The battle waged by Holocaust survivors against Swiss banks was a resounding achievement that set a precedent for minority groups seeking reparations for historic injustices, according to Professor Michael Bazyler, an international expert in the field of Holocaust restitution. In his opinion, rising anti-Semitism, inflated legal fees, and infighting among Jewish groups with regard to the distribution of funds among Jewish organizations, did not manage to damage this battle's overwhelming success. However, he criticizes the foot-dragging adopted by Israeli banks and the state in returning the assets of deceased Holocaust victims.

On October 3, 1996, Jewish-American attorney Edward Fagan filed a suit against the Swiss bank UBS in a New York federal district court. The appellant was Gizella Weisshaus, an elderly Holocaust survivor from Romania, who attempted, for half a century, to obtain the funds her father deposited in the Swiss bank. Weisshaus initially paid her legal fees to Fagan in the form of cakes and kugel. Her lawsuit represented the beginning of a fascinating historical, legal and political process.

In August 1998, a settlement with Swiss banks was signed in the Brooklyn Federal Court. It called for the payment of $1.25 billion to Holocaust survivors and forced labor victims. The agreement with the Swiss banks was followed by agreements with the governments of Germany, France and Austria, five of the leading insurance companies in Europe, and a number of major German corporations, all of which signed a settlement with the United States government and Jewish organizations, to return assets and to compensate Holocaust victims. According to estimates, about $8 million has so far been paid in the context of these settlements.

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Bazyler, a professor of international law at Whittier Law School in Costa Mesa, California, calls the Swiss bank settlement "the mother of all Holocaust restitution settlements." Last month, Bazyler participated in a conference to commemorate the 60th anniversary of the Nuremberg Trials, which was held at the International Institute for Holocaust Research at Yad Vashem. Bazyler identifies four factors responsible for the success of the Swiss bank settlements: Jewish organizations, led by the World Jewish Congress, which rallied maximal public pressure; American politicians, like then-New York Senator Alphonse D'Amato and then-New York State Comptroller Alan Hevesi, who threatened to deal a severe blow to Swiss banking in the U.S.; the American judicial system, which agreed to deliberate a class-action suit filed by the heirs to the accounts; and the media, which boosted the success of the public battle.

The ugly aspects

However, some aspects of the public struggle were less satisfying. A report presented by the Swiss Federal Commission Against Racism to the Council of Europe's Human Rights Committee in the late 1990s stated that from 1997 to 1998, "there was a massive increase in the extent of anti-Semitic and neo-Nazi propaganda in the nation, directed at the Jewish community, Jewish attorneys, and international Jewish organizations."

Other grievances concerned the fact that large parts of Swiss bank settlement funds have remained in judicial coffers. In the context of the settlement, the banks transferred $1.25 billion to Brooklyn Federal Court accounts in return for dismissing the class action suit brought by Holocaust survivors, forced labor victims, and owners of dormant Swiss bank accounts and their heirs. Judge Edward R. Korman, responsible for implementing the settlement, decided to allocate $800 million from this fund to compensate Swiss account owners. By the end of 2006, only half that amount - $400 million - was distributed to the heirs. The rest remained in the court's accounts. A few Jewish organizations and the State of Israel have already begun fighting over the remaining sum.

The main reason why account owners received only half the sum is that an examination by accountants, which cost the banks more than $250 million, revealed that only 20,000 Swiss bank accounts met the suit's conditions. Swiss journalist Daniel Ganzfried, who published a series of investigatory articles about the Swiss bank settlements, believes that the compensation paid by Swiss banks is merely an expression of the political power wielded by Jewish organizations. Bazyler, on the other hand, insists the banks got off easy, especially if one takes into account that they had time to destroy the records of millions of other dormant accounts.

Bazyler mentions rising anti-Semitism as a footnote in his book "Holocaust Justice." He does not consider fear of anti-Semitism to be a relevant aspect of judicial consideration. Bazyler noted that Anti-Defamation League Director Abraham Foxman "decried that this struggle for restitution from the private corporate defendants made money the 'last sound bite' of the Holocaust... I can certainly understand the moral claim, but from the point of view of justice, this is no reason not to claim what belongs to you according to law."

