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NEWSMAKER Q&A November 10, 1999

Nazi-Era Compensation Claims: Time Is Running Out
In a Q&A, historian Gerald Feldman talks about the need for a just but speedy settlement -- before all survivors are gone

If ever a historian was on the hot spot, it's Gerald D. Feldman, a professor at the University of California at Berkeley. Feldman is deeply involved in probes of the role of German banks and insurance companies during the Nazi era. Among other activities, he's heading the investigation of Munich-based Allianz, the biggest German insurance company, about which he is now writing a book.

He also is on the commission investigating Nazi-era activities at Deutsche Bank, the biggest German bank. Among other work there, Feldman is conducting an examination of the bank's activities in Upper Silesia, where a branch was revealed earlier this year to have funded the installation of crematoriums at Auschwitz, the notorious death camp.

In addition, Feldman is chairman of the Working Group of the German Association for Business History, the 80-member umbrella group of historians working on the investigations of various German companies' activities under the Nazis.

Feldman, who is American and makes a point of noting in interviews and speeches that he is Jewish, believes passionately that the aging victims of Nazi crimes should be compensated quickly, before they die. But he fears that the whole issue is getting badly polarized and that attempts by companies and the German government to form a compensation fund could dissolve in acrimony. On Nov. 6, Business Week Online Contributing Editor Thane Peterson checked in with Feldman by telephone and discussed these and other concerns. Here are edited excerpts of their conversation:

Q: How big a compensation fund is being talked about, and what is its status at this point?
A:
As it stands now, 6 billion marks -- or $3.3 billion [two-thirds to be provided by industry, one-third by the government]. The big constroversy is over whether that is adequate. German industry feels that's about what it can afford. But of course, not all of the firms have joined up. A lot of them are on the sidelines. The German government, which is cutting back programs, also considers this about all it can afford. They were supposed to negotiate on that next week but that has been suspended while they try to get more companies to join. The problem is that the German companies want protection against any further lawsuits, which in the U.S. is virtually impossible to give.

There also was a very significant development in that two cases in New Jersey -- one involving Ford and the other involving Degussa and Siemens -- were decided in favor of the defendants [i.e. the companies]. The decision in the Degussa case was very significant because it said these matters have to be decided at an international level and cannot be decided by the courts.

The problem is that decision will harden some of the German firms to say that they will tough it out, which I think would be an unfortunate thing because what you want to see is some kind of reconciliation....

There's also a real problem of time here. These people [the victims of Nazi crimes] all could die. The money then would have to go to someone other than the victims.

Q: Is the U.S. government playing a role in the negotiations?
A:
The U.S. government is heavily involved. [U.S. Undersecretary of State Stuart] Eisenstadt himself is heavily involved in trying to get some kind of settlement. My sense is that they're trying to raise the amount as best they can.

The problem always is, when you say it's a moral issue, the other side always says, 'How much?' And vice versa. So, you seesaw back and forth between these two poles. It obviously is a moral issue, and there is no way of coming up with a just sum to compensate the victims. I wouldn't know how to do that.

For instance, giving German marks to a person in Eastern Europe is very different from giving marks to someone in the U.S. It's also difficult to differentiate between categories of forced labor. You can say, for instance, that people who were in concentration camps, people who were Jews and Gypsies were more likely to be worked to death than Western European workers. And that working on farms was often better because of the access to food. But what we [historians] have found is that people often didn't stay in one job for long. Sometimes they worked in agriculture for a few months and then were transferred to industry. It's very hard to categorize these things. To talk about a search for perfect justice is just silly.

Q: I thought the German companies and government had arrived at a sum of about $6,000 per person for the estimated number of victims who still are alive.
A:
Right. When they talk about 6 billion marks, it's based on 10,000 marks or $6,000 per person, though nobody knows for sure how many people are still alive to be compensated. But if you begin to pile up all the crimes of the Nazis, it goes on forever. That 10,000 marks only makes sense for [compensating] forced laborers in certain categories.

Q: Do you think there's a possibility of arriving at a settlement sometime soon?
A:
I sure hope so. But, there's a great danger that the thing will break up and that all the companies will say, "We'll just compensate the people who were working for us." That will amount, I think, to much less. If people decide to fight it out in court, plaintiffs may begin losing. That's would be terrible for German industry. They'll have won the cases and lost the moral battle. Then there's all this talk of boycotts. So, it could turn very very sour.

A lot of the Jewish survivors are also concerned. The big problem is that time is of the essence. They have to settle soon or these [victims] are going to die off. The average age is 80.

