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Europe: World War II Slave Labor Victims Demand Compensation

Prague, 31 August 1998 (RFE/RL) -- A large-scale class-action lawsuit seeking damages on behalf of World War Two slave laborers is to be filed today against 16 German industrial countries in U.S. federal and state courts in California.

The suit names big German firms such as Volkswagen, Siemens, Daimler-Benz and Krupp-Hoesch as has having failed to compensate their forced laborers. The question of why they haven't and who will has already become an issue in the current national electoral campaign in Germany. The elections are to be held in four weeks (Sept. 27).

The California suit names, among others, claimants now living in the U.S. who were, for the most part, born in Eastern Europe and forced to work for Germany during the war. It is the latest in a series of moves designed to put German and other war-time companies under heavy legal and political pressure, more than 50 years after the war's end, to pay compensation to Nazi-era slave-labor victims or their heirs.

Perhaps more important, the suit is also a clear harbinger of what kind of war-time settlement disputes we can expect in the near future. Major Swiss banks and the biggest European insurance companies have recently given in to legal demands from Jewish Holocaust victims and their families for restitution of moneys the plaintiffs said have been unfairly denied them for a half-century. Now legal action for war-time crimes is likely to move into other areas, such as uncompensated slave labor and the restitution of looted art works and homes

No-one disputes that the Germans forced some eight million mostly East European Gentiles into working on behalf of the Nazi war machine. The labor took place both in factories and on farm, and almost always was not compensated. With few exceptions, East European Jews were deemed fit by the Nazis only for slaughter. But non-Jews had a chance of surviving through slave labor, even though conditions for them often were as harsh as those in concentration camps.

In recent weeks many German companies, eager to ward off the looming litigation in California and elsewhere, have supported a plan to pool private and public funds into what they call a "humanitarian" fund run by the German Government. The fund would aid wartime survivors, largely former slave laborers ("zwangsarbeiter" in German).

The companies willing to participate in the "humanitarian" fund mostly deny any legal responsibility, saying that the Nazi regime forced them to engage slave laborers. That's why they have insisted on German Government participation in the fund.

A spokesman for Volkswagen (Bemd Graef, chief of the company's archives), which has offered to contribute to the fund, said recently: "In purely legal terms, we are not responsible, but we feel a moral and historic obligation (to) do something." The spokesman acknowledged that Volkswagen exploited up to 20,000 slave workers at a plant (in Wolfsburg) making military vehicles and munitions during the war.

But last week, in the midst of the election campaign, Chancellor Helmut Kohl ruled out any German government involvement in the proposed compensation fund. Kohl recalled that over the past 50 years the German government has paid out more than $66 billion (120,000 million marks) in reparations to Nazi victims, most of them Jews. Private companies, he concluded, would have to furnish all the money to compensate ex-slave laborers who worked for them. Kohl's election opponent, Social Democrat Gerhard Schroeder --who happens to sit on Volkswagen's board of supervisors-- says he would be willing to offer at least a symbolic portion of government money to a humanitarian fund that would also include corporate contributions. And his party has joined Jewish leaders and historians in Germany and elsewhere in urging German banks to follow the example set recently by Switzerland's two biggest commercial banks (Union Bank and Credit Suisse). The two banks pledged to pay $1.25 billion to Holocaust victims and their heirs whose Swiss accounts have been closed to them since the War.

Deutsche and Dresdener banks, Germany's two largest, are facing a $18 billion legal suit filed in New York two months ago charging them with having knowingly accepted, laundered or sold property of Nazi victims during the War. Press reports (especially Der Spiegel) say that Deutsche Bank is already in touch with Jewish representatives to discuss an out-of-court settlement similar to the one negotiated by the two Swiss banks. In July, historians commissioned by Deutsche Bank said it had profited from gold plundered from Holocaust victims and that top bank officials at the time probably knew the origins of the gold.

All these developments suggest that, with the Swiss banks having decided to compensate victims on a large scale, the focus of future Holocaust suits and settlements is shifting to other areas. World Jewish Congress Executive Director Elan Steinberg, whose organization has played a major role in past Holocaust settlement negotiations, told RFE/RL that this development heralds a broadening of the very concept of Nazi gold to include many assets stolen by the Nazis. Steinberg also said that the focus of the negotiations has shifted from Switzerland to other countries:

"What we are seeing happening here is the broadening of the definition of (the term) 'Nazi gold.' It no longer specifically refers to the gold they looted, but it has come to represent the whole array of Holocaust-era assets that were stolen in what was the greatest robbery in the history of mankind. And with the settlements that have already been announced, the focus is indeed shifting away from Switzerland, where the bank settlement was made, to other countries and to the other components of these Holocaust-era assets --which is to say, insurance, art works, bank accounts in other countries, securities and the (whole) vast array of assets."

(This is part two of a three-part series.)