The fees exacted by the lawyers who handled these settlements represent another problematic aspect. Last year Professor Burt Neuborne, a lecturer at the New York University School of Law, presented a bill of $1.4 million to the New York court for the eight years he worked, on behalf of the court, in implementing the Swiss bank settlement. After The New York Times exposed embarrassing mistakes in the number of hours billed by Neuborne, he announced that he was updating his hourly fees and increased the amount owed him to $4.76 million. American Holocaust survivors and one of the lawyers who worked with Neuborne on the settlement were inflamed. They decried the stiff hike in fees demanded by a man who had previously announced that he would relinquish his fees, and who was praised in publications, including in Bazyler's book, for his "pro-bono" work. Leo Rechter, director of the National Association of Jewish Child Holocaust Survivors, noted that the fees Neuborne received were $1 million higher than the total sum received by American Holocaust survivors in the settlements. "Bazyler unilaterally supported Neuborne," Rechter told Haaretz. "We stopped speaking to him after we saw that he was lending Neuborne his full support."

Bazyler believes Holocaust survivors forget that the money they received in the settlement was a "gift" from the court. According to him, Judge Korman specified that the only claim with any legal basis was that of the owners of dormant accounts. Bazyler adds, "If anybody deserves fees in the Swiss case, it's Burt Neuborne." He claims Neuborne invested everything in "Sisyphean work" no other attorney would have been willing to take on. Bazyler does not believe the attorneys deserved the criticism directed at them. He also holds that had American courts not permitted attorneys to exact fees in percentages, there would never have been restitution suits of this type. "It is very sexy to criticize attorneys, but in my opinion, they belong to the heroes in this story. It is true that I have a personal reason to maintain connections with them, because I need information for my research. By the way, I do not think that they are particularly disturbed by the criticism. They have thick skin."

The settlement 'opened the floodgates'

Bazyler considers the settlement with Swiss banks to be a historic precedent. According to him, the settlement "opened the floodgates of litigation" involving minority groups like African-Americans, who sued the U.S. government for damages sustained from slavery; Armenians, who sued an American insurance company for damages in the Turkish genocide in 1917; and American prisoners of war who sued Japanese corporations that forced them to perform hard labor in World War II.

Most of these suits ended without results. The public struggle against the Japanese, waged by American war veterans and based on the Holocaust model, failed when the court ruled that the Security Treaty between Japan and the U.S., signed in 1951, prevented filing suits for compensation. The plans of African-American activists to establish a "legal dream team" led by Johnnie Cochran were quashed upon his death. Only the Armenians succeeded in their attempt to obtain real compensation: $20 million from the New York Life insurance company for 2,000 life insurance policies held by Armenians.

There are still many holes in restitution suits filed by Jewish Holocaust victims. Last week, the research conducted by Sidney Zabludoff, an American economist and former employee of the U.S. Treasury Department, was published. His findings estimate that only a fifth of the assets taken from Jews had been returned to their rightful owners in the period from 1945 to the present day. Zabludoff says that in 2005, the market value of these assets was a total of $115-175 billion. Restitution settlements in Eastern Europe are stuck. Only a fraction of the art looted in the Holocaust has been returned to its owners. American corporations, like IBM and Kodak, which earned tremendous profits from forced labor and trade with Nazi Germany during the Holocaust, have successfully evaded paying reparations.

But if there is a subject that personally disturbs Bazyler, it is the way the State of Israel handles the return of assets to the families of the deceased. There are thousands of dormant accounts that remain in Israeli banks, an unknown number of plots of land, and financial and other assets in Israel. After six years of parliamentary work, last year the Knesset passed a Holocaust restitution bill. A few months ago, a national company was established to manage these assets before returning them. Bazyler, who has recently begun to investigate this matter, maintains that the state of Israel has yet to return a single asset to heirs in the context of an official procedure. "As a bystander, I am deeply disappointed. One can now make the same claims against Israeli banks that were once made against Swiss banks. Why, in God's name, does everything move so slowly here? This is about Holocaust survivors. We lose 10 percent of them every year. Enough. It's time to bring this matter to an end."