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Superintendent Elizabeth McCaul Testifies On Proposed Claims Resolution Process For Holocaust Victims' Claims Against Swiss Bank


January 19, 2001

The Superintendent spoke today on the claims process for Holocaust victims, her speech follows:

Thank you for this opportunity to appear before you today to offer my comments on the Proposed Rules Governing the Claims Resolution Process.

I want to commend both Special Master Paul Volcker and Special Master Michael Bradfield for your unwavering commitment and dedication to the just resolution of claims to Holocaust-era Swiss bank accounts. The draft rules that you created are yet another example of your dedication to ensuring the claims of Holocaust victims are handled in an appropriate manner.

I am here today to tell you that I strongly support the proposed rules and urge the court to implement them.

The New York State Banking Department takes this matter very seriously. As a regulator we must ensure that banks operate under safe and sound procedures and that the public confidence in banking institutions is maintained. The most fundamental responsibility of a bank regulator is to ensure that the banking system has the confidence of the public and that customer assets are protected, whether they were deposited one year ago or sixty years ago.

It was this concern for the protection of customer assets that formed the basis for the Banking Department's initial opposition to the proposed merger between the Union Bank of Switzerland and the Swiss Bank Corporation in 1998. Only after we received appropriate assurance and evidence of cooperation did we move to approve the merger.

As you know, the issue of Holocaust claims is of great importance to Governor George E. Pataki, who first directed the Banking Department in 1996 to investigate the pre-war and war-time activities of Swiss Banks that operated here in New York State.

The goal was to identify all the accounts held by those banks and determine to what extent assets held here belonged to victims of the Holocaust. Those investigations are virtually complete and much of the information uncovered has been integrated into the work of the International Committee of Eminent Persons ("ICEP") in Switzerland.

Most recently, I was informed that a number of accounts which were uncovered as a result of our investigation are slated for publication by ICEP as likely to have belonged to Holocaust victims.

Our concern with this issue, however goes much further than just documenting the past.

In 1997 the Governor authorized the creation of the New York State Holocaust Claims Processing Office as an arm of the New York State Banking Department. This office was established for the sole purpose of assisting and advocating on behalf of Holocaust survivors and their heirs who were trying to recover assets wrongfully held or stolen in World War II.

To give you an overall picture of the work the Banking Department is doing with regards to Holocaust claims since the office opened in 1997, I want to share a few statistics with you.

The HCPO has received a total of 4,615 claims from 33 countries and 44 states referencing nearly 7,000 individual bank account and insurance policy holders. In addition, the HCPO has received 66 looted art claims from 7 countries and 17 states referencing more than 16,000 lost, looted, and stolen items.

More specifically, a significant number of individuals who lived in pre-war Europe are seeking to recover assets still believed to be held by Swiss banks in Switzerland. We have received more than 2,200 claims from 30 different countries referencing over 3,200 individuals.

Given this involvement, the Banking Department has been following the Swiss bank settlement very closely and has reviewed the rules of procedure for the Claims Resolution Tribunal proposed by Special Masters Volcker and Bradfield.

These rules represent an extraordinary effort on your part to ensure that a process is established which is fair and equitable. They cover a number of important issues, some of which I would like to emphasize and expand upon.

Today I would like to offer our views which are based largely upon our experiences in handling and settling claims of Holocaust survivors for more than three years. I would like to do that by commenting on four important principles laid out in the proposed rules of procedure that we believe should be followed in the claims process:

  • unfettered access to information,
  • individual adjudication of claims,
  • the cooperation of banks, and
  • the broadest possible publication of names.

First, and most important, unfettered access to information is imperative for those who will be reviewing and adjudicating claims.

If the CRT is to have any credibility with claimants and their representatives, the facts necessary to make informed decisions must be readily available. Without this access, there is a very real danger that the effectiveness, fairness and credibility of the entire claims process will be called into question.

In order to ensure that the claims process is one which has integrity we believe it is imperative that all claims filed with the CRT be processed in a manner which ensures the names contained in claims are compared with each and every one of the 4.1 million accounts identified by the Independent Committee of Eminent Persons (ICEP) audit firms.

As you know, I sent a letter to Judge Korman in November, 2000, expressing this opinion and the reasons behind it.

Today I want to reiterate that opinion again. I want it to be very clear-- the bottom line is that we want ALL of the Swiss bank databases that contain 4.1 million names to be searched.

We now know there are over 4 million accounts that have been identified as having been opened between 1933 and 1945. Under your leadership Mr. Volcker, the ICEP auditors compiled this data during the course of a massive three year audit. During the course of our investigation of the Swiss accounts here in New York, my staff pushed tirelessly to ensure that every single account that could be identified was identified.

That work product is now incorporated into the work product of the ICEP auditors. It would be indefensible to place obstacles in the way of using the results of the audit—the data compiled is an essential part of any effective case-by-case adjudication of individual claims.

Only by ensuring that full and complete searches are conducted can we ensure that the claims of survivors and their heirs are being handled in a just and proper manner.

The reason we attach great importance to the need for searching all names identified by the ICEP auditors, as opposed to searching only those 46,000 accounts classified as "probably or possibly belonging to Nazi victims" is not solely grounded in basic concepts of fairness.

There are real reasons to believe that additional Holocaust victims’ accounts are unaccounted for because they have Swiss addresses.

This belief is based not only on what we have seen and heard from claimants in the course of the past three years, but is also based on what we have heard from the banks themselves.

Nobody denies the fact that non-Swiss accountholders did use Swiss addresses, such as those of friends, lawyers, business associates, or quite possibly even fictitious Swiss addresses. Some banks have readily acknowledged that at times depositors were encouraged to do so by the Swiss bankers themselves.

