Families Battle for Assets in Court

Israeli Firms Accused of Profiting Off Holocaust

By JONATHAN COOK

Nazareth.

Israel’s second largest bank will be forced to defend itself in court in the coming weeks over claims it is withholding tens of millions of dollars in “lost” accounts belonging to Jews who died in the Nazi death camps.

Bank Leumi has denied it holds any such funds despite a parliamentary committee revealing in 2004 that the bank owes at least $75 million to the families of several thousand Holocaust victims.

Analysts said the bank’s role is only the tip of an iceberg in which Israeli companies and state bodies could be found to have withheld billions of dollars invested by Holocaust victims in the country — dwarfing the high-profile reparations payouts from such European countries as Switzerland.

“All I want is justice,” said David Hillinger, 73, whose grandfather, Aaron, died in Auschwitz, a Nazi camp in Poland. Lawyers are demanding reparations of $100,000 for Bank Leumi accounts held by his father and grandfather.

The allegations against Bank Leumi surfaced more than a decade ago following research by Yossi Katz, an Israeli historian.

He uncovered bank correspondence in the immediate wake of the Second World War in which it cited “commercial secrecy” as grounds for refusing to divulge the names of account holders who had been killed in the Holocaust.

“I was shocked,” said Dr Katz, from Bar Ilan University near Tel Aviv. “My first reaction was: ‘My God, this isn’t Switzerland!’ ”

In 1998, following widespread censure, Swiss banks agreed to pay $1.25billion in reparations after they there were accused of having profited from the dormant accounts of Holocaust victims.

Dr Katz’s revelations led to the establishment of a parliamentary committee in 2000 to investigate the behaviour of Israel’s banks. Its report came to light belatedly in 2004 after Bank Leumi put pressure on the government to prevent publication.

Investigators found thousands of dormant accounts belonging to Holocaust victims in several banks, though the lion’s share were located at Bank Leumi. Obstructions from Leumi meant many other account holders had probably not been identified, the investigators warned.

The parliamentary committee originally estimated the accounts it had located to be worth more than $160m, using the valuation formula applied to the Swiss banks. But under pressure from Leumi and the government, it later reduced the figure by more than half.

A restitution company was created in 2006 to search for account holders and return the assets to their families.

Meital Noy, a spokeswoman for the company, said it had been forced to begin legal proceedings this week after Bank Leumi had continued to claim that its findings were “baseless”.

The bank paid $5m two years ago in what it says was a “goodwill gesture”. Ms Noy called the payment “a joke”. She said 3,500 families, most of them in Israel, were seeking reparations from Bank Leumi.

The bank was further embarrassed by revelations in 2007 that one per cent of its shares — worth about $80 million — belonged to tens of thousands of Jews killed during the Holocaust.

Mr Hillinger, who was born in Belgium in 1936 and spent the Second Wold War hiding in southern France, today lives in Petah Tikva in central Israel.

He said before the outbreak of war his father and grandfather had invested money in the Anglo-Palestine Bank, the forerunner of Leumi, in the hope it would gain them a visa to what was then British-ruled Palestine.

Although his parents escaped the death camps, his grandparents were sent to Auschwitz and died in the gas chambers shortly after arrival.

Mr Hillinger said he had only learnt of the outstanding debt from Bank Leumi after his father, Moses, died in 1996. Papers showed the bank had paid his father “a pittance” in 1952 when he closed his account and that it had never returned his grandfather’s money.

When he wrote to Bank Leumi in 1998, it denied his grandfather had ever opened an account.

“My grandfather died because he was a Jew, and it is shameful that other Jews are exploiting his death,” he said. “We need to wake people up about this.”

A quarter of a million Holocaust survivors are reported to be in Israel, with one-third of them living in poverty, according to welfare organisations.

Shraga Elam, an Israeli investigative financial journalist based in Zurich, said after the war many Israelis showed little sympathy for the European Jewish refugees who arrived in Israel.

“David Ben Gurion [Israel’s first prime minister] notoriously called them ‘human dust’, and I remember as children we referred to them as sabonim, the Hebrew word for soap,” he said, in reference to the rumoured Nazi practice of making soap from Jewish corpses.

“In fact, I can’t think of any place in the world where [Holocaust] survivors are as badly treated as they are in Israel,” Mr Elam said.

He said Bank Leumi’s “lost” accounts were only a small fraction of Holocaust assets held by Israeli companies and the Israeli state that should have been returned. The total could be as much as $20bn.

He said European Jews had invested heavily in Palestine in the pre-war years, buying land, shares and insurance policies and opening bank accounts. During the Second World War Britain seized most of these assets as enemy property because the owners were living in Nazi-occupied lands.

In 1950 Britain repaid some $1.4 million to the new state of Israel, which was supposed to make reparations to the original owners.

However, little effort was made to trace them or, in the case of those who died in the Holocaust, their heirs. Instead the Israeli government is believed to have used the funds to settle new immigrants in Israel.

