Putting a price on the Holocaust

A plain cardboard box in the US Holocaust Memorial Museum in Washington holds a sheaf of hand-written papers and a photograph…

A plain cardboard box in the US Holocaust Memorial Museum in Washington holds a sheaf of hand-written papers and a photograph album belonging to Lorenz Schmuhl.

Schmuhl was the first US commander of the liberated concentration camp at Buchenwald. His official reports coldly record everyday problems such as the search for water and the increased rations needed to feed the starving survivors. But his personal papers - which the war veteran's family wanted to throw out after his death - tell a starkly different story of revenge and despair. One passage reads: "Some of the inmates have gone out into the nearby woods and have captured some of the former SS guards. They bring some in dead, others beat up so they will die. They give them the kind of treatment they used to get. Have tried to stop the killing but to no avail."

More than 50 years on, the horrors of the Holocaust still have the power to disgust and dismay, and a new generation is searching for a different kind of justice. But today, a worldwide campaign to compensate Holocaust survivors has become engulfed in its own moral turmoil. In particular, the campaign has sparked a highly public debate involving the oldest anti-Semitic theme of all: money. Did the Nazis kill the Jews for their money, and can money ever repay the crimes of the Holocaust?

What started with the hunt for victims' accounts in Swiss banks in 1995 rapidly escalated into an effort to return looted art to its original owners and their heirs in Austria and France. Finally, this year, the campaign turned to its ultimate target: to win restitution from German companies that profited from looted Jewish assets and from slave labour in concentration camps.

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For survivors, the campaign underlines how the Holocaust represented more than just the destruction of Jewish life across Europe. Miles Lerman, chairman of the Washington Holocaust Memorial Council and a survivor himself, said: "It was not coincidental that IG Farben or any other industrial complex in Germany settled themselves around Auschwitz-Birkenau. They were getting labour for 10 cents a day.

"We are interested not in the dollars and cents but the fact that it was by design. They were trying to utilise and benefit from every aspect of the prisoners. First, their labour, then they were gassed for their hair, their gold teeth and even their bones were crushed and used as fertiliser."

Armed with such evidence - much of it from archives opened after the end of the Cold War - the leaders of the various restitution campaigns have taken an aggressive stance. Jewish groups in the US have threatened economic sanctions against German and Swiss companies and embarrassed their directors into settling claims. Class action lawyers representing "tens of thousands" of camp survivors are preparing lengthy legal action in Brooklyn, New York, toward the same goal.

Taken together, it amounts to a bold and sometimes brash campaign that is challenging established views of corporate morality, Jewish politics and Holocaust history.

At its centre is a sprightly Brooklyn rabbi who leads the small but influential World Jewish Congress (WJC). Israel Singer has been credited with spearheading the public fight for compensation and insists the struggle involves far more than money.

"I don't want to enter the next millennium as the victim of history," he said. "Himmler said you have to kill all the Jews because if you don't kill them, their grandchildren will ask for their property back. The Nazis wanted to strip Jews of their human rights, their financial rights and their rights to life. It was an orderly progression. I want to return to them all of their rights."

Singer's aim is to reconstruct an image of Jewish life before the war, one that will drive out visions of emaciated concentration camp prisoners in their striped uniforms. "I want to know how they filled their libraries and their homes with paintings. I want to paint a picture of the Jew before the war properly, not as a victim but as a society. This is our project - to take these people and breathe new life into them."

A veteran of the civil rights movement of Martin Luther King in the 1960s, Singer rose to prominence with the WJC in the 1980s, fighting for the rights and freedoms of Jews in countries behind the Iron Curtain. But the WJC's first big headline coup was its criticism in 1986 of Kurt Waldheim, Austria's president and the former UN secretary-general, whom it accused of lying about his role as a Nazi officer.

Such high-profile tactics have proved remarkably successful again in the campaign for Holocaust compensation. After a bitter, two-year international conflict, the Swiss banks agreed to pay $1.25 billion (£912 million) in August to needy survivors and to promote Holocaust education.

German businessmen and politicians have proved more ready to accept compensation claims. The list of more than a dozen companies which have agreed to pay into a slave labour compensation fund reads like a roll-call of German industry and finance: BMW, Volkswagen, Siemens, Deutsche Bank, Dresdner Bank. The single-biggest target is now Deutsche, which last month admitted it had helped finance the building of Auschwitz. The admission came as city and state regulators - prompted by the WJC - threatened to block the bank's proposed merger with Bankers Trust of the US over its Holocaust record.

