for its extraordinary cooperation in that matter.

The Claims Conference mission includes "the relief, care, [and] maintenance of Nazi victims of persecution." In steadfastly performing that function for nearly 65 years, the Claims Conference has served the interests of Holocaust survivors faithfully and honorably, obtaining funding which has been applied to help mitigate the cry of Holocaust survivors in desperate need. In pursuing this task, criticism seeking to make this undertaking more effective is welcome. However, to paraphrase Senator Daniel Patrick Moynihan, Lieberman and Kornstein are entitled to their own opinion, but not their own facts.

» Read the full article in New York Law Journal.

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