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If it goes on distributing $1 million a year to organizations catering to Holocaust survivors, the Claims Conference will run out of funds within six year, the conference chairman Reuven Merhav told a Knesset panel.

During its first meeting on Monday, the parliamentary inquiry committee on Holocaust survivor reparations, headed by Labor MK Ophir Pines-Paz, heard that most of the conference's budget to date has come from selling unclaimed Jewish property in the former East Germany, which is likely to yield just another $300 million in the future.

The Claims Conference was founded in 1951 at the instigation of the Israeli government, which wanted an organization to represent world Jewry in negotiations with Germany over Holocaust reparations.

Pines said he decided to set up the inquiry committee, because "for the 56 years of its existence, the Claims Conference was not subject to public scrutiny, which is wrong and inappropriate. It's time to discuss its roles and structure thoroughly and substantively."

Pensioner Affairs Minister Rafi Eitan demanded to appoint an external auditor who would review the conference's "procedures, decision-making and methods, as well as policy and planning. I've suggested that on a number of occasions and was refused offhand."

Merhav said for his part that the "Claims Conference has nothing to hide."

Eitan also criticized the make-up of the conference's executive board, which comprises 48 representatives of Jewish organizations worldwide. Some of the represented organizations are now defunct and merely four delegates represent Israeli organizations.

"This situation disproportionately represents the distribution of Holocaust survivors, of which 45% live in Israel," he said.

Three months ago a state commission of inquiry into the government's treatment of Holocaust survivors, headed by former Supreme Court judge Dalia Dorner, published a report slamming the government's decades-long mistreatment of German reparation funds.