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Superintendent Taylor Testifies Before Judge Korman at a Swiss Bank Holocaust Litigation Hearing
Requests That More Bank Account Claims Be Processed Before Funds Are Distributed

April 29, 2004

Good morning, Judge Korman. Thank you for this opportunity to provide comments on the recommendations the court has received from Special Master Judah Gribetz and Deputy Special Master Shari Reig for the allocation of excess and possible unclaimed residual funds. Over the past months you have received a plethora of proposals, many of them commendable for their efforts to provide humanitarian assistance programs serving needy Nazi victims into the next decade.

Having said that, I feel it appropriate to take a step back to recount the reason I am here and to sketch our involvement in these issues since 1996, when the world finally began to pay attention to the fate of assets deposited in Swiss financial institutions. Governor Pataki, at the urging of then Superintendent Neil Levin, encouraged the Banking Department to use its influence, expertise and reach to help rationally resolve these emotionally charged and tangled estates.

We have been actively committed ever since, first with our investigation into the wartime activities of the Swiss banks’ New York Agencies and then by establishing the Holocaust Claims Processing Office, as part of the Department. Our involvement has extended further still, with the establishment of the International Commission on Holocaust Era Insurance Claims, also a legacy of the late Neil Levin.

The so-called Swiss dormant account issue was a catalyst for a number of other Holocaust era looted asset questions, including "lost" accounts, insurance claims and missing artwork. The Banking Department has been intricately bound to resolve many of these issues in the intervening years through the steady, solid work done by the Holocaust Claims Processing Office. Since we opened our doors to claimants in 1997, we have received a total of 4,754 claims from 45 states and 37 different countries regarding bank accounts, insurance policies or lost or stolen art. Some have been resolved, others are still under investigation.

As important as these other issues are, it was clearly the fate of assets deposited in Swiss financial institutions by individuals who were persecuted by the Nazis and their henchmen in their sweep across Europe that brought us all here in the first place. In 1998, a sizeable settlement with the defendant banks was achieved and the Claims Resolution Tribunal in Switzerland (the CRT) was established to review and resolve claims for Swiss bank accounts. By early 2001, the names of 21,000 possible claimants account holders – out of 33,000 applicants from around the world – were published, out of a total of 36,000 accounts identified by the Volcker audit as possibly or probably having belonged to Holocaust victims. This publication prompted more than 33,000 claims from around the world.

I do not intend to speak for the CRT – I am sure you will hear from them today regarding the difficulties they have faced and the challenges that still await.

What I will say is that to date $139 million has been returned to bank account owners or their heirs in connection to 1,145 awards. Contrasted with $200 million in payouts to former slave laborers and surviving refugees, who have been paid almost in entirety and more than $200 million already distributed and/or allocated to humanitarian assistance programs serving 100,000 of the neediest survivors worldwide, restitution to the account claimants is lagging.

Let me be clear – I am not disputing the worthiness or necessity of any of these other payments. They are essential humanitarian reparations. But put another way, virtually all of these allocation and distribution programs are now nearly finished – except for the deposited assets class that deals specifically with the funds deposited by former bank customers – that is: the very group of individuals whose claims prompted our involvement some eight years ago.

Based on our experience, the Banking Department is aware of the difficulties encountered by those trying to research such claims and match what information has survived in the banks to the often-fragmentary information that claimants can provide. We alone have received nearly 1,700 claims from 33 different countries seeking to recover assets still believed to be held by banks in Switzerland. These claims reference more than 2,312 individuals who lived in pre-war Europe and are believed to have had a customer relationship with a Swiss financial institution.

Therefore, the Banking Department’s Holocaust Claims Processing Office has been working closely with the CRT in an effort to help expedite these claims to Swiss bank accounts. While only 5 percent of the CRT’s claims originated with our department, more than 10 percent of the CRT’s payments to date have been made to claimants who have worked with us.

I say this to illustrate that I know whereof I speak. This is hard, exhausting and exhaustive work. We are clearly faced with a Herculean task. The overwhelming majority of claims remain unresolved. This is the main reason I would respectfully submit to you, Judge Korman, that before this court determines how to allocate any so-called ‘residual’ funds, the CRT be given an opportunity to complete its work on the claims it has received. Until this has been achieved, there is no accurate means of determining just what may be left as so-called ‘residual’ funds.

Moreover, I must confess that from where I sit, as difficult as it may be to hear for those representing so many commendable projects here today, I rather hope that there will be no funds left. That is: I sincerely hope that we can identify as many rightful owners of bank accounts as possible and extend awards to their heirs as quickly as possible. That is what I have always understood our priority to be.

It was with this in mind that the Department worked hard to have the results of our investigation into the Swiss banks’ New York Agencies incorporated into the ICEP investigation. Indeed, it is my understanding that a number of accounts that were uncovered as a result of our investigation were slated for publication by ICEP as likely to have belonged to Holocaust victims.

Similarly, the New York State Banking Department has repeatedly stressed the importance of unfettered access to the total accounts database containing the 4.1 million Holocaust-era bank accounts located during the Volcker investigation – a database we believe is imperative for those reviewing and adjudicating claims.