Yet, in spite of the successes, some Jewish leaders have questioned whether the funds represent much more than blood money. They fear the high-profile campaigns have aggravated latent anti-Semitism, pointing to the backlash in Switzerland. There, Swiss bank negotiators were accused of succumbing to moral and emotional blackmail from the Jewish group, and there was dark talk of an international conspiracy against the Swiss.

Abraham Foxman, national director of the Anti-Defamation League, said: "When we talk about justice there is no way to obtain justice for what was lost, destroyed and stolen. The best we can get is symbolic justice, but what price are we paying for it?

"What troubles me is that in this quest for accountability and a measure of justice, it will skew the history of what the Holocaust was all about. Jews were killed because they were Jews, not for their money. How many Jews had Swiss bank accounts and how many had gold teeth? It is such a perversion of the tragedy. The last soundbite of the Holocaust in this century will be about Jews with their Monets and Stradivarius."

The emotive tactics have also been rejected by other Jewish communities, such as the one in France, which has bitterly disputed the WJC's campaign over the restitution of looted works of art. The WJC branded more than 2,000 plundered masterpieces - currently in the hands of the French government - as "the last prisoners of war".

But Adolphe Steg, vice-president of the Matteoli Commission of historians charged with locating looted Jewish assets, reacted angrily to the comparisons. A former resistance fighter who was imprisoned in Lyon in 1942, Steg said: "In France we know what it means to be jailed. We consider that someone over the Atlantic who comes to give us lessons has to be more cautious and more measured with modesty."

The campaign underlines just how far the American Jewish community has developed compared with its counterparts in the diaspora outside Israel. David Harris, executive director of the American Jewish Committee, said: "This is a new Jewish community which is assertive where necessary and not afraid of finding allies in the US administration and Congress. It recognises that moral argumentation alone is not sufficiently persuasive.

"You can no longer push Jews around. That is an important psychological dimension in this campaign. After suffering the greatest tragedy in history accompanied by the greatest theft of the century, you will no longer find Jews hiding behind the fear of unleashing anti-Semitism."

If the more aggressive Jewish groups' tactics have alarmed some, the strategy of the group of class action lawyers has proved even more controversial. The lawyers have been among the most tenacious negotiators with both the Swiss and German banks, condemning the WJC for appearing to favour low settlements.

For the lawyers, the crusade is not about reconstructing Jewish communities but proving basic corporate responsibility for human rights abuses. Michael Hausfeld, one of the lawyers suing for slave labour and looted Jewish assets, said: "If we are going to have a global economy, including South Africa, Cambodia and Bosnia, then we as a world need to establish what international humanitarian principles we are going to hold everyone to, as a minimum.

"I want to establish the principle that there are fundamental human rights recognised on an international basis that no government and no corporation can evade, and will be held accountable for, regardless of the passage of time."

However, the lawyers have themselves become bogged down in a moral quagmire. While most lawyers acted free of charge in the Swiss bank negotiations, many - including Hausfeld - are now seeking fees from any settlement with the German companies. "We are trying to keep it in single-digit percentages if possible," Hausfeld said.

For Holocaust survivors, the lawyers' fees and tactics are little short of reprehensible. Roman Kent, chairman of the American Gathering of Jewish Holocaust Survivors, said: "When we have lawyers running around from one country to another trying to ambulance chase, then of course it gives people the wrong sense of what the Holocaust was and is to be. "From my point of view, if the lawyers want to help us, that is one thing. But if they want to work on a contingency basis then it has no place in this. You just see the glitter gold in front of the eyes of the lawyers."

But can money serve any purpose in the case of the Holocaust? There is at least a practical need for the cash, according to survivor groups. Although Germany has already paid more than DM96 billion (£38.7 billion) to survivors, the ending of the Cold War revealed that thousands in the former Soviet bloc had never received any compensation. Others lost their claims because they lived under false identities, which they adopted to escape Nazi persecution.

For many, the issue of money is largely symbolic. Stuart Eizenstat, the US undersecretary of state who has spearheaded the investigation into Holocaust assets, said: "There is a real difference between restitution of property that can be identified and the more debatable issue of the class actions where you have more generalised payments.

"After all, the great bulk of the people who will be paid under the Swiss settlement will have had no relationship to Swiss banks. When we were developing the structure of the deal we called that the rough justice amount. I think there is a certain symbolic quality that only money can convey to repair the injustices."

When and where will the campaign for justice and compensation end? The answer, for the Germans as for other collaborating nations, may be many years away. Israel Singer said: "The Germans say we are the only ones who can give closure to this. But you know when there is closure? When the last Holocaust survivor dies. And you know when there is moral closure? Probably never."