Et Tu, Israel?

What has taken the Jewish state so long to right the historical wrong toward Jewish victims of the Holocaust? And what is it doing now to make things right?

By EETTA PRINCE-GIBSON
A DEBT TO THE HEIRS 311 (photo credit: GPO)
A DEBT TO THE HEIRS 311
(photo credit: GPO)
SINCE THE END OF WORLD War II, following the urgent efforts to rehabilitate Holocaust survivors, the Jewish world has focused on restitution of property to victims or their heirs in Germany and Western Europe. And subsequently, with the fall of the Iron Curtain, attention has focused on communal and individual restitution in the countries of the former Soviet bloc.
Yet the State of Israel was called to task only in 1999, more than a decade after Jewish institutions fought with Swiss banks until they agreed to pay billions of dollars in restitution to Holocaust victims and their heirs. Following extensive research by Professor Yossi Katz, a Bar-Ilan University historian, it became clear that there were assets in Israel, too – worth hundreds of millions of dollars, if not more.
But, as in those other countries, the Jewish state and its banks, too, have been loath to provide Holocaust survivors and their heirs with the monies and properties that are legally and morally theirs.
On August 31, 2006, after five years of struggles in the Knesset, the government established, by law, the Company for Location and Restitution of Holocaust Victims’Assets, better known as “Hashava” (“Giving Back” in English), as a non-profit company. Hashava was established in order to locate assets in Israel of Holocaust victims and transfer them to the company’s trust, to trace victim’s beneficiaries and guide them through the claims process, and to allocate unclaimed assets as aid for needy Holocaust survivors and organizations that assist them.
After years of wrangling, most governmental and quasi-governmental institutions have transferred their assets to Hashava. Most banks have also come to agreements. But Bank Leumi, the successor to the Anglo-Palestine Bank of the Mandate period, has not. Both Hashava and the bank have agreed to a binding arbitration process, scheduled to conclude sometime before the end of 2010.
Says Colette Avital, former consul in New York, a former member of Knesset who headed the Knesset Committee of Inquiry that ultimately lead to the establishment of Hashava and currently a member of its directorate, “This is first and foremost a moral issue. We, the Jewish people, have fought with other countries and other institutions to force them to pay the victims what is due. We are the Jewish State; it is our obligation to provide justice to the victims and it is appalling that now we must also fight within Israel.”
As the arbitration, headed by two former justices and one recognized independent expert, proceeds, Hashava continues to actively seek out survivors and their heirs. Hashava is also calling on individuals and families, especially in North America, who believe that relatives may have deposited or invested money or purchased property in pre-State Israel to check its website (www.hashava.org.il) or to make contact with the company.
But painful questions hover over the process: What has taken the Jewish state so long to right the historical wrong towards Jewish victims? And what is it doing now – or not doing – to make things right?
ON JUNE 30, 2009, THE Terezin Declaration, signed by 46 nations, including Israel, urged that “every effort be made to rectify the consequences of wrongful property seizures, such as confiscations, forced sales and sales under duress of property, which were part of the persecution of these innocent people and groups, the vast majority of whom died heirless.”
The Nazis, of course, did not “wrongfully seize property” in pre-state, mandatory Palestine. Yet the equivalency is clear: victims and survivors had left assets in Israel, and they have been lying here, unclaimed and, in many cases, continuing to provide revenues to the state, institutions, companies and individuals.

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These assets were purchased from the late 19th century until the mid-1930s by Jews from across Europe and North America, who, at the behest of the nascent Zionist movement, invested in what would become the State of Israel. These early investors purchased real estate and bought shares of Jewish Zionist companies such as the Jewish Colonial Trust (JCT, the Zionist movement’s financial arm created by Theodore Herzl in 1899) and the Israel Land & Development Company (created by the World Zionist Organization in 1908). Enthusiastically they invested in the banks of the era, most prominently in the Anglo-Palestine Zionist Bank, now Bank Leumi, established at the Second Zionist Congress in 1898.
Although the British Mandate limited immigration to Palestine, individuals investing the sum of 1,000 British pounds or more were not counted as part of that quota. By the 1930s, with the advent of the Nazi regime, Jews were investing in Palestine because it was considered a safe haven for their assets. And under the British Mandate, investment in Palestine, which was financially prospering, was also considered a provident venture.
