U.S. Department of State
Other State Department Archive SitesU.S. Department of State
U.S. Department of State
U.S. Department of State
U.S. Department of State
U.S. Department of State
The State Department web site below is a permanent electronic archive of information released online from January 1, 1997 to January 20, 2001. Please see www.state.gov for current material from the Department of State. Or visit http://2001-2009.state.gov for information from that period. Archive sites are not updated, so external links may no longer function. Contact us with any questions about finding information. NOTE: External links to other Internet sites should not be construed as an endorsement of the views contained therein.
U.S. Department of State

Department Seal Stuart Eizenstat, Deputy Secretary of the Treasury
and Special Presidential Envoy for Holocaust Issues
and and his German Counterpart, Count Otto Lambsdorff

Press Conference, Loy Henderson Auditorium,
U.S. Department of State, Washington, DC March 10, 2000
Flag Bar

Forced and Slave Labor Talks

Deputy Secretary Eizenstat: During this week's meeting, we have taken some important steps with respect to the allocation of the 10 billion deustchmarks to bring us closer than ever to making this historic initiative a reality. We have significantly narrowed the differences with respect to the allocation of the D-mark 10 billion capped amount.

At our last negotiating session in Berlin in mid-February, all of the different participants in this process shared their proposals to allocate the 10 billion D-mark that was agreed to in Berlin. The various proposals revealed that some clear differences needed to be bridged and; therefore, at the end of the session, I urged all of the participants to maintain the spirit of compromise that has enabled us to resolve many difficult issues in this process.

I am pleased to report that after 2-1/2 days of intense negotiations here in Washington, all of the participants have heeded my words. There is agreement that the 10 D-mark needs to be allocated to four broad categories: labor, non-labor, future fund and administration. Reaching an agreement on the allocation, however, will require a delicate balance of a number of competing interests. The different participants in this process have different interests that they are seeking to protect. Some favor a larger allocation to forced and slave labor; some favor a larger allocation to non-labor causes, which include banking and insurance issues; some favor a larger allocation to the future fund. Each of these priorities is important.

I hope, and I believe that though no one will be completely satisfied, that we will reach our goal to ensure that all go away, as Count Lambsdorff has said, only mildly dissatisfied. Despite these different priorities, there is almost complete agreement among the German side and the vast majority of plaintiffs' attorneys and the Conference on Jewish Material Claims on the outline of an allocation plan for laborers and other victims, property of the future fund and administrative costs. Moreover, the differences between these groups and the Central and Eastern European countries are small compared to the size and importance of the Foundation.

I believe that the representatives of the Central and Eastern European governments who played a constructive role in these discussions want to reach an agreement. For the vast majority of recipients and their countries, the Foundation provides the only possible mechanism for receiving any money for the suffering they endured during the Nazi era.

The major remaining issue in the allocation concerns insurance. There is a difference of views concerning how to treat insurance claims. This matter is being negotiated separately within the International Commission for Holocaust Era Insurance Claims, or ICHEIC. Once ICHEIC resolves this difficult issue, the remaining allocation issues concerning the German Foundation should fall into place.

Former Secretary of State Lawrence Eagleburger, the Chairman of ICHEIC, met with the interested parties today and will continue to meet with them over the next few days until there is a resolution of this issue.

The focus of this week's meeting concerned allocation; however, we have made a proposal from the U.S. side to resolve all remaining substantive issues with respect to the German legislation that is now in draft form. As the Count mentioned, we have scheduled our next meeting for March 22-23 in Berlin, and between now and then everyone is committed to work to bridge the remaining differences on both allocation and the legislation, and we agreed to establish working groups to try to resolve these remaining substantive differences.

Thank you. And, Dr. Gentz, if you'd like to make any statement. I'm sorry -- Count Lambsdorff.

Count Lambsdorff: Ladies and gentlemen, when preparing for this meeting and for this press briefing, my staff prepared two briefing notes for me: one, a best case scenario and the other a worst case scenario. I won't be using either of them because we are in between, between best case and worst case scenario.

