<DOC>
[108th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:90748.wais]
HOLOCAUST ERA INSURANCE RESTITUTION AFTER AIA v. GARAMENDI: WHERE DO WE
GO FROM HERE?
=======================================================================
HEARING
before the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 16, 2003
__________
Serial No. 108-79
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
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90-748 WASHINGTON : 2003
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COMMITTEE ON GOVERNMENT REFORM
TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana CAROLYN B. MALONEY, New York
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
DOUG OSE, California DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky DANNY K. DAVIS, Illinois
JO ANN DAVIS, Virginia JOHN F. TIERNEY, Massachusetts
TODD RUSSELL PLATTS, Pennsylvania WM. LACY CLAY, Missouri
CHRIS CANNON, Utah DIANE E. WATSON, California
ADAM H. PUTNAM, Florida STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia CHRIS VAN HOLLEN, Maryland
JOHN J. DUNCAN, Jr., Tennessee LINDA T. SANCHEZ, California
JOHN SULLIVAN, Oklahoma C.A. ``DUTCH'' RUPPERSBERGER,
NATHAN DEAL, Georgia Maryland
CANDICE S. MILLER, Michigan ELEANOR HOLMES NORTON, District of
TIM MURPHY, Pennsylvania Columbia
MICHAEL R. TURNER, Ohio JIM COOPER, Tennessee
JOHN R. CARTER, Texas CHRIS BELL, Texas
WILLIAM J. JANKLOW, South Dakota ------
MARSHA BLACKBURN, Tennessee BERNARD SANDERS, Vermont
(Independent)
Peter Sirh, Staff Director
Melissa Wojciak, Deputy Staff Director
Rob Borden, Parliamentarian
Teresa Austin, Chief Clerk
Philip M. Schiliro, Minority Staff Director
C O N T E N T S
----------
Page
Hearing held on September 16, 2003............................... 1
Statement of:
Arbeiter, Israel, president, American Association of Jewish
Holocaust Survivors of Greater Boston, Inc.; Daniel Kadden,
Ph.D., Holocaust Survivor Advocate; and Michael J. Bazyler,
professor of law, Whittier Law School...................... 128
Bell, Ambassador Randolph M., Special Envoy for Holocaust
Issues, U.S. Department of State........................... 30
Eagleburger, Lawrence S., chairman, International Commission
on Holocaust Era Insurance Claims; Gregory V. Serio,
superintendent, New York State Insurance Department,
chairman, International Holocaust Commission Task Force of
the National Association of Insurance Commissioners; Gideon
Taylor, executive vice-president, Conference of Jewish
Material Claims Against Germany; and Roman Kent, chairman,
American Gathering of Holocaust Survivors.................. 50
Letters, statements, etc., submitted for the record by:
Arbeiter, Israel, president, American Association of Jewish
Holocaust Survivors of Greater Boston, Inc., prepared
statement of............................................... 132
Bazyler, Michael J., professor of law, Whittier Law School,
prepared statement of...................................... 151
Bell, Ambassador Randolph M., Special Envoy for Holocaust
Issues, U.S. Department of State, prepared statement of.... 33
Davis, Chairman Tom, a Representative in Congress from the
State of Virginia, prepared statement of................... 4
Eagleburger, Lawrence S., chairman, International Commission
on Holocaust Era Insurance Claims, prepared statement of... 54
Foley, Hon. Mark, a Representative in Congress from the State
of Florida, State of California Attorney General's letter.. 23
Kadden, Daniel, Ph.D., Holocaust Survivor Advocate:
International Commission on Holocaust Era Insurance
Claims Report.......................................... 163
Prepared statement of.................................... 140
Ros-Lehtinen, Hon. Ileana, a Representative in Congress from
the State of Florida, prepared statement of................ 15
Schakowsky, Hon. Janice D., a Representative in Congress from
the State of Illinois, prepared statement of............... 19
Schiff, Hon. Adam B., a Representative in Congress from the
State of California, prepared statement of................. 27
Shays, Hon. Christopher, a Representative in Congress from
the State of Connecticut, prepared statement of Mr.
Carnicelli................................................. 215
Serio, Gregory V., superintendent, New York State Insurance
Department, chairman, International Holocaust Commission
Task Force of the National Association of Insurance
Commissioners, prepared statement of....................... 85
Taylor, Gideon, executive vice-president, Conference of
Jewish Material Claims Against Germany, prepared statement
of......................................................... 102
Towns, Hon. Edolphus, a Representative in Congress from the
State of New York, prepared statement of................... 215
Waxman, Hon. Henry A., a Representative in Congress from the
State of California, prepared statement of................. 11
HOLOCAUST ERA INSURANCE RESTITUTION AFTER AIA v. GARAMENDI: WHERE DO WE
GO FROM HERE?
----------
TUESDAY, SEPTEMBER 16, 2003
House of Representatives,
Committee on Government Reform,
Washington, DC.
The committee met, pursuant to notice, at 2:03 p.m., in
room 2154, Rayburn House Office Building, Hon. Tom Davis
(chairman of the committee) presiding.
Present: Representatives Tom Davis of Virginia, Shays, Ros-
Lehtinen, Waxman, Cummings, Van Hollen, Ruppersberger, Norton,
and Bell.
Also present: Representatives Foley, Schiff, and
Schakowsky.
Staff present: Peter Sirh, staff director; Melissa Wojciak,
deputy staff director; Keith Ausbrook, chief counsel; Randall
Kaplan, counsel; Robert Borden, counsel/parliamentarian; David
Marin, director of communications; Drew Crockett, professional
staff member; Teresa Austin, chief clerk; Brien Beattie, deputy
clerk; Allyson Blandford, office manager; Corinne Zaccagnini,
chief information officer; Phil Barnett, minority chief
counsel; Kristin Amerling, minority deputy chief counsel; Karen
Lightfoot, minority communications director/senior policy
advisor; Anna Laitin, minority communications and policy
assistant; Michelle Ash, minority counsel; Earley Green,
minority chief clerk; and Jean Gosa, minority assistant clerk.
Chairman Tom Davis. A quorum being present, the Committee
on Government Reform will come to order. I want to welcome
everyone to today's hearing on the status of Holocaust-era
insurance restitution.
During the Holocaust, the lives of 6 million Jewish people
were systematically extinguished. Countless families lost all
their properties and belongings. Assets were confiscated and
personal and business documents including bank records,
insurance policies and investment information were destroyed.
Following the Holocaust, survivors and their families
attempted to pick up the pieces of their shattered lives. When
victims and their heirs attempted to collect on insurance
policies, European insurance companies frequently denied their
claims because records were missing. Holocaust victims and
their heirs have been seeking to redeem these policies ever
since.
Finally, in the late 1990's, the threat of class action
lawsuits forced five insurance companies with American
subsidiaries to the negotiating table. This ultimately led to
the creation of the International Commission on Holocaust-Era
Insurance Claims [ICHEIC]. ICHEIC is a voluntary nonprofit
organization comprised of five European insurance companies,
the State of Israel, representatives of Holocaust survivors,
and U.S. and European insurance regulators. The commission was
formed in 1998 and established a process to address insurance
claims of Holocaust victims and their heirs.
While hopes were high for the success of ICHEIC, the
initial results were disappointing. On November 8, 2001, the
Committee on Government Reform held a hearing to examine some
of the shortcomings on the ICHEIC process. At that time very
few claims were being paid. Of the claims submitted, less than
2 percent resulted in offers from insurance companies. Critics
noted that missing information was a primary obstacle in the
claims process. The majority of all applicants were unable to
provide basic policy information, including policy numbers and
the name of the insurance company holding their assets. Since
the Holocaust ended almost 60 years ago, it shouldn't come as a
big surprise that aging survivors and families of those that
perished couldn't remember account numbers. Any claims process
must account for this. Witnesses also complained that a
comprehensive list of policyholders was not being developed and
shared with the public by ICHEIC or anyone else. Many of the
companies that issued Holocaust-era insurance policies were not
cooperating in the process, with only five companies directly
involved in the ICHEIC process.
To address shortcomings with the ICHEIC process, a number
of States have enacted laws designed to force insurance
companies to supply information about Holocaust-era policies.
For example, California passed the Holocaust Victims Insurance
Relief Act, which authorized the suspension of the license of
any insurance company operating in the State if it failed to
publish information about Holocaust-era policies.
The Supreme Court, however, struck down the California law
in a narrow 5 to 4 decision on June 23, 2003. The court held
that the State didn't have the right to interfere in the
Federal Government's handling of foreign affairs. Since it is
the policy of the U.S. Government that ICHEIC serves as the
sole remedy for Holocaust-era insurance claims, the court
reasoned that California's approach would undercut the
President's diplomatic discretion, which in this case he has
exercised to encourage insurance companies to participate in
ICHEIC and voluntarily disclose information through ICHEIC.
The court's opinion left open the possibility of
congressional action, and two bills have been introduced in the
108th Congress to address the issue. H.R. 1210, the Holocaust
Victims Insurance Relief Act, introduced by Congressman Henry
Waxman, would require insurance companies doing business in the
United States to publish basic policyholder information for
insurance policies in effect during the Holocaust era. Another
bill, H.R. 1905, introduced by Congressman Mark Foley, would
authorize States to pass laws requiring insurance companies to
disclose Holocaust-era policyholder information.
With the Supreme Court's recent decision, ICHEIC is pretty
much the only game in town for resolving Holocaust-era
insurance claims. And this brings us to today's hearing, where
we will examine whether ICHEIC is fulfilling its mission or
whether congressional action is warranted.
Since the last hearing, there have been improvements. An
increasing number of policyholder names have been published and
agreements have been made with countries such as Germany, the
Netherlands, and Belgium, to process insurance claims using
ICHEIC standards. There is no doubt that progress has been
made.
However, we need to ask whether these improvements are
enough and whether more can be done. At a minimum, we should
make sure that a comprehensive list of policyholders is
developed, and that insurance companies are fully cooperating
in this effort. We also need to ask whether there is more the
U.S. Government can do to urge European countries and insurance
companies to get involved in this process. And, finally, we are
left with the question of whether the ICHEIC process is
working; is it fair, efficient, transparent, and, above all,
accountable?
It has been almost 60 years since the end of one of the
most tragic episodes in human history. It amazes me this issue
still has not been resolved. I realize that there are
complicated issues, but all parties, including heads of State,
ICHEIC, insurance regulators, and insurance companies need to
work expeditiously and in good faith to solve this problem.
There is a basic premise here, which is that every Holocaust
victim who had insurance is entitled to restitution. Providing
restitution for victims and their families on these policies is
the very least we can do to help bring a small amount of
closure to one of history's darkest hours.
I want to thank all our witnesses for appearing before the
committee, and I look forward to their testimony. I ask
unanimous consent that the following members be permitted to
serve on the committee for the purpose of today's hearings:
Congressman Mark Foley, Congresswoman Jan Schakowsky, and
Congressman Adam Schiff.
Without objection, so ordered.
I also want to particularly thank my colleague and ranking
member, Henry Waxman, for his dedication to this issue, which
is why we are holding this hearing, and I now yield to him for
his opening statement.
[The prepared statement of Chairman Tom Davis follows:]
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Mr. Waxman. Thank you, Mr. Chairman. I want to thank you
for holding this hearing to examine the ongoing challenges in
Holocaust insurance restitution, and I also want to acknowledge
your leadership role in ensuring restitution for Holocaust
survivors and their relatives.
This committee held the first congressional hearing on the
International Commission on Holocaust Era Insurance Claims
[ICHEIC], in November 2001. That hearing examined a number of
serious problems with the ICHEIC process, including the
extraordinary backlog in unresolved claims. It is nearly 2
years since that hearing and nearly 5 years since ICHEIC was
established to facilitate and accelerate the payments of
policies purchased by the victims of Nazi terror. Yet even
today, approximately 80 percent of ICHEIC claims are still in
limbo.
There are two primary problems that prevent survivors from
redeeming their insurance policies. One problem we cannot do
anything about: The Nazis often destroyed the records held by
persons imprisoned in the concentration camps. The other
problem we can address: Many of the insurance companies who
issued these policies will not disclose complete lists of their
policyholders. The result is a catch-22. Survivors and their
relatives cannot collect on insurance policies because they
cannot prove who issued the policies.
California tried to address this problem by passing the
Holocaust Victims Insurance Relief Act. This law required
insurance companies doing business in California to disclose
the list of Holocaust-era policyholders. The chairman joined me
in filing an amicus brief in support of the California law
before the Supreme Court.
Unfortunately, the Bush administration opposed this law,
and the Supreme Court agreed, striking down the law this summer
in AIA v. Garamendi. This decision removed critical leverage
that State insurance regulators tried to use to pressure the
insurance companies to fulfill their obligation to publish
information about Holocaust-era policies. The Supreme Court's
opinion, written by Justice Souter, concluded that California's
``iron-hand'' approach would undercut the President's
diplomatic discretion to use ``kid gloves'' to resolve
Holocaust-era insurance cases. Well, it is time to take the
gloves off.
Look at a chart of Jewish population distribution in Europe
before the Holocaust and also the chart of the names that have
been published through ICHEIC for each country. Germany makes
up most of the names released on ICHEIC's Web site, nearly
400,000 policies identified in a country that had 585,000 Jews.
Look at Poland, where 3 million Jews lived but a mere 11,225
policyholders have been listed. Or Hungary, where barely 9,155
policyholder names have been identified out of a prewar Jewish
population exceeding 400,000. In Romania, where close to 1
million Jews lived, only 79 policyholders have been identified.
These countries were the cradle of Jewish civilization in
Europe. Clearly, these numbers demonstrate that claimants are
far from having a complete list.
Congress must act to fix this terrible injustice. That is
why I have introduced H.R. 1210 and Mr. Foley has introduced
his legislation. My bill would require all insurance companies
operating in the United States to publish basic information
about Holocaust-era policies for public dissemination through
the National Archives.
At this hearing we will also need to address accountability
at ICHEIC, the insurance companies, and the State Department.
ICHEIC is supposed to be a public institution performing a
public service, yet it has operated largely under a veil of
secrecy without any accountability to its claimants or to the
public. Even basic ICHEIC statistics have not been made
available on a regular basis. And information about ICHEIC's
administrative and operational expenses have been kept under
lock and key. There is no evidence of systematic changes that
will guarantee that claims are being handled by ICHEIC in a
timely way with adequate followup.
Even worse, many of the insurance companies remain
recalcitrant and unaccountable. ICHEIC statistics show that the
claims are being rejected at a rate of 5 to 1. German claims
have been idled because of the slow pace of research into
whether the claims are eligible for payment. The Generali Trust
Fund, an Italian company, has frequently denied claims
generated from the ICHEIC Web site or matched by ICHEIC
internally, without even providing an explanation that would
help claimants determine whether it would be appropriate to
appeal.
Likewise, the State Department should be doing more. As an
observer to ICHEIC and the guarantor of the President's policy
to rely upon a voluntary system of compliance, the
administration must make clear to the companies that there are
consequences if they fail to comply. The State Department
should also play an activist role in resolving other obstacles,
like the inaccessibility of state archives in Poland, Hungary
and Romania that could help identify policyholders in those
countries. Similarly, intervention with the French Government
could help with privacy laws that have blocked the publication
of French policyholder names.
Mr. Chairman, whether through legislation, oversight,
diplomatic efforts, or a combination of all three, I hope this
hearing will help us identify steps that can be taken by
ICHEIC, its members, the State Department, and Congress to make
sure that this chapter of history will not close without 100
percent effort and 100 percent accountability. Time is running
out for survivors still living today.
Chairman Tom Davis. Mr. Waxman, thank you very much.
[The prepared statement of Hon. Henry A. Waxman follows:]
[GRAPHIC] [TIFF OMITTED] 90748.006
[GRAPHIC] [TIFF OMITTED] 90748.007
Chairman Tom Davis. Other Members wishing to make a
statement? Ms. Ros-Lehtinen, followed by Mr. Foley.
Ms. Ros-Lehtinen. I want to thank you, Mr. Chairman, for
holding this important meeting. After so many years, we want to
finally correct this historic wrong and restore to the
survivors the benefits which they were denied for so long.
The subject of insurance benefits denied to Holocaust
survivors is heart-wrenching. It involves the legacies of
families torn apart by the Holocaust with bitter reminders that
these injustices of half a century ago are unfortunately being
perpetuated by insurance companies to this day. The full story
of the fate of insurance policies from the Holocaust is one of
utter betrayal.
Past testimonies from survivors has provided chilling
accounts of insurance agents in Europe cynically selling life
insurance policies to families that they knew were doomed
because of the tides of war. Policy payments were demanded up
front, and the agents knew in many cases that there would never
be anyone left to claim the benefits.
According to documents found in the U.S. National Archives
as well as those in Europe, insurance companies were found to
have closed policies out and delivered the proceeds to the
Nazis. These terrible events occurred during the war. The story
of what happened after the war is just as bad. When the war
ended, survivors struggled to rebuild their lives, trying to
reacquire what little remained of their family's legacies. In
some cases, survivors were told that there was no record of the
policies they sought or that they needed a death certificate to
prove their claim. Other survivors were told that the company
had been nationalized by the Communists and there was nothing
more that could be done to help them.
No matter what the excuse, the end result was the same.
Survivors were abandoned and betrayed. Countless numbers of
survivors are still seeking information on their policies. What
is absolutely necessary for their success is a comprehensive
listing of all of these policies. In the past, with other forms
of stolen assets from the Holocaust, this kind of information
has proven to be invaluable for the prompt and accurate
identification of the assets. This situation cannot be allowed
to go on any longer. Survivors are entering their twilight
years and they need these funds now.
When I chaired the Subcommittee on International Economic
Policy and Trade, I dealt with the issue of Holocaust-era
assets and with these insurance companies. I found their
practices to be cynical and deplorable. Nothing has changed. It
is very unfortunate that the Supreme Court struck down the
California law requiring these same disclosures by the
insurance companies in return for doing business in the State.
I firmly believe that each State must be allowed to establish
requirements on insurance companies as a condition of doing
business in that State. If States are allowed to obtain the
information necessary to fulfill claims, survivors will
certainly benefit, and, in the end, that is what we seek.
Far too many claimants have been arbitrarily denied their
benefits by these companies. This is simply unacceptable.
Holocaust survivors deserve to be treated better.
And I want to thank the constituents from my congressional
district who are here today, very interested in this subject,
Mr. Samuel Dubbin of Dubbin and Kravetz, and Mr. David
Schaecter of World Industrial Products, and I welcome them here
to this hearing.
Thank you, Mr. Chairman.
[The prepared statement of Hon. Ileana Ros-Lehtinen
follows:]
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Chairman Tom Davis. I will go to Ms. Schakowsky, then get
Mr. Foley. Ms. Schakowsky.
Ms. Schakowsky. I thank you, Chairman Davis and Mr. Waxman
for all the work that you and your staff have done to put this
important hearing together, and I am particularly grateful to
the chairman and the ranking member and the members of the
committee for allowing me to participate as a former member of
this committee.
I represent the Ninth Congressional District of Illinois,
which includes the village of Skokie, home to one of the
largest survivor populations in the country. Actually, a
shrinking survivor population, because as they wait for some
semblance of justice, many have died. I have closely followed
and been involved in efforts to seek some justice for Holocaust
survivors and the era of victims since before coming to
Congress. I have sat through numerous hearings in this
committee and elsewhere over the last several years and I have
kept in close touch with the survivors in my district. The
process has been disappointing and there has been little
progress compared to the amount of work that remains to be
done.
Today's hearing is timely because Congress has a duty to
consider possible legislation or other actions in light of the
June 2003 Supreme Court decision that struck down California's
Holocaust-era insurance law. That law prompted significant
action in other States and signified the great frustration many
involved with the restitution process have experienced.
California passed legislation because of the reprehensible
behavior of insurance companies that refused to cooperate with
efforts to secure the names of Holocaust-era policyholders. The
law was necessary because ICHEIC was not successful enough in
convincing many of those companies to own up to their
responsibility in a timely manner.
I believe one necessary and logical course of action for
Congress to take is passage of H.R. 1210, the Holocaust Victims
Insurance Relief Act, which was introduced by Mr. Waxman. I am
proud to be an original cosponsor of that legislation because
it is needed in order to require insurance companies that do
business in this country and which held Holocaust-era policies
to release the names of those policyholders to the U.S.
Government so that they can be made available to the public.
Without this law, and particularly in light of the Supreme
Court ruling, insurance companies will continue their shameful
practice of delay. H.R. 1210 is an appropriate mechanism to
force real progress on this issue for those who have been
denied justice for their suffering for over 50 years.
Without access to names, survivors and victims' families
have had no way to know if they qualify for compensation under
the ICHEIC agreement. Numerous constituents contact me with
questions, dismayed that the process has gone on for so long,
depressed and angry that they are still without answers or
justice. There are still some 10,000 survivors in Illinois.
Over 1,000 of them have filed claims for insurance, and only a
fraction of those individuals have received offers for payment.
Many of my constituents lost their families, their properties,
and their bank accounts during the Holocaust. Most were
children at the time, and now, years later, they are elderly,
often the sole representatives of their families, and reminders
of our historic and moral imperative to provide the utmost
measure of justice to those who suffered at the hands of the
Nazi regime.