Some Jews deposited the money with the intention of immigrating at a later date. Some never made it to Palestine. Others came but returned to Europe for various reasons. These were the stories of wealthy businessmen and poor shtetl Jews alike, later trapped and murdered in the Holocaust.
During the war, much of the money was transferred to the British Custodian of Enemy Property in London. After the establishment of Israel, the money was repatriated, some of it to the state and some of it to the banks. As the institutions of the Yishuv (the pre-state Jewish community in Palestine) matured into state institutions, the monies and the properties came to be held by numerous bodies, including the Jewish National Fund (JNF), the Custodian of Property, United Israel Appeal, and others. Many properties were held by the Office of the Custodian General, a branch of the Justice Ministry that serves as the legal holder of property that has no owners, which inherited unclaimed assets of Holocaust victims in 1969 from the Finance Ministry’s Custodian of Enemy Properties.
Survivors or their heirs who knew they were entitled to property or other assets were able to claim them. But with regard to bank accounts, the amounts were usually paltry at best – since the banks took into account the devaluation of the British pound into the Israeli pound, which was devalued numerous times and then became the Israeli shekel and finally the new Israeli shekel. And while the banks offered no interest to the claimants, they did, in many cases, deduct handling and account fees over the decades.
Avital reveals that her own father had deposited 1,000 British pounds in Palestine before the war. After surviving the Holocaust, her family left Romania and came to Israel. When her father went to the bank to claim his funds, “He came back with a few lira in his hands and tears in his eyes,” she recalls. “They were tears of disappointment and humiliation.
“Money doesn’t just sit in an account over the years,” accuses Avital. “It makes money for the bank. And it should make money for its owners, too. There is clear evidence that by 1942, the Yishuv and the banks knew very well what was happening to the Jews in Europe. They had a moral responsibility to these Jews to take care of their money, to make sure that it maintained its value and that it was held for them or for their heirs.”
Furthermore, Avital continues, when no one claimed the assets, the state and the banks did not do enough to find out if there were living survivors or heirs. “Everyone was very comfortable just leaving things they way they were.”
AVITAL TELLS THE REPORT THAT she became involved with the restitution process in Israel when she read Katz’s report. “I was infuriated at the injustice,” she recalls. “As consul general [in New York], I had been involved in the demands that the Swiss banks make restitution. How could the Jewish state do any less than what we demanded of others?”
 In 2000, she established a Knesset Committee of Inquiry, which worked for five years to identify heirs and holdings. The task was difficult and intricate. Some state companies had been sold to private owners, who demanded that they be exempted from any liabilities that might be found. Lots that were once in peripheral areas are now in the center of the country; some have been developed, others remain in disrepair. Most have changed hands many, sometimes dozens, of times. The Custodian General originally claimed that it did not have any relevant information, and only when the Knesset hired workers to find the files did they acknowledge that they were, in fact, holding properties. Some institutions refused to open their files for the committee, others closed their archives, making the investigative work even more difficult.
Many documents had been lost over the years. In the 1970s, a fire in the offices of the Custodian General wiped out valuable evidence. When files were computerized in the late 1970s, dormant accounts with smaller amounts were simply erased.
Formulas for evaluating the worth of the assets today had to be worked out. The Knesset determined that all deposits owned by Holocaust victims who have identifiable heirs be linked to inflation and carry four percent interest. Deposits with no living heirs would be linked to inflation starting in 1948 and carry three percent interest.
The work of the committee led to the passage of the laws that established Hashava. Avital emphasizes that, subsequent to the passage of the law, all of the relevant institutions – except the banks – did transfer their holdings to Hashava’s trust. “Eventually, they realized that this was not only the law, it was the right, moral and just thing to do,” she says.
The banks, on the other hand, were unwilling to cooperate. Avital recalls the angry backand- forth between the banks and her committee. To date, Discount Bank and Bank Hapoalim have returned the assets to Hashava, and Mercantile-Discount Bank and Bank Mizrahi are still in negotiations, although Hashava is confident that they will reach settlements soon.
But the bulk of the accounts were in Bank Leumi, which refused to cooperate with Hashava. Initially, the bank claimed that the majority of the funds had been transferred to London; if the money had been repatriated, Bank Leumi claimed, it had not been returned to the bank. The bank did offer 20 million shekels (approximately $4.5 million) to the Holocaust Survivors Fund, the umbrella organization for survivors in Israel.
