U.S. firms to join restitution drive?

NEW YORK, May 1 (JTA) — The drive to provide compensation to Holocaust-era victims has reached American shores.

And those being asked to put up the funds are some of America’s largest corporations — Coca-Cola, Colgate Palmolive, Eastman Kodak and IBM.

While few U.S. companies have admitted to charges that their overseas subsidiaries profited under the Nazi regime, a barrage of such charges has led to the creation of a U.S. fund for wartime slave and forced laborers.

While it is too early to tell how many American firms will join the fund, there appears ample motivation for them to do so.

U.S. firms who contribute will be “expecting a general closure,” the executive director of the World Jewish Congress, Elan Steinberg, said, noting that the contributions would mean an end to several threats now looming over the companies — including sanctions, boycotts, lawsuits and image problems.

But at least one lawyer who has filed class-action lawsuits on behalf of Holocaust victims is threatening to proceed with court cases if the companies do not agree to contribute soon.

The U.S. initiative to create the fund grew out of negotiations aimed at creating a similar German fund for slave and forced laborers, according to sources familiar with the talks.

During those talks, “there were concerns about U.S. subsidiaries that benefited from such labor,” said Gideon Taylor, executive vice president of the Claims Conference, which was among the groups negotiating on behalf of the laborers.

The idea of having American companies make contributions was “discussed quite extensively” during the negotiations with Germany, Taylor said. “It was felt that there was a responsibility on the part of U.S. companies to make contributions separate from the German fund.”

The negotiations with Germany resulted in the creation last December of a $5.2 billion fund, with half the contributions coming from the German government and the other half from German industry.

After the German Parliament approves the fund, a move considered likely, the fund is expected to begin making payments before the end of the year.

The slave laborers were concentration camp prisoners, most of them Jewish, whom the Nazis sought to work to death. The forced laborers, imported from Eastern European nations to free up Germans to serve in the army, worked under better conditions than the slave laborers.

Under the terms of the German deal, some 240,000 slave laborers — about 140,000 are Jewish — will receive up to $7,500 each. More than 1 million forced laborers — most of them not Jewish — will get up to $2,500 each.

Discussions with U.S. firms “moved to front stage” after the conclusion of the negotiations with Germany, said Taylor.

On Monday, U.S. Deputy Treasury Secretary Stuart Eizenstat announced that the U.S. fund would be created under the umbrella of the U.S. Chamber of Commerce.

The fund “will help heal the wounds of the past, avoid confrontation and settle or prevent lawsuits and other potential pressures on American firms,” Eizenstat said at the opening of a conference in Washington on corporate responsibility.

Lawsuits — threatened and actual — played a large role in creating both the German and U.S. funds.

A series of lawsuits brought in recent years in U.S. and German courts on behalf of Jewish slave laborers are generally credited with getting Germany to agree to its fund.

For its part, the Chamber of Commerce said it decided to establish the U.S. fund after it was approached by a number of firms that had been threatened with lawsuits over the same issue.

Although the details of who would benefit are still sketchy, the U.S.- sponsored fund is expected to augment its German counterpart.

“As large as the German fund is, it may not be able to cover all claims,” said Steinberg.

New York lawyer Melvyn Weiss, who has brought class-action suits on behalf of the laborers, was more blunt about the size of the German fund.

It is “short of the mark by hundreds of millions of dollars,” he said.

Weiss has estimated that as many as 200 U.S. firms with plants in Germany or occupied countries had used slave or forced laborers.

He and other lawyers researched U.S. and German archives to draw up the list of U.S. companies.

Several American firms have denied profiting from slave or forced labor, saying their subsidiaries had been taken over by the Nazis.

Hours after Eizenstat announced the fund, Weiss called the plan “vague”and said he was willing to wait “a month or so” before proceeding with his previously threatened lawsuits.

“I don’t have confidence that they will raise a meaningful amount of money,” Weiss said of the U.S. effort. “Unless they have real pressure, from litigation and public pressure, I don’t think they’re going to do it.”

Jewish leaders also felt the plan for the U.S. fund was still vague. Steinberg of the WJC called it “a great unknown.”

Still, they were optimistic.

“We welcome the commitment of American companies to face up to their responsibilities from this era,” said Taylor of the Claims Conference.

But he is not planning to sit back and wait to see what develops.

“We will be contacting the companies to have them make a contribution,” he added.