Israel’s second largest bank will be forced to defend itself in
court in the coming weeks over claims it is withholding tens of millions of
dollars in “lost” accounts belonging to Jews who died in the Nazi death camps.
Bank Leumi has denied it holds any such funds despite a
parliamentary committee revealing in 2004 that the bank owes at least $75
million to the families of several thousand Holocaust victims.
Analysts said the bank’s role is only the tip of an iceberg in
which Israeli companies and state bodies could be found to have withheld
billions of dollars invested by Holocaust victims in the country -- dwarfing the
high-profile reparations payouts from such European countries as Switzerland.
“All I want is justice,” said David Hillinger, 73, whose
grandfather, Aaron, died in Auschwitz, a Nazi camp in Poland. Lawyers are
demanding reparations of $100,000 for Bank Leumi accounts held by his father and
grandfather.
The allegations against Bank Leumi surfaced more than a decade
ago following research by Yossi Katz, an Israeli historian.
He uncovered bank correspondence in the immediate wake of the
Second World War in which it cited “commercial secrecy” as grounds for refusing
to divulge the names of account holders who had been killed in the Holocaust.
“I was shocked,” said Dr Katz, from Bar Ilan University near Tel
Aviv. “My first reaction was: ‘My God, this isn’t Switzerland!’ ”
In 1998, following widespread censure, Swiss banks agreed to pay
$1.25 billion in reparations after they there were accused of having profited
from the dormant accounts of Holocaust victims.
Dr Katz’s revelations led to the establishment of a parliamentary
committee in 2000 to investigate the behaviour of Israel’s banks. Its report
came to light belatedly in 2004 after Bank Leumi put pressure on the government
to prevent publication.
Investigators found thousands of dormant accounts belonging to
Holocaust victims in several banks, though the lion’s share were located at Bank
Leumi. Obstructions from Leumi meant many other account holders had probably not
been identified, the investigators warned.
The parliamentary committee originally estimated the accounts it
had located to be worth more than $160m, using the valuation formula applied to
the Swiss banks. But under pressure from Leumi and the government, it later
reduced the figure by more than half.
A restitution company was created in 2006 to search for account
holders and return the assets to their families.
Meital Noy, a spokeswoman for the company,
said it had been forced to begin legal proceedings this week after Bank Leumi
had continued to claim that its findings were “baseless”.
The bank paid $5m two years ago in what it says was a “goodwill
gesture”. Ms Noy called the payment “a joke”. She said 3,500 families, most of
them in Israel, were seeking reparations from Bank Leumi.
The bank was further embarrassed by revelations in 2007 that one
per cent of its shares -- worth about $80 million -- belonged to tens of
thousands of Jews killed during the Holocaust.
Mr Hillinger, who was born in Belgium in 1936 and spent the
Second Wold War hiding in southern France, today lives in Petah Tikva in central
Israel.
He said before the outbreak of war his father and grandfather had
invested money in the Anglo-Palestine Bank, the forerunner of Leumi, in the hope
it would gain them a visa to what was then British-ruled Palestine.
Although his parents escaped the death camps, his grandparents
were sent to Auschwitz and died in the gas chambers shortly after arrival.
Mr Hillinger said he had only learnt of the outstanding debt from
Bank Leumi after his father, Moses, died in 1996. Papers showed the bank had
paid his father “a pittance” in 1952 when he closed his account and that it had
never returned his grandfather’s money.
When he wrote to Bank Leumi in 1998, it denied his grandfather
had ever opened an account.
“My grandfather died because he was a Jew, and it is shameful
that other Jews are exploiting his death,” he said. “We need to wake people up
about this.”
A quarter of a million Holocaust survivors are reported to be in
Israel, with one-third of them living in poverty, according to welfare
organisations.
Shraga Elam, an Israeli investigative
financial journalist based in Zurich, said after the war many Israelis showed
little sympathy for the European Jewish refugees who arrived in Israel.
“David Ben Gurion [Israel’s first prime minister] notoriously
called them ‘human dust’, and I remember as children we referred to them as
sabonim, the Hebrew word for soap,” he said, in reference to the rumoured Nazi
practice of making soap from Jewish corpses.
“In fact, I can’t think of any place in the world where
[Holocaust] survivors are as badly treated as they are in Israel,” Mr Elam said.
He said Bank Leumi’s “lost” accounts were only a small fraction
of Holocaust assets held by Israeli companies and the Israeli state that should
have been returned. The total could be as much as $20bn.
He said European Jews had invested heavily in Palestine in the
pre-war years, buying land, shares and insurance policies and opening bank
accounts. During the Second World War Britain seized most of these assets as
enemy property because the owners were living in Nazi-occupied lands.
In 1950 Britain repaid some $1.4 million to the new state of
Israel, which was supposed to make reparations to the original owners.
However, little effort was made to trace them or, in the case of
those who died in the Holocaust, their heirs. Instead the Israeli government is
believed to have used the funds to settle new immigrants in Israel.
“These are huge assets, including real estate in some of the most
desirable parts of Israel,” Mr Elam said.
Last year the Israeli media reported an investigation showing
that the finance ministry destroyed its real estate files in the 1950s,
apparently to conceal the extent of the state’s holding of Holocaust assets.
The case against Bank Leumi may end the generally muted criticism
inside Israel of the banks’ role. Officials and even the families themselves
have been concerned about the damage the case might do to Israel’s image as the
guardian of Jewish interests.
In 2003 Ram Caspi, Bank Leumi’s lawyer, used such an argument
before the parliamentary committee, warning its members that the US media “will
say the Israeli banks also hide money, not just the Swiss”.
Organisations that led the campaign for reparations from European
banks, such as the Jewish Claims Conference and the World Jewish Restitution
Organisation, have also downplayed the role of the Israeli banks.
A shorter version of this article originally appeared in The
National (www.thenational.ae), published in Abu Dhabi.
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