There is no good excuse for the process to have gone on for
this long. Last September, many of us participated in a similar
hearing on the same subject, and I am sad to say that not much
has changed since then. There are serious problems that need to
be resolved and Congress has the responsibility to make sure
that is done so that those who have lived to recall the
Holocaust may also have some measure of dignity provided to
them.
The history of this process and the behavior of these
companies have demonstrated that only with the threat of
financial consequences can results be achieved. Instead of
sitting back and relying on the actions of States to force
companies to operate as good-faith partners in the struggle to
provide justice to Holocaust survivors, Congress should take
the lead. Pressure needs to come from all sides. But now
Congress must take action because the States may now be limited
in their ability to do so as a result of the Garamendi
decision.
The Bush administration should also reevaluate a policy
that relies on a process, the ICHEIC process, that is riddled
with flaws as the only mechanism for resolution of these
issues. Too much time has passed, too many promises have been
broken, and too many survivors have died without receiving what
they deserve.
Mr. Chairman, I want to welcome our witnesses today and I
look forward to hearing their testimony, to a worthwhile
discussion, and, hopefully, to be followed very soon by
concrete action.
Chairman Tom Davis. Thank you very much.
[The prepared statement of Hon. Janice D. Schakowsky
follows:]
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Chairman Tom Davis. Mr. Foley.
Mr. Foley. Thank you, very much, Mr. Chairman, for agreeing
to host this important committee hearing. I am almost
embarrassed to be sitting up here still having this
conversation. If these were September 11 claimants, they would
be storming the doors of this Capitol to get relief.
I had the utmost hope for ICHEIC when we talked about the
foundation of this. Three percent of the claims have been
answered. Three percent. Anyone ever miss their insurance
premium payment by about a day? You get a notice within 3 days
that they are going to cancel all your coverage. They are
miraculous in coming up with records when it comes their way,
when it is about their financial well-being. But when it is
someone else's, you have to go to a litany of places in which
to find proof you held a policy. I am outraged that people even
demand this kind of verification of a policy. Insurance
companies will not be forthcoming, so they are making the
claimants find information they know is unavailable.
The Nazis took fillings out of people's teeth to get the
gold, they stole their clothes, and they killed them. Yet they
are asking their loved ones for proof positive that they may
have had a claim. It is disgusting. It is absolutely
reprehensible.
Enron, when we had that financial disaster in America,
there was not a Member of Congress that did not want to get up
on the floor and speak for hours about the corruption of the
system in America. Where are the voices today on this issue?
Maybe it is only because it is a few Jews that are maybe
waiting to die in dignity, waiting for an answer. Maybe that is
why we are not all outraged.
I am sickened to the core of my being that we have not been
more responsive as a Nation to the claims of these people. We
teach our kids to never forget. We teach them about the
Holocaust so they will not have to hopefully witness the same
atrocity in their own lifetime. Yet they got a taste of it on
September 11. They got a taste of what hatred does and how it
destroys other lives that get in the way of that hateful
feeling inside themselves, these terrorists.
Hitler was a terrorist and he killed millions of Jews, and
we are sitting here having this debate, almost perfunctory,
just to satisfy some people in the audience. I don't want to
just satisfy them here today, I want to satisfy their families.
I want what is rightfully theirs. I want insurance companies to
pay for that claim that is due those claimants, and I want
these lists revealed and I want them revealed soon. I am tired
of waiting.
The Supreme Court did not close the door on Congress. The
Supreme Court's opinion also clearly noted that Congress has
not disapproved of the Executive's policy and that it is
impossible to interpret congressional silence as approval or
disapproval, thereby leaving open the possibility of
congressional action.
Two bills have been introduced in the 108th Congress to
address this issue. Those bills can answer the Supreme Court's
decision and we can empower the States to collect this data.
Again, if this were about tracking terrorists, you can be sure
we would give them the authority and the power to check the
records to make certain
terrorists are not conspiring in States like California and
Florida and Texas.
Mr. Chairman, I'd like to enter into the record the State
of California Attorney General's letter to myself on the
insurance policies.
[The information referred to follows:]
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[GRAPHIC] [TIFF OMITTED] 90748.013
Mr. Foley. Senator Coleman in the Senate, myself, and
Congressman Israel have introduced H.R. 1905. Mr. Waxman, who I
commend for his leadership on this issue, we both have similar
bills, we both have similar destinies, they may be somewhat
different, but they are both bills that will address the
underlying problems we hear of today.
I can assure you of one thing, the time for talk is over.
The time for tears and mourning is long since over. We must, in
this Congress, put an end to this terrible time in our history
once and for all. And I pray that as we continue to debate--and
again, Mr. Davis, I do thank you for keeping the dream of those
who are in the audience alive that someday we may find
legislation that will force these companies to come clean, to
pay the claims, to do what is right, and to do it soon. Thank
you.
Chairman Tom Davis. Thank you.
Mr. Schiff. Thanks for being with us.
Mr. Schiff. Mr. Chairman and ranking member I want to thank
you very much for allowing me to participate in today's hearing
before this committee.
In 1998, the California legislature enacted the Holocaust
Victim Insurance Relief Act in order to facilitate Holocaust-
era claims by California residents. As a California State
senator at the time, I was proud to be involved in this process
as a principal coauthor of the legislation that provided
victims with the right to bring legal actions to recover on
outstanding insurance claims.
Prior to World War II, millions of European Jews purchased
life insurance policies with various European insurance
companies as a form of savings and investment in the future.
Insurance companies, however, have rejected many claims
submitted by Holocaust survivors or heirs of the victims
because the claimants lacked the requisite documentation, such
as death certificates that had been confiscated by the Nazi
regime. Some families have tried for years to obtain promised
benefits, but insurance companies continue to demand that
survivors produce nonexistent documents.
In 1998, the International Commission on Holocaust Era
Insurance Claims was established to address the issue of unpaid
insurance policies and to expedite payouts to Holocaust
victims, but its record has been dismal at best. The commission
has received over 900,000 claims, but has only made a few
thousand settlement offers. In fact, only 35.5 percent of the
pre-war insurance market participate in the commission's work.
Reports also indicate that the commission has resolved only
797 of 77,000 claims against a major Italian insurance company,
and, as of a year ago, offered survivors $38 million in
restitution but ran up a $40 million bill in overhead costs.
Even the economists recently reported on the commission's
insignificant number of settled claims, charging the commission
has a strikingly poor record.
These shortfalls have forced disillusioned claimants to
turn to the States for assistance in obtaining the swift
justice they deserve. To continue to deny these claims would be
a further injustice to these survivors and would only serve to
perpetuate the acts that occurred years ago.
As we all know, the Supreme Court recently visited the
issue, and I was proud to join Mr. Waxman in filing an amicus
brief in support of the California law. The court narrowly
rejected the rights of States like California to require
insurance companies doing business in their State to disclose
information about Holocaust survivor insurance policies. The
court maintained the President's preferences for Holocaust-era
insurance claims to be handled by the commission, an approach
that has wholly failed Holocaust victims. But as Mr. Foley
points out, and I quite agree, the court also pointed out that
Congress has done nothing to express disapproval of the
President's policy, and in light of congressional silence, the
issue of the authorization of preemption is far from clear.
I believe we ought to make it clear that Congress approves
of the State's offering this opportunity to Holocaust
survivors, and am proud to be a cosponsor of both Mr. Waxman's
and Mr. Foley's bills, and have also drafted a bill that
narrowly addresses the court's decision that speaks to the
silence that the court pointed to and explicitly authorizes
States to pass laws much like California's.
I want to thank again the chairman and the ranking member
for all of their work on this issue and for allowing me to
participate in this hearing today.
Chairman Tom Davis. Thank you. Thank you very much.
[The prepared statement of Hon. Adam B. Schiff follows:]
[GRAPHIC] [TIFF OMITTED] 90748.014
Chairman Tom Davis. Mr. Van Hollen.
Mr. Van Hollen. I want to thank you, Mr. Chairman and Mr.
Waxman, for holding this hearing, and both of you and Mr. Foley
for your efforts in this area.
I just want to say at the outset--because I don't want to
take much time, I would like to get to the witnesses'
testimony--that I look forward to all the witnesses' testimony
and look forward to your answers to the question after this
hearing entitled, ``Holocaust Era Insurance Restitution After
AIA v. Garamendi: Where Do We Go From Here?'' I think you hear
a lot of frustration, and I share the frustration expressed by
my colleagues on this panel with the pace of developments.
I am interested in any concrete suggestions that you may
have that can move the process forward and I thank you for
being here. And I thank you, Mr. Chairman, for holding the
hearing.
Chairman Tom Davis. Mr. Bell.
Mr. Bell. Mr. Chairman, I would like to thank you for
calling this hearing on such an important issue facing
thousands still waiting to collect what is owed to them from
Holocaust-era insurance policies. I would also like to commend
the ranking member for his efforts to continue the fight for
justice for survivors and their families.
On June 23 of this year, the U.S. Supreme Court struck down
the California law, as we have heard, the Holocaust Victims
Insurance Relief Act. The decision was rightfully met with
anger and disappointment from Jewish organizations and
activists all across the Nation. The court opinion determined
that California did not have the right to interfere in the
Federal Government's handling of foreign affairs.
In 1998, it became the policy of the U.S. Government that
the International Commission on Holocaust Era Insurance Claims
would serve as the sole remedy for Holocaust-era insurance
policies. Although the commission is charged with establishing
a just process that will expeditiously address the issue of
unpaid insurance policies issued to victims of the Holocaust,
it was revealed in a November 2001 Government Reform Committee
oversight hearing that the Commission's claims approval rate
was barely 1 percent.
In all fairness, the Commission has been given a monumental
task. The international commission has cited the large volume
of claims, difficulty of investigations, and lack of evidence
as reasons for the delayed processing. This evidence is almost
impossible to produce for most survivors or heirs of
concentration camps or others who fled persecution, which leads
many to turn to insurance companies, because only insurance
companies would have that information now.
But it is appalling to think that after more than 4 years
of stonewalling, delays and obstruction, German insurance
companies only released 360,000 names out of a total of 8
million policies that were matched, and many continue to fail
to provide a comprehensive list of policy names. These lists
are critical because over 80 percent of Holocaust survivors and
their heirs recall their families held policies but do not know
the names of companies that issued them.
The United States has played a leading role in the
international effort to right injustices of the Holocaust era,
and much has been accomplished, but there is much more to be
done. The administration's policy of allowing companies to
voluntarily release information about insurance policies has
failed miserably. It is time we act to remedy this.
Mr. Chairman, that is why I believe Congress must act
swiftly to pass H.R. 1210, the Holocaust Victims Insurance
Relief Act, legislation introduced by the ranking member, Mr.
Waxman. This legislation would apply pressure on these
companies to end their tactics of deliberately stonewalling and
ensure that survivors have the necessary information to file
their rightful claims. Thank you, Mr. Chairman.
Chairman Tom Davis. Thank you very much.
The gentleman from Connecticut.
Mr. Shays. Thank you, Mr. Chairman. Mr. Chairman, I would
like to align my words with all those that have been already
spoken and to say to you that I am very grateful you are
holding this hearing, and, Mr. Waxman, for your pursuit of this
as well. I am grateful this is bipartisan.
When I was a Peace Corps volunteer, I developed a favorite
author in Leon Uris. And when you read Mila 18 and Armageddon
and Exodus, you think no one could do the horrible things that
were done, and yet they still continue. In listening to Mr.
Foley, I know his outrage. What we have to be willing to do is
to offend those that don't want to be offended. We have to be
willing to confront those that don't want to be confronted; for
example, our friends in Europe, who seem to be very quick at
criticizing the United States over trying to end the regime of
Saddam Hussein, but don't want to right a wrong that has
existed for over 50 years.
I would particularly like to say that I have a deep
affection for Roman Kent, who is going to be testifying, so
proud he is a constituent of mine, and grateful that he has
held this banner high and long for so many years. And if for no
other reason than to do him right, I would like to see this
happen.
Chairman Tom Davis. Thank you very much.
Mr. Ruppersburger.
Mr. Ruppersberger. Yes, Mr. Chairman, again, thank you for
the hearing and to all of our Members here who are stating
their positions here today.
It is important to keep close checks on the insurance
industry with respect to this issue as it relates to all the
Holocaust victims. It is time, though, to be critical of the
effects of the Supreme Court decision. We need to guarantee to
our constituents that there are no loopholes for the insurance
industry. Our goal is to guarantee that all victims of the
Jewish Holocaust have fair and equal treatment with respect to
their insurance claims.
Thank you.
Chairman Tom Davis. Thank you very much.
I think this concludes our opening statements, and we are
happy to get to our first panel.
[Disruption in hearing room.]
Chairman Tom Davis. Excuse me.
[Disruption in hearing room.]
Chairman Tom Davis. Excuse me. We will move to our first
witness here, Ambassador Randolph Bell, who is the special
envoy for Holocaust issues.
[Disruption in hearing room.]
Chairman Tom Davis. Sir, we are going to ask you to sit
down.
[Disruption in hearing room.]
Chairman Tom Davis. Ambassador Bell, I'm going to have to
have him removed, I'm afraid. But, look, it is the policy of
this committee that all witnesses be sworn before they give
testimony. If you would rise and raise your right hand.
[Witness sworn.]
Chairman Tom Davis. We have a light in front of you. It
will turn orange after 4 minutes and red at the end of 5
minutes. If you can sum up, your entire statement will be in
the record.
Let me just remind the audience that you are guests of the
committee. We are happy to have you here, but we expect you to
obey the rules of the committee. If you do not observe the
proper decorum, we can't have you disrupt the meeting. We will
have to have you escorted out.
[Disruption in hearing room.]
Chairman Tom Davis. I'm afraid it is, sir.
[Disruption in hearing room.]
Chairman Tom Davis. Ambassador Bell, go ahead.
STATEMENT OF AMBASSADOR RANDOLPH M. BELL, SPECIAL ENVOY FOR
HOLOCAUST ISSUES, U.S. DEPARTMENT OF STATE
Ambassador Bell. Thank you, Mr. Chairman. Very quickly if I
may, I want to, before turning to my prepared statement, to
note that today we are observing at the State Department the
near end of my own 31 years working in the Foreign Service,
much of which has been devoted to working on Holocaust issues.
And I mention that only for one purpose, and that is to stress
that our efforts have always been bipartisan I think in both
branches of the government. And that is just by way of saying I
worked on these issues under the previous administration also.
And I would just like to note for the record that the policies
I am going to explain to you today are identical to those which
we pursued under the previous administration.
Mr. Chairman, ladies and gentlemen, I am honored to have
been invited here to testify on a subject which so deeply
concerns us all. It is my understanding that our concentration
today will be on ``next steps'' following the recent Supreme
Court decision.
As you know, I am a diplomat, not a lawyer. Though I work
on legal issues quite a lot, our lawyers would certainly not
want me to address Constitutional issues, and I will refrain
from doing so.
If I may take the liberty, I would like to restate for my
own purposes what I think we are looking at here today, which
is next steps in getting as many Holocaust survivors and heirs
of Holocaust victims as possible paid as quickly and as fully
as possible on the basis of Holocaust-era insurance claims. I
think that sums up what it is we all want to see.
Last year, when I was here, I testified on the history of
our efforts to date, and made some points I would like to
recall this afternoon. Following the 1998 Washington Conference
on Holocaust Assets, the United States expressed its support
for ICHEIC. I noted that at the request of the parties that
signed the ICHEIC memorandum, the United States became formally
an observer to the negotiating process, as we have made clear
again today in your discussions. I explained how we, as
observers, and many of the ICHEIC negotiating parties shared
the widespread frustration of the pace of payments.
Part of the problem was that it took so long to establish a
climate of trust and confidence among the negotiating parties,
and that should come as no surprise, given the history and the
disparate roles of the people around the negotiating table. I
am pleased to note that the ICHEIC process today enjoys the
full support of survivors groups, of major Jewish-American
NGO's, of the Government of Israel, as well as this
administration, like the previous one.
With regard to the specifics of the process for paying
Holocaust survivors and heirs, I will leave these in the able
hands of Chairman Eagleburger, who is scheduled to testify. Let
me, however, cite at least one important achievement of recent
months. On April 30, the ICHEIC parties resolved one of the key
issues in the process by reaching agreement on a name-matching
mechanism devised as a means of assuring that all prospective
Holocaust-era insurance claims can be found and processed. This
mechanism significantly augments the lists that were previously
available for matching names against policies, adding to the
published dissemination of names some 360,000 new entries.
Now, you combine those with the 40,000 names that the
companies and archives had previously provided, and the 150,000
names that were already in the ICHEIC reservoir, and the total
is 550,000. But we should recall, of course, that a name may
match more than one actual insurance policy, since many people
had more than one.
The names available represent the very best efforts of all
the ICHEIC participants, including Yad Vashem, and of the
international community generally to produce an exhaustive list
of potential Jewish German insurance policyholders. The new
360,000-name list draws on many archival sources, including the
1938 German census data, which carefully listed all Jewish-
German citizens, emigration statistics and local archives as
well. All the available names are matched carefully against the
total of more than 8 million names contained in the companies'
internal files for the years 1920 through 1945. And in an
earlier version of this statement there was a typographical
error in that passage in my statement. The years should read
1920 through 1945.
Here I think we reach a crucial point of our inquiry. The
central question we have all been looking at is, ``shouldn't
the companies publish all the 8 million names of its
policyholders?'' A variant of that has been, ``shouldn't we
require that, as a condition for doing business in the United
States, the companies should publish all these names?'' And to
this question I think our answer remains ``no,'' because
requiring such an extensive publication of names will probably
not get any additional claims paid. It would almost certainly
stop the current mechanism for making payments.
The matching mechanism really will help identify claims.
You need only enter the ICHEIC Web site, enter your
grandmother's or your great aunt's name and the process begins.
There is little if anything to be gained by requiring far
broader disclosure of millions of names, the vast majority of
which in no way relate to the Holocaust. Through ICHEIC,
insurance companies are making records available in a way that
companies and governments agree will not violate European
privacy laws, as other procedures would. I defer to my written
statement for other technical points and statistical data on
this matter.
I sum up simply by noting that we have a system which now
is working much better than previously it did. Litigation is
not an alternative. It would provide a very slow process which
might in the end result in no payments at all. We should
perfect the system that we have available. It is the only one
at our disposal. Thank you.
Chairman Tom Davis. Well, thank you very much, Mr.
Ambassador.
[The prepared statement of Ambassador Bell follows:]
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Chairman Tom Davis. Let me start the questioning.
Some of the witnesses today will testify that the
publication of policyholder names is the most important
resource enabling the public to participate in the Holocaust
insurance claims process. My understanding is that while ICHEIC
has done a good job of getting policyholder names from German
insurance companies, cooperation from non-German companies and
governments has not been as great. For example, one witness
will testify that France has persistently refused to release
hundreds of thousands of insurance records that are well over
60 years old. Would you agree we are not getting full
cooperation from non-German companies and other European
countries, such as Austria and France, in developing a complete
list of policyholder names?
Ambassador Bell. Not at this point, Mr. Chairman, I would
not. I would note that--and again you may wish to talk to
Chairman Eagleburger about this--just recently there was a
successful round of negotiations involving precisely French as
well as Swiss companies. You must recall that the Dutch
companies participate directly in the ICHEIC process, as do the
Austrian companies, as does the Italian company Generali.
We could go into the very technical explanation of how a
great many East European policies will be subsumed under the
ICHEIC mechanism--again I defer to Chairman Eagleburger to give
you technical data on that--but, no, it would not be accurate
to characterize the matter as I believe you just did.
Chairman Tom Davis. Are you comfortable with the French
cooperation at this point?
Ambassador Bell. I am comfortable that any company brought
into the ICHEIC system will have to cooperate according to
ICHEIC standards, and those standards involve documentary and
claim settlement procedures which have been agreed to by the
victims' representatives themselves. And if they have
confidence in this matter, and you can turn to some of their
representatives today, then those procedures, I think, merit
our support.
Chairman Tom Davis. What can our government do to
facilitate cooperation from these other companies and
countries? Can we do more from a governmental point of view?
Ambassador Bell. Well, there are general means outside this
as well, which I might mention. I, as the Special Envoy for
Holocaust Issues, along with my colleagues from the Holocaust
Museum, from a great many other walks of life, place major
emphasis on archival openness in all aspects of Holocaust
research, education and the diplomatic activities surrounding
it; historical commissions, etc. So we are already doing a
great deal in that regard. There is a great deal more we have
to do.
Chairman Tom Davis. Let me ask this. Secretary Eagleburger
is going to claim that ICHEIC researchers are unable to gain
access to archives in Hungary and Romania, and that Poland may
possess insurance files for several ICHEIC companies. Can the
State Department play a role to help ICHEIC gain access to
these files; and is there a way to bring Eastern European
companies into the process?
Ambassador Bell. With regard to the first question, I
personally have traveled to Budapest to urge that archival
openness be improved. It emanates from a law passed after the
fall of the Communist regime which sought to protect all files,
particularly secret police files, but a consequence of that has
been to close off to Holocaust research and Holocaust claims
processes that data. We have strongly urged the Hungarian
Government to find a way around that. They assure us that they
may well succeed in doing so.
Romania--last week, when I appeared before the Helsinki
Commission to talk about property restitution issues in
Romania, I made it a matter of public record that there is a
great deal to be accomplished in that country, least of all--
most of all, not least of all, excuse me, the opening of
archives.