I think the outcome is between those two extremes. It would certainly been preferable, had we been able to tell you today that as regards the allocation aspect of the 10 billion we would have reached a final agreement and the worst case would have been had we failed in all our efforts. Neither is the case.

We have achieved significant progress -- and please don't say that you say every time that we have made progress. Well, you can say it but it is also true. And I think this time, although it might not be that tangible, this is of very special and significant importance. As Secretary Eizenstat has just told you as regards allocation, we have reached agreement that we will have 1 billion for property claims -- this was envisaged and we'll stick with that -- and 200 million are envisaged for administrative costs. This includes the attorneys' fees.

There are still some differences of opinion as regards the future fund as well as the labor-related amount. With the future fund, we within the German side still have some differences of views which I think we'll easily bridge. That won't be the reason to fail. Whether we'll now have 8.1 billion and a future fund of 700 million or whether we have 8 billion for the labor-related issues, slave and forced labor, and a future fund of 800 million.

But we all agree that for the labor-related issues, slave and forced labor, we will have a total amount of 80% out of the 10 billion. This is an amount duly reflecting the importance of this issue as an appropriate share, but we'll also need to point out that right from the outset, the property issue and future fund have played a key role in the negotiations on the Foundation initiative. Initially, there was also the idea that the future fund should have sort of a higher proportion, if you look at the percentages, than what has now evolved in the recent weeks of 1 billion or slightly below 1 billion.

Let me also stress another aspect which is of great importance to the German side. You know that prior to this meeting there have been discussions that for property damages which are not racially motivated to be included into the initiative, we might run the danger -- that's at least the view of the German Government -- that we might trigger another reparations debate. This cannot be the case and, therefore, we ask the U.S. Government, the U.S. side, to give us a clear statement of their views on this. And yesterday evening, Secretary Eizenstat gave the U.S. suggestion to me, handed the U.S. suggestion to me. I did not sort of accept it or agree to it because it's such a core issue, a vital issue, that I need to have consultations in Berlin. I'll do that as of tomorrow. I cannot decide that and do not want to decide that on my own. It's far too important for that.

And whether we'll take the step that we'll run the danger of getting into a reparations debate, the Chancellor has taken this step and he will also have to decide whether the suggestion made by the U.S. will meet his concerns.

Then another issue relating to legal closures, that's the treatment of U.S. parent companies of German subsidiaries. Here we have also got suggestions regarding the wording. We'll look into that. Perhaps Dr. Gentz can say something on this because he is more knowledgeable on this than I am. But we sort of at first glance would say this is acceptable.

We still need to discuss a few other aspects. I don't want to go into too many details here, and the property -- [inaudible] -- it's all legal issues which we need to discuss and which we'll have to settle. We'll do that in working groups prior to our next plenary in Berlin.

And let me finally say -- and this is also something which should be known before the meeting -- we'll have this parallel process in the ICHEIC, the Eagleburger Commission, and that is why the insurance issue is such a difficult issue for us. And, again, this has been the case. In this meeting it was particularly difficult. Today, after my meeting with Secretary Eagleburger who, despite his illness, agreed to meet with us, I think meant that we've made quite considerable progress since he said that for the German member in the Eagleburger Commission, Allianz, he has seen greater scope to facilitate an agreement with the interested parties, which would then allow the German insurance industry to participate in the Foundation initiative without running the risk of having to pay twice for the same thing, once through the Foundation initiative and once through the ICHEIC process. I should like to express my great appreciation for this support and the goodwill he has shown to us.

Ladies and gentlemen, let me finally also make two further comments. Before this meeting, some parties -- participants in this meeting -- criticized both Deputy Secretary Eizenstat and also me that we shouldn't have let this allocation discussion take its course but that we should have basically imposed a settlement. I'm very glad we didn't do such a thing because by allowing such a discussion it helped us to achieve two things: one, which I greatly appreciate, the Central and Eastern European countries have agreed among themselves how to share out the allocation to them among themselves. I don't dare to the imagine the work we would have had to have done had we tried to impose an agreement on this internal distribution among the Central and Eastern European states. This is an important aspect.

