This Day in Jewish History

1999: Deal Made to Pay Back Nazis’ Slave Laborers

More than 3,100 German firms that had taken advantage of forced labor during World War II pledged a total of some $2.4 billion, with the balance of $3.75 billion to come from the German government.

Slave laborers digging irrigation ditch in Nazi camp in Poland, 1940.

On December 15, 1999, the United States and Germany announced that they had reached agreement on the principles of a deal for the providing of compensation to surviving forced and slave laborers from the period of the Third Reich.

More than 54 years after the end of World War II, there were an estimated 1.5 million to 2 million – Jews, Roma, Poles and other Eastern European nationals – who remained alive from the approximate 8-12 million who were forced to work under inhuman conditions for the Nazis. Those who were pressed into work from concentration and labor camps or ghettos were literally slaves, whereas those who were imported en masse to Germany to undertake forced labor in industrial plants there had slightly better conditions and were generally paid minimal wages.

An impetus for the agreement was the fact that, in the 1990s, a number of individual and class-action suits had been brought against German corporations by survivors who had been forced to work for such companies as Volkswagen, Siemens, Leica Camera and Ford Werke (a partially owned subsidiary of Ford Motor Co.) during the war. The Christian Democratic government of Helmut Kohl had rejected the idea of requiring private companies to pay restitution for using forced labor, but with the election of Gerhard Schroeder, a Socialist, to the chancellorship in 1998, government policy changed.

At the same time, Deutsche Bank was bidding to buy out the American Banker’s Trust, but found its path blocked by the U.S. government, which threatened to block the purchase of the bank as long as an agreement was not reached between the countries on compensation.

The key issue whose resolution made it possible to proceed with an agreement was the German demand that the fund to be established would serve as the only means for restitution to be made – that American courts would not accept lawsuits filed against German corporations by former forced laborers – and that the completion of the payout process would constitute the end of any claims.

At the time, the average age of surviving laborers was estimated to be about 80, with some 10 percent of them dying annually, so from the plaintiffs’ point of view, time was an essential consideration.

Once Schroeder’s government was able to agree with 12 German industrial giants on the establishment of a fund, into which both the corporations and the public would pay, intense negotiations began between it and the American government, which was represented by Under-Secretary of State Stuart Eizenstat.

Bundestag votes

After the agreement in December, the details still needed to be hammered out. Finally, in August 2000, the two houses of the Bundestag voted to approve creation of the “Remembrance, Responsibility and Future Foundation,” which make payouts of up to DM 15,000 (about $7,800) for former slave laborers and DM 5,000 to those who did forced labor. Compensation would only go to victims; their heirs would not be eligible to make claims.

More than 3,100 German firms that had taken advantage of forced labor during World War II pledged a total of some $2.4 billion, with the balance of $3.75 billion to come from the German government.

By the time the final payments were made, in late 2006, a total payout of €4.45 billion ($6.53 billion) had gone to more than 1.66 million people, living in some 100 countries. Among them, more than 140,000 were Jewish survivors, who were living in 25 different countries.

Separate sums were allocated to three different organizations for the funding of programs. The Claims Conference received DM230 million ($172 million) to run welfare programs for Jewish survivors; the International Organization on Migration had a fund of DM24 million for Roma and Sinti victims; and the International Commission on Holocaust Era Insurance Claims had access to €350 million for a variety of social programs.

Another €358 million ($525 million) was allocated for educational and cultural programs worldwide, intended to raise consciousness of the crimes of the Holocaust and of the peoples and cultures destroyed.