The Holocaust Claims Processing Office works with Holocaust survivors and the heirs of Holocaust victims and survivors every day. From this first-hand experience, I know only too well how difficult this path has been and how unbearably long the wait for justice. While some claimants have been able to provide documentation for the accounts they seek; many others are dependent on the records still available in the banks to supplement their memories.

This is why publication of as many accountholder names as possible has always been so important to us. And I note from the comments you have received that we are right in our assessment. Mrs. D. puts it plainly when she states in her letter to you [and I quote]: "I know that my mother would not have known of her parents’ accounts, if it were not for the publication of the Accounts Owners list in February 2001. I also know that she abstained from making claims in regards to other relatives, because they did not appear in the said list."

I know from the HCPO’s experience that many others shared Mrs. D’s mother’s reluctance to file additional claims, not knowing whether to trust their own memories, not having anyone left with whom to compare their recollection or to ask for details. For some it must be like attempting to scale the highest mountain alone, without a map. Where does one begin and what will the view from the peak offer?

That is the undeniable reality of the Holocaust: when family, friends and neighbors are murdered, when entire communities perish, there is often no one that one can turn to for documentation or assistance with establishing the facts. Many claimants lost everything and everyone. In those cases, publication can be the only way to connect a claimant with a relative’s account.

It is my understanding that the parties are currently engaged in an ongoing discussion what additional accounts can be made public and what can be made available to the CRT for claims-related work. Let me repeat here once again what Superintendent McCaul stated in this very court in January 2001: unfettered access to the Total Accounts Database is critical if matches are to be made, accounts identified and awards made to claimants.

It is imperative that those who will be reviewing and adjudicating claims have full access to the 4.1 million names in the Total Accounts Database. If the CRT is to have credibility with claimants, if the process is to have any integrity, the facts necessary to make informed decisions must be readily available. The data compiled in the Volcker audit is an essential part of any effective case-by-case adjudication of individual claims. Otherwise we risk having the effectiveness, fairness and credibility of the entire claims process called into question.

The Special Masters’ report states that recent tests demonstrate that there are awardable accounts in the Total Accounts Database. We always suspected there would be; we now apparently have the technology to find them. Moreover, unlike three years ago, we now have claim forms from claimants that often provide the additional information needed to help determine whether account closing dates, where they are available, fall into a period of time where the account holder would have had full control of the account. Given this, it would be indefensible to place any obstacles in the way of making the best use of this information.

We also have the benefit of the work that the HCPO has done with claimants. This includes – archival and genealogical research to confirm family relationships as well as details regarding the fate of many accountholders. It also encompasses significant work HCPO staff have done with archives, financial institutions, trade associations and our colleagues in federal, state, and local governments in Europe to locate historical records identifying pre-war asset ownership for claimants. I cannot urge all involved strongly enough to make the most of the CRT’s new technology as well as the information provided by claimants and our Holocaust Claims Processing Office to help settle such claims.

In this context it is my understanding that some bank secrecy concerns remain. I am confident that the parties can find a way to ensure the list of names is searched while still remaining responsive to the needs of our Swiss colleagues and their legal framework. It would be a tragedy if limitations on access to account ownership documents, the very issue that prevented resolution of claims of Holocaust survivors for so many years, would once again make a fair claims process impossible.

We have been able to overcome similar obstacles in the past; we should be able to do so again. The Special Master’s report states that some work has been relocated to New York from Zurich without objection from the Swiss Federal Banking Commission – that augurs well. I am confident that whatever secrecy issues remain can be resolved promptly, if everyone is willing to keep the claimants’ best interests in mind.

I am fully aware that my suggestions here come close to asking for patience from those for whom the wait has already been too long. Moreover, by finding more matches and potentially more awards we are also generating far more work for the CRT and with that comes the potential for further delay. I am only too familiar with how cumbersome this process has been to date. The CRT has faced many challenges over the past three years; let us not add further obstacles to their path by denying them access to information that could help to resolve claims, thereby delaying the process further.

While I recognize how difficult the wait for justice has been, let’s remember what brought us here in the first place. We need to work hard to expedite the CRT’s efforts, I cannot stress that enough. But it is precisely because there is so much work that remains for the CRT at this juncture that we must be cautious, so as not to risk expending any of the funds we may need for deposited assets. Based on the CRT’s recent analysis, we may well need them to pay for future awards. It is my sincere hope that we will need them soon.

In closing, I commend you for your commitment to this issue. Were it not for your work, the work of the Special Masters and the CRT, and indeed the dedication of the Department’s Holocaust Claims staff, we would not be where we are today, with the potential to help so many people. We all share the profound hope that together we will be able to push forward and expedite the remaining bank claims.

In closing: Time is not our friend; the reality is that too many of those who filed with the HCPO in the years since 1997 are no longer with us. Claimants have been waiting far too long for resolution of their claims as well as for closure of this difficult issue – if we can even imagine that as a possibility.

There is no obstacle here that cannot be resolved. And as such, there is no discernable reason why claimants seeking the return of assets deposited in Swiss financial institutions should have to wait any longer.