The committee, working from international and Jewish archives, compiled a list of some 1,300 names of accounts, but the bank proved that many of the names – the bank claimed 70 percent – were not even the names of Holocaust survivors. “Of course there were errors,” retorts Elinor Kroitoru, Hashava’s head of the Asset Location and Heir Search division. “Had the bank handed over the lists of accounts, as Hashava demanded, and in accordance with every sense of justice, the lists would have been correct. Instead, we had to work backwards.”
Hashava demanded that Bank Leumi hand over the sum of 305 million shekels (some $77m.), the projected sum of the expected claims. In 2008, Bank Leumi’s board chairman and legal advisors asked former Supreme Court Justice Theodor Orr to examine the bank’s liability; Orr determined Bank Leumi is not legally obliged to hand over to heirs money it had held for people who died in the Holocaust. Hashava angrily rejected Orr’s opinion and threatened to sue Bank Leumi. Eventually, the sides agreed to arbitration.
Says Avital, “In Jewish tradition, we speak of the more strict rulings of the House of Shamai and the more compassionate rulings of the House of Hillel. I would have hoped that the banks would have acted according to the House of Hillel.”
Aviran Cohen, spokesman for Bank Leumi, refused to respond to any questions from The Report, repeating only that since the matter is in arbitration, he will not comment.
BY LAW, ALL ASSETS IN Hashava’s possession must be publicized and some 66,000 assets are currently listed on the company’s website, in Hebrew, English and Russian. In 2009, Hashava began advertising on Israeli radio. In 2010, they began the campaign to find survivors and heirs in North America.
Since its inception, Hashava has come to control about 800 million shekels worth of assets, of which more than 34 million shekels ($8.5 m.) have been paid out to inheritors, 90 percent in Israel and 10 percent in the Diaspora. The company says it is continuing to search for properties, as more archives, including letters and other personal documents, are found in Europe.
According to Jeremy Ruden, spokesperson for Hashava, as of December 2009, Hashava holds 500 plots of land; 49 apartments; 147,997 shares from the Jewish Colonial Trust; 250 million shekels from government agencies; a deposit of 20 million shekels from Bank Leumi; 1.27 million shekels from Bank Discount; 871,000 shekels from Bank Hapoalim and smaller amounts from the other banks and sources.
The places of origin of the original owners reveal some of the early support for the Zionist movement. Some 29 percent of the assets held in Israel were purchased by Jews residing in Russia; 15 percent lived in the Ukraine; 14 percent in Poland (although some 25 percent of Polish assets were purchased in areas which were part of the former Soviet Union); even in countries as poor as Belarus, Jews purchased 5 percent of the current holdings. Two percent came from Germany.
The Israel Museum is also holding works of art and Judaica of survivors and their heirs, handed over by its predecessor, the Bezalel National Museum, which received them from the organizations created to represent Jewish constituencies. Like Hashava, the Israel Museum has listed these holdings on its website, for survivors and heirs to review. “While much of this work may not have much artistic value, it all has tremendous emotional and moral validity,” James Snyder, director of the Israel Museum, tells The Jerusalem Report.
To date, some 10,000 restitution applications have been made, and successful claims have been filed by some 1,300 people from throughout the world. According to Ruden, the average rate of restitution of Jewish property throughout the world is about 10 percent. Hashava has located between 13 and 15 percent of the heirs, and hopes to reach some 20% of survivors or, more likely, their heirs.
AVITALATTRIBUTES THIS RELAtively high “success rate” to the fact that Hashava does not merely respond to applications but is mandated to actively search for heirs. “We are an Israeli institution that is not asking the Jewish world for money, but is actually trying to return money,” she says.
Kroitoru and her team of about a dozen researchers comb through archives, property registrations, and so forth. “We try to draw a family tree, so that we can find the heirs.”
Not everyone wants the money. In some cases, Kroitoru says, and especially when the sum is small, family members ask that the money be donated to needy Holocaust survivors. In other, more complex cases, the owners tell Kroitoru that they have not lived as Jews all their lives, that even their children do not know that they are Jewish, and that they do not want to identify as Jews now. “Sometimes they tell me that they cannot open these wounds at this late stage in their lives.” Most of these individuals live in the former Soviet Union, where the Holocaust was followed by Soviet repression, although several were also located in the US.
