FROM THE OFFICE OF PUBLIC AFFAIRS

I came to Berlin this week for two reasons:

• To continue discussions with all the participants at the plenary on the allocation of the 10 billion D-Marks capped amount that we agreed upon at our meetings here in the middle of December; and
• To present to the Bundestag Interior Committee some of the critical provisions that need to be incorporated in the legislation to establish the Foundation.

We made considerable progress during our meetings here over the past two days.

For the first time, all representatives of the victims presented comprehensive proposals for allocating the 10 billion D-Marks. The parties came to Berlin with proposals that were serious, realistic, and not far apart.

We recognize that all parties will have to show flexibility and understanding to reach an agreement. We continue to be committed to a fair and equitable allocation, and we appreciate the German Government's commitment to incorporate an agreement on such an allocation into the legislation establishing the foundation.

Through our discussions, we were able to further narrow our differences so that we are now within striking distance of an agreement on allocation.

The watchword of all the delegations today was "flexibility." Everyone pledged willingness to move away from "red lines" and to seek ways to bridge our increasingly small differences.

Secondly, everyone agreed on the need to accelerate the discussions, recognizing the urgency of the situation, namely that elderly survivors should not continue to be made to wait for the dignified payment they so deserve. We plan to continue our discussions in Washington on March 7 and 8, when I hope we will be able to achieve an agreement on allocation at that session.

With regard to the German legislation to establish the Foundation, I want to thank the members of the Bundestag Domestic Affairs Committee for inviting me to testify before them yesterday. My written statement is available on Embassy Berlin's web site: www.usembassy.de. There are also some hard copies available here today.

As I told the Bundestag yesterday, we commend Germany for its efforts on this truly historic initiative. For the past fifty years, Germany has set an example for the rest of the world on how to deal with a horrific aspect of its past. The German government's willingness to provide 5 billion D-Marks during a period of budget cutting is truly extraordinary. The tremendous support of German citizens is deeply appreciated as well.

My discussion with the Interior Committee was detailed and serious. Committee members demonstrated through their comments their commitment to the Foundation legislation. They recognized that the legislation must reflect the compromises that eight governments, a number of victims' representatives and the German companies have spent nearly a year negotiating in order to achieve the comprehensive legal peace the German companies seek and deserve. The members assured me that they would take account of what we had accomplished. I think all understood that the overarching aim of our talks was to provide a measure of justice for the victims as soon as possible.

At its core, the Foundation legislation aims to provide dignified payments to former forced and slave laborers and to others that suffered at the hands of German companies. We seek a foundation with a breadth of coverage that will establish a new direction in the never-ending effort to deal with the consequences of the Holocaust. Dignified payments will be accompanied by provisions that allow German companies to achieve the broadest possible legal peace, thus building a cooperative rather than adversarial basis for the future. Every change I suggested over the past several weeks was to this end. It will do little good to pass legislation that fails to achieve legal peace. I want to note that the 10 billion D-Mark capped amount has been agreed to by all of the participants and nothing I will say would increase the obligation of either the German Government or German companies by one pfennig or reopen any issues closed over the years since the end of the Second World War.

I want to stress that, although we want the Foundation to be as inclusive as possible, we have no intention of allowing the Foundation legislation to affect the wording or interpretation of any pre-existing treaty or agreements, including those dealing with reparations issues.

• I cannot overemphasize the issue and importance of scope.

My testimony touched on a variety of issues important to all of the participants in the negotiations. Allow me to address a few of them now:

• First, I stressed that individuals, upon receipt of payment from foundation funds, should be required to waive further claims only with respect to the specific claim that was filed.
• Second, I spoke about insurance, one of the most difficult outstanding issues. We view the International Commission for Holocaust Era Insurance Claims as the best and most expeditious vehicle for resolving claims. I welcome the International Commission's announcement that it began this week its claims process and its massive, worldwide outreach program to identify those with unpaid claims. We need to negotiate the relationship of insurance issues in the German foundation with the International Commission process. Efforts need to be undertaken to persuade or require all German insurance companies that issued policies, or today own companies that issued policies, to join the International Commission and participate fully in its programs, including claims, humanitarian fund, public outreach, and audit programs. How can we do justice if people with real claims for real insurance policies have no redress?

It is also critically important that the German companies deposit their 5 billion D-Mark contribution as soon as possible in an interest bearing account. The interest should support the purposes of the Foundation and would be a source used to pay administrative expenses and negotiated legal fees.

In conclusion, let me reiterate that the progress we made in the last couple of days takes us to within striking distance of an agreement on allocation and some of the other outstanding issues. The only way we can resolve the remaining issues in a speedy fashion, however, is for everyone to continue to approach these discussions with the flexibility and spirit of cooperation that has brought us to the brink of achieving something truly historic.