“These are huge assets, including real estate in some of the most desirable parts of Israel,” Mr Elam said.

Last year the Israeli media reported an investigation showing that the finance ministry destroyed its real estate files in the 1950s, apparently to conceal the extent of the state’s holding of Holocaust assets.

The case against Bank Leumi may end the generally muted criticism inside Israel of the banks’ role. Officials and even the families themselves have been concerned about the damage the case might do to Israel’s image as the guardian of Jewish interests.

In 2003 Ram Caspi, Bank Leumi’s lawyer, used such an argument before the parliamentary committee, warning its members that the US media “will say the Israeli banks also hide money, not just the Swiss”.

Organisations that led the campaign for reparations from European banks, such as the Jewish Claims Conference and the World Jewish Restitution Organisation, have also downplayed the role of the Israeli banks.

Jonathan Cook is a writer and journalist based in Nazareth, Israel. His latest books are “Israel and the Clash of Civilisations: Iraq, Iran and the Plan to Remake the Middle East” (Pluto Press) and “Disappearing Palestine: Israel’s Experiments in Human Despair” (Zed Books). His website is www.jkcook.net.

A version of this article originally appeared in The National (www.thenational.ae), published in Abu Dhabi.

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(http://www.counterpunch.org/cook06252009.html)

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Jun 25, 2009 1:14 | Updated Jun 25, 2009 16:03 Survivors: We’re waiting for justice By  Article’s topics: Holocaust The elderly men sat in the foyer of the Jerusalem District Court building, clutching documents, some frayed at the edges and all yellowed with age. David Hillinger displays a document from the SS showing tha his grandfather, Aharon, had been registered in Auschwitz, where he was later murdered. Photo: Ariel Jerozolimksi They survived the Holocaust while most – or all – of their families perished in German-occupied Europe six decades ago. They built new lives in Israel, and now they are in their 70s and 80s. On Wednesday, the men were in court as a NIS 300 million lawsuit was filed by the Company for the Restitution of Holocaust Victims Assets against Bank Leumi, over assets that the group says belong to thousands of Holocaust victims and their heirs. The bank has rejected the claims as baseless. “We are waiting for justice,” said Antwerp-born David Hillinger, 73, of Petah Tikva. Hillinger said his grandfather had invested £1,400 with the Anglo-Palestine Bank, the prestate precursor to Bank Leumi, in 1940, just weeks before Germany invaded Belgium. “People could not escape from Europe, but thought that if they sent money they could receive a visa. But it was too late,” he recounted. While the family managed to escape to the south of France, his grandparents were arrested by French police and transported to Auschwitz, where they were murdered. After the war, Hillinger’s father received a bank statement with his balance, but when he asked the Israeli Embassy in Brussels in the 1950s about the money, the response was that “Israel is a poor country, and could not help,” he said. After his father died in 1996, his mother sent the bank a letter inquiring about the account – which he said by today would be worth NIS 400,000 – but was told it did not exist, he recounted. “We have all the papers that the account existed,” Hillinger said. He added that it was unconscionable that Swiss banks, and “even German banks” could return money to Jewish victims, but that an Israeli bank would balk at returning funds. “Jews stealing money from Jews who died at Auschwitz; this I cannot accept,” he said. It is a wicked injustice that an Israeli bank is holding on to money that belongs to Holocaust survivors, some of whom are dying of hunger in Israel,” said Menachem Ariav, chairman of the restitution organization. “We are not looking for charity; we are looking for what belongs to Holocaust survivors.” He added that Bank Leumi was acting in an “un-Jewish, un-Zionist, un-Israeli manner,” and contrasted its actions with that of Bank Hapoalim, which is on the verge of reaching an agreement with the restitution group. The amount of money invested with Bank Hapoalim and three other Israeli banks, however, is marginal compared to Bank Leumi, said Nadav Ha’etzni, an attorney for the organization. The organization is planning similar suits against Mizrahi Bank, Discount Bank and Mercantile Discount Bank, Ariav said. The legal action against Israel’s second-largest bank follows years of fruitless negotiations to reclaim the funds that the restitution group said was deposited by Holocaust victims in more than 3,500 bank accounts before World War II. “I am embarrassed in their name; they are acting like cold fish,” said Shlomo Gonen, 70, of Kfar Saba, adding that he has documents that show that his Polish-born uncle, who was murdered by the Nazis, also deposited money with the bank. In a largely symbolic move, Leumi transferred NIS 20m. to the restitution organization two years ago, even though the bank has asserted that it does not hold any funds or property belonging to Holocaust victims. An internal report carried out for the bank by a retired Supreme Court justice concluded that the bank is not legally obliged to hand over to heirs money it had held for people who died in the Holocaust. Bank Leumi has rejected the lawsuit as “baseless,” and said that the lawsuit was initiated solely to cover up the restitution organization’s