In some cases, Hashava has reunited long-lost family members. Recently, a brother-in-law and sister-in-law, both in their 90s now, who had been living in Israel “within seven miles of each other” were reunited when Kroitoru’s team informed them that they were the heirs to property in Israel. “When we visited their homes, we found that they have both kept the identical family picture, taken before the war,” Kroitoru says, clearly still excited. Sometimes, Kroitoru is able to provide people with other artifacts that she comes across during the search after the investments. “When you know that you had a grandfather who died in Auschwitz, whom you never knew and you don’t even have a picture of him and then you receive a paper with his signature – this is very meaningful.”
When is an asset finally considered unclaimed? “This depends on the country from which the asset was purchased and on the sum, and there are clear criteria,” Kroitoru answers. “But even if we declare an asset unclaimed, if at some later point, we find we were wrong, the rightful heir will receive what he or she is entitled to, since we are bound by law to keep 20 percent of the holdings in cash.”
“Maybe it sounds like a cliché,” she adds. “But to me this is truly a mission. I am a lawyer by profession, and lawyers don’t always deal with justice. Hashava is dealing with historical and moral justice.”
AS HASHAVA CONTINUES its intensive search for survivors and their heirs, needy Holocaust survivors in Israel are suffering. Kroitoru acknowledges that this is a dilemma. “On the one hand, we are bound, by law and by duty, to search for every heir. But on the other hand, if we are successful, we will be able to restitute some 20 percent of the assets we have obtained, while there are needy survivors who are desperate, right now, for the aid we can give them.”
In 2010, some 127 million shekels were budgeted for aid to Holocaust survivors, as direct aid to survivors and organizations that deal with survivor welfare, including 15 million shekels over Rosh Hashana to some 10,000 Israel-based Holocaust survivors in need, deposited directly into the individuals’ accounts. Decisions were based on Israeli laws defining eligibility for support, which, while controversial among the survivors, are, Hashava officials explain, the only legal criteria available.
Nor is Hashava without its detractors. One daughter of a survivor, speaking with The Report on condition of anonymity, says that the officials from Hashava “were very kind and very efficient, but in the end, I wouldn’t have gone through the long list on the web, or filled out the form, if I had known that the sum I was entitled to – which was money that my grandmother had deposited at the turn of the century – was a mere 200 shekels.”
Kroitoru acknowledges that the online list of unclaimed assets includes few details, in order, she says, “to minimize fraud and because of privacy issues.”
And although Bank Leumi spokesman Cohen refused to respond to any of The Report’s questions, in the past, representatives of the bank have publicly criticized Hashava in the media, contending that the establishment of the institution was unnecessary and that, like all institutions, Hashava would, ultimately, merely accumulate assets and engage in self-preservation.
Avital responds vigorously. “By law, we are limited to two percent overhead. We must selfliquidate within 15 years of establishment, so Hashava really has no motivation to amass assets. We employ the lawyers and the professional support to make the claims – applicants to Hashava need only fill out a two-page form, and we will do the rest.
“We have seen how the banks have responded,” she continues. “Imagine if each individual – even if they knew they had assets – had to make their own claims to the banks – they would never get anything that they are entitled to.”
What will happen to the assets when Hashava is liquidated? Kroitoru says that the decision has not yet been made. “By law, we are not allowed to give the money to institutions that receive government support, although Yad Vashem may be entitled to receive some of the funds. Most of the money will probably go to education and commemoration, since it is unlikely that there will be any survivors left at that point.”
In conclusion, Avital says that she is still troubled. “I’ve really tried to understand why the banks and the state have acted the way they have. The banks’ reasons are clear – there’s a lot of money there. But with regard to the State of Israel, it is less clear to me.
“Yes, there is money here, too, and the state and its institutions benefited from it. But I believe the answer goes deeper. I believe that the state did not want to be identified with the Holocaust experience or accept responsibility for what was happening in Europe to the Jews while the Jewish state was coming into existence.”
Details regarding Hashava and the assets it currently holds can be found at:
www.hashava. org.il. The company encourages individuals and families throughout the world to visit the site to see if their relatives are on the list.