So I would agree that we must keep the pressure on for
better archival openness there. Yes, there is more to be done,
and, yes, I agree the State Department and the administration
can and must and is helping.
Chairman Tom Davis. Mr. Waxman.
Mr. Waxman. Thank you, Ambassador Bell, for your testimony.
Just a followup on what you just conclude here in your answers
to Mr. Davis' questions. What can we do to pressure these
countries to open up their archives?
Ambassador Bell. Well, there is a great deal already in
place with regard to the way we conduct Holocaust diplomacy
with them. The United States currently, this year, is chair of
an international organization called the Task Force for
Holocaust Education Remembrance and Research, and the research
part of that touches directly on archives. We just chaired a
meeting of that task force and we urged them----
Mr. Waxman. Well--excuse me.
Ambassador Bell. There is, with regard then to the conduct
of our relations with that country, the embedding of that issue
directly in our bilateral relationship. And we make it clear to
all those countries that this matters. Obviously, there is a
give-and-take in the bilateral relationship, then, which is an
asset.
Mr. Waxman. Why wouldn't it matter if some of the German
and Austrian insurance companies issued policies in those
nations whose archives are not open? Are we taking the position
that we are going to give them legal peace, an end to
liability, for policies they may have issued in these countries
when we have no knowledge whether those policies were ever
paid?
You said in your testimony, and I thought it was very
interesting, if we try to force the listing of the policies,
you think we would get fewer claims paid rather than more
claims paid. I cannot see the reasoning of that. You also said
the ICHEIC process, in effect, is sufficient and is working.
But so few of the claims are actually being paid. So I don't
think we have a very good system, certainly not anything that
has reached the result that we would want.
What can the U.S. Government say to these countries that we
want to open up the archives so that we will get the names of
those who are entitled to payment on those policies?
Ambassador Bell. Well, if I may address some of that very
quickly, again deferring to Chairman Eagleburger. But let me
very broadly note that of the 60,000 claims ICHEIC has
received, I think one needs to recall 48,000 are from the
Soviet Union. Of the claims that ICHEIC is processing, 80
percent are so-called unnamed claims; that is to say, where
someone simply signals that I think a relative of mine may have
had a policy, and there is nothing more than that in
substantiation of that assertion. So when we talk about
percentages and rates of payment, we need to bear that in mind.
The reason, Congressman, that I think that forcing the
publication of all the insurance company holdings from 1920
through 1945 would undercut if not completely end the current
system is the same reason I alluded to last year. It would
directly violate the privacy laws of those countries, and the
companies and the countries have told us they would not be able
to do that and would not do that. And that's just a mechanical
point.
Mr. Waxman. Well, let me ask you a question about that. Has
the State Department ever done a review of these privacy laws
to make certain that the interpretation of the companies is
accurate? And has the State Department ever spoken to these
countries about making exception to their privacy laws for the
purposes of Holocaust-era restitution?
Ambassador Bell. I can comment on that to the extent that
our Foreign Service posts, when confronted with this issue,
have indeed reported back to us concerning privacy laws in
those countries. I do not have those reports with me, and some
of the reporting has also been oral reporting. But the
universal tenor of it is that if indeed you attempted to
mandate the violation of those laws, the answer would be no.
Mr. Waxman. I didn't say ``mandate.'' I would like to know
whether our government ever tried to see whether the insurance
companies' interpretations were valid.
Ambassador Bell. I am not aware of any instance in which,
Congressman, for instance, whether on the basis of your bill
anyone has gone to a European government and asked, would this
be a basis on which you could make exemptions from your privacy
law?
Mr. Waxman. You are talking about my bill, and I am talking
about the responsibility of the U.S. Government. You seem to
say that ICHEIC is a sufficient mechanism, but I don't think
it----
Ambassador Bell. I have haven't said----
Mr. Waxman. Well, let me finish my question. I don't think
it has produced a sufficient result.
Now, one of the reasons you and others have cited that they
haven't gotten good results is because you can't violate these
countries' privacy laws, according to the companies. Now, did
my government, the United States of America, through its
Foreign Service, do something to check whether that was
accurate? Or have we pretty much accepted the statement and
decided that basically what we want to do from a foreign policy
point of view is end all of this ugly chapter and give legal
peace to the insurance companies in Austria and Germany, so
that for foreign policy goals and objectives we can just say
the end is the end, even though many people, obviously, are
going to go without getting justice done for them?
Ambassador Bell. Well, point one, it is not just what the
companies have said, it is what the governments have said.
Point two, I cannot, sitting here today, give you any detail
about what our government has and knows about all these privacy
laws. But I can tell you we looked into them very carefully,
not simply because of this connection but also because they
touch on the doing of business by the United States in a great
many other areas of trade and commerce.
We certainly have a very active dialog with the European
Commission and European governments on this issue, and,
consequently, yes, we know a lot about it.
I believe, if I understood you correctly, sir, you just
implied--and if I am wrong please tell me so--that we would
have sought a means to proclaim that we believed them, so that
as a matter of foreign policy we can proclaim the chapter to be
closed. Let me assure you that neither under the Clinton
administration nor under the Bush administration has anyone
that I know ever taken that perspective in this matter.
The emphasis which we have all held dear--Stuart Eizenstat
and all of us who worked with him during the Clinton years, all
of us working on the issue now--has been, ``How can we get the
greatest number of claims paid as soon as we possibly can while
the victims are still alive.''
Mr. Waxman. Well, that is certainly the objective all of us
share.
Mr. Chairman, I just want to tell the Ambassador, I
understand this is your retirement day.
Ambassador Bell. Yes, sir.
Mr. Waxman. And I want to thank you for your service. It is
unfortunate that you had to come today to testify.
Ambassador Bell. It's all right.
Mr. Waxman. We very much appreciate your being here.
Ambassador Bell. Thank you, Congressman.
Mr. Waxman. Even though I must say, as you will hear from
some of my colleagues, I still have some issues where you and I
seem to disagree.
Ambassador Bell. Thank you, sir.
Chairman Tom Davis. Thank you. Mr. Foley.
Mr. Foley. Just briefly, if I could. You state in your
opening statement that you consider this an important
achievement of recent months, and that is April 30, because
ICHEIC has resolved one of the key issues in the process by
reaching agreement on a name-matching mechanism.
Do you really believe after 5 years that's significant?
Ambassador Bell. Yes, sir, I do, for the reason that it
gets down again simply to the field of numbers. This is a set
theory--I am old enough that they only invented set theory it
seems to me when I was in high school and not earlier in my
arithmetic courses, but I have something of a grasp of it.
It depends on how broadly you define the set of numbers. We
could be talking about the set of numbers which is all the
company archives between 1920 and 1945, the great preponderance
of which have nothing whatever to do with the Holocaust and
Holocaust victims, or we could be talking about the set of
numbers which, after a great deal of careful and hard work on
the part of a lot of people from very differing perspectives,
constructs a mechanism in which they have confidence in which
we will find the nth degree of completeness, 99 percent or
whatever the degree of completeness as to the perspective
claimants. It's that set that all the participants in the
ICHEIC process have been working on, and it is that set which
that matching mechanism very directly addresses. It's not the
wider one.
Mr. Foley. The State Department's position--obviously, we
believe in Congress we have given authority to the States to
regulate insurance for the purposes of insuring business
conduct and other things within those jurisdictions. Based on
the foreign nature of these companies, that is where the rub
lies. How should we proceed, though, as a Congress considering
now with DaimlerChrysler and other foreign corporations now
doing business in the United States? Should we have any
prerogative over----
Ambassador Bell. If you're asking me that as a
Constitutional question, I am obviously not going to give you
profound Constitutional law.
I would note that in the last two administrations, this one
and the one previously, there has been a consensus that State
sanctions and sanctions taken up at the State level frequently
undercut the policies which administrations are pursuing, and
this has arisen in areas as divergent as human rights and the
conduct of various kinds of commerce as well as in this
instance. I think there is a common thread there. In the ICHEIC
process the State insurance commissioners participated directly
and noted themselves that they accepted the obligation not to
undercut the results of this process, and that's a matter of
record.
I believe the chairman can address that issue, too. He has
personal experience with it. It follows from the same consensus
and precept.
Chairman Tom Davis. Mr. Van Hollen.
Mr. Van Hollen. I have no questions.
Chairman Tom Davis. Mr. Ruppersberger.
Mr. Ruppersberger. No questions.
Chairman Tom Davis. Ms. Schakowsky.
Ms. Schakowsky. When the State Department's analysis of the
foreign relations authorization bill was submitted by the State
Department to the Senate, I was really surprised to see that
Section 802 of the bill would repeal a semiannual report
required by Congress concerning the German Foundation and the
requirement in the U.S.-German executive agreement that German
insurance companies process claims by ICHEIC guidelines. I was
very disturbed to see this recommendation, because I had worked
with Mr. Waxman to get that reporting requirement passed, and
I'm not pleased that it was struck from the bill.
But I was more shocked, however, to see that one of the
justifications for this decision the State Department gave in
its section-by-section analysis was that the administration
does not have the authority to require ICHEIC or the claims
conference to supply data needed for the report; and what I'm
asking is, if you're saying that this administration, which has
gone to court to defend the voluntary nature of the ICHEIC
system, does not have the ability to determine whether the
companies are actually complying.
Ambassador Bell. Well, Congresswoman, my office actually
endeavors to provide that report. We are drafting at this
juncture the next edition of it because, while that requirement
exists we will do our utmost to comply with it.
Let us recall that ICHEIC is, indeed, an independent
commission, and that is by design, and the American
nongovernmental organizations representing victim interests
wanted it to be that way as did all the other participants. And
as long as it is that way, an independent commission, not an
arm of the U.S. Government, it will be the case that we cannot
``de jure'' require that all the records and internal files of
that institution be turned over to us any more than we can
require that the Conference on Jewish Material Claims hand over
to us its documentation.
What we must do and can do is remain as informed as we
possibly can, and we must also be in touch with all of the
participants continually to determine what their level of
confidence and/or dissatisfaction is. And on the basis of that
latter endeavor, we remain, as we were over the last few years,
convinced that this is the only available course. But it is
incumbent on us, the U.S. Government, to enforce the greatest
degree of efficiency and the greatest degree of speed in this
process as possibly we can.
Ms. Schakowsky. You know, your statement says that the
ICHEIC process, the one that is in your testimony, ``enjoys the
full support of survivors' groups and major Jewish-American
NGO's.''
Ambassador Bell. Those who participated in the
negotiations, yes, ma'am.
Ms. Schakowsky. When the Garamendi case was being
considered at the Supreme Court, two survivor applicant
organizations, the Simon Wiesenthal Center and the B'eth Settak
Legal Aid Service, gave scathing assessments of ICHEIC
failures.
Ambassador Bell. I'm sure they did. I didn't say ``all.''
The adjective ``all'' is not in the sentence. I said that it
enjoys the confidence of survivor organizations.
Ms. Schakowsky. I wanted to be clear, because I think the
statement was meant to show that there is a broad consensus
that everybody agrees. I think it's important to note.
Beyond all that, when you look at the actual outcomes, the
actual results--you know, we may talk about faith in a process
and everybody agrees and we are doing all we can, bottom line
is so few of the survivors are getting the money. What I want
to hear is a sense of urgency, and maybe you do feel that, but
I want to know what we are actually going to do other than say,
``you know, we have done all we can, this is the process,
everybody is on-line.'' In the meantime, people are dying every
single day, and those of us who have been to these hearings one
after another are just feeling the frustration of ``deja vu''
all over again. As Representative Foley said, you know, we're
not talking about September 11, 2001. We're talking about 50
plus years.
I'm venting here, you know, but how do we move from these
hearings, from this process, to checks in the hands of the
people that need them?
Ambassador Bell. Point one--if I could just go back to
parts of what you addressed, ma'am--I did not wish in my
statement or otherwise to imply that there's universality and
support among every survivor organization. I would note,
though, if you look at the major Jewish-American organizations
which have expressed strong support for ICHEIC, including the
American Jewish Committee--you can talk to representatives at
the Conference on Jewish Material Claims, which is a
participant, World Jewish Congress and others--major
organizations have expressed support for this. The survivors'
organizations directly involved in the process can speak for
themselves, but there was certainly more than one.
With regard to what specifically needs to and can be done,
I attempted to state as clearly as I could the precept that we
have to take what history has now given us as the means, it
would appear to all who look at this, the sole means of getting
payments out during people's lifetimes and not just perfect it
but truly invest in it the energy and the resources required to
make it pay.
I believe we are in a very different circumstance this year
than when I sat before many of you last year. I would like all
of us to listen to the statistical and other information ICHEIC
representatives themselves will provide and test that thesis.
But to the extent that there is unexploited opportunity, all of
us are committed to doing that. All of us have the same sense
of urgency that you do.
If I could just say, it's just a practical matter; if you
take this away, you're going to go back to the courts. That's
all you are going to be able to do. And as a matter, I think,
of just ordinary legal analysis or political legal analysis, I
would observe litigation benefits as the few rather than as the
many. For those who can afford lawyers, it takes years; it may
never succeed. We simply want to get the very best deal we can
out of the non-litigious approach which both the Clinton and
Bush administrations have espoused.
Ms. Ros-Lehtinen [presiding]. Thank you very much, and we
appreciate your testimony here today and--oh, Mr. Shays.
Mr. Shays. Thank you. We will see how long it takes.
I want to know what European country has been the most
cooperative and what European country has been the least
cooperative.
Ambassador Bell. On what aspect?
Mr. Shays. I would like to know what European country has
been the most cooperative in trying to help us solve this
problem and what European country has been the least
cooperative.
Ambassador Bell. You're talking about those who are
directly engaged in the ICHEIC process or beyond the ICHEIC
process or what?
Mr. Shays. Beyond the ICHEIC process. Bottom line for me,
you have countries that have the ability to tell their
companies to solve this problem, which is simply to help
disseminate information that would enable people to know if, in
fact, they are covered or their loved ones were covered. What
countries have been the most willing and the most eager to
solve this problem so it goes away and what country has been
the most reluctant and most stubborn and the most
uncooperative? It's not a hard question.
Ambassador Bell. The one thing that makes it difficult,
sir, and that is, as an American and I dare say even you as an
American legislator, would be unable to tell us today what
legal hold we have on American companies in every instance.
Mr. Shays. That's not even the point.
Ambassador Bell. You just said they have the ability to
make them comply.
Mr. Shays. They have the ability to encourage, to use the
bully pulpit. I mean, there are vibrations you get from people
who, when you sit down and talk with them, they say, ``this
person wants me to solve the problem.''
Ambassador Bell. I can give you then the examples of the
countries that have decided to negotiate; and those countries
where governments directly were involved are, of course,
Germany and Austria, where we ended up with an agreement with a
$25 million carve-out to settle insurance claims. Certainly we
had the good offices of the Dutch government when it came to
folding the Dutch insurers into the process. Now that we have
the French companies engaged, the French government has taken a
positive approach, as it did to other Holocaust negotiations in
which we engaged.
The other side of your question is where have there been
instances where governments wouldn't engage themselves. One
was, of course, Switzerland where the government did not become
engaged.
Mr. Shays. And where they had an individual who stepped
forward saying records are being destroyed and he's being
ostracized.
Ambassador Bell. The positive stories are those where the
governments have become directly engaged in negotiations, and
the ones where governments have not chosen to become directly
engaged are the other side of the ledger.
Mr. Shays. And the last question, we're talking about not
large awards, correct?
Ambassador Bell. There are minima, my Latin teacher would
have said, on the payments, which are, if I remember correctly,
$4,000 for a Holocaust victim, $3,000 for another claimant.
Those are minimum payments; there's no maximum. The claims,
through the agreed adjudication process----
Mr. Shays. What have the average awards been?
Ambassador Bell. I defer to Chairman Eagleburger on that.
He can give you fresh data.
My knowledge of it is that you can find an average along
the level of about $1,200 at this juncture, but that's because
the process has taken into account even all the little marriage
dowry policies, the really small ones that people even under
the relaxed standards of proof have put forward. So that's
brought the average down.
Mr. Shays. Is it your sense that the companies think in the
end they are going to have to pay out a fortune or are they
fighting this for other reasons?
Ambassador Bell. My honest opinion, sir, is there are these
amounts that have been devised for the settlement of claims;
and they are fully at peace with all of those amounts being
exhausted, including up through the humanitarian fund which
ultimately would be devoted to insurance purposes. And the
total for the claims process under ICHEIC is $217.5 million.
Mr. Shays. I know we don't have the ability to make anybody
do anything, but we do have the ability to push the envelope
and we do have the ability to offend people and risk offending
them, and I just hope that we are pushing real hard.
Ambassador Bell. Of course.
Mr. Shays. Thank you.
Ms. Ros-Lehtinen. Thank you.
I'd like to note that anyone who has further questions
would be advised to send them in writing, and I hope that you
could respond as quickly as possible.
Ambassador Bell. As rapidly and quickly as I can.
Ms. Ros-Lehtinen. Thank you, Ambassador.
We now move to our second panel of witnesses.
Our second panel includes the Honorable Lawrence
Eagleburger, the former Secretary of State, who is the chairman
of the International Commission on Holocaust Era Insurance
Claims.
Next, we will hear from Gregory Serio, Superintendent of
the New York State Insurance Department. Mr. Serio also serves
as the chairman of the International Holocaust Commission Task
Force of the National Association of Insurance Commissioners.
After Mr. Serio, we have Gideon Taylor, who is the
executive vice-president of the Conference of Jewish Material
Claims Against Germany.
Rounding out this panel, Mr. Roman Kent, who is a Holocaust
survivor and serves as chairman of the American Gathering of
Holocaust Survivors.
We thank all of you for being here today, and once we get
settled we will recognize the Honorable Secretary of State,
Lawrence Eagleburger.
As you know, gentlemen, it is the policy of this committee
that all witnesses be sworn in before they testify. Please rise
and raise your right hands.
[Witnesses sworn.]
Ms. Ros-Lehtinen. In order to allow more time for questions
and discussions, please limit your testimony to 5 minutes. All
written statements will be made a part of the record. Thank you
very much.
Secretary Eagleburger.
STATEMENTS OF LAWRENCE S. EAGLEBURGER, CHAIRMAN, INTERNATIONAL
COMMISSION ON HOLOCAUST ERA INSURANCE CLAIMS; GREGORY V. SERIO,
SUPERINTENDENT, NEW YORK STATE INSURANCE DEPARTMENT, CHAIRMAN,
INTERNATIONAL HOLOCAUST COMMISSION TASK FORCE OF THE NATIONAL
ASSOCIATION OF INSURANCE COMMISSIONERS; GIDEON TAYLOR,
EXECUTIVE VICE-PRESIDENT, CONFERENCE OF JEWISH MATERIAL CLAIMS
AGAINST GERMANY; AND ROMAN KENT, CHAIRMAN, AMERICAN GATHERING
OF HOLOCAUST SURVIVORS
Mr. Eagleburger. It is the normal practice, I know, to say
when you testify like this how pleased you are to appear before
a committee. I never did that when I was in government because
I didn't feel it was wise to lie to a committee when I started
out. So I hope you will understand if I don't do it now.
I thought what I would do is, I will try to do this as
briefly as I can, and I will try to do it in 5 minutes. And do
I assume we're going to go through the whole list before we go
to the questions?
As chairman of the International Commission on Holocaust
Era Insurance Claims, I have been entrusted to help establish
and run an organization capable of resolving unpaid Holocaust
era insurance claims. This attempt to bring a measure of
justice to Holocaust victims decades after the events--on the
basis of incomplete and nonexistent records and in the face of
hostility and resistance--has no precedent. I undertook this
job because I believe profoundly in the mission of this
organization, to help those who have for so long been denied
recourse to address their claims and who have for much too long
been denied justice.
What I would do, Madam Chairman, is try very briefly to
address the questions posed by a letter that was written to me
by the committee chairman, that is, the status of ICHEIC
administration of claims, progress there on the number of
claims processed, the status of ICHEIC success in acquiring
lists of policyholders from participating insurance companies,
the extent to which insurance companies have cooperated with
ICHEIC, and benefits of using the ICHEIC process to administer
the claims.
I'm not going to spend any time on our history and things
of that sort. We can go into those in the questions and so
forth.
In brief, with regard to the benefits of using the ICHEIC
process to administer claims, let me try to make these points
very quickly.
First of all, in using ICHEIC, it is of no cost to the
claimants. Unlike litigation, there's no cost--there are no
lawyers and there's no proceeds of policy payments. There's
nothing paid to the lawyers.
There is an independent appeals process for most ICHEIC
entities. And where that is not possible, and there are a few
cases, there is a secondary review where there's not an
independent appeal process. And I will explain that more as we
go into the discussion.
There are very relaxed standards of proof. They
substantially reduce the amount and quality of the evidence
required to support a claim. And claims can be submitted that
do not name a particular insurance company. ICHEIC companies
will check and in a separate system, ICHEIC may provide
humanitarian payments. There's an opportunity for where we
cannot identify a company at the end of the day.
Finally, archival research projects used to provide ICHEIC
claimants with additional evidence to support their claim are
very much a part of the ICHEIC process. An effort to pair
ICHEIC claims with additional supporting documentation for
submission to the ICHEIC member companies and organizations,
that is the matching process, also is a part of the ICHEIC
system.
