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News :: Politics
Israeli banks profit from Holocaust
13 May 2007
"Investigations by the Israeli parliament have dug up disturbing evidence that Israel has been profiting for decades from vast sums invested in local banks by European Jews who died in the Nazi death camps."
UPDATED
TUESDAY, DECEMBER 07, 2004
16:49 MECCA TIME, 13:49 GMT

"Investigations by the Israeli parliament have dug up disturbing evidence that Israel has been profiting for decades from vast sums invested in local banks by European Jews who died in the Nazi death camps.

Banks object to how Holocaust assets have been calculated

And even now the banks are delaying returning the money to their heirs.

But unlike a similar scandal that hit European banks in the mid-90s, almost no pressure is being brought to bear on the Israeli banks by the Israeli government or by Jewish reparation organisations representing Holocaust families, who were the main critics of the European banks.

The Israeli government is believed to be keeping quiet because it is deeply involved in the local banking scandal itself, and the Jewish organisations are reported to be concerned that exposure of the story will damage Israel's international reputation.

Instead the Knesset committee which unearthed the shocking revelations has been forced to sit on its unpublished report for the past 18 months as the banks dictate terms to the inquiry, largely supported by the government.


Tommy Lapid has been a sole
voice speaking against the banks

One dissenting voice has been Tommy Lapid, who this month left his post as justice minister. He called Bank Leumi, the bank believed to hold the lion's share of the Holocaust accounts, "the last bank in the world that refuses to pay money to Shoah survivors".

The Knesset committee was established under the chairmanship of Colette Avital in February 2000, in the wake of a settlement in which the Swiss banks agreed to pay $1.25 billion to Holocaust survivors and Jewish organisations.

After the Swiss affair, questions were raised about the difficulties faced by Holocaust families in tracing money deposited in Israeli banks before the second world war.

Denials

At the time, the banks fiercely denied that they held any money from Holocaust victims but after three years of auditing the banks' accounts, led by a former police anti-corruption officer, Yehuda Bar-Lev, the committee found thousands of dormant accounts, estimated to be worth some $220 million.

Colette Avital chaired the
investigating committee

Bar-Lev has said that he cannot be sure if there is more money because the banks have been obstructing his team's work. "There are still documents that the bank doesn't agree to show us," he said. "According to the bank, they'll not be shown to us as they are against the bank's interests."

The banks have also refused fully to finance the audit. The Swiss had to pay about $400 million to finance the work of the investigating accountants, whereas the Israeli banks have agreed to pay only $3 million, less than half the amount demanded by the Knesset committee.

"We're in a bind," said committee chairman Avital in September when the banks contested the report's publication yet again. "The banks can keep delaying again and again and again."

Defence

The banks have defended their position on several grounds, including the claim that exposure will harm Israel's image.

"The Wall Street Journal will say the Israeli banks also hide money, not just the Swiss"

Ram Caspi, company lawyer for Bank Leumi

At one closed meeting in December 2003 between the committee and Bank Leumi, the company's lawyer, Ram Caspi, warned that Israel would be painted as a hypocrite.

"The Wall Street Journal will say the Israeli banks also hide money, not just the Swiss," he told the committee members.

More recently the bank has been citing its commercial interests and secrecy rules. "Bank Leumi is a publicly traded company," Caspi told the committee in November. "It has to answer to stockholders. It cannot simply pay as a result of a committee's recommendations."

Victim's story

His statement came during a meeting at which one woman identified only as "K" told the committee that her uncle, who lived in Bucharest, deposited £1000 in 1940 in the Anglo-Palestine Bank, which later became Leumi. When Leumi finally admitted it still held the money in 1979, she received a tiny fraction of the original deposit.

An Israeli lawyer, Roland Roth, said he was representing more than a dozen families with similar stories. He has threatened a class action against the Israeli banks in the US courts. An earlier legal campaign he waged in the Israeli courts was rejected.