Q: Please update us on the investigations that various historians are conducting in archives of German companies. What have they been finding in the last year or so?
A:
A lot of the attention has shifted from property issues to the use of forced labor by German companies. A lot of the recent work has involved the construction industry. For example, a new book on [the construction company] Holzmann has just been published by [German historian] Manfred Pohl, who heads the Deutsche Bank Commission. It shows how much Holzmann used forced labor in its construction projects.

There also was a conference in July at [the site of the onetime death camp] Buchenwald. At that conference, there was an awful lot of new information about categories of slave labor, categories of forced labor, and role of construction companies. For example, that many people went through so-called labor education camps. These were concentration camps in the sense that people were incarcerated under miserable conditions, but they were meant for short-term stays to "educate" people to work. They were obviously not intended for Jews.

These places were pretty horrible, and they were run by the state. One of the things that has come out is that local governments in Germany employed a lot of forced labor. That is one of the reasons the German government has decided to set up a fund of its own to compensate forced laborers. It wasn't simply a matter of industry doing it.

Q: What have you found at Allianz?
A:
I'm writing my book now. I haven't found anything terribly new and sensational. One point I make is that there continues to be talk about [Allianz] having a lot of unpaid insurance policies [taken out by victims of Nazi crimes]. I don't think this is the case. My sense is that the real moral issues are that Allianz insured the construction of the ghetto at Lodz, they were head of a consortium that insured construction of factories at concentration camps. That's not terribly new. They were involved with the government in all kinds of ways....

Allianz also recently has decided to release to the public 150,000 insurance policies that it had audited by Arthur Anderson. Some [critics] are suggesting that all 1.4 million policies that they have stored should be released.

Q: The World Jewish Congress is threatening a boycott if they don't go through all the policies, rather than just a sample?
A:
Yes, they have threatened a boycott. I don't speak for Allianz, but I think some sort of compromise has been reached. But as a Jew and a citizen, I would rather see the money paid to victims than spent on audits.

Q: Do you feel you still have total freedom to probe into Allianz' history?
A:
Oh yeah. I've gotten wonderful help from them. They have opened up everything. I've got a team of people working for me. They are doing everything conceivable to help me find materials I want. They've helped me find papers that people thought didn't exist. I think this is true of Deutsche Bank and Dresdner Bank, too. They have an obvious interest in getting this out: So they don't get any surprises coming out five years down the road. This stuff is not pretty, but it's coming out. I think we have a new generation of business leaders who were not directly involved. At the same time, they're better educated and more socially conscious. All of these things play into it.

The number of people working on this is phenomenal, which means that there are going to be a lot of revelations in coming years. But the [compensation] fund shouldn't wait for us because a lot of the victims will be dead by then.

Q: You said you are hopeful there will be a settlement that will lead to the compensation fund going forward. But what do you think the odds are that it will happen?
A:
If you want an educated guess, I think the settlement will happen. And there may be some movement upwards in the amount. But I'm not certain about that. One of the things that worries me is that what was being done in a more-or-less voluntary spirit could be done in a bad spirit. That would be very, very sad....

In the case of insurance there's a real dilemma. It's just hard to know who was Jewish and who wasn't. If the name was Cohen, you know they were Jewish. But if the name was Rosenberg, you just don't know. The Nazis had this problem when they were trying to steal all this stuff. Now we're having the same problem because we're trying to compensate them. There's an irony in the whole thing that is quite extraordinary.

Q: And what are you looking at at Deutsche Bank?
A:
Well, there was some funding of crematoria and other construction at Auschwitz by the branches. But it would be interesting to know how much was known about this at the [head office] in Berlin. Whether I can find that out, I don't know.

Q: Being Jewish -- or even if you weren't Jewish -- are you in a difficult position as a historian doing these studies? I mean, you're being paid by the companies to do this, right?
A:
Well, you hire doctors, dentists, and all sorts of other professionals, and you don't necessarily hire them to give you only good news. I'm being asked to bring out as much of the bad news as can be found. I don't mind that kind of pressure.

What I find painful is reading the Nazi documents. It gets you down. But I don't feel beholden to spare anybody. What is the worth of my reputation as a historian? They couldn't pay me any amount of money that would make it worth prettifying this story. I don't think any of us [historians] would do that. Our reputations are our stock in trade. A historian who reports falsely or covers up information is dead. And rightfully so.

Q: Nonetheless, it's a difficult situation to be in?
A:
Yes. As a Jew, I find it difficult to read this stuff. I could be doing a lot of other [historical] work that wouldn't make me nauseous.
EDITED BY DOUGLAS HARBRECHT _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

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