own blunders and waste of public funds, including significant errors in identification of accounts, involving tens of millions of shekels. The bank added that the amount being sought by the restitution company was not based on sums that had ever been in the bank, but represented interest calculations on assets that, in any case, had long ago either been transferred to the prestate British authorities or to Israel’s custodian-general as unclaimed assets. The Company for the Restitution of Holocaust Victims Assets was established by the Knesset three years ago in an effort to uncover and return the assets of Holocaust victims to their rightful heirs. Property and assets that are not claimed will be used to help elderly Holocaust survivors in need. About 250,000 survivors live in Israel, nearly a third of them in poverty. ————- (http://www.jpost.com/servlet/Satellite?cid=1245184921986&pagename=JPost%2FJPArticle%2FShowFull) *********** Lawyer Edward Fagan is disbarred in N.J. for misusing Holocaust victims’ funds by /Statehouse Bureau Wednesday June 24, 2009, 8:02 PM TRENTON — Only a few years ago, Edward Fagan was a world-renowned lawyer for the underdog, brash and audacious enough to take on Swiss banks and even whole countries to win judgments for Holocaust survivors and victims of South African apartheid. This week, the Supreme Court announced he was barred from practicing law in New Jersey, completing one of the steepest falls from grace in the state’s law community. Aaron Houston/For The Star-LedgerEdward Fagan contests his disbarment in front of the New Jersey Supreme Court in Trenton today. The court found Fagan, 56, misappropriated nearly $400,000 of the money he won for the victims he so effectively championed. The justices agreed with the Disciplinary Review Board that Fagan knowingly misused client and escrow trust funds and was also punished for his “conduct involving dishonesty, fraud, deceit, or misrepresentation.” Fagan was disbarred in New York in December. “Somebody’s life work that goes bad in such a negative way … that’s the sad part,” said Jeannette Bernstein, the niece of Estelle Sapir, a Holocaust victim and former client of Fagan’s who had “entrusted” him with “everything.” “I think the survivors were badly serviced by him,” Bernstein said. “He worked very hard but along the way, he lost us somewhere. He walked away with millions, and for him to end up doing what he did, is unconscionable.” Fagan said in an e-mail he had no comment on the court’s order. When he appeared before the court last week, Fagan said he “didn’t misappropriate a penny of client funds.” Fagan did not deny he had taken money from Gizella Weisshaus, a Holocaust survivor he represented, after putting it in his own personal trust fund. He said he was “entitled” to the money — more than $80,000 — she owed him for work he had done. But Fagan could not produce all of the records showing he had done that work. “I was a terrible bookkeeper,” he told the court, saying the New Jersey Office of Attorney Ethics had stolen his documents. Fagan initially worked with large law firms in Manhattan and New Jersey, including the Morristown law firm formerly known as Shanley & Fisher, defending tobacco companies and asbestos producers against personal injury claims. But he got fed up with that and tried to make it big on the other side — by representing those who had personal injury claims to make. That led him to work for skiers killed in a fire on a lift in Austria and a 2002 legal action against Swiss banks, claiming their financial dealings had helped extend South Africa’s apartheid regime. He gained international attention by being the first to file suit against Swiss banks for Holocaust survivors. In the class-action case, he and other lawyers eventually got a $1.25 billion settlement for thousands of clients in 1998. Elan Steinberg, the former executive director of the World Jewish Congress, said when the case began, he was “critical” of lawyers like Fagan, who charged fees for the survivors they represented. Steinberg, who knew Fagan, described his misappropriation of client funds as a “tragedy twice over” for Holocaust victims. “There’s something also particularly poignant here, in that the effort was trying to achieve justice and this terrible turn of events makes this particularly bitter,” Steinberg said. During the ethics probe, Fagan testified he grew up in a conservative Jewish home in Texas, where the Holocaust was frequently discussed. He described traveling to Israel, first for school and then for a brief stint in the military during the Yom Kippur War of 1973. When he decided to become a lawyer, after spending time in Israel and teaching Jewish education classes in the Midwest, he said he wanted to help people who had suffered. But the ethics report detailed several lapses in Fagan’s career. John McGill, the ethics attorney representing the state, said he was not surprised at the court’s decision, because there was “overwhelming evidence of guilt” in Fagan’s record. Weisshaus, 79, who survived Auschwitz and lives in Brooklyn, said Fagan still owes her money from her settlement. “I’m not going to go after him because he claims he’s broke,” she said. “This is all right for the time being.” Previous Star-Ledger coverage: – Holocaust victims’ lawyer asks N.J. Supreme Court to allow him to practice law – Holocaust victims’ attorney Fagan should be disbarred, counsel says COMMENTS: http://www.nj.com/news/index.ssf/2009/06/the_lawyer_who_represented_hol.html ————- (http://www.nj.com/news/index.ssf/2009/06/the_lawyer_who_represented_hol.html)