Absence of ‘Justice’

“Imperfect Justice: Looted Assets, Slave Labor, and the
Unfinished Business of World War II” by Stuart E. Eizenstat (Public Affairs,
$30).

“Holocaust Justice: The Battle for Restitution in America’s
Courts” by Michael Bazyler (New York University, $34.95).

In the last moments of the Clinton administration, Stuart
Eizenstat was breathless. From his posts at the European Union and the
Commerce, Treasury and State departments, Eizenstat was the administration’s
“point man” on Holocaust restitution, with a unique portfolio to pursue the
assets that were looted from Nazi victims. This was to be the final financial
accounting for the crimes of World War II. In the frenzied final days of the
Clinton presidency, Eizenstat was wrapping up deals with the Austrians and
French that — together with earlier agreements with the Germans and Swiss banks
— were worth some $8 billion.

In his memoir, “Imperfect Justice: Looted Assets, Slave
Labor, and the Unfinished Business of World War II,” Eizenstat, who will be
speaking at the University of Judaism on Sunday, March 30, recounts his five
peripatetic years as a facilitator-mediator sprinting among the various parties
in the most emotional legal and diplomatic issue of the time. On one side were
the Western European governments and businesses that faced lawsuits in U.S.
federal courts assailing them for their failure to honor war-era insurance
policies and demanding compensation for slave labor and the restoration of
dormant and unclaimed Jewish accounts in Swiss banks. On the other were the
lawyers, Jewish organizations, American regulators and Eastern European
governments that pressed victims’ claims.

“I felt like the manager of an insane asylum,” he writes.

It’s a valuable, if lopsided, book, and it contains some
surprises. The U.S. government jumped into this fray without any thought.
Eizenstat was based in Brussels, nudging the post-communist governments of
Central and Eastern Europe to restore communal properties confiscated during
the Nazi-era to religious communities, when, in June 1995, he read a Wall
Street Journal story about the dormant accounts in Swiss banks. He asked
Richard Holbrooke, his boss at the State Department, for authorization to
extend his restitution work to Switzerland. Holbrooke did not hesitate to
approve.

“No one in Washington held any meetings or weighed the
pluses or minuses,” writes Eizenstat, now an international trade lawyer in
private practice in Washington and special counsel to the Commission on Art
Recovery of the World Jewish Congress. “I just plunged in, initially with no
goal other than to find out the facts about the numerous dormant bank accounts
in Swiss hands for over five decades. There were no grand plans or strategies;
these came later.”

Eizenstat’s work on the issue entailed juggling conflicting
interests as the Swiss banks issue snowballed. Eizenstat was attempting to help
Nazi victims while trying to steady the United States’ diplomatic and economic
relations with European governments, which were roiled by the American lawsuits
and regulators’ threats of sanctions. Much of it was far beyond his control,
and he routinely battled with state and local regulators, arguing that their
threats of sanctions interfered with U.S. foreign policy. The $1.25 billion
Swiss banks settlement was under the supervision of U.S. District Judge Edward
Korman in Brooklyn, not the U.S. executive branch. Where Eizenstat did take
some control — to deal with claims against German and Austrian interests — he
freely admits in his memoirs that he used “creative accounting” and “dubious”
arithmetic to reach deals that looked better than they were.

He also was creative with funds that the U.S. government set
aside for Holocaust survivors. The funds were supposed to be “redress” for the
American failure to turn over to Jewish successor organizations the heirless
Jewish assets held by American banks after the war. Eizenstat was “rarely more
proud” than when he announced in 1997 that the United States would contribute
$25 million to a new international fund for Nazi victims. The money, he writes,
was to be used for food and social programs for Holocaust survivors in Eastern
Europe. However, 150 pages later, he recounts that, in the midst of the slave
labor negotiations, the Polish delegation was balking at the amount of
compensation being offered to its war-era forced laborers, so Eizenstat made a
“secret” deal in which Poland would receive $10 million of the $25 million.

The public did not notice Eizenstat’s efforts until May
1997, when he issued a U.S. government historical report on Switzerland’s
commercial links to the Nazis. His statement that these links helped “prolong”
the war was the sound bite that made the news. In his memoirs, however, he says
that these were “ill-chosen words” and that he could have made the same point
less harshly by saying these links helped “sustain” the German war effort.
“Prolong” is not the only thing from which he is backtracking. The cover of the
book — a swastika-shaped image superimposed over the Swiss flag — raised a hue
and cry. Eizenstat has said he regrets that the book cover offended the Swiss.
Apparently, that is not good enough. In January, a lawyer in Zurich filed
criminal charges against him, under a Swiss law that protects the flag from inappropriate
use.

Eizenstat seems to have an aversion to giving others proper
credit — even to the government he served. He refers repeatedly to the fact
that over 50 years, Germany paid DM 100 billion [$44.25 billion based on
conversion rates] to Nazi victims, without stressing that it was American
military occupation authorities who, after the war, compelled the German states
in the American Zone to enact restitution and compensation measures for
victims, and that in every subsequent treaty dealing with German sovereignty,
including reunification, the U.S. insisted that Germany retain its commitment
to Nazi victims.

In his chapter on Nazi-looted art, he discusses the “poster
child” of all successful claims: a 16th century painting by Lucas Cranach the
Elder that was looted from the collection of Philip von Gomperz, a Viennese
industrialist, and turned up at the North Carolina Museum of Art. The Gomperz
heirs, so impressed that the museum agreed to return the painting, agreed to
sell it to the museum for half its value. Eizenstat mentions by name everyone
except the woman who mediated between the museum and Gomperz heirs, arranging
both the recovery and the sale: Monica Dugot of the Holocaust Claims Processing
Office of the New York State Banking Department.

“Imperfect Justice” focuses on the political and diplomatic
aspects of Holocaust restitution. The legal dimensions are covered in
“Holocaust Justice: The Battle for Restitution in America’s Courts” by Michael
Bazyler, a professor at Whittier Law School in Costa Mesa. (I should disclose
here that Bazyler mentions me in the acknowledgments, for reading part of the
manuscript in draft.) The book, which is due out in April, is valuable as a
play-by-play of litigation on the Swiss banks cases, slave labor, Nazi-looted
art and Holocaust-era insurance policies, the latter being a topic Eizenstat
ignored. But to tell the story, Bazyler relies heavily and indiscriminately on
news accounts, especially those that bolster his points. However, most of the
news reporting of the litigation, negotiations and settlements was shoddy. Most
reporters were ignorant of the relevant history and law, and the stories were
only as accurate as the sources cited. Thus, the stories routinely were
incomplete, ahistorical and often served as platforms for partisans in the
disputes.

Despite these flaws, taken together, the two books provide
the most realistic picture yet of the road to Holocaust restitution settlements
at century’s end. Try to overlook the titles. Bazyler’s title implies that the
courts provided a remedy, although the major suits — against German companies
for slave labor compensation — failed. The Swiss banks’ settlement was not a
triumph of law and legal rights, but instead was due to Korman jawboning
everyone to reach a settlement. As for Eizenstat’s choice, it suffices to say
that Nazi victims rarely call this justice, imperfect or otherwise.

Stuart Eizenstat will be speaking and signing his book on
Sunday, March 30, at 8 p.m. at the University of Judaism, Gindi Auditorium, 15600
Mulholland Drive, Los Angeles. For more information, call (310) 476-9777 ext.
445.

He is also scheduled to speak at the Los Angeles Times Festival of Books at UCLA on Sunday, April 27 from 2-5 p.m. For more information, visit