Jewish groups which support Holocaust families, however, have mostly chosen to remain silent. Israel Singer, chief negotiator of the World Jewish Restitution Organisation, who campaigned against the European banks, said his group would not be publicising the case. Unlike the Swiss banks, which he called thieves, Israel's banks had got hold of the Holocaust accounts "incidentally", he said.

Secretive past

The bank's refusal to accept responsibility for the accounts is based on the murky period before and after Israel's founding in 1948.

It is known that thousands of wealthy European Jews stashed money away in the country during the 1920s and 1930s, as it was then Palestine and under British rule, in an attempt to hide it from the Nazis. They also invested heavily in land and property to bring nearer their dream of a Jewish state.

During the war, Britain confiscated all assets belonging to citizens of enemy territories, including Jews living under Nazi occupation. The assets were handed back after Israel's creation in 1948, with an official in the Israeli Justice Ministry known as the custodian-general charged with tracing the heirs.

Hidden sums

However, the Knesset committee found that the banks, particularly Leumi, had managed to hide many of the accounts from British officials and so were able to keep the money. The investigators believe the banks have been profiting from the money ever since.


Land and belongings were sent
to Zionist organisations

The government is also accused of not having done enough to trace survivors.

It passed many of the assets of Holocaust survivors, including land and property, to Zionist organisations such as the Jewish National Fund.

To the surprise of the committee, Bank Leumi was widely reported in the Hebrew media last month as having agreed to pay less than $10 million to Holocaust families, even though it is still publicly denying that it has any such accounts. Separately, the government is also reported to be mulling the idea of paying some $15 million to the families.

Deal

The deal was struck last month by Lapid after the banks accused him of slandering them. Lapid did not consult with the Knesset committee.

Avital responded angrily: "The banks can now claim that they bought Lapid with a bit of money and, in exchange, they are exempt from returning the Holocaust survivors' money."

The reduction agreed with Lapid follows several objections the banks have made to the way the Holocaust assets have been calculated.

Inflation

The Israeli banks have been resisting the efforts of the Knesset committee to work out the current value of the accounts using the same criteria applied to the Swiss assets. There, the banks had to adjust the money by inflation and add 4% interest.

The Israeli banks, on the other hand, want inflation not to be taken into account until after the creation of Israel, omitting the war years when inflation reached more than 300%, and will fund only 2% interest.

In Israel, there is little sympathy with the banks' position. For many years, Israeli banks have been running a cartel-like operation where they charge the same high commissions.

They are currently being investigated by the Anti-trust Authority. In the first nine months of this year they racked up a $1 billion profit - their highest ever.

Avital suggests public pressure must be used against the banks: "If the banks don't want to pay, we will have to launch a public campaign, perhaps legislation. It won't be easy. The Knesset and government have done nothing about this for more than 50 years. The heirs will have to go to court."

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Israel: Little Support for Holocaust Survivors
13 May 2007
Israel: Little Support for Holocaust Survivors

By JENNIFER MEDINA
Published: April 17, 2007

Nearly a third of the estimated 260,000 Holocaust survivors in Israel are living in poverty and struggling to get state medical services or sufficient pensions, according to a report by the Holocaust Survivors’ Welfare Fund.

The report, timed to coincide with Holocaust Remembrance Day, was delivered to Parliament on Sunday. Hundreds of survivors, advocates and students marched outside the building in protest. “We keep being very critical of those who have not admitted guilt or deny that there was a Holocaust, but here we are ignoring the people who are living in dire poverty,” said Collette Avital, a member of Parliament who advocates for Holocaust survivors. Isaac Herzog, the social affairs minister, asked to take control of the care for Holocaust survivors, now under the Finance Ministry. “I feel deeply ashamed,” he said.

www.nytimes.com/2007/04/17/world/middleeast/17briefs-holocaust.html?ex=1

Holocaust Survivors in Israel Living in Poverty
Bill Van Auken

Israel marked its annual Holocaust Remembrance Day Monday not only with the traditional wailing of air raid sirens, but also with protests over the government neglect and right-wing social policies that have left one-third of the country’s Holocaust survivors living in poverty, with little or no assistance.
A number of organizations, including the Israeli pensioners rights group Ken Lazaken, boycotted the official Holocaust Remembrance Day ceremonies to call attention to the plight of more than 80,000 survivors living below the poverty line, which in Israel is set at 2,000 shekels (486 dollars) a month for a single person.