Second question, the extent to which insurance companies
have cooperated: Generally speaking, they have become much more
cooperative than was the case in the early days. We still have
contentious issues and there are contentious times with each of
the companies and with all member groups as we're negotiating
settlement agreements. But, nevertheless, we focus very much
more on getting claims processed as quickly, effectively and
fairly as possible. The difficult times in the past are, to a
great degree now, behind us. We have learned through sometimes
difficult negotiations how best to gain cooperation as
necessary from all parties to keep the process moving forward
to completion.
Now as to the status of claims administration and progress
on the number of claims processed and so forth, some progress
has been made since we last met. But the number of claims
processed and decided is nowhere near where we need to be,
given the age and the need of the claimant population. We have
worked hard over the past year to revise the system of claims
administration so that I can now promise you that we have
turned the corner and in the coming year we will see
significant improvement in the number of claims decided. As of
now, we have received and we have heard any number of
statistics today so far. Let me try to give you ours, and I
think they are correct.
ICHEIC has received 61,336 claims which fall within our
jurisdiction. And I'll try to explain the jurisdiction if it is
necessary, but we have received 61,336 claims. Total offers
made using ICHEIC valuation guidelines is 3,268, for a total
value of $46,950,000. Let me repeat those statistics: 61,336
claims. Offers made through using the ICHEIC guidelines, 3,268,
for a total of $46,950,000.
I cannot tell you exactly how many of those offers have
been accepted. There is no way at this point to tell you that
because there is such a lag time between the time of the offer
and the time when we will be told the offer has been accepted.
The reason for this being that, from the time the offer is made
until the time it is received by the claimant--and in some
cases there will be an appeal so that by the time we know that
the offer has been accepted--there is often a fairly
substantial lag time. And at this stage I cannot tell you
precisely how many have been done.
Ms. Ros-Lehtinen. Mr. Secretary, I apologize, but we are
sticking to our 5 minute rule, so if you could wrap it up.
Mr. Eagleburger. May I have 1 more minute?
Ms. Ros-Lehtinen. Yes, sir.
Mr. Eagleburger. And it is the minute you will love the
least because I will comment briefly on why I think--and I know
this will not be agreed upon by anybody up there--but why I
think the two bills before you, though I understand the
purposes for them are clearly to help the survivors, I think
that they in fact will work in precisely the opposite
direction. Because the difference between those bills and the
ICHEIC approach is, we have tried to approach it from the
bottom up, that is, to identify where the Jewish Holocaust
victims are and to work in that direction, where these bills
will simply produce--I won't say millions of names--names with
no identification as to whether they are Jewish Holocaust
victims or not. And I simply cannot understand in that process
how you will then identify Jewish Holocaust victims from that
process without some system that you will have to impose with
checks to see whether the companies who have provided these
names ``in toto'' and then begin to figure out which ones are
Jewish and which ones are not.
And I could go on, but, obviously, since I don't have time,
I will stop there except to say to you, much as I understand
the purpose of these bills, and they may have been important at
some earlier time, I do not now understand how they solve the
problem. All they do is produce some millions of names without
any identification as to whether they are Jewish Holocaust
victims or not. I don't know what kind of policing system you
have thereafter and where in fact
the claimant goes to make his claim and then how you force the
company to pay the claim if they deny it.
And I'll end at that, Madam Chair.
Ms. Ros-Lehtinen. Thank you so much, Mr. Secretary.
[The prepared statement of Mr. Eagleburger follows:]
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Ms. Ros-Lehtinen. Mr. Gregory Serio, superintendent of the
New York State Insurance Department.
Mr. Serio. Good afternoon, Madam Chairman, Mr. Waxman and
members of the committee. My name is Greg Serio, the
Superintendent of Insurance for the State of New York and Chair
of the National Association of Insurance Commissioners'
International Holocaust Commission Task Force.
I come before you today not just as a representative of my
fellow commissioners who have taken the issue of settling
Holocaust era insurance claims as a most important and time-
sensitive priority, but also as a successor to the visionary
Glenn Pomeroy and Neil Levin who, as insurance regulators in
the late 1990's, recognized the injustice of justice delayed
and did something about it.
The matter of Holocaust survivors and their heirs being
ignored or worse goes beyond party lines, religious lines and
geographic lines as an issue that should be and is a national
priority, aided much by the cornerstones laid by Commissioners
Levin and Pomeroy. In fact, if we look back to the early
working groups and the task forces of the NAIC to the formation
of ICHEIC, the six criteria spelled out in the initial
memorandum of understanding provides the basis for review of
the work of ICHEIC now several years later.
The initiative culminating in the creation of ICHEIC and
the various international agreements framing the Holocaust
claims process had as its objectives: establishing the process
to investigate claims, consulting with European government
officials and insurance industry representatives, establishing
an international commission to manage a claims process,
establishing a just mechanism for compensation for the
restitution of claims, exempting from State regulatory action
those insurers who participate in the process, and establishing
a fund to provide humanitarian relief.
To measure progress against these targeted objectives it is
indisputable that much has been accomplished already. The point
of analysis then should be to evaluate how well each has been
achieved and whether our mutual constituencies, the Holocaust
survivors and their heirs worldwide, how well they have been
served.
One thing is certain, though, regardless of the outcome of
this analysis: the foundation, structure and essential working
elements of the claims restitution program is sound, and any
effort to reinvent the program or process could well lead to a
further delay in our ultimate and just cause which is
compensating the Holocaust victims and returning to them what
is rightly theirs.
There's no question that for various reasons the ICHEIC
mechanism stumbled out of the gate in the early going. The
enormity of the task, the uniqueness of the construct, the
unknown dimension of the challenges, and other internal and
external forces at work all contributed to some rough going
and, in turn, some well-deserved criticism directed at ICHEIC.
To belabor these points, however, would be to distract from the
improvements made in the internal staff structure, the addition
of significant outside resources, the resolution of certain
outstanding negotiations to where ICHEIC has agreements with
all the companies, and, perhaps for the first time, the
appreciation for the reality that evidence of insurance
policies and other assets are quite literally tucked away in
virtually every nook and cranny in Western and Eastern Europe
and that the claims process from investigation to adjudication
has to be built to reflect that reality.
Many of the improvements have come at the behest of the
five insurance commissioners from New York, Pennsylvania,
California, Illinois, and Florida who sit as members of ICHEIC,
joined with the two dozen other commissioners from Washington
State, Texas and other States where there are Holocaust
survivors. Insurance commissioners are on the front lines in
managing the claims and expectations of the Holocaust survivors
and their families and so have a significant stake in making
certain that the structures and processes deliver the only
acceptable and prudent deliverable, that being justice. We use
these original objectives as our touchstones and concrete
results as the benchmarks of the effectiveness of ICHEIC. We
also have helped to apply our resources from the State level to
assist ICHEIC claims operations which, through the redeployment
of personnel items from administrative and executive positions
to claims processing jobs in Europe, through the retention of
other outside advisors to direct the coordination of claims
investigations here and abroad, and through the commitment of
resources from the States of California, New York, Washington
and others, ICHEIC is in a vastly improved position at this
time. The progress that we believe ICHEIC is making to date,
together with faster attention to new issues that arise, will
be the focus of greater oversight by the NAIC and the
commissioners that serve on the Holocaust task force.
Since I became chairman of the task force in January of
this year, I and my colleagues have worked to forge a more
meaningful review of ICHEIC activity, including leveraging
technology and the offices of the 50 State insurance
commissioners to expedite the sharing of information to
claimants and to ease their way through the claims process. The
Commissioners, Commissioners Koken, Kridler, Garamendi,
Gallagher, and others, myself included, are asking the tough
questions in pressing for better action sooner and offering the
States as conduits to the claimant community.
Given the passage of time and delay that has been realized,
maintaining strict focus on the claim settlement process and
the unearthing of information from files long forgotten or
previously undiscovered are paramount. Well-intentioned actions
that are borne of care, concern and frustration may not be best
suited if they give any sense that we are rethinking our
approach. If any action is to be taken by the Congress, it
should be directed at assisting these activities and proving
the track we are on, rather than attempting to create a
parallel track. Mr. Waxman in his opening comments may have
appropriately established the scope. With respect to possible
remedies, regulatory, administrative and diplomatic avenues
should be considered along with any legislative action that may
be contemplated. I thank the committee for its time and
attention.
Ms. Ros-Lehtinen. Thank you very much. Thank you for your
comments.
[The prepared statement of Mr. Serio follows:]
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Ms. Ros-Lehtinen. We will hear from Mr. Gideon Taylor, the
executive vice president of the Conference of Jewish Material
Claims Against Germany.
Thank you, Mr. Taylor.
Mr. Taylor. Thank you for giving me this opportunity to
testify before you today. The holding of this hearing clearly
reflects your commitment to the pursuit of justice for
Holocaust survivors and their heirs, which has long been an
important value held by the U.S. Government and by so many of
you individually. We understand the frustration felt by so many
members of the committee. All of us involved in this tortuous
process feel the same frustration.
Let me open by acknowledging the tremendous efforts that
Lawrence Eagleburger, as chairman of ICHEIC, has made on behalf
of claimants and Holocaust survivors. His dedication and
commitment have, despite the huge challenges, frustrations and
difficulties, brought great progress on an issue that has for
over 50 years seen only obfuscation and denial. The question is
not whether ICHEIC is perfect; the question is whether the
alternatives can or would have brought faster or better relief.
First, let me comment on the focus of ICHEIC.
The ICHEIC has directed most of its efforts in three main
areas: Notification of the ICHEIC to claimants and informing
potential claimants that they may have a claim through the
publication of lists. ICHEIC launched an extensive media
campaign in February 2000, and with the recent incorporation of
additional names, ICHEIC has again placed advertisements
worldwide to ensure that potential applicants are aware of the
process.
Assisting claimants in achieving a positive resolution of
their claims by establishing relaxed standards of proof and a
fair evaluation system, conducting research to assist claimants
by finding proof of their claims in governmental archives and
establishing procedures to assist in the identification of
positive claims through effective matching techniques.
ICHEIC has spent significant funds on conducting research
in governmental archives. In this regard, the matching of names
is, we believe, critical to identifying valid claimants. The
matching system must take into account all relevant factors to
be comprehensive, and variations and inaccuracies of names
should not disqualify a claim. For example, an individual with
the name of Schwartz may seek to prove ownership of a policy.
The name of Schwartz may have significant spelling differences.
How these claims are matched and identified will, we believe,
have a significant impact on the number of claims that can be
paid. Verification of those decisions of the companies was
instituted to ensure that the claimants have trust in the
system. It comprises three components: ICHEIC internally
monitors the responses of the companies, independent audits
into processes of the companies are conducted and an
independent appeals system has been established.
In addition, monitoring: ICHEIC recently established a
policy of reviewing all company decisions. We believe this is
vital. While we applaud this development, we believe it is
important that ICHEIC now goes back and ensures that past
decisions of companies also be reviewed. Cooperation from the
companies will be essential in this regard. Audit: The first
stage audit looked at systems of the companies. The second
stage of the audit will, however, be critical. It will consist
of a sample of the claims processed by each company and will
verify whether the company is complying with ICHEIC rules.
Appeals: The number of appeals has not been large. However, we
believe the appeals system will enhance the process.
I would also like to mention some of the problems
encountered to date. Despite the best of our efforts, there
have been significant problems in the processing of claims. The
main problems are consequences of delays in the processing and
difficulty in establishing and proving claims. First, delays in
company processing: The system established by ICHEIC is
dependent on the company's processing the claims. Many of the
companies did not dedicate sufficiently qualified staff to the
processing. Clearly, it is not adequate that more than 3 years
into the process a large number of the claims have not been
processed by the companies. We believe it is necessary that
companies have adequate staff in order that the process can be
concluded without further delay. Second, delays at
indemnification archives: Many of the claims on policies issued
in Germany must be checked in archives to see if a prior
payment was made. Unfortunately, we have seen claims in which
companies have waited for a long time for an answer, the burden
of which falls upon the claimants. Third, there have been
issues of data protection, and we hope that some kind of
mechanism can be developed and will be developed to overcome
the problems in this regard. Fourth, lack of information:
Claimants generally have no documents and little detailed
knowledge of the assets of their parents. A combination of
limited information on the part of claimants and incomplete
records of the insurance company have led to a situation in
which it is extremely difficult to process successful claims.
Fifth, nonmember companies: Many companies have not joined
ICHEIC because they do little or no business in the United
States. Further action is necessary in this regard.
Unfortunately, many companies that issued policies no longer
exist.
Finally, I would like to make a few comments on the current
situation. At present, over 3,000 claims have received offers,
as you have heard. However, I hope this number will be
increased for the following reasons. Many companies that have
good records still have a significant number of claims to
process, and speeding up that process is clearly a high
priority. Second, the ICHEIC Web site now has a total of over
500,000 policyholder names. It is expected, as a result of
recent agreement with three companies, additional names will be
published; and we hope and believe that this will result in
further successful claims. And, finally, a protocol and system
for matching of names, we believe, will be significant and is a
high priority to finalize and to implement.
Although about $40 million has been offered to claimants,
it is vital to note that agreements with insurance companies
have generated almost half a billion dollars. This will be used
to pay claims on Holocaust era insurance directly from
companies to claimants; to make ICHEIC humanitarian payments to
certain claimants who cannot name an insurance company and
whose claims are not found by the matching process but have
some anecdotal evidence; and for projects such as the provision
of home care, medical assistance and food that will assist
Holocaust victims living in dark conditions in 31 countries
across the world, including here in the United States. Since
insurance was common in Jewish families throughout Europe, it
is highly likely that families of these needy Holocaust victims
probably had insurance, but either the victims do not know the
policies, they could not be found or perhaps the victim is too
frail to even apply. It is about achieving a measure of rough
justice.
Of course, the Holocaust era restitution process is too
little, too late. All Holocaust restitution is too little, too
late. There is still much to do, and we will continue to pursue
the effort on behalf of survivors of the Holocaust.
Ms. Ros-Lehtinen. Thank you. Thank you very much.
[The prepared statement of Mr. Taylor follows:]
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Ms. Ros-Lehtinen. We will round out the panel with Mr.
Roman Kent, who is a Holocaust survivor serving as the chairman
of the American Gathering of Holocaust Survivors.
Mr. Shays. From Stamford, CT.
Mr. Kent. Thank you very much for inviting me to this
hearing; and thank you very much, Chris, for saying a few kind
words about me. I don't know whether I deserve it or not, but I
will take it at face value.
I heard here a lot of statements, and I would like to
mention to you that I am here right now testifying maybe in a
dual capacity, both as a survivor and a member of the
Commission as well as a U.S. taxpayer and citizen, and I think
the views which you will hear from me right now are based on
the above.
The views I am going to express are really based on some of
the things I heard here; and I was disturbed, to put it mildly.
I am here not to disprove what I heard, but I am here rather to
tell you what I do know. Long ago, when I went to school here,
I studied Mark Twain; and he said that there are three kinds of
lies: There is a lie, a big lie and then there are statistics.
Statistics was knowing the totality, is knowing exactly what it
is. It is a big lie.
Now the second thing which I heard also here is--how should
I say it--an attack on ICHEIC, as if ICHEIC would be the
criminal, as if ICHEIC didn't do anything. We did not take
under consideration what ICHEIC did accomplish. And I am not
here only to say what ICHEIC accomplished. God as my witness,
they made a lot of mistakes. But, on the other hand, ICHEIC
undertook something that was never done before. So in making a
judgment, we have to take the good and the bad things.
And let's say what ICHEIC did accomplish. ICHEIC
accomplished things which were completely against the arts for
a normal person to accomplish. They had to deal with the
largest companies in Europe, with the Generalis, with the
Allianz, with the AIA, and they each one have a different kind
of aim. They have different characteristics, they have
different valuation systems. But they had one thing in common:
They really did not want to pay any claims. That was one common
ground for them.
ICHEIC accomplished by taking all these diversified views
and they have created, yes, an imperfect system to evaluate the
views--the insurance to provide a certain system in the chaos
which was created by the companies due to the unpaid policies.
We have to realize that when we are talking about, ``yes,
let's just force the people to get the list,'' it took us
years--years--to get the list from the Allianz, for example.
And the German Foundation was instigated not to give any list,
but we finally achieved it; we have over 500,000 names.
But now let's consider what the names will do by
themselves. The names by themselves would only give us an heir,
if he survived, or if his members of family survived. Very few
of us survived; very few of the family members survived. So the
list would only give us a small percentage of claimants. Thus,
the companies would be left with all the unclaimed money in
their own coffer.
ICHEIC accomplished that we were able to receive, like
Gideon said, about $500 million already. So we have money not
only to pay for the actual heirs, but we also have money to do
what you people are talking about, the humanitarian justice for
the survivors.
Let's say we cannot have in this world--and you in the
Congress know better than anyone else--there is nothing on this
Earth like perfect justice. We can have relative justice, and I
think the relative justice is being accomplished by a system of
voluntary--voluntary, but it was a push, it was a push. And you
people in the Congress, you are part of the U.S. Government,
and you could give the voluntary push to us, to ICHEIC. We
welcome it, I welcome it; I would love to have a push. Because
of this direct push to the aims which we want to accomplish, we
could achieve much, much more. I know, Lady Chairwoman, you
want to cut me, but let me tell you the following issue.
I had a meeting a few years ago with Dr. Breuer, who is the
chairman of the Deutsch Bank, and he told me very simply--it
was a very private meeting, and he told me the following. He
said, ``Mr. Kent, look, we can fight the survivors in the court
for the next 20 years. So what? It will cost, $2, $3, $5
million a year, and we have good lawyers. But what will this
accomplish? If we can achieve a voluntary settlement, we can do
it faster.''
This is what I am asking you; give us the help, we need
your help. And let the Congress issue a statement, a sense of
Congress that they are supporting us. That would be the biggest
help you can give us.
Thank you for giving me the extra minute.
Ms. Ros-Lehtinen. Thank you so much. That is only because
you are Congressman Shays' constituent.
Secretary Eagleburger, you have expressed your opinion
regarding the two bills put forth on this issue. Do you not
believe, however, that the companies could do more with the
threat of sanctions to achieve this purpose?
Mr. Eagleburger. No, I shouldn't have answered both
questions with a no. Yes, the companies--within limits, the
companies could do more. I don't deny that. They have been--I
have to do--answer this in pieces, I think. The companies could
do more. They are still too slow sometimes--many times--and
there's no question they could speed up their process. I can
only say this, however, in the sense that, in comparison with
the way they used to act, they are substantially better, but
they still need to do better than they have. But they are doing
better than they did.
Ms. Ros-Lehtinen. Don't you think pressure and the threat
of sanctions has caused them to be better--or certainly
goodwill?
Mr. Eagleburger. Certainly the experience of the last few
years has caused them to do better, and the threat of sanctions
at an earlier stage at least certainly made them do better.
I will say to you--and this is something that my dear
friend, the constituent from Connecticut--a point he made, and
I would say it again. Part of the reason for the doing better,
believe it or not, I think is because over the course of the
years that we have dealt with these people, the fact that we
have dealt with them for so long has also, I think, convinced
them by dealing with us instead of fighting us all the time has
led to some progress.
So, yes, certainly the threat of sanctions in the earlier
stages and, frankly, my threatening to go public on a number of
occasions with their problems has made a difference, but also
the experience with working with us has helped some. So I think
there is more the companies can do. I also think there is real
room for help from the Congress. I do not think, however, that
to try to sanction them at this stage would help at all. I will
give you an example, however, where we desperately need help.
In the agreement with the German Foundation, many of the
German insurance companies that are now encompassed in our
agreement are in a number of different German states and a
number of the claims have to go through the insurance
administrators in those states. They are organized in many
cases the same way we are in the United States in terms of
regulations being handled by the states. And the ponderousness,
to the degree to which the state regulators and the state
insurance institutions move in handling and checking their
records is wondrous to behold. If there is any way that the
Congress could help us to encourage the state insurance
regulators and regulations in those German states to speed up
the process, it would make a tremendous difference. This is a
classic example in the German case of the fact that the
insurance industry is not controlled from the center and a
number of the German state insurance regulators are less than
enthused with this system that we have developed and some of
the processes are slowed down because of that.
So I have gone off from your question a bit, but it is an
area where we find real trouble and where there could be some
encouragement from the Congress. But to get back to your
question, the companies are doing better than they have in the
past. They still are not totally cooperative and, on occasion,
we have real trouble, but we have been able to find our way
through most of that. I do not think at this stage that
legislated sanctions would help.
Ms. Ros-Lehtinen. Thank you, Mr. Secretary; and just one
more question. How relaxed are the standards for survivors to
make claims? What burden of proof rests on the survivors? What
burdens rests on the companies? Is it equal? Is it more one
than the other?
Mr. Eagleburger. It's hard for me to give you a specific
answer on that and maybe to say my expert on insurance can help
me out here. We have substantially relaxed the standards of
proof, very substantially, to the great discomfort of the
insurance companies. But when it gets into an explanation of
how they are--how much they are relaxed, all I can say is I
don't think there's any insurance company in this country or
any other country, as far as that's concerned, that would feel
comfortable with the relaxed standards, but let me ask him to
be more specific.
Mr. Serio. The ICHEIC process doesn't require much more
than showing the existence of a policy at some point in time. I
think as the way the process has been set up we've tried to
create a combination of both handling specific claims as well
as handling almost an aggregated type of approach to the
humanitarian funds, and I think between those two ways of
approaching it we have been able to provide a relaxed standard
through nothing more than the existence of a policy as well as
the large and more aggregate approach to compensation through
the humanitarian funds.
