Israel Criticizes Jewish Claims Conference Huge Profits Casts Shadow over Holocaust Survivors Organization

Through the sale of property Nazis stole from Jews in eastern Germany that was later signed over to the organization, the Jewish Claims Conference has made a profit of about 1.5 billion euros. But not all of that money has been given to Holocaust survivors. Criticism of the powerful organization is growing in Israel and many are calling for greater transparency.

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A solidarity march for Holocaust survivers in Israel: Not all of the money from sales of property by the Jewish Claims Conference has gone to the victims.

A solidarity march for Holocaust survivers in Israel: Not all of the money from sales of property by the Jewish Claims Conference has gone to the victims.

The building at Sophienstrasse 26 is plain and functional. The guard in the lobby and the access control system are the only clues that this building in Frankfurt's Westend neighborhood houses more than just ordinary offices. In fact, it is the German headquarters of one of the world's most influential Jewish organizations, the Jewish Claims Conference (JCC).

Georg Heuberger, a small, white-haired man, greets visitors in his office on the sixth floor. The 62-year-old, the JCC's representative in Germany, reports to the organization's main office in New York. When Heuberger, a historian, took the position two years ago, he knew that the JCC is not uncontroversial among Jews, especially given its sensitive monopoly: the exclusive right to distribute compensation funds from the German government to the Jewish victims of Nazi persecution. He had not been in office long before he began hearing complaints.

Meanwhile, Heuberger is no longer the only target of grievances. Around the globe, the descendants of Holocaust victims feel unfairly treated by the JCC, an umbrella association for Jewish organizations. They accuse it of hoarding compensation and restitution funds instead of distributing them to victims. The JCC's critics include the Israeli government and parliament.

The money at the center of the controversy consists of funds the JCC collected in Germany. The organization, established in 1951 to enforce Jewish restitution claims against Germany, found a new field of activity in eastern Germany in 1990. There, it searched for real estate once owned by Jews, seized by the Nazis and eventually nationalized by the East German government -- all without compensating the owners or their heirs. After the fall of the Berlin Wall, the heirs were given until 1992 to file claims. By law, those who did not file such claims forfeited their property to the JCC. According to its own records, the JCC has earned about €1.5 billion ($2.3 billion) from the sale of properties following restitution.

According to the JCC, the proceeds from these sales are used "for the benefit of Holocaust survivors." But representatives of victim groups question whether this is true and accuse the JCC of a lack of transparency and of having accumulated enormous reserves. Documents SPIEGEL has obtained also suggest questionable business practices. Internal documents paint a picture, not of a selfless organization devoted to championing the rights of others, but of a business enterprise sitting on assets worth hundreds of millions of dollars.

In Israel, the venerable organization has come under public pressure as a result of a film by Israeli journalists Guy Meroz and Orly Vilnai-Federbush. In the film, which was aired in early May, the Israeli Pensioners' Affairs Minister Rafi Eitan calls the JCC "a gang." The government has already taken action in response to the film. A €400 million ($620 million) fund for Holocaust survivors requiring special care was withheld from the JCC. The Movement for Quality Government, a citizens' group leading the fight against corruption in Israel, even wants to see the JCC placed under the supervision of a German-Israeli government commission.

The activity in Jerusalem has reverberated in Berlin, where negotiations between the JCC and the Finance Ministry are scheduled to take place on Wednesday. Heuberger's goal is to increase various compensation funds and to gain recognition of additional victim groups. But now JCC representatives fear that the course of events in Israel could obstruct the talks with the German government.

The main reason that the JCC petitioned for large restitution sums after 1990 was the Nazi confiscation of real estate. When property records in eastern Germany became accessible, they were often in deplorable condition. The JCC's German office sent out researchers to comb through address records and telephone books from the 1930s, as well as the membership lists of Jewish congregations. In each case, the JCC petitioned for the restitution of the applicable piece of property, even when it did not know whether heirs or property owners were still alive.

JCC representative Georg Heuberger: Criticism from around the world

JCC representative Georg Heuberger: Criticism from around the world

The JCC had plenty of competition in its struggle to lay claim to these properties in the former East Germany. Many attorneys eagerly listed themselves as claimants, even without powers of attorney, and then placed newspaper ads to locate the corresponding heirs, so that they could buy the property from them. The consequences were bizarre. When the deadline for filing restitution claims expired on Dec. 31, 1992, approximately 240,000 claims had been filed for properties formerly owned by Jews -- in East Berlin alone. Up to 10 different claims were filed for some pieces of property. In most cases, the JCC was one of the claimants.

Shortly before the 1992 deadline, the JCC, after tough negotiations with the German government, managed to achieve a decisive advantage: It was the only claimant that was granted the right to file broad claims. Even important details, such as the exact location of a piece of property or the names of the original owners, could be filed later in the restitution proceeding.

The preferential treatment of the descendants of Holocaust victims remains a source of considerable dissatisfaction today. Ironically, the purpose of the agreement between the JCC and the German government was to prevent former Jewish assets from being awarded to the German treasury if heirs could not be found. The JCC interpreted the agreement to its benefit, arguing that heirs had, after all, been given the opportunity to file their claims before the 1992 deadline.

But these heirs were in a far less favorable position than the JCC. If they filed claims after the deadline, they could only hope that the JCC's New York office would be accommodating and willing to make exceptions for their individual situations. Two brothers living in Australia, for example, neglected to file their claims to an apartment building in Berlin's Pankow district by the filing deadline. They simply did not know that the building had once belonged to their grandfather. When they learned the truth in 1999, the building had already been signed over to the Claims Conference. The brothers wanted to keep the building, but the JCC had it auctioned off.

The brothers' only remaining option was to file a petition with the JCC under the auspices of the organization's so-called “Goodwill Fund”. As a precondition, they had to accept that they had "no legal claim" to "payment of portions of the proceeds" and had no legal means of contesting the decision in favor of the JCC. In the end, the JCC's Special Committee in New York agreed to pay the brothers 80 percent of the price realized at auction, with the JCC keeping the balance. Although the brothers still see themselves as the only rightful heirs, they gave in. "My clients reproach the Claims Conference, in the clearest of terms," their attorney wrote to the JCC, "for not having looked after the interests of the original owners, but instead exclusively pursued its own interests."


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