I would leave you with a question on this point. Can anyone present to you and the court that there is no possibility of any Holocaust victim’s account being present in that universe of 4.1 million accounts? If not, there can be no justification for not searching the 4.1 million accounts when evaluating claims.

This is why we believe the claims process must find a way to screen for this information or risk missing a significant number of legitimate claims. We understand that granting the CRT the ability to search these names raises concern among the Swiss banks regarding Swiss bank secrecy laws.

I am confident that as Special Masters with enormous experience in these matters, it is not beyond your capabilities to find a way to ensure the list of names are searched while still remaining responsive to the needs of our Swiss colleagues and their legal framework.

The second principle addressed by Special Masters Volcker and Bradfield is that the proposed plan assures individual adjudication of claims lodged by Holocaust survivors or their heirs. ICEP recommended that a fair and efficient process be established to adjudicate claims from survivors of the Holocaust and the heirs of Holocaust victims and survivors for assets deposited in Swiss banks.

The proposed plan implements the ICEP recommendations, and is clearly guided by the principle that individual claims to deposited assets must be individually adjudicated. The New York State Banking Department and the HCPO believe the current draft plan ensures not only that this is done, but also that such claims are adjudicated in the most fair and equitable manner.

The third principle addressed in the plan is that the cooperation of banks is necessary and crucial to a speedy resolution. Obviously, given that the most extensive sources of information about these 4.1 million accounts are still with the individual banks, the CRT will also need to work closely with the banks in resolving claims on unpublished accounts. The proposed plan establishes a clear framework for such cooperation. It is our view that with this framework in place, accepted by all parties, the process will be streamlined to help prevent further delays. The written commitment of cooperation made by banks such as Credit Suisse and UBS-AG is important since it will be critical in the coming months as more decisions are made.

As I stated in my letter to Judge Korman, "it is imperative that their commitment have practical and specific expression so that the claims process ultimately put in place will not be one doomed to fail at the outset because limitations were placed on access to, and use of the wealth of information collected and identified by the ICEP auditors."

Lastly, it is extremely important for our claimants and claimants worldwide that the CRT publish the full list of names as widely as possible.

The proposed rules note ICEP’s recommendation that the 26,000 accounts with the highest likelihood of belonging to Nazi victims be published, a recommendation which has been endorsed by the Swiss Federal Banking Commission (SFBC). This is very good news and the SFBC is to be commended for their decision on this matter which we realize represents a departure from traditional Swiss bank secrecy laws.

The importance of publication of accountholder names may not be clear to those who have not worked with survivors of the Holocaust on a daily basis.

Let me explain: Many claimants lost everything and everyone, and with that the ability to ask others to help to complete the unavoidable gaps. Claimants are confronted on a daily basis by the simple physical impossibility of asking those who perished. When family, friends and neighbors are murdered, the truth of the matter is, the publication of names is often the only way to connect a claimant with a deceased family member’s account.

On this point, I would only like to suggest that the publication be done in a manner that is as user friendly as possible. Potential claimants must be permitted to examine complete lists of these 26,000 names and any Internet capabilities must contain a feature that allows for the browsing of names.

Widespread publication is a critical component of the claims process. It is in fact the only way to ensure full access to the most fundamental building block of the claims process – accountholder names – to claimants, their representatives and those of us committed to assisting Holocaust survivors and their heirs.

The widespread publication of 5,570 names in July and October of 1997 seems to have been fairly successful and the experiences of those two publications should be examined and used as a basis for any mechanism created for the publication of the 26,000 names.

In the same vein, it is critical that the publication date be soon. Much time has already been lost; sadly, many claimants who filed with the HCPO over three years ago are no longer with us. The HCPO has gone from losing a claimant a week to almost double that number in the past year. As you already recognize, time is of the essence.

I want to commend Special Masters Volcker and Bradfield for your commitment to this issue, if it were not for your work, the work of ICEP, we would not be in the position we are today to potentially help so many people.

In my letter to Judge Korman, I pointed out that the ICEP effort was the most recent in a number of efforts undertaken by Switzerland over the past fifty years to resolve these issues in an appropriate manner. These previous efforts failed to provide an objective and complete accounting. It would be a travesty of history if we allow the current effort to identify the rightful owners of Holocaust accounts to be less than objective or complete.

It is imperative that the information identified and compiled by the ICEP auditors in this latest and most comprehensive effort be made available to the Claims Resolution Tribunal in a fashion that will actively assist the claims resolution process.

The current effort represents what will probably be the last best attempt at providing a measure of justice to those who are still alive and the heirs of those who have since died. We should ensure limitations are not placed on the effectiveness of the claims process and that it is constructed in a way that fosters rather than hinders effective research of claims.

At the same time, we should ensure that the settlement monies go to those to whom it belongs and are not expended in an excessive manner for administrative matters.

Cost effectiveness and thoroughness, however, need not be mutually exclusive and we must ensure that this claims process is one which is thorough, one which the claimants have faith in and one which, in the end withstands the test of time.

For it would be tragically ironic if limitations on effective and convenient access to documentation on account ownership, which has for so long prevented a fair resolution of the claims of Holocaust victims, made it so expensive to adjudicate cases as to make a fair claims resolution process impractical if not impossible.

In conclusion, I want to commend you both for the work you have done over the past three years. You have performed an enormous service to those who survived Nazism and to the memory of those who did not. Your work represents a valuable contribution to history by validating the claims of Holocaust victims that were ignored for so many years.

The New York State Banking Department believes the draft rules governing the claims resolution process constitute a very thorough, well-considered, and workable plan. We urge you to implement this reasonable and realistic plan. Claimants have been waiting for resolution of their claims and for closure of this difficult issue for far too long—open access should not be the reason they wait any longer.


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