Mr. Eagleburger. If I could, I have to--I've been corrected
by my brains behind me here. In the earlier problems I
mentioned with the German states, it is their archives we need
access to more than anything else. It's not their insurance
regulators so much as it is access to the state archives; and
our biggest problems there are Bavaria, Hesse and the Rhineland
Palatinate. So if there's any way we can get any assistance
from the Congress or a sense of Congress or something that
suggests that these German states could be more cooperative, it
would be a help.
Ms. Ros-Lehtinen. Thank you, Mr. Secretary.
Mr. Waxman.
Mr. Waxman. Thank you very much.
Secretary Eagleburger, one of the main problems, as I see
it, is that the companies are not publishing a complete list of
the names of the Holocaust era insurance policyholders. Let me
get basic facts straight. How many names of policyholders have
been published by the companies?
Mr. Eagleburger. By the companies? Do we know that at all?
The best--I guess this would be the answer to your
question. We have 520,000 names on our Web site, and those are
names that have come from the companies, but--I am trying to be
careful here because you have specifically mentioned companies,
and what I am trying to be careful about here is whether these
have all come from the companies or whether any of them have
come from our independent research. What I am trying to get
here is the specific answer to his question.
In terms of the sources of policyholder names on ICHEIC's
Web site, the German Insurance Association provided 363,232,
and that includes--do you want to go by company?
Mr. Waxman. I think your answer is, overall, 520,000. My
second question is, how many Holocaust-era insurance policies
did these companies actually have? How big is the universe of
the actual policies that were issued?
Mr. Eagleburger. I can't answer the question other than to
say, so far as we know, given the fact that some of these will
be duplicates of more than one policy to a specific person, as
far as we know, that's the universe we know about.
Mr. Waxman. Well, the charts that I displayed earlier
indicate to me that there are likely to be many names that
haven't been disclosed. In Poland there were 3 million Jews but
11,000 policies listed. Surely there are many more Jewish
families with insurance policies. The only country that seems
to have an adequate collection of names is Germany, where
400,000 names have been listed with a population of 585,000
Jews. So there is a larger universe of insurance policies we
are not getting to, and failure to get those names of the
insured is putting survivors and their heirs in a ``catch-22.''
What can ICHEIC do to increase the number of names that are
being disclosed?
Mr. Eagleburger. Let me give you some of our statistics.
For example, on the German numbers, there were 8 million
policyholder names, which included both Jewish and non-Jewish
names. ICHEIC matched 8 million policyholders names against the
list of German Holocaust victims.
If you want a country where the statistics were elegantly
kept, it is Germany. They listed every single German--Jewish
Holocaust victim. They would not have called them that. They
had an elegantly complete list of the Jews who were victims of
the Holocaust, and we came up--with that matching, we came up
with 360,000 names.
What I am trying to get at here, if we have confidence in
our statistics anywhere, it is on the--that we have 360,000
Jewish Holocaust victims out--that is insured victims in
Germany. And I have to keep coming back and underline that word
insured. There clearly were more German-Jewish victims than
that. But insured victims: 360,000.
Mr. Waxman. Excuse me for interrupting. We both acknowledge
that Germany had better statistics, but I'm sure you would also
agree that we look at Poland.
Mr. Eagleburger. I'm coming to that. I'm coming to that.
Mr. Waxman. Well, I have a problem, because my time is
going to run out.
Mr. Eagleburger. Well, I'm sorry, but I can't answer your
questions other than to answer--if I take too long, I will be
glad to give you all of these figures in writing, if you wish.
Mr. Shays [presiding]. Here is what we're going to do, if
the gentleman will suspend. I am going to give the gentleman
another 5 minutes, because there are not that many of us here,
and that way we can pursue the questions.
Mr. Waxman. I think that's fair, because I don't want to
cutoff the Secretary. So I want him to proceed.
Mr. Eagleburger. All right. Let me see, I have my notes
here on Poland. Just 1 minute. Where is it? No, it's here
somewhere because I just had it. Here it is.
The total market in insurance at the time in Poland, Jewish
and non-Jewish, was 261,000. Of that total of 261,000, 11,225
is the number of Holocaust victims whose policies we have
published.
As my written statement notes, we would look for your
assistance in supplementing our effort with the Polish
Government as well as with the Governments of Hungary and
Romania.
As a comparison point, the total number of Jewish
professionals in Poland in 1929 was 45,000. That's lawyers,
doctors and industrialists. Our assumption is that the total
number of Jewish insured would be somewhere above the 11,225 we
have listed, but certainly not more than the 45,000. Now, that
is not to say that nonprofessional Jews wouldn't insure. It is
to say, however, that on the basis of what we have been able to
establish over the last 4 years, it is highly unlikely that
many of them would.
So I am saying our Polish statistics are by no means
complete and we are trying to get more information, but it is
probable that, at the most, we will find--as we continue the
process, we will find less than, let's say less than 50,000,
and we now have 11,225 names. We are continuing the process of
trying to get more on that.
Mr. Waxman. Mr. Secretary, I appreciate that, but if in
Poland, Hungary, and Romania we don't have the full list----
Mr. Eagleburger. That's right, we don't.
Mr. Waxman [continuing]. Then the people who have relatives
that came from those countries are in a ``catch-22.'' They
can't file a claim, even through ICHEIC, without knowing if
there's a policy.
Mr. Eagleburger. Congressman, you are absolutely correct.
Mr. Waxman. Let me finish.
So then the question is, what can be done to increase the
numbers of names that are being disclosed? One is, what can
ICHEIC do? We have laid out a different proposal.
Mr. Eagleburger. Well, do they have names? Excuse me, go
ahead.
Mr. Waxman. Yeah, I think it would be nice to let me
finish, because then you can answer.
Mr. Eagleburger. Go ahead.
Mr. Waxman. We want to get the names disclosed and to
require it. Then they could go through ICHEIC. I don't see it
as an alternative to ICHEIC. We want to get the names out so
they can go through ICHEIC.
What can you do, what can we do, to get those names if the
companies are refusing to disclose them, especially in light of
the fact that, at the end of this year, there's a deadline, and
those people who can't come in and establish a claim are going
to be out of luck and the funds will not go to those people who
deserve it?
Mr. Eagleburger. First of all, if they have a name, in
other words, they are not simply searching to see if they can
find a name--if they have a name, they can go ahead and file a
claim, even if they do not have a company. That then produces--
forces us to go through our matching process to see what we can
find out. And if it comes into one of our companies, we will go
ahead and try to match the claim, even if it's in Romania or
wherever it is.
This is not a total answer to your question; it is a
beginning. But they can go ahead and file a claim, and we will
see what we can find out. Beyond which, we are continuing to
try to get better access in Hungary and in Poland--in Hungary
and Romania. And it has been difficult, but we have not stopped
our attempts, and we are going through the State Department and
we are going to continue to try to get into them, and in Poland
as well. But he can go ahead and file his claim.
But as Mr. Serio has pointed out to me, one of the problems
you're going to face is that most of the policies that were
issued in Poland, particularly, were by companies that are no
longer in existence. That does not solve any of our problems.
Mr. Waxman. And there is nothing we can do about that. But
those companies that are in existence, I believe, ought to be
required to disclose the names.
As I understand, the matching that you do is based on the
lists of Yad Vashem, which is 3 million of the 6 million Jews
that were killed. We don't have all the names even of those
people who have died in the Holocaust, but we ought to require
those companies that are still around to disclose these names.
Do you disagree with that?
Mr. Eagleburger. No, I don't disagree. The question is, to
come back to my point, if you have people who already have a
name and they want to see if there's anything in our records
they should file a claim. In terms of our being able to get
into the three countries to get more names--in the Polish case
get more names, and in the other two cases to get some names--
we're going to continue to try, and we will, I think, in the
end, succeed. But the point at this stage is, in answer to your
specific question, as of right now, if they have a name, they
should file a claim, and we will run it through our system to
see if we have any match at all.
Mr. Waxman. Thank you, Mr. Chairman. I know the time is up
and we will have a subsequent round.
Mr. Shays. We definitely will. We don't have many
opportunities like this, and there are not many Members, so we
can make sure all our questions are answered.
At this time the Chair will recognize Mr. Foley.
Mr. Foley. Thank you very much.
Mr. Secretary, please understand, I know this is not a paid
job; you are doing this to try to----
Mr. Eagleburger. No, I'm not getting paid.
Mr. Foley. I understand that, and we, hopefully, are not
being argumentative, but it is a sensitive subject.
Mr. Eagleburger. I have learned that, Congressman. I have
really learned that it is a sensitive subject.
Mr. Foley. Well, thank you for serving in this capacity. I
want to make sure everybody understands: I think Mr. Waxman and
I, both of our bills, try to reaffirm a longstanding right that
Congress gave to the States to broadly regulate the insurance
industry. So I don't think we are creating any new body of law
here. We're trying to be consistent with what we see as the
rights of States in order to ensure that those who are doing
business in their States are complying with all other
responsibilities for corporate citizenship. We also don't, in
our bill, H.R. 1905, usurp the process, the goals or the
activities of ICHEIC; I want to underscore that. And there has
been good progress, without question, but it is, in our
opinion, taking a bit too long.
Professor Bazyler included with his testimony some examples
of insurance claims that are still pending in the ICHEIC
process. In one example, a claim is still pending despite the
fact the claim was filed in 2000 and included the name of the
insurance company and the policy numbers. In another example, a
claim was denied based on insufficient documentation, despite
the fact the insurance company identified the policies.
I would just hope, Mr. Secretary, you would followup on
some of those cases supplied by Professor Bazyler and report
back to the committee on how they were resolved.
Mr. Eagleburger. If you or somebody will give me those
cases, I will assure you I will get you an answer within 2
weeks, at least that we are following up, and see what I can
find out. I will be glad to do that.
Mr. Foley. Thank you.
Mr. Eagleburger. In fact, if I may, one of the problems we
have had is, there is lack of understanding. Well, first of
all, we have screwed up. I'm sorry, that's the wrong word. We
have messed up sometimes, there's no question about that. And
in those cases, I would like very much to find out any
information I can. In a number of the cases, however, people
don't understand that companies have disappeared and/or that
it's a policy that was written by a company that is outside our
jurisdiction.
Anyway, my only point is, there's great misunderstanding
all along the line. And when we can find out these cases, I
will be glad--if you can find somebody to give them to us, I
promise you an answer within a very short period of time, even
if the answer is, we are still looking into it.
Mr. Foley. Thank you, Mr. Secretary.
Mr. Serio, you are with the National Association of
Insurance Commissioners, I understand. Can you give me an idea
when you expect, having served on this tribunal, to have all
the valid claims paid to the ones that are now standing, that
are valid? What year do you expect payments to be made? Do you
have a timeframe?
Mr. Serio. I would have to go back and work with the ICHEIC
folks. I will put it this way, and I think this is a position
held by my colleagues, as well as myself.
What we are trying to do is to use our positions as members
of ICHEIC to help change the process so that the process can be
moved as expeditiously as possible. Expediting that, I think,
has been one of the weaknesses of ICHEIC in the past. And I
think the steps that ICHEIC has taken to put more claims people
on the ground with a capable manager in London to investigate
those claims and adjudicate those claims, I think, is a big
step in the right direction. And that is a step that had not
been there previously.
The mechanism has been changed, which is a positive thing,
and I am hoping--and I guess I could concur with what the
Secretary said in terms of, that you will see a lot more action
coming this year now that these steps are in place, rather than
the last couple of years where we were trying to do five
different things at the same time--negotiate settlements, get
the process in place, put people on the ground in Europe, and
to a certain extent, not even knowing where to look at those
points, because suddenly we would find out there was a cadre of
policies in Poland and elsewhere.
But I think now that both the intelligence, in terms of
where the claims might be and, more to the point, the fact that
this isn't just what you might call the ``traditional insurance
industry'' as the only focal point of this process but rather
the ``extinct insurance community,'' those companies that did
not survive, changeovers after the war, did not survive the
years after the war, and where they kind of fell off the radar
screen. I think that is what ICHEIC really needed to get in
place what I think now is in place.
Mr. Foley. So as a regulator you are starting to see the
infrastructure finally following along with the design of the
panel?
Mr. Serio. Yes. And this is overdue, there is no question
about it. But the infrastructure is now there. And the
infrastructure is important in another way, and that's this:
From the State level, in terms of working with the claimants
who will approach the insurance commissioners and say, ``I have
an issue,'' or, ``I have a claim,'' or, ``I think I have a
claim,'' to better expedite claimant information to ICHEIC is
also important.
One of the things we have been doing at the NAIC this year
is to try to expedite claimant information into ICHEIC and to
set up a process of tracking those claims. One of the things
that has been happening is this: There has been a lot of
inefficiency in the process up to this point. Some claimants
call their insurance commissioners, and those are the folks we
know. Some claimants call ICHEIC directly, and those are the
claimants they know. But we haven't really put that information
together. So for the first time we have actually created a
spread sheet, and we are working on it at the ICHEIC to
coordinate claims with the ICHEIC so that we are not counting
people three times and then missing counting people on the
other hand. I think that has been a crucial part of this.
One reason the insurance commissioners were a part of this
is not because it was just created with the impetus of
Commissioner Pomeroy and Superintendent Levin and the others,
but because we, on the ground level, really have some of the
best intelligence from the bottom up, as the Secretary
described. And I think by assisting the process from the bottom
up, as well as keeping the pressure from the top down, which I
think the committee has told us before is a process that has
been going on all along--and, in fact, as the first Deputy
Superintendent in New York, serving under Superintendent Levin,
I sat through many very contentious sessions with the insurance
community where they were bristling at these notions, but where
they did come around to understanding that their cooperation in
ICHEIC was an important matter for us and, frankly, an
important matter for them.
Mr. Eagleburger. By the way, I should make the point that
Superintendent Levin, who had moved on to another job, was
killed in the September 11 event in New York. It was a great
loss.
Mr. Kent. If I may add just a couple of points here, which
the Secretary mentioned, that some of the problem with the
slowness of the claim is also due--particularly in the German
case, is that they want to check if the claim was not paid
already under what they call BEG payments, and they have a very
slow process doing it. So they are delaying us in handling the
claim.
And the second thing which--I want to give credit to the
State regulators, that they were indeed extremely helpful in
two areas. No. 1, during the negotiation they were helping us
in the pressure point to accomplish certain things from the
insurance companies, and right now, also, they are helping in
developing the system which never existed before to do
something more expeditiously.
Mr. Foley. Mr. Serio, have they ever ventured an estimate
of what the present-day value of these aggregate policies are
worth, with interest earnings and all; what we may have roughly
out on the table as far as when companies took in premiums,
what they would be worth in terms of present value?
Mr. Eagleburger. Not as far as I know.
Mr. Serio. I don't think we've done a present value
calculation of those policies.
Mr. Foley. Do we have a value of the day, say, the war? Is
there any kind of number out there?
Mr. Serio. I'm not sure. I suppose some of the policies
were relatively small, some of the policies were large,
depending upon the purchaser.
Mr. Eagleburger. I don't know.
Mr. Serio. I'm sure that will come out as the portrait is
expanded in terms of the claimant community that we have and in
terms of the types of policies that we have. We haven't done
that. And, frankly, I think one of the things we've been trying
to do, and I guess from the Commissioners' perspective is, we
have been trying to assist, if not push at the appropriate
times, the process issue. And I think some of those facts you
are asking for, Congressman, will come out as that process
starts to yield some benefit.
Mr. Foley. Thank you.
Thank you, Mr. Chairman.
Mr. Shays. I have some questions I would like to ask.
It seems to me that if you could take in premiums and not
pay out benefits, you'd do pretty well, and ultimately, that's
what a number of insurance companies did. And it really wasn't
brought to my attention in a such a graphic way until the
gentleman in a Swiss bank or insurance company, I'm not sure
which, talked about records being destroyed. To me, it was like
a wake-up call and a real kind of indication that we were not
getting cooperation; and some attempts to just ignore this
problem and pocket the money had gone on for years and years
and years. Then, when the individual made it public, he was
condemned as somehow being anti-Swiss. Frankly, that speaks
volumes for the attitude among many Swiss people, which is
regrettable.
My question is a reaction to what Secretary Eagleburger
said when he said, ``Well, what's the point''--and I hope I'm
saying it correctly--``what's the point of printing out such a
vast list?'' With banks, if they have savings accounts and
nobody claims them, they have to print that. And people see it
and they say, my gosh, someone in their family was actually one
of the people named.
So my question, Mr. Kent, and then Mr. Taylor, and we will
go right down the line, what conceivably is wrong, conceptually
wrong with--if you had beneficiaries who weren't paid benefits,
what's wrong with noting those names? Maybe it's not even a
family member, but it's a neighbor who says, I knew that person
and that person, and so on. I don't see the problem. It seems
like a no-brainer. Print the names of all the policyholders and
then go from there. Mr. Kent, what's wrong with that?
Mr. Kent. I have no problem at all with having the list of
names. As a matter of fact, we were fighting for 4 years to get
the list of names.
Mr. Shays. So you have no problem with that?
Mr. Kent. We were fighting to get the list of names for
three reasons. One reason is for the reason which you mention.
The second reason was for the history, because the Germans said
there was no insurance meant for the Jews. They had hardly any
insurance. For the history it was important to show that, yes,
there were people that had hundreds of thousands of insurances.
And the third thing is also that, to me, it's like you
mentioned, the insurance companies created the most cynical
business structure. The insurance company actually is based on
trust, not for today, but for tomorrow, for 10 years from now,
for 20 years from now. Suddenly, they already had 50 years of
not paying the policyholder. They considered it their own
money. They didn't want to pay it anymore.
Mr. Shays. So your bottom line is, you have no problem with
the list being printed?
Mr. Kent. I have no problem. But I will say to you that
from the experience I have seen, even if I print a lot more
names, and I want to print as many as I can, 85 percent of the
Jews who were killed, so that the people will not be able to
claim the insurance because they are no more alive and their
family is no more alive. So unless we will force the companies
to have the total agreement how much we estimate there was in
insurance in force and ask for the money, so there will be
money for humanitarian purposes for others.
Mr. Shays. Very helpful. Thank you very much.
Mr. Taylor. Mr. Chairman, I think it is a no-brainer. I
think it is critical that lists are published; that is, being,
as you have heard, a central piece for the negotiations most
recently with the German Foundation, and the priority of
getting lists has been one that has been pushed by ICHEIC since
the beginning of ICHEIC.
I think the question is simply, what's the best way to get
the most number of names that are going to help the maximum
number of people as quickly as possible without creating an
unwieldy system that's going to include hundreds of thousands
or millions of names of people who weren't Holocaust victims,
for whom policies were already paid, without having a system to
try to handle them? What ICHEIC has tried to do is try to find
ways. They are not finished, and it is clear--you have heard it
from the chairman--to make sure that we have the lists of those
who were victims of the Holocaust as accessible and quickly as
possible, not something that will be dragged out for years to
be accessible and available. And I think the results of 500,000
names being available is progress. It's not the end of it, and
I think in some ways we will never know.
Mr. Shays. The problem with progress is that if there is a
legal, cut deadline, and then people have attempted by legal
peace, by so-called ``searching their archives'' and didn't
make a good-faith effort to do it, but then they bought legal
peace and then they have a claim now that they have reached the
cutoff, then the system has worked against us.
Mr. Taylor. Right. I think the issue is, has ICHEIC
succeeded in getting the largest number of names within the
kind of timeframe that is not going to drag on for years; and I
think ICHEIC has done that. I think it has a very significant
number of the names available. I think there are a couple of
areas where it's clearly lacking, and hopefully, those issues
will be finalized very quickly.
Mr. Shays. I just react to this, and maybe I am way off,
but maybe the fact that we have wanted to get this sooner
rather than later has put us at a disadvantage. Because,
frankly, we're not talking about a lot of money to any of these
individuals anyway. Maybe it won't be the grandchildren, maybe
it will be the great-grandchildren, but it seems to me that by
giving ourselves a deadline, they are using it against us,
frankly.
Mr. Serio. I agree with Mr. Taylor's assessment. It is not
really a question of list versus no list, but what list and
from whom. And I think as both the Secretary has requested and
I think as we have been finding, getting a complete list from
those, that we don't have a current regulatory nexus to,
probably has been the hardest part of this. That is probably
the bigger gap we are dealing with at this point. Again, if
something was fashioned that could go after those folks who
don't fall under the regulatory structure, who would never have
been subject to a California law to begin with, I think that's
really where the focus of our mutual effort has to be at this
point.
Mr. Shays. Mr. Eagleburger.
Mr. Eagleburger. I have a lot of problems.
Mr. Shays. Mr. Eagleburger, could you put your mic down
lower, please?
Mr. Eagleburger. Then I'll hit myself in the nose, but
that's all right.
Mr. Shays. Mr. Eagleburger, you're not going to hit
yourself in the nose.
Mr. Eagleburger. I've done that many times, or shot myself
in the foot, one or the other.
Let me explain, if I may, why I have a different view of
this, and I have it for two reasons. One is, I think it is not
the best way to do what I know we both are trying to do, which
is to solve this question of paying claims to Holocaust
survivors. But let me follow it through for a minute, if I may.
