Alternative Insight

A Tale of Two Reparations
Part I- Reparations for Victims of World War II


Restitution and Reparations
Holocaust Memorial
Contrary to reparations provided in the surrender agreement that ended World War I, the WWII victors did not demand reparations in their unconditional surrender agreement. Fifty years later Jewish and other groups, that did not have the political concerns of nations, sought restitution and reparations for their several years of forced labor and persecution in wartime Nazi Germany. They have won their petitions. Are their demands and gains directly applicable to African-American petitions for reparations for centuries of slavery and persecution in peacetime United States? Let us survey and see.

The demands and gains of WWII victims resulted from specific charges.
These charges are that (1) Swiss banks stonewalled families of Holocaust victims when they tried to obtain funds from Swiss dormant accounts, (2) Swiss financial institutions benefited financially from the WWII tragedies and owe part of their proceeds to the victims, and (3) present day German industrial giants are responsible for the forced labor in German WWII factories.

The charges have been resolved in three prominent class actions.

  • A plethora of individual law suits requested that Swiss banks recognize heirs of dormant accounts opened prior to 1945 despite limited information and lack of definite proof of ownership of the accounts.
  • Lawsuits were initiated in New York courts against Credit Suisse AG and UBS AG, the two most prominent Swiss banks, for not properly examining all assets in Swiss financial institutions whose owners might have been victims or targets of Nazi persecution. Compensation had also been requested for all persons who performed slave labor for companies or other entities that may have deposited the revenues or proceeds of that labor with or transacted such revenue and proceeds through Swiss entities. Persons who unsuccessfully sought entry into Switzerland to avoid Nazi persecution, or after gaining entry were deported or mistreated, issued related claims against Swiss entities. Another class of claimants consisted of all persons, whether or not a victim or target of Nazi persecution as previously defined, who were forced to perform slave labor in any facility or work site, wherever located, that was owned, controlled or operated by any Swiss company or other entity
  • Representatives of Jewish and Eastern Europe laborers have petitioned for compensation for an estimated 2.3 million surviving victims of the Third Reich's forced labor program. The lawsuits intended to have 255 companies and the German government pay several billion dollars into a compensation fund for employing slave-like labor during WWII.

The success in obtaining reparations for WWII victims has implications on the claims for reparations for persecution of Black people and the injustice of slavery in the United States. These implications can be inferred from a study of the results of the presently resolved cases and other cases of reparations from the World War persecutions.

Restitution from Swiss bank accounts
In response to pressure from U.S. State Department representative Stuart Eizenstadt and U.S. Jewish organizations, Swiss banks published a list of dormant accounts on 23 July 1997 and 20 October 1997. The list contained 5,570 names of all dormant accounts opened before 1945. These accounts had been available to anyone who provided sufficient proof of account ownership or entitlement by inheritance.

As of January 2001, a total of 9,762 claims have been submitted to the Claims Tribunal for treatment. Of this number 2,909 claims have been approved and
6,579 have been dismissed. No decision has been rendered on 274 of the submissions.

The Tribunal awarded a total amount of $27 million to claimants of Non-Victim Accounts.
The Tribunal awarded a total amount of $6.4 million to claimants of Victim Accounts.
Ten to twenty per cent, or 300-600 of the heirless assets, have been considered to be related to victims of the WWII Holocaust.

No proof has been offered that the dormant accounts of WWII victims had been treated differently than other dormant accounts. All dormant accounts are dormant for unusual occurrences; unrecorded deaths, lack of information on the account for possible heirs, etc. Since the accounts of Holocaust victims fell into this category, the Swiss banks could have been more attentive to the unusual aspects of these type of accounts. Evidently banking bureaucracy did not permit exceptions and the claimant's demands became lost in bureaucratic procedures.

The lesson of bureaucratic indifference to those who had been persecuted in WWII might apply equally to African-Americans persecuted in the United States. The attention given by U.S. officials to a relatively small amount of foreign accounts of mistreated Europeans can be used as an impetus for a much larger study of a greater magnitude of unusual dormant bank accounts, unpaid checks, wages and insurance policies of migrant African-Americans, driven apart from their families and into a life of wandering due to discrimination, persecution and indifference. This aspect will be explored in Part II of the article.

Reparations from Swiss banks
In August 1998, Credit Suisse AG and UBS AG came to an agreement with the World Jewish Congress and representatives of claimants and settled the four classes of claims by WWII victims--(1) unclaimed assets in Swiss institutions, (2) forced labor in companies that deposited assets in Switzerland, (3) forced labor for Swiss companies in Germany, and (4) harm to refugees who had been refused entry into Switzerland. The settlement amounts to USD 1.25 billion.

Hundreds of accountants from major firms scoured more than 4 million accounts from 59 Swiss banks and searched for accounts that were opened between 1933 and 1945. Accounts in the categories that seen most likely to have stemmed from Holocaust victims had an estimated value of ~$20 million. Compounding with a 3% interest rate (many of the accounts, such as in safe deposit boxes, were not interest bearing) calculates present worth at 5 times 1945 worth, or ~$100 million. Since the total restitution of assets is a small part of the $1.2 billion settlement, a principal part and thrust of the agreement can be considered reparations for past persecutions. The distribution of this money, which must be approved by the responsible judge, will be carried out by the representatives of the claimants and by the concerned Jewish organizations.