Approximately 1,000 Holocaust survivors, students and others joined in a demonstration and “March of the Living” Monday that went from the Israeli Knesset to the Yad Vashem Holocaust memorial, the site of the official proceedings, to protest these conditions.

Some of the protesters referred to “Israel’s denial of its Holocaust survivors.”

On the eve of the annual day of remembrance for the millions slaughtered by the Nazi regime, various government agencies and advocacy groups prepared reports spelling out the deepening poverty that tens of thousands of survivors confront in Israel.

According to figures presented by the National Insurance Institute and other Israeli agencies, out of the 250,000 Holocaust survivors living in Israel, 20,000 receive reparations from Germany and another 40,000 are paid stipends by the state. The overwhelming majority, however, receive no support whatsoever.

Thousands of the survivors die annually, with 70 percent of them older than 76, and 20 percent older than 86.

The state stipends themselves amount to barely $300 a month, not enough to pay for basic necessities. “Those fortunate enough to receive this meager sum must decide whether to buy food or get the medicine necessary for their survival,” said Colette Avital, a Member of the Knesset, who has advocated for Holocaust survivors.

“We keep being very critical of those people who have not admitted guilt or deny that there was a Holocaust, but here we are ignoring the people who are living in dire poverty,” Avital added.

“I feel deeply ashamed, the situation we’re faced with in terms of the conditions Holocaust survivors are living in is completely absurd,” Israeli Social Affairs Minister Isaac Herzog said on Sunday in response to the reports.

Under Israeli law, those survivors who arrived in Israel after 1953 are ineligible for government benefits. The Israeli government believes that a large share of the survivors living in poverty is made up of more recent immigrants from the Soviet Union and Eastern Europe.

Some of the Holocaust survivors themselves vented their anger at government callousness and neglect at a Knesset hearing held April 10, accusing government officials of deliberately humiliating those seeking medical care and other assistance.

Those survivors seeking disability benefits must go before a medical committee and prove that their disability stems from persecution by the Nazis.

The Israeli daily Haaretz quoted Tova Pedens as saying that state functionaries had urged her to feign insanity to improve her chances of getting state aid.

Abraham Berkowitz, a survivor who immigrated to Israel from Romania, came to a medical committee because of dental problems. The panel told him he could “receive money only for teeth he lost in the Holocaust.”

Rachel Biyale, another survivor, declared, “Hannah Arendt wrote of Adolf Eichmann’s Banality of Evil. The [Israeli] treasury adopts a banality of deception.”

In essence, the conditions confronting tens of thousands of Holocaust survivors reflect the deepening impoverishment of large sections of the Israeli population and growing social inequality resulting from Israel’s militarized economy and successive cuts to social spending.

A record 1.6 million Israelis—nearly a quarter of the population—now live below the poverty line. Child poverty is even worse, standing at 35.2 percent, worse than in any advanced capitalist country.

Government agencies recently reported that some 200,000 Israeli families—11 percent of the population—depend upon soup kitchens for their daily meals.

At the same time, government policies have generated substantially more wealth for Israel’s class of super rich, leading to an ever wider gap between wealth and poverty.

It is under these conditions that the plight of the impoverished Holocaust survivors has captured the attention of the Israeli public. The government and the political establishment as a whole are clearly apprehensive about the political implications of the exposure of the conditions facing this layer of Israeli society, whose fate has been invoked for decades as a principal justification for the creation of the Zionist state.

That they too are subjected to poverty and neglect can only contribute to the growing social and political discontent among broad layers of Israel’s working class.

Bill Van Auken

- Homepage: wsws.org/articles/2007/apr2007/holo-a18.shtml