If you demand that these companies publish the lists, and
let us assume they go along with that--which I think you are
going to have a terrible time getting them to do, but let us
assume they go along with it. I have to assume that from that
you are going to be faced with lists of some millions of names;
and so those are all published, and that's going to include a
great many names that have nothing to do with victims of the
Holocaust, and somewhere in there are going to be mixed in
there the names of Holocaust victims. And how you find those is
going to be an extremely difficult problem, but forget that for
a moment.
First of all, as we have found out, you are going to have
to find some mechanism--it is the mechanisms that follow from
this that I want to point out. First of all, how are you going
to know that the companies have provided you with all of their
names? The only way you can be sure of that is, you are going
to have to establish some form of policing system that goes to
look to make sure they did it.
Second, how are you going to know, when someone makes a
claim against that company, that the company gives the right
kind of response to the claimant? You are going to have to have
some form of audit system or some form of policing system to
make sure that when they read the file, they give the right
kind of response to the claimant. That's going to require some
other form of auditing of what they do.
Those are just two small--they are not small, but two
issues that are going to require, one way or another it seems
to me, the establishment of some form of mechanism, some
mechanism to follow through on how the companies deal with
these problems.
And by the way, let me just say, and then I'll stop--that's
all on the assumption that having dealt with some, let's say
2.5 million names, it will be more than that by a long shot,
but having dealt with 2.5 million names, and with all of the
claims that will come in on those 2.5 million names, most of
which I suspect will be specious, how are you going to
establish--what are you going to do with the claims that are
made where there is, in fact, no evidence of any Holocaust
involvement?
Mr. Shays. Before giving the floor back to Mr. Waxman for
another round, since you are talking about policing, on a
November 2001 hearing you testified you would institute a
policing function to ensure that ICHEIC rules and standards are
followed. Can you give us an example of some of the policing
policies you have implemented?
Mr. Eagleburger. I couldn't hear you, sir.
Mr. Shays. Let me say it again. At the committee's November
2001 hearing when you came before us, you testified that you
would institute a policing function to ensure that ICHEIC rules
and standards are followed. Can you give us an example of some
of the policing policies you have implemented?
Mr. Eagleburger. Yes. We have made a number of improvements
in the claims processing. For example, we have put out final
valuation guidelines, which were not at the time you were
talking about. We have now put those out in final form, and as
Mr. Serio indicated, they are substantially less than would be
required in normal circumstances. We have a means of now
reviewing and have reviewed over 2,200 offers and denials where
we had a team that looked at both the offers and the denials.
We have established a new claims team, which is now in London
under the supervision of our new London office director, and it
will be looking at all claims that come in and how they are
handled and at the responses to those claims. We have a system
in place to check company office and denials. We have put out
an extensive claims processing guide, which is now in the hands
of all of the insurance companies, and lists in elegant detail
how they are to handle those claims. And we have established an
improved statistical system, which should make it much easier
for us to answer your kinds of questions from now on. And we
have also--is that enough, or do you want more?
Mr. Shays. That's pretty good. Do you have a few more?
Mr. Eagleburger. Yes. We have established an ICHEIC
quarterly report which goes out to all of the interested
parties in ICHEIC, which gives a list of the things that have
occurred over the course of that quarter, and it lists all of
the information that's come out as a result of those other
changes I have indicated. We have put out a recent Webcast to
promote the new lists that are available.
Mr. Shays. Let me just understand, though. Is all of that
what I call ``policing''--or what you call ``policing,'' is
that, all of that, what I call ``policing?''
Mr. Eagleburger. No, it's not all of it. Most of what I
suggested up here earlier is. Not all of this now. The
quarterly report isn't, no. Things like the valuation
guidelines, reviewing the 2,200 offers and denials, the claims
team, all of that is policing, yes.
Mr. Shays. Let me go to Mr. Waxman. We will give you 10
minutes and we will do a 5 and then a 5.
Mr. Waxman. Thank you, Mr. Chairman.
Mr. Eagleburger. I'm having trouble hearing. I'm getting
old.
Mr. Waxman. I haven't said anything yet.
Mr. Eagleburger. Oh, all right.
Mr. Waxman. That can make it difficult. Mr. Eagleburger, on
this last point, you testified in November 2001 you were going
to have this monitoring committee to police the companies and
conduct an audit to identify deficiencies in the claims
process, and then there was a committee created by ICHEIC,
chaired by Lord Archer, that made its report, with
recommendations, in April 2002, highlighting the need for
strict oversight of the decisions made by the companies. I
understand that this key recommendation was not implemented
until this summer when three people were hired to handle these
responsibilities. Why did it take so long to implement these
key recommendations?
Mr. Eagleburger. Well, in the first place, we haven't sent
Lord Archer out again at all. I have to be even more direct
about it. Archer hasn't gone at all, although I'm going to ask
him to go soon. But principally, and I'm not sure this is an
answer to your question, but what we were doing was looking at
the best means--and some I have just listed to you.
Mr. Waxman. I'm asking about the timing.
Mr. Eagleburger. I understand that, but we were looking for
the best means of establishing the proper kind of policing
system. And I guess the best answer to you is that in that
process it took us more time to establish the kinds of policing
system that satisfied me.
That's about it, isn't it? What?
We started the review of the claims cases and the
training--that's right--and the training of the claims review
team, we started that in January, but it was still some time--
nevertheless, we started in January.
What time did you say that we began?
Mr. Waxman. Summer.
Mr. Eagleburger. No, we started in January. But even so,
it's a length of time from when I said it.
Mr. Waxman. My understanding at the last hearing in 2001
was that the monitoring committee would become a permanent
feature, and I thought that was a good idea. I think it would
go a long way to reassure the claimants and the public that
real changes are taking place to improve the system.
Mr. Serio, would you agree that the monitoring committee
should become a permanent feature of ICHEIC, capable of
overseeing the proper limitation of its recommendations, and
make its reports available to the public?
Mr. Serio. I haven't consulted with my colleagues from the
insurance regulatory community on that. In terms of the five
members on ICHEIC, I think that some permanent feature is
necessary and it would be appropriate.
I think one of the places we have been trying to find or
focusing our work on has been on assisting ICHEIC at getting
the rest of their processes squared away; as the Secretary
indicated, getting the London office up and running, getting
the claims folks trained and working and then bringing
something of a permanent nature behind that I think would be a
perfect one-two, if you would, for that.
Mr. Waxman. Mr. Eagleburger, do you want to comment on
that?
Mr. Eagleburger. Yes, I have changed my mind since that
last hearing to this extent. The monitoring group will continue
to operate, but it was then, and it continues to be, an ad hoc
operation. And, therefore, while I agree it's a useful idea,
it's not, in my mind--and one of the reasons I changed my
mind--is that it is not permanent enough. And that's why I
mentioned earlier here these other systems that we're setting
up as well. And they, it seems to me, will provide a much more
regular review of what's going on. The monitoring group doesn't
oversee operations. What it does do is report on them and lets
me know when things aren't going well. But I want something
that is much more a daily or weekly or monthly report on what's
going on.
So the reason I changed my mind is that I wanted to
institute things that were much more directly involved in
watching what was going on. The monitoring group will continue,
but I wanted to put in there in much more direct control these
other ideas that I have suggested. And the monitoring group
will continue to oversee or, rather, continue to evaluate, but
it will not be in charge.
Mr. Waxman. Mr. Serio, considering the expertise of the
National Association of Insurance Commissioners and the
fundamental role of insurance regulators in enforcement, I'm
interested in the role you think the NAIC should play in
increasing transparency at ICHEIC and increasing oversight of
the way the ICHEIC office in London and the companies handle
claims. Do you have a response to that?
Mr. Serio. Yes, and I think we have actually started that
process. A couple of things that we've done since January--in
fact, since March: No. 1 is that we have not only offered but
we have bestowed upon ICHEIC some State assistance in terms of
direct contact and direct involvement in the London operation.
One of the things that a number of States have done over
the years is set up their own Holocaust claims processing
offices. New York, I think, may have been the first to have set
up its own separate State Holocaust Claims Processing Office.
Superintendent Levin, who I believe was the Banking
Superintendent at the time, and Governor Pataki set that
processing office up. And what we have now done is that we have
now offered the services of the New York HCPO directly to
ICHEIC, and we have the HCPO staff, not one but two people, who
are now regularly interacting with the London staff.
Mr. Waxman. Thank you very much, Mr. Serio. I appreciate
your response. You think you are playing an appropriate role in
the expertise of regulators?
Mr. Serio. Exactly.
Mr. Waxman. I want to go in another area, because the
failure to publish the names is a concern to me, but it is not
the only problem with the ICHEIC process. Even when survivors
are able to file claims, they are encountering all kinds of
problems in dealing with the insurance companies. And one of
the key components of oversight is whether the companies are
researching the claims against their data base in a fair and
accountable way.
One case that has been brought to my attention involves two
sisters in their eighties from Los Angeles, who filed an
undocumented claim in July 1999 for policies issued to their
parents. In 2000, they got a response from Generali that there
was no match. In June 2003, both of their parents' names showed
up on the Generali policy lists finally published on the ICHEIC
Web site spelled exactly as the claims form in 1999. These
women have waited 4 years for no reason.
Mr. Eagleburger, what are the benchmark guidelines that
companies are required to use and what is being done to make
sure that they are enforced?
Mr. Eagleburger. I'm not even sure I understand the
question. What do you mean?
Mr. Waxman. You said people ought to file claims.
Mr. Eagleburger. Yes.
Mr. Waxman. These two sisters filed a claim. They filed a
claim with Generali and they were turned down. But then
Generali published a list and the parents' names were on the
list. These women have had to wait 4 years. I'm trying to find
out whether ICHEIC is processing these and trying to check
these things out.
Mr. Eagleburger. Congressman, the only thing I can tell you
there is that there is no question that if that is an accurate
case, then somebody has made a mistake and royally messed up.
But if you will give me the names, I will do what I can to find
out immediately what happened and correct it. Admittedly, 4
years too late, apparently, but all I can say to you is there
has apparently been a mistake made and we will have to try to
correct it.
Mr. Waxman. Well, I will give it to you, but I also have an
ICHEIC claim filed by Iga Pioro, a survivor from Los Angeles,
who filed a claim with Generali in 2000 for two policies taken
out by her parents worth $5,000 each. Generali rejected the
claims because its records could not show that the policies
were still in effect in the Holocaust era. The decision
violated your rule that companies cannot reject these kinds of
claims unless they supply proof that a payment was made.
Now, if ICHEIC staff had gone through every wrong denial,
why hasn't Mrs. Pioro's case been resolved?
Mr. Eagleburger. No, no, I indicated to you that this
question of going through every denial is something we've
instituted recently. I assume this one was done some time ago?
Mr. Waxman. This was done in 2000.
Mr. Eagleburger. We have instituted this individual review
since then. Again, I will be glad to take a look at the case.
Mr. Waxman. What can ICHEIC do to prevent the companies
from giving these kinds of runarounds to survivors?
Mr. Eagleburger. Well, I hope that what we have indicated
to you, Congressman, on the things that we have instituted over
the course of the last 6 to 9 months will in fact correct these
things.
One of the things that I have indicated to you is that we
have now got a system that is supposed to be going through
every single one of these cases in London, and it is a system
we have just set up in the last few months, last few weeks,
really, and hopefully that will stop all of this.
Mr. Waxman. Mr. Eagleburger, from your testimony we have
learned that $465 million has been contributed by the companies
for the payment of individual claims with an additional $35
million from beneficial exchange rates. From Ambassador Bell's
testimony we know that $217 million of that money was
contributed for the payment of individual claims. Currently,
ICHEIC has made $42 million worth of offers. How much money
actually has been accepted by the claimants? How much money, in
total, does ICHEIC project to pay out to individual claimants
during the course of the commission?
Mr. Eagleburger. I indicated a little earlier, Mr. Waxman,
that I can't tell you how much has now totally been accepted by
those to whom it has been offered because of the time lag
between the time of offering and the time of acceptance or the
time of an appeal. So we are always some weeks--or months, in
fact, on occasion--behind. So I do not have at this stage
accurate figures on how much has been accepted.
I will be glad to give you--as soon as we can get it pulled
together, give you what figures we do now have. I will be glad
to send it to you, but at the moment I do not have it, and it
will be some time before we can pull it all together. It is
always lagging behind the real facts.
Mr. Waxman. Do you have any projection about how much is
going to be paid for individual claimants?
Mr. Eagleburger. No. I could give you a guess, but that
would be all it is, and I would be very reluctant to do it
because I could be way off. I can only say this to you, that on
occasion I have seen figures that run to over $1 billion; and I
can tell you with total confidence on the basis of what I have
seen so far, it will be very much below that.
Mr. Waxman. Well, I guess that's my concern, that it will
be very much below it because we don't have the names, people
get a runaround from the companies; and I worry about all these
individual claimants that should be satisfied and are not going
to be paid.
Mr. Eagleburger. Mr. Waxman, I just think that's the wrong
judgment. I just don't think they are there. But, anyway,
that's the difference between us.
Mr. Waxman. Thank you.
Thank you, Mr. Chairman.
Mr. Shays. I thank the gentleman. Just very quickly. Mr.
Serio, the National Association of Insurance Commissioners
[NAIC], is that how to say it?
Mr. Serio. NAIC. We try not to pronounce it out.
Mr. Shays. OK. NAIC filed a brief in support of the
California law that was at issue in the recent Supreme Court
case. Since NAIC supported the California law, is it safe to
assume there was dissatisfaction among insurance regulators
with policyholder lists?
Mr. Serio. That's stating the case mildly, Congressman.
There was dissatisfaction, and the directness of the decision
left little room for doubt as to where the Supreme Court stood
on the question.
But there are a couple of, perhaps, glimmers of hope that I
think have allowed us to refocus some of our efforts on
assisting the process with direct State assistance, whether
it's through the dedication of staff from our own Holocaust
claims processing offices to ICHEIC, or trying to assist the
claimant process. And I think that's where the State efforts
have been refocused, given the conclusion of the Supreme Court.
Mr. Shays. Mr. Eagleburger--excuse me, Secretary
Eagleburger----
Mr. Eagleburger. Congressman, Mister is perfectly
acceptable to me. I don't need to be reminded I'm a has-been.
Mr. Shays. May I say something? You deprecate yourself too
much. It makes me uncomfortable.
Mr. Eagleburger. That's why I do it.
Mr. Shays. Well, OK. Because you were an extraordinary
Secretary, and you should carry that title with pride.
I just want to know if the cutoff date of December 31 can
be put back a bit, given the question of a few who may not meet
that cutoff date? Is that something that is potentially on the
table?
Mr. Eagleburger. If I say anything but, ``no, sir,'' I
won't get out of this building alive. No, sir.
Mr. Shays. No, sir, means it can't be extended?
Mr. Eagleburger. No.
Mr. Shays. Mr. Kent and Mr. Taylor, we didn't ask as many
questions from you. Would either of you like to make a--
actually, I will say to all of you, but I will start with the
two of you, is there anything you want to put on the record,
briefly, before we get to the next panel?
Mr. Eagleburger. Yes, I would like to.
Mr. Shays. I'm going to have you go last.
Mr. Kent, is there anything you would like to say?
Mr. Kent. First of all, I would like to agree with you,
with the last statement you said about Secretary Eagleburger.
He is not only an outstanding secretary--was--but he is an
outstanding human being, and that's very important to me. And
if I have learned anything during the years of being in this
negotiating committee, one of my pleasures was to get to know
Secretary Eagleburger.
The second thing is, as I said at the very beginning,
believe me, being a survivor, I definitely want to have the
thing beyond me. I do want to see that some kind of justice is
being done to the survivors while we are alive, not a perfect
justice, but some kind of justice. So whatever we can do--and
it is my belief that the Congress can help us; that's why I
say, I open my arms to any pressure that you can give us with
the governments which--we still have a lot of problems, and we
have problems with various governments. And this would be
faster than by pressing the laws, because by pressing the laws,
they will find out, they will have lawyers to counterbalance
the law and fight it in courts for another 20 years.
Mr. Shays. OK. Thank you very much. Very thoughtful.
Mr. Taylor.
Mr. Taylor. Yes, I would just like to echo the comments
that Mr. Kent made about Chairman Eagleburger and also to
acknowledge Superintendent Serio, who has really put much time
and effort and weight of authority.
One brief comment I just wanted to make was, there was
reference earlier to issues of transparency and so on with
regard to ICHEIC. I think it should be noted that since the
last hearing there is a considerable amount of information on
the ICHEIC Web site, including the budget of ICHEIC, detailed
reports on what's going on with ICHEIC; and I think that point
should be noted for the record. I think ICHEIC has done a lot
in that regard in recent months.
Finally, I think the importance of a hearing like this and
the role of this committee is to bring these issues to the
attention of an increasingly disinterested world. When we
started this process, there was a very interested community of
people involved in the issue and a very interested media and
public. I think that is not the case now, or to a much lesser
extent. And I think highlighting these issues and particularly
the role of companies and the importance of companies
processing these quickly and fairly and doing the proper
matching of all these issues is very important.
Mr. Shays. Very nice way to close this meeting. Thank you.
Mr. Serio. Yes, Congressman, two quick points, and it goes
to the list question. I think everybody up at this dais
understands the frustration of the Congress and of the
committee and wanting to do something. But the concern we have
is that by going back to those who have already committed to
cooperating, those who have supplied the lists--and those are
the ones who either we hold sway over as insurance regulators
in the country or you hold sway over as businesses doing
business in this country--I think there is some concern that we
are going back to the same well again as opposed to expanding
the scope of our review.
Also, just for the record, expanding on what Secretary
Eagleburger mentioned about the review and monitoring process,
working together, the New York Holocaust Claims Processing
Office and ICHEIC started back in January 2002, as he
indicated, the review process; we went through over 400 claims
in December, preparing for the claims process as it would be
operating under ICHEIC in London. And that is the kind of
volume that we were doing under a test pattern, and we suspect
we will be able to do significantly more than that going
forward.
Thank you.
Mr. Shays. You get the last word, Mr. Secretary.
Mr. Eagleburger. Thank you, sir.
First of all, it's really in reference to your question
about extending the deadline. People need to understand they
can still file a claim without naming a policy through ICHEIC's
matching process, and then we have the companies that do the
match themselves. So just because the deadline is coming, that
doesn't mean they can't file a claim.
Mr. Shays. It's very important, if the deadline is not
going to be extended, to make sure that people file claims.
Mr. Eagleburger. File the claim. So there's that point.
And the second point I would make, sir, is that when we
have a hearing like this and there's no yelling and screaming,
we get a lot farther than we do, or have, on other occasions.
So I just want everybody to know that I really did appreciate
the way things have gone today, and I want to thank everybody
involved.
Mr. Shays. Thank you very much, all of you.
Mr. Waxman. Mr. Chairman, I appreciate the responses and
the way that they were given to our questions this time,
particularly compared to last time, and I thank the witnesses.
All these witnesses on this panel are from ICHEIC. I regret
the fact that we didn't mix up the panels, but we didn't set up
the hearing that way. The next panel is going to say some
things that are critical, and it would have been good to get
the back-and-forth so that we could have gotten responses from
ICHEIC for some of the criticisms we are going to hear later.
But I do thank these four witnesses.
Mr. Shays. What I think we will do in that regard is make
sure that the ICHEIC folks know that we will maybe followup
with a letter or two, or questions; and the record will remain
open for 10 days so that we can have some good exchange.
So I thank this panel very much.
And I thank our third and final panel for its patience:
Israel Arbeiter, president, American Association of Jewish
Holocaust Survivors of Greater Boston; Daniel Kadden, Holocaust
Survivor Advocate; and Michael Bazyler, professor of law,
Whittier Law School.
I would ask all three of you to come and stand, because I
am going to swear you in.
[Witnesses sworn.]
Mr. Shays. Note for the record all three of the witnesses
have responded in the affirmative.
It is a pleasure to have you here and thank you very much.
I think I am going to do it as the way I called you. Mr.
Arbeiter. Take your time and get settled here.
Is there any symbolism between the empty chair there? If
not, I'm going to have you move over. I'm sorry, I like to
micromanage sometimes.
STATEMENTS OF ISRAEL ARBEITER, PRESIDENT, AMERICAN ASSOCIATION
OF JEWISH HOLOCAUST SURVIVORS OF GREATER BOSTON, INC.; DANIEL
KADDEN, Ph.D., HOLOCAUST SURVIVOR ADVOCATE; AND MICHAEL J.
BAZYLER, PROFESSOR OF LAW, WHITTIER LAW SCHOOL
Mr. Arbeiter. Mr. Chairman, Congressman Waxman,
distinguished members of the committee, good afternoon.
Mr. Chairman, first of all, with your permission, I would
like to express my most sincere thanks to the staff of the
committee for their assistance, for their help in coming here.
Zahava Goldman, Drew Crockett, and Dee Kefalas, thank you very
much for your help and assistance.
I am Israel Arbeiter; I'm a survivor of the Holocaust and
president of the American Association of Jewish Holocaust
Survivors of Greater Boston. I serve as chairman of the
Advisory Committee of Hakala, a program of the Jewish Family &
Children's Services in Boston, which provides emergency
assistance to needy survivors. I am also a founding board
member of the Holocaust Survivors Foundation-USA, a national
coalition of survivor organizations. In these roles, I am in
frequent contact with survivors who have filed claims for
unpaid insurance policies. I appreciate the opportunity to once
again address the committee both as a leader in my community
and as an individual claimant.