In December 1999, the $1.2 billion settlement went to U.S. District Court for the Eastern District of New York, Chief Judge Edward R. Korman presiding, for distribution to claimants. For 13 months, valid claimants could not be specified and the lawyers and banks debated. Finally, on February 5, 2001, a new claims process was established to provide Nazi victims or their heirs with an opportunity to make claims to assets deposited in Swiss banks in the period immediately before and during World War II. The new claims process contained a third list of 21,000 names of previously archived account owners, who had a likely connection to victims of Nazi persecution. Examination of the published names indicates that only a few thousand of these accounts had not been entirely closed and could have some funds. In order to publish the accounts, the Swiss banking system waived its secrecy laws.

Distribution of settlement funds to claimants is now scheduled for late 2001. $800 million of the $1.25 billion paid by Swiss banks in the framework of the Global Settlement with Jewish organizations, will go to Holocaust survivors and victims' heirs who had funds and accounts in Swiss banks. (It is not clear if that sum will be distributed even though the total account estimates indicate a much lower figure.) Approximately $300 million will be awarded to forced laborers and other Nazi survivors or refugees who have either been mistreated in Switzerland, or sent back at the border. One hundred million dollars will be reserved for people who show they are the rightful owners of looted art and other valuables, and $10 million will be used to create a foundation. The Swiss Bankers association stated that they financed the report at a cost of about $200 million. The Associated Press used a figure of $500 million.

Since the settlement of the complaints against Swiss institutions can be classified more as reparations than as restitution, the compensation for Swiss institutions financially benefiting due to persecution and victimization, can be compared to the manner in which U.S. industry and institutions defied Fair Practice and anti-discrimination laws and benefited from persecution of African-Americans. The Swiss border closings and possible mistreatments of refugees eerily bring to mind the return of escaped Black slaves to their masters and echo the infamous Dred Scott decision. Although the latter actions occurred to former generations of African-Americans, the results of the actions have vibrated through decades and have indirectly contributed to destitution of many Black people in the present generation.

Reparations from German industry
In December 1999, the lawyers for the estimated 2.3 million surviving victims of the Third Reich's forced labor program secured an agreement with German industry and government. The agreement directs German companies and the German government to pay DM 10 billion (~$5.2 billion) into a compensation fund.

In March 2000, the German government detailed the distribution method for the10 billion DM fund, shared between former WWII slave laborers and other victims of the Nazis. Half of the fund will be provided by the German government, half by some 700 German companies. A foundation will administer the fund. Plans to begin payments were scheduled to begin at the end of year 2000. This commitment has been delayed. In the distribution, 8.15 billion DM will be allocated to former slave laborers and 700 million will be allocated to research, educational and other projects.

The awarding of reparations for forced labor during war time has established a precedent. It will be shown in Part II, that despite the passing of many years and generations, this precedent applies equally to the slave labor employed in both ante-bellum plantations and Northern cities.

Other Reparations
Since the end of WWII, the Federal Republic of Germany has contributed billions of dollars in reparations to Israel to repair the damage to European Jewry during the German Nazi era.
In the year 2000, Israel estimated that their population of 5 million (of Jewish ancestry) consisted of only 230,000 persons who had some relation to the Holocaust. According to the Israel newspaper, Ha'aretz, May 2, 2000, "Israel is home to some 230,000 people who lived between 1933 and 1945 in Nazi Germany or in countries conquered by the Nazis. More than half of those individuals, amounting to 120,00 persons, survived conditions of extreme duress in ghettos, hiding places, or forced labor or concentration camps." The German funds have not mostly assisted victims of WWII or West European Jewry. The funds have instead mostly assisted in building Israel for North African and Middle East Jews and later generations of Russian Jews, none of whom had a direct relation to the WWII victimization.

By providing blanket reparations, the Federal Republic of Germany recognized its role in the severe persecution of the Jewish people and its debt in restoring the Jewish people's dignity and structure. The African-Americans can claim a severe persecution and loss of dignity and structure from a racist America.

The United States realized its obligations to its Japanese-American community for temporarily displacing that community during WWII. Displacement of the African-American community has not been temporary. It has been a recurring phenomenon of the American landscape.

One serious failure of the World War II reparations and restitutions is that they have not been specifically directed to large groups that had been permanently damaged, psychologically or economically, by their WWII experiences or had not been properly assisted in gaining livelihoods during the last 50 years. Specific cases, of which there must have been many, have been served by reliable social agencies. The African-American experience encompasses large groups inhabiting ghettos throughout the United States, who can show permanent damage due to centuries of persecution and violence against them.

With the WWII reparations serving as a guide, African-American appeals for reparations for centuries of slavery and persecution in America can be investigated.


Go To
Part II-
Reparations for Afro Americans

alternativeinsight
May 1, 2001

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