I express my alarm over the slow pace of justice as
practiced by the ICHEIC. Today, I feel like we have reached the
end of the line. Twenty-two months ago, I sat in this spot and
appealed to you for help in resolving this matter of great
concern to so many survivors. Time, we all agreed, was of the
utmost importance. I listened to the testimony that day of
Chairman Eagleburger, government officials and other members of
ICHEIC. They all promised quick action, a fair process where
rules are enforced, where everyone gets a fair shake. We were
told to be patient, that improvements would be made, that the
process would soon succeed. The frustration I felt that day has
become deeper with each passing month that my fellow survivors
and I are left waiting for a solution.
There are several issues I wanted to touch on today. Each
of them is an important part of why survivors little or no
confidence in ICHEIC at all.
No. 1, publication of names. It was certainly an
achievement to see hundreds of thousands of names from German
insurance companies published by ICHEIC a few months ago. It
was, unfortunately, a few years late, but welcome all the same.
For many survivors and families originally from Germany, it was
important to see the names of loved ones come into light. Among
the discoveries on the lists were the parents of one of my
colleagues in Seattle, Fred Taucher, which was reported in the
New York Times in May. Fred, like myself, had no documentation
but had very clear memories of insurance coverage purchased by
his father. His efforts to file a claim with ICHEIC originally
resulted in quick denial by Allianz and other insurers. Now the
list has revealed that both his parents who died in the
Holocaust actually had life insurance. We will now see if the
list translates into real payments for Fred and others.
While the list is important for many German-Jewish
families, it is not really of any use to the vast majority of
us who came from Poland and Eastern Europe. You see, the German
companies didn't do business there. We are still waiting for
the light to fully shine on the files of Generali, RAS and
other companies that operated in the East. I know for every
name Generali has agreed to release, there are many more kept
hidden. Why? Because they get to make the rules about which
names get published. Unfortunately, when it comes to Eastern
European names, French names and many other lists, the
agreement which led to German names being published does not
apply.
Chairman Eagleburger says he thinks the current lists are,
in his words, ``virtually all the names that the companies
have.'' How can he say this when so many of Generali's names
remain purposely hidden from us? We believe that the only way
to make the process work, the only way to prove to skeptical
survivors that the process is honest, is to allow the
publication of comprehensive lists.
No. 2, the claims process. I submitted my claim late in the
year 2000, almost 3 years ago. In December of that year, I was
informed by ICHEIC that they received my claim and that I would
hopefully receive a response in 90 days. That was exactly 1,011
days ago. And in the whole period, I have not had one word from
ICHEIC about my claim. My repeated calls to their help line
have provided no new information about the status of my claim.
I had decided to try again just last week. I was told that
nothing could be determined about my claim until the completion
of the company's audits. When I asked when these audits were to
be completed, I was told the date was indefinite. Mr. Chairman,
for someone who is 78 years old, this is not a comforting
answer.
What has ICHEIC been doing with my claim since they
received it? Are they still negotiating with the companies over
how to handle claims like mine? Are they still waiting for
Generali and other companies that once did business in my
native Poland to complete their investigation? Are they waiting
me out? Have they lost my claim? Do they care? I have the
impression that ICHEIC is still struggling to establish basic
ground rules for its claims process, and this is holding up my
claim and probably thousands of others. How can this honestly
be called a claims process?
No. 3, claims with no company named. I read recently in the
Economist magazine that ICHEIC was still trying to figure out
what to do with the thousands of claims it has received that do
not have documentation naming a specific company. Because the
lists of names from Eastern Europe are so meager, most of us
have only our sharp and painful memories to go on. I am in this
category. I will repeat what I told this committee in November
2001: My father, Itzchak Arbeiter, had life insurance. I
remember distinctly the insurance agents coming to my home
regularly and collecting premiums from my father. I remember
how my father kept the records of these payments using a
booklet provided by the company. I remember how my father
explained that he was thinking about the future. But after the
war, I had no papers; nothing was left.
ICHEIC has been accepting claims like mine for over 3
years, and here we are, September 2003, and they haven't been
able to decide how to deal with them. This is shameful. After 3
years, they should have been able to make some kind of a
decision one way or another. At the very least, they could have
provided an honest explanation of what is causing this holdup.
I have read that the companies and other ICHEIC members feel
they need to create a special system for considering claims
like mine that do not have a company in order to prevent fraud.
I want to ask Chairman Eagleburger, if he is still here:
Because I have no documentation, is my story not believable? Am
I considered a potential risk for fraud? I will tell you what
fraud is. It is the ICHEIC process itself that is carrying on a
deception on people like me. What good does it do to create an
elaborate claims system and proclaim there are relaxed
standards of proof when everyone knows from the beginning that
most of us survivors have no documentation. Hitler didn't allow
us to keep any documentation. What good does it do to have
rules about completing claims investigations in 90 days when
they don't honor them? What good does it do to have a claim
process when claimants receive no word about the status for
almost 3 years? I feel like I have no voice in the process and
am at the mercy of the companies which control the process.
No. 4, ICHEIC Humanitarian Fund. While we wait for the
claims process to somehow begin working for us, we are also
reading about the efforts by Chairman Eagleburger and the
ICHEIC members to distribute funds specially designed for
humanitarian purposes. So far, as I understand it, ICHEIC has
$162 million at its disposal. This amount may grow depending on
how many claims are paid or denied. Ladies and gentlemen, I
must report to you that thousands of aging survivors in this
country are today facing a crisis. They lack the adequate
social services to meet their needs. Thousands of survivors,
alone and in poor health, depend on special services. I see
this problem personally in my community in my capacity as
chairman of the advisory committee reviewing emergency
assistance in greater Boston. The Jewish Family Service
agencies everywhere are straining to meet even the minimal
needs of survivors who need home care, transport, and other
special services to maintain a decent quality of life. The
strong consensus in my community is that until the needs of
aging survivors are met, all available funds from the insurance
settlements and other insurance settlements must be devoted to
these needs.
The ICHEIC has been debating how to use humanitarian funds.
The debate takes place behind closed doors; my voice and my
community's voice is not heard. This is no way to run a
humanitarian program. ICHEIC has taken on a major
responsibility in this humanitarian area with the approval and
support of our government. I ask you to do everything you can
to require an open and transparent process for the distribution
of these desperately needed resources. $162 million is a lot of
money that can make a huge difference in people's lives. Let's
make sure it is distributed fairly.
Let me share with you from a letter written jointly by 48
executives of Jewish Federations and Community Relations
Councils in the United States to Chairman Eagleburger last
March, urging all ICHEIC humanitarian funds to be directed to
the care of needy survivors. I have attached the complete text
of the letter to my written testimony. The letter concludes
this way: ``The story of the Holocaust is not yet complete.
There is at least one important chapter remaining which will
tell the story of how the survivors of mankind's darkest hours
lived out the balance of their lives while under our care,
after being extricated from the death grip of the Nazis. When
you consider the distribution of funds under your control, we
beg you to be guided by the very name you have chosen for the
fund, humanitarian. Please help ensure that Holocaust survivors
are not abandoned in their final years.''
I am proud to tell you that the leadership in my community
under the Jewish Federation of Greater Boston helped initiate
this letter.
In conclusion, I believe you and Congress can do much to
address this problem either through legislation calling for
publication of comprehensive lists of Holocaust-era policies,
by exposing the problem fully and honestly, demanding real
oversight of ICHEIC by conducting hearings on the plight of
needy survivors in our country, and through moral persuasion.
Hopefully this hearing will help ICHEIC turn a new page, and
that fundamental changes can be implemented. My community has a
glimmer of hope that something good and decent can come out of
the insurance settlement process while we are still alive to
see justice done. Thank you very much.
Mr. Shays. Thank you Mr. Arbeiter.
[The prepared statement of Mr. Arbeiter follows:]
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Mr. Shays. Let me just say to you that I used to, in
chairing hearings about Gulf war illnesses, we used to have the
Department heads come first and they would tell us no veterans
were sick. And after they spoke, they left, and the veterans
came and showed how they were sick. So we reversed the role.
And I do probably agree that we should have had the three of
you go first. In part, because you are the third panel, we let
you go on for 15 minutes because it was important for you to
put on the record. I do want to ask, is there--and I hope the
answer is yes. So I am hoping that there is a staff member from
ICHEIC here right now. Is there any staff member? Thank you. I
appreciate you being here. And you are taking good notes.
Correct? Thank you very much. Would you identify your name,
please? Pat Boudish? Thank you very much. Appreciate you being
here.
Thank you. Dr. Kadden.
Mr. Kadden. Thank you, Mr. Chairman, Representative Waxman.
We thank the committee chairman, Mr. Davis, for this
opportunity. And I am pleased to come back here and speak with
you again after 22 months. My name is Daniel Kadden; I work as
a Holocaust survivor advocate, it seems around the clock lately
because time is very urgent.
The hour here is late and the number of people hearing me
are small, but I appreciate this opportunity, and I will try to
condense my written testimony today for you. Most of my points
were covered by Mr. Arbeiter, I think, much more eloquently.
And I do want to leave you with an impression which I came into
this meeting with, which has not changed one bit after hearing
the testimony of the last few hours.
I want to focus briefly on the central issue before us,
which is the publication of policyholder names. My written
testimony includes other material covering the fundamental
accountability issues, which I appreciate your spending some
time and reading through, and the committee's members have
that, I understand.
I believe the publication of names and whether there is any
success in that area is going to determine whether ICHEIC has
even a chance of gaining a passing grade in the weeks and
months ahead. As of today, they have not reached a passing
grade. Let me emphasize that the publication of names is the
single most important resource enabling the public to
participate in the Holocaust insurance claims process. For
claimants, the list simply demonstrates transparency of the
entire process.
I wanted to mention for the record on a personal note my
own recent experience with the German policyholder list. Both
sides of my family are German-Jews from the Hitler era. My
parents and grandparents were all Holocaust survivors. Previous
archival research by ICHEIC identified one of my grandfathers
as an insurance policyholder, the first time we had direct
evidence of this. In reviewing the new names last spring from
the German lists, I was able to locate my other grandfather,
four great uncles, a great aunt, and about 25 additional
relatives. It is a bittersweet thing to see the names of
people, some who didn't survive and whom I never met, and to
think about what this really signifies.
The publication of the German lists demonstrate the value
of names as a core element of the claims process. It argues for
the expansion of this model to other companies in regions of
Europe so that the greatest number of names can be published.
Unfortunately, ICHEIC and the companies have failed to do so
beyond the German list.
And I was struck, I think, with an Alice in Wonderland
feeling when I heard that publishing more names will in fact
degrade the claims process during earlier testimony. I am
struggling with how to even respond to that. I find it such a
topsy-turvy statement which I reject and I strenuously would
argue against. The entire claims process is driven by the
publication of names. It should be a names-driven process
because of the nature of the Holocaust and the intervening time
that has passed, and it is simply an argument that I am going
to stick by as strongly as I can. I have found it to be true
and I am sure it will continue to be true if we could see more
names published.
I want to address the issue of lag time which I took some
notes on. Mr. Eagleburger claimed that there was a long lag
between the offering, of ICHEIC offering or the companies
making an offer to claimants, and the reporting whether the
offer was accepted. I find that it makes no sense at all. I
think the reporting of how many claims have been settled, how
many cases have been closed, finalized, ended, put to rest is
the single most important measurement point of a claims
process. It is the basic data line. And I want to tell you that
Mr. Eagleburger spoke about weeks and months of lag time. That
number stopped being reported internally in ICHEIC in June
2002. That is not just a few weeks or months ago. This is a
fundamental reporting problem. I will refer you to my written
testimony for more points.
Mr. Shays. If the gentleman will just suspend. One of the
things that will be good is, I think, for the staff to make
sure that we have a direct followup question as to why that is
the case.
Mr. Kadden. I believe they have had trouble collecting the
information from the companies as to how many checks have been
cut, literally, to people. I believe that they don't have the
ability to collect that information from the companies. The
companies can simply say, ``No, it is hard, we don't have time,
it is confusing, we can't tell you.'' This is a fundamental
reporting and oversight problem. And here we have a very public
process that doesn't have access to internally or externally
the single most important measure of its performance. And I
believe there is a communication breakdown of some sort--I am
not in a position to really understand it fully--between the
ICHEIC and its member companies.
Obviously, the companies have this information. If I was an
executive in the companies, I would want to know how many
checks are cut and how many people have signed away future
rights to bring litigation against them by accepting an offer.
That would seem to me a very, very important point that the
company would be obsessed with knowing on a daily, weekly,
basis even. The fact that there is a communication breakdown
points to the failure of the ICHEIC to be the claims process
that it purports to be.
I want to, in the very little bit of time remaining--and I
hope there will be an opportunity to return to these things
when there are questions, and I do appreciate any additional
minute or so that you can give me for this--I want to put aside
ICHEIC the process for a moment, if you don't mind. I represent
survivors; I work with survivors daily. I have had hundreds and
hundreds of conversations with insurance claimants over the
last few years, both in my capacity working with the Washington
State Department of Insurance and now in the field, so to
speak, as an advocate. This process has ground to a halt and
come to an end, in my mind. We can talk about and describe the
problems. We can come up with possible solutions. And I have
had many ideas in the past. But I am looking at it from the
point of view of the claimants of the survivors and their
family members who need justice, who need completion.
And I want to appeal to you, the committee, and all of
Congress, based on some of the past discussions here today,
that we have to keep all of the options open, including the
litigation option. We should promote the publication of
comprehensive lists of names for every reason. We should also
support the right to litigation.
I want to conclude by saying, the survivors I talk to--and
I am not exaggerating--many, many of them talk about their
experiences coming to this country after the war. My own
parents were immigrants and my grandparents to this country
after the war, and they embraced the American system, the
political system, the justice system, and all the institutions
of our democracy with passion, and they taught me that.
Survivors cannot understand how the doors toward gaining their
rights are being closed on them, how the government is turning
its back on their efforts to at least have their day in court,
even if they lose. It is something about being an American for
them which is maybe amplified by the fact of their history and
their experience coming to this country as immigrants. And I
want to just underline that point in my conclusion, that they
need your help, because they are not organized, they don't have
resources to contend in the political sphere. They need your
help to keep those doors open so that they can gain justice.
And I will leave it at that, and I hope we can have a little
more discussion about this.
Mr. Shays. Thank you very much.
[The prepared statement of Mr. Kadden follows:]
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Mr. Shays. Mr. Bazyler.
Mr. Bazyler. Thank you. Good afternoon, Mr. Vice Chairman,
Congressman Waxman and distinguished members of the committee.
My name is Michael Bazyler; I am a professor of law at the
Whittier Law School in southern California, and a research
fellow with the Holocaust Educational Trust in London, England.
I am also a child of Holocaust survivors. I received my primary
education in Poland and emigrated with my family to the United
States as a refugee in 1964 at age 11. Since 1965, I have lived
in Los Angeles.
My legal specialty is international law, and I am the
author of over 50 legal articles on the subject. For the last 8
years, I have devoted my research and scholarship exclusively
to the area of Holocaust restitution. And in April of this
year, New York University Press published my book, ``Holocaust
Justice: The Battle For Restitution in America's Courts,''
whose aim is to examine the various Holocaust restitution
claims and settlements that have been reached since 1998. When
the U.S. Supreme Court last June issued its decision in
American Insurance Association v. Garamendi, both the majority
decision of Justice Souter and the dissenting opinion of
Justice Ginsburg cited to and quoted from my book.
I want to emphasize that I have not been involved in any of
the lawsuits filed by Holocaust survivors or their heirs or
been involved specifically in any of the claims. My role is
strictly that of the professor in the Ivory Tower analyzing the
various claims being made and the responses to the claims. Now,
in trying to figure out the actual situation on the ground, I
keep in close touch with the individuals both in the United
States and abroad, in and out of government, involved in
Holocaust restitution, many of the people that were here
testifying earlier including representatives of major Jewish
organizations both in the United States, Israel and Europe, and
elderly Holocaust survivors, primarily and most importantly.
I hope to be able to assist the committee to assess how the
Holocaust era insurance process is doing. Since I am limited to
5 minutes, I am including a more complete statement. And, as
Congressman Waxman previously noted, I have put together four
summaries of actual case studies, of actual claimants,
Holocaust survivors that have made claims. Let me go ahead and
put on the record what they are and how I obtained them.
The first one is that of Holocaust survivor Zev Jalon of
Israel, who is 77 years old, and the claim he made is against
the Italian company RAS, which is part of Allianz. I obtained
this from Moshe Zanbar, who is the representative from Israel
on ICHEIC, and in fact, is a former Governor of the Bank of
Israel. And in sending me this information by e-mail, he tells
me that: ``I now hasten to bring to your attention an excellent
example of ICHEIC's negligence''--those are his own words--``in
supporting and following up documented claims.'' And that is
what Mr. Jalon's claim is.
The second, third, and fourth claims I was provided by
attorneys Lisa Stern and Bill Chernoff, and also Beth Settak
Legal Services in Los Angeles, the organization that has been
referred to before that has also been critical of the ICHEIC
process. The second claim is of the sisters Esther Berger
Lichtig and Violet Berger Spiegel, age 83 and 85 respectively,
that Congressman Waxman asked secretaries to Eagleburger. The
third one is that of Iga Pioro, also from Los Angeles. And the
fourth one is of Holocaust survivor Felicia Haberfeld, 92 years
old, who received an offer on two insurance policies from
Generali of $500. That was the offer that she got. And then
another policy which was issued to her father, she received a
denial letter saying, just like for the Pioro claim, that they
don't have any records of the policy being in existence in
1936. So, negative proof was the reason for them to deny the
policy, specifically contrary to the decision memorandum issued
by Chairman Eagleburger.
Mr. Shays. Let me just ask the gentleman to suspend. We
have taken each of these cases and we have given them to ICHEIC
to have them check out, and we are going to expect that there
will be a report.
Mr. Bazyler. Well, what I have done is this. I know Jodie
Manning, the chief of staff of ICHEIC in her previous position
of working with the Special Envoy's office, and so I gave her
the four summaries with the backup documentation. I am more
than happy to provide----
Mr. Shays. No. What I said is, we have given these cases to
ICHEIC.
Mr. Bazyler. OK.
Mr. Shays. And we expect ICHEIC will get back on a formal
basis to the committee.
Mr. Bazyler. Wonderful. I want to add that there is a fifth
case that I just received last night, and that is from the
Washington State Commissioner of a Fannie Mattalone who
actually received a decision from the appeals board and is now
waiting months for that decision, and I want to add that to my
statement.
Now, Mr. Chairman, next month ICHEIC will mark its 5th
anniversary. Sadly, it will do so under a continuing cloud of
public distrust and skepticism over its poor performance in
mishandling claims and in getting claims paid. This is not
where we expected to be 5 years ago. We on the outside, like
you and Congress, have struggled to make sense of ICHEIC and
evaluate its troubled track record. Let me briefly review what
I feel are the two most critical failings that impact
claimants.
The first one, the passive pileup of unprocessed claims. A
number of principles were adopted by ICHEIC at the time it was
formed to take into account the unique challenges posed by the
passage of time and the nature of the Holocaust. Among these
were relaxed claims standards and the need to determine a fair
mechanism for treating claims that are undocumented and do not
name a company. Living up to these principles has proved
elusive. An initial experiment with well-documented claims in
1999, the so-called fast track process, was a complete disaster
and showed that the companies were basically rejecting their
best kind of claims for really specious reasons.
After 5 years, and up to this very day, ICHEIC continues to
struggle by consensus with how to handle and resolve these
claims and also claims that do not name an insurance company.
These claims that do not name an insurance company constitute
the majority received from around the world. And these claims
are being held up. Thousands of them have been held up since
2000 when the claims process began. As the claims process has
piled up with nowhere to go, ICHEIC in the past year has shown
no hesitation to throw money at the problem. They contracted
with a top-tier consultant to develop standards for claims
without a named company. And, if completed, these will only be
the latest in a series of standards that have been developed
since 2000 but have never been implemented. That was per your
reference to the Archer Commission. We are all waiting to see
what will emerge and how many good faith claims will be honored
in the end.
The second problem I see is the administration of the
claims by the ICHEIC staff. While the pileup of unprocessed
claims is perhaps the single most important issue involved in
ICHEIC and the cause of a good deal of paralysis, it is by no
means the only unfinished element or gap in the process. What I
see as time passes is that the London office of ICHEIC, where
the administration and oversight of claims is done, has not put
pressure on the companies, has not put their feet to the fire
to resolve these claims. Over and over, I hear stories of
survivors sending in their claims to ICHEIC, like Mr. Arbeiter,
and waiting for years for a response from the companies with no
followup from ICHEIC.
Now, this brings me to the last point, which is with regard
to the appeals process that Secretary Eagleburger mentioned.
The right to an appeal is a fundamental element of fairness,
but ICHEIC has developed a confusing system for appeals, with
three different appeal bodies: The appeals tribunal for non-
German claims, the appeals panel for the German claims and what
appears to be a separate appeal-like process only for Generali
claims done with the Generali trust fund, completely separate
from the other two. Each one has a different basis of standard
and different authorities which decide the claimants.
Moreover, and I think this is really critical, there have
been no publication in any of these decisions. And I compare
this to the Swiss bank dormant account claims where the
decisions of the Swiss claims resolution tribunal are publicly
available and posted on the tribunal Web site. And I urge
ICHEIC to go ahead and start posting these decisions. It well
may be that the appeals process is the court of real resort
rather than the court of last resort in deciding these claims.
If that is so, then the pending claims that exist, the
unprocessed claims, should be decided quickly up or down, yes
or no, and then go on to the appeals process where a final
decision can be made.
Now, what can Congress do? The publicity and the hearings
that are done today I think are very, very critical. The second
point is really important to keep the litigation option open to
the claimants. If a claimant does not want to go through the
ICHEIC process, has no confidence in it, he or she should be
able to file a lawsuit in court and have that lawsuit decided
by a judge or jury, as Dr. Kadden has mentioned.
Now, the Supreme Court decision also makes clear that our
Federal law requiring foreign insurance companies doing
business in the United States to disclose Holocaust era
insurance policies would not run afoul of the Constitution. And
if such a Federal law would not instantly solve these problems,
I think it would go a long way in moving the process forward.
And I think, as has been said by others, the publication of
names is the single most important resource enabling the public
to participate in the Holocaust insurance claims process, and I
urge you to pass such a law. Thank you.
Mr. Shays. Thank you very much.
[The prepared statement of Mr. Bazyler follows:]
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Mr. Shays. At this time, the Chair will recognize Mr.
Waxman for 10 minutes.
Mr. Waxman. Thank you, Mr. Chairman.
Well, I think the three of you have given us a pretty
disturbing picture of ICHEIC. In trying to help my colleagues
understand the problems in the ICHEIC system, I have used your
case, Mr. Arbeiter, as an example of the system's unfairness.
As I understand it, you are saying that since December 2000,
when ICHEIC first sent an acknowledgment that your claim was
received, you have never gotten one letter with an update on
its status?
Mr. Arbeiter. No, sir.
Mr. Waxman. Even after you called the help line, ICHEIC
still didn't send you a letter or an update explaining that
your claim would be reviewed by ICHEIC once all other claims
had been paid because your claim does not name a company?
Mr. Arbeiter. No, sir. I did not get anything from them.
The only answer was when I called them and they tell me we
don't know anything yet. And, like I said, the last call which
I made last week, they told me we won't have any answer for you
until the audit is done. And I asked him how long will that
take, and they said indefinitely.
Mr. Waxman. Mr. Bazyler, Mr. Kadden, is it too late to
restore public confidence in ICHEIC? Is it too late to have the
people in the survivor community feel that this system is
busted, that an easier process could still succeed?
Mr. Kadden. I think it is largely too late. I have to be
perfectly frank with you. I am looking at it from the point of
view of survivors, Congressman Waxman, and not looking at it
from the point of view of the mainstream of those invested in
the process, in administering the process and the legal aspects
of the process. I am talking about the concerned stakeholders
that are most important here, which is the claimants, who are
mostly older people who survived the Holocaust. And for them, I
think it is largely too late. The suspicions run so high. And I
have to say that the words from the Federal judge overseeing
the Generali case, which is still active in the Federal courts,
who called ICHEIC the company's store in one of his rulings is
a very, very hard thing to rub off. And I think one has to look
at it from the point of view of survivors, that there is
virtually nothing at this point, especially based on the
testimony we heard today, that can be done to earn the trust of
survivors.
Now, the process may muddle through and come to some kind
of conclusion that is minimally acceptable to power brokers and
others, but I don't think it is going to pass muster based on
what I have seen with the survivor community, sorry to say.
Mr. Waxman. Mr. Bazyler.
Mr. Bazyler. Well, I would hate to see 40 million go to
waste; and I hope that ICHEIC can improve and can go ahead and
make progress. I will have to say that the publication of the
German names was an important step. A lot of people looked at
that list and came up with, I see, you know, my name is on it.
I am able to make the claim.
Mr. Waxman. So publication of names to you is really key.
Mr. Bazyler. Absolutely. It is the first and most important
step. We are dealing with a reality, as everybody knows, that
most survivors don't have the information. They were children
at the time. You need to start publication. If you suppress the
names, you suppress the claims.
Mr. Waxman. Mr. Kadden, the companies say the publication
of the names is not important, because if you have a claim,
your name will be searched at the companies even if you are not
on the list of policyholders. Why is the list publication so
important? And how will we know that the list of the names of
policyholders is relatively comprehensive? Should we assume
that a certain percentage of the Jewish population at the time
held policies? Is that the way we should judge it?
Mr. Kadden. Yes. I think we should assume that, to answer
the second part of your question. There has been a great deal
of research done, and if you don't mind, I am going to share
with you a report which I obtained, an internal document of the
ICHEIC. In December 1999, the estimation of unpaid Holocaust
era insurance claims in Germany, Western Europe and Eastern
Europe. And I will be happy to share my copy with the
committee. This is actually in direct answer to the question
asked of Chairman Eagleburger earlier, which he was unable to
answer clearly. And I don't think he fully understood the
question. The ICHEIC has gone through this process of trying to
estimate in a very systematic way as much as possible, given
various assumptions, the actual extent of insurance coverage
within the Jewish communities across Europe. And, not only
that, tried to attach a certain estimation of the value of
unpaid insurance. It makes for fascinating reading for those
interested in this issue.
To answer your main question, I think----
Mr. Shays. We will make that part of the record. Thank you.
[The information referred to follows:]
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Mr. Kadden. Thank you very much--not only answers the
current question, but answers the previous question, which I am
glad to do. It is ironic that perhaps I am the one that can
answer these questions, not the ICHEIC.
I said before that this has always needed to be a names-
driven process, not a claims-driven process. We have so many
decades that have gone by in the intervening years between the
Holocaust, the rebuilding of people's lives, and the way this
has come back into the light. And based on that alone, you have
to, you simply have to have the process driven by names,
because the vast majority of people who had any direct
knowledge as children of their parents' policies, of the actual
victims of the Holocaust who were adults at that time, are
dead.
Families and child survivors, those who survived the
Holocaust as children, like Mr. Arbeiter, must have that list
in order to have even a glimmer of sense that there is an
actual insurance policy to make a claim for. When you jury-rig
the system from the beginning to force people on their own
motivation and anger and frustration and just on a whim to file
a claim in the hopes that something turns up, you are going to
suppress claims. When you publish an extensive list, a
comprehensive list, you are inviting people to participate in
the process whether it comes to fruition for them or not.
And the question of what are comprehensive lists, it is a
very hard thing and I think we got at that during the earlier
discussion. But I look to the model of the German list and want
to see that replicated. And I think your chart here on the side
said as much as I could about the gaps. We have only begun to
turn over the stones. Chairman Eagleburger promised there will
be no stones left unturned. Well, I know of many, many stones
that still have to be overturned, especially archives in Poland
currently which may have significant numbers of Generali and
RAS policy information that have not been tapped. We need the
time, we need the extension of the deadline, and we need people
simply to get that information so that they can make a choice
whether to join the claims process or file litigation or
whatever other options they may have ahead of them.
Mr. Waxman. I appreciate that. I have a lot of questions
for the two of you, particularly, and I think I am probably
going to submit them to you and get answers in writing because
I want to ask your analysis of certain things in the ICHEIC
process. But let me just ask this one question of you, Mr.
Bazyler. In your testimony, you talked about ICHEIC's
standards. How do we know whether relaxed standards are applied
by ICHEIC and whether they have been applied consistently, and
what would need to be publicly disclosed to make such a
determination? This is the strongest argument for ICHEIC, they
have this streamlined process with standards that are relaxed.
Mr. Bazyler. Absolutely. And the evidence that I see of the
claimants that I speak to is that the process is not being
applied. That you have rules being made by either the chairman
or through meetings or through consensus and then going through
the process. They are not applied. I think the examples of the
memorandum decisions saying that, if a claimant comes forward
with the policy, then it is the insurance company that has to
come up with proof that, in fact, the policy, you know, is not
in existence during the Holocaust era. We can see two cases
that I provided. It hasn't occurred. The last case that I
mentioned from Washington, you have a situation where a claim
was submitted to the Generali trust fund and the person is
waiting for a decision to come out. And I just don't see a
consistency. I don't see one set of process, one set of rules,
and one consistent application of rules. I think more
transparency is critical. Publication of the decisions, getting
statistics as to how many claims have been accepted from each
country, from each company over 3 months, 6 months, 9 months,
is really critical to understanding it. And then, what is going
on through the appeals process, through each of the three
appeals bodies.
Mr. Waxman. Well, I think those are excellent points. One
of the biggest problems identified is oversight and
accountability. Who or what should be overseeing ICHEIC? I know
that NAIC, Congress and the State Department have limited
roles. Do you think that more should be done in that area? It
may be too late because they are so far along. And rather than
respond to that, give it some thought and give me a response
for the record.
And I am going to ask Mr. Arbeiter one last question now
and then we are going to ask you questions later through
writing. I understand Mr. Eagleburger is deciding how funds
contributed for humanitarian programs should be spent. What are
the priorities of survivors' organizations that you have worked
with? And do you think that survivors need to be part of the
decisionmaking process to ensure that social services are going
to those most in need?
Mr. Arbeiter. Yes. We would--the survivor organizations and
the survivors by and large would rather see the funds go to the
emergency process, which is being carried out in conjunction
with the Jewish Family and Children Service and the advisory
committee consisting of Holocaust survivors; thereby, the money
is distributed for the very needy Holocaust survivors. We
supply them with help, with medication, help with food. And,
Mr. Waxman, you would be surprised that in these days today in
the United States of America how many elderly Holocaust
survivors are in a position where they cannot afford to pay for
their medication and they cannot buy the food, the necessary
food that they come to us for help and we are doing the best
possible to help them. And the same thing goes for clothing for
the winter, helping with paying for the rent, and warm clothing
and oil and so forth. In other words, the necessities of life.
Mr. Waxman. So if some money then is going to be dispensed
for humanitarian efforts, you think that some of the survivor
organizations ought to be part of the decisionmaking?
Mr. Arbeiter. Yes. Absolutely.
Mr. Waxman. Time is running out for these survivors, and so
many of them are still in great need.
Mr. Arbeiter. I'm sorry, Mr. Waxman?
Mr. Waxman. So many of the survivors that are still alive
need a lot?
Mr. Arbeiter. Yes.
Mr. Waxman. And they need the attention paid to their
concerns.
Mr. Arbeiter. We are talking about the elderly survivors.
Of course, today everybody--the average age today of a
Holocaust survivor is 80 years. I am among the youngest group.
I am 78. I am among the youngest. I am called a kid among my
elderly friends because we are survivors, but in the 80's and
even in the 90's. And some of them live just on the Social
Security or on the fixed income. And----
Mr. Waxman. I want to tell you that I appreciate that you
are here and you are speaking for others who have had the
experience you have and others have had worse experiences, and
I think that all three of you have given us excellent
testimony. It will be important for the record. There may not
be a lot of Members here at this moment, but we will make a
record of this hearing. And your testimony orally will be in
writing, and then the responses to the further questions we ask
will also be part of that record and it will be very helpful
for us. Thank you very much for your testimony.
Mr. Shays. I thank the gentleman. And, Mr. Waxman, thank
you again for being such a motivator for this hearing.
I think you had such nice and thoughtful statements that
are part of the record that a lot of my questions would be
redundant. I do want to ask this question and then make a point
and have you react to it. What will it take for the various
stakeholders--and I would like all of you to answer this. What
would it take for the various stakeholders to be satisfied that
a comprehensive list of Holocaust victim policyholders is
compiled? I will start with you, Mr. Bazyler.
Mr. Bazyler. Could you repeat the last part? I'm sorry.
Mr. Shays. What will it take for the various stakeholders
to be satisfied that a comprehensive list of Holocaust victim
policyholders is compiled?
Mr. Bazyler. I think that if we take the German model and
apply that German model to the other countries, then the
Holocaust survivors, the individuals who are making the claims
have the possibility and their heirs, children and
grandchildren, will be satisfied. I think that is a very
workable, provable model. It has been done in Germany. It
also--and Secretary Eagleburger mentioned this--took a long
time to get the Germans to agree to that. This wasn't something
they wanted to do and something that Chairman Eagleburger at
first was not--was willing to forego. And then it was--their
feet were held to the fire and they finally agreed to do so.
That is a model that could be used for other countries. When
that is done, I think that will be a feeling that the best
possible thing could have been done.
Mr. Shays. Dr. Kadden.
Mr. Kadden. I think whether ICHEIC is the force that is
able to extract these names or acts of Congress or a further
clarified force of state regulators, the public will benefit.
And that is really the goal here. I am not very optimistic
about the ability of ICHEIC at this point to extract any more
names, and I can certainly say that my concerns were raised
further by the testimony today from all the parties.
Mr. Shays. But what I asked is, what will it take for the
various stakeholders to be satisfied that a comprehensive list
of policyholders is compiled? Did you agree with Mr. Bazyler?
Mr. Kadden. I do generally. I think ICHEIC has published
the German names and has set a good and reasonable standard for
what should be done when you get your teeth into a source of
names and how to go about putting together the best possible
list that captures by their own objectives 90 to 95 percent of
the presumed victim population, policyholder population. I
believe that can be done in other countries in Europe. We may
fall short in some of the countries, but there is very clear
evidence in my mind that can be done. It is physically possible
to do it.
Mr. Shays. And if it was done, you think----
Mr. Kadden. And the survivor community--and I speak as a
member of a family that found many, many names on the German
list.
Mr. Shays. Right.
Mr. Kadden. Some may not understand this when I talk to
them about it, but there is a symbolic value which goes a long
way toward survivors making peace with this process. And even
if they decide not to file a claim--and I know people like
that--``It is not worth it, the pain.''--but there is a certain
sense that something is being done by publishing these very
comprehensive lists. Some good faith went into it, and the
results that were yielded really showed that light is shining
on this dark chapter. And I think that is quite apart from the
claims process itself.
Mr. Shays. Thank you very much.
Mr. Arbeiter, how about you responding to that question?
Mr. Arbeiter. I feel that the publishing of course of the
list is of very, very great importance. To be honest with you,
Mr. Chairman, the feeling in the survivor community is, today,
resignation. They don't believe that something--that ICHEIC is
handling this honestly and that something will be done in their
lifetime. We don't see--I get calls quite often being the
president of the Association of Holocaust Survivors, I get
constant calls from members of our organization. Did you hear
anything? Do you know anything?
Mr. Shays. Well, but what that implies to me is that,
whatever happened, they wouldn't be satisfied. And I want to
have you respond to attorney Bazyler's--you are an attorney?
Mr. Bazyler. I am, but much more I am a professor.
Mr. Shays. Professor Bazyler commented that, if they used
the German model, that a lot more people would be satisfied.
Mr. Arbeiter. Any progress, anything the survivors will see
that there is some movement, they would be--they would have
hope and maybe a dim of satisfaction.
Mr. Shays. I am sorry, sir.
Mr. Arbeiter. As of now, they don't see anything. To the
best of my knowledge, in the community in Boston, MA, I don't
know of any survivor--and of course I don't know exactly how
many claims were filed. I don't know of even one survivor that
had his claim settled or had the satisfactory answer from
ICHEIC about his claim.
Mr. Shays. I remember at the last hearing we had someone
who had a document that was the actual reproduction of the
policy, and that person clutched on to that policy as if they
were hugging their loved one. It spoke volumes to me.
I appreciate--we, this committee and our staff--appreciate
your presence and your participation. Is there any last thing
you want to put on the record before we adjourn this hearing?
Mr. Arbeiter. I would just like again to appeal to you, Mr.
Chairman, and to the committee and to Congress, you are the
only ones that can help us. We are citizens of the United
States and we have rights, and we should have the right, if we
don't get satisfaction from ICHEIC, then we should be able to
use that right of law and go to court and sue them. And we
believe that you can help us with this. You are the only ones
that can help us. And you, of course, are our representatives.
Mr. Shays. I don't intend to prolong this, but my
understanding is that you could still go to court. So let us
just put down on the record where I am wrong here. You can go
to court right now. That is correct?
Mr. Bazyler. Let me go ahead and answer that question.
Right now, if you have a claim with a German company, you
cannot go to court. It has been precluded by the German
agreement.
Mr. Shays. In the German court?
Mr. Bazyler. The German.
Mr. Shays. Because they have cooperated.
Mr. Bazyler. Well, because you have an agreement, a
comprehensive agreement with Germany in which all claims
relating to World War II against Germany have been put aside.
This is an agreement that was put together by the Clinton
administration and the German Government and German companies,
and included any kind of World War II claims.
Mr. Shays. So, in German court we could not go for German
cases.
Mr. Bazyler. In a U.S. court.
Mr. Shays. In a U.S. court?
Mr. Bazyler. In a U.S. court.
Mr. Shays. Let me just make sure I am saying it correctly.
In a U.S. court over a German policy?
Mr. Bazyler. Correct.
Mr. Shays. Correct.
Mr. Bazyler. The only claims right now that are still open
are the claims against Generali, which is one of the largest
sellers of insurance to Jews prior to World War II. That is
still going on, that litigation is still open, and that is
before Judge Michael McCasey, the chief judge, Federal district
judge in Manhattan.
Mr. Shays. I have triggered one last question.
Unfortunately, when you ask one, you sometimes realize you want
another answer. What would happen if the money that you set
aside from the social expenditures was put in a fund for those
people who didn't make the deadline? How would you react to
that? So, instead of it going for social expenditures, it went
to pay settlements? In other words, the companies in a sense
are held harmless; they have no further draw on their
resources. How do you react to that?
Mr. Kadden. I don't like the sound of it. I think the
process of which I am not very enamored of was set up
envisioning a claims process and a humanitarian process. This
is what was negotiated, this is what was settled. The desperate
need of survivors in the streets, and in some cases I am
literally saying in the streets, of American cities as well as
in Europe and elsewhere requires this money to be made
available. It is desperate need for----
Mr. Shays. Well, we have a problem though. It is called
compromise. And in this world of compromise, we have one
problem; we have a deadline so they get nothing, or we try to
find a way to deal with that deadline.
Mr. Kadden. Well----
Mr. Shays. But I understand you don't like the sound of it.
I don't like the sound of it either, compromise. I don't.
Mr. Kadden. I think the volume of the claims process, the
number of claims coming in, the volume of claims that are
meeting some kind of acceptability by the companies and winding
up as offers, we don't know anything about how many have been
accepted.
Mr. Shays. Fair enough.
Mr. Kadden. It is not enough, I think, to argue for the
extension of the deadline using--borrowing money basically from
other uses which are desperately needed. If the deadline is
extended because there are innovations in the process, I think
that would be a lot more acceptable.
Mr. Shays. It would be more acceptable. I hear you. Any
last comment before we adjourn this hearing?
Mr. Kadden. I do, with your permission. I did note Chairman
Eagleburger in a letter to the London Economist magazine on
August 8th of last month, which is published on the ICHEIC Web
site. I don't think it is published in print by the magazine.
But he said very simply, ``ICHEIC is a process unlike the
litigation course, which is also open to them,'' meaning
claimants. Earlier, Mr. Bell said ``Would result in a slow
process that may not yield payments.'' I don't know if Mr. Bell
is confused. He may have been talking about ICHEIC, not the
litigation process, because ICHEIC is a slow process that may
not yield payments.
I reiterate my point because it is so very important to the
communities I work with: Keep the options open. Mr. Shays, you
are in a sole position now to--and I take your promise very
seriously that you will work hard to communicate with your
fellow members and try to work out solutions with the ideas and
the passion that exists here in Congress. The survivor
community is depending on it. They don't have the resources
literally to lobby. Thank you very much.
Mr. Shays. Thank you very much, Mr. Kadden. Anyone else, or
are we all set here?
Mr. Bazyler. I just agree with what Mr. Kadden said
completely.
Mr. Shays. Thank you. All three of you have been a
wonderful--the staff has just reminded me. We may be submitting
followup questions to the three of you, so don't be surprised
if you get that request in.
Mr. Arbeiter, I just want to say again. Your statement is
the reason why we are having these hearing. So, on behalf of
Chairman Davis, I would like to thank our witnesses for
appearing today. And I would also like to thank the staff that
worked on the hearing. And I would say, Mr. Arbeiter, you are
the first person I have ever heard as a witness thanking the
staff. So that goes----
Mr. Arbeiter. They deserve it. They did a great job.
Mr. Shays. I understand, but I just thought it was very
nice.
I ask unanimous consent to insert in the record the written
testimony of Christopher Carnicelli, the president and chief
executive officer of the U.S. branch of the Generali Insurance
Co. Without objection, it is so ordered.
[The prepared statement of Mr. Carnicelli follows:]
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Mr. Shays. I will also leave the record open for 2 weeks so
Members or witnesses can submit additional materials or
comments.
It is this committee's hope that the information we have
gathered today will help to facilitate the processing of
insurance claims for Holocaust victims and their heirs. Almost
60 years have passed since the end of the Holocaust. All
parties, including the U.S. Government, ICHEIC, insurance
companies, and Europeans nations should do whatever it takes to
resolve these claims in a fair, efficient, and expeditious
manner. Paying these legitimate claims is not only a legal
responsibility, it is truly a moral one. Thank you. With that,
we will adjourn this hearing.
[Whereupon, at 5:56 p.m., the committee was adjourned.]
[The prepared statement of Hon. Edolphus Towns and
additional information submitted for the hearing record
follows:]
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