And on the other hand, there has also been a process where all parties involved realized that it won't be that easy to come to an agreement just on a very voluntary basis just by their own efforts, and; therefore, I can understand and sort of sympathize with participants who have come to me during breaks, and probably also to Secretary Eizenstat, and said, well, now the time has come that you should lead the way and show us what to do. And we will certainly have to return to this issue and do something about that.

And, also, participants in the meetings asked me whether I'm disappointed in the course of our discussions. Well, of course, disappointment always depends on what you expect beforehand, and since I had very low expectations my disappointment, if at all, is also very low. But certainly my disappointment is not as high that I wouldn't go to the next meeting with hopes and the determination to settle the allocation issue and, hopefully, also the insurance issue.

We hope we will be able to achieve that in Berlin, and the legal issues which are still pending and which also, of course, have an impact on the legislative process within the Foundation law, and I hope that we'll be able to resolve these even beforehand or perhaps even after our Berlin meeting. All this can be done, can be achieved.

Dr. Manfred Gentz [from the German Foundation]: Ladies and gentlemen, I'm happy to confirm that during the last 2 days in Washington we have once again made progress. At the same time, I have to tell you that we did not quite reach the goal we had set for ourselves, at least as regards allocation of the money. And as far as legal closure is concerned, we have also not been able to come up with a conclusive result.

Nevertheless, it is true that we are much closer in terms of our positions than we had been before. There is a good chance for us to arrive at an agreement at the next meeting, and I think a bigger step forward today was the fact that by virtue of the conversation with Secretary Eagleburger we have paved the way, as it were, for a resolution of the insurance issue.

Nevertheless, it being said, that issue in particular will require a great deal of work. In addition to the rough allocation of the money that Count Lambsdorff explained will yet require further effort to work out the suballocations and achieve a conclusive result. I believe, however, that we will be able to do that, and we actually have to do that at the next meeting which will be held in Berlin.

I am sorry that we were unable to talk about the unresolved legal issues, or just touch upon them very briefly. That is an issue that we will have to conclude at the Berlin meeting on March 22 and 23.

I think all concerned should resolve to appear at that next meeting well prepared, and with the help of the legal working groups we shall be able to do that. The idea is that we should reach a final result at that meeting in Berlin. To be sure -- and here I agree with Count Lambsdorff and Secretary Eizenstat -- there will still remain technical issues which will have to be worked out. But we should at least resolve to settle the substantive issues at the next meeting.

I am saying that among other things because, if we fail to do so, there is a danger of the law not being completed prior to the summer break. That way, things would be delayed into the fall, and if that were to happen it would be out of the question for us to start payments to victims, to claimants. For that reason in particular, it's very important that we prepare the next meeting well, so well that we can, in fact, finalize the substantive issues at that meeting, the substantive issues that are so very important for that law to be adopted.

Count Lambsdorff touched upon legal closure for foreign parents of German subsidiaries. That's a technical issue, I think. In substance we are in agreement with Secretary Eizenstat and the American Government; however, we'll have to check the wording, the language, simply because we must rule out opening a new window for class actions for the kinds of cases which we believed we had excluded successfully during the last 12 months. We -- and I, too -- have learned a great deal about the ways in which one might inadvertently open a new window for class actions, so we must be sure to avoid mistakes.

In conclusion, I would like to emphasize once again that we have made a good bit of progress. We have had some very heated discussions. That was necessary, but I think these discussions helped us resolve issues.

Thank you very much.

Deputy Secretary Eizenstat: Questions, please, if you want to identify yourself and your news medium.

Question:[Inaudible] -- Poland. Mr. Lambsdorff just said that we all agreed of the 80% of the funds should be allocated for compensations. Should we understand that East European countries and all the lawyers accepted, definitely accepted, the amount of 8 billion marks to be allocated for compensations?

Count Lambsdorff: The answer is I never said that we agreed on 80%. I said that we wanted 80% and that 80% is a good bit of the total amount.

Deputy Secretary Eizenstat: The answer is there is no final agreement on the allocation, but the minimum that we were talking about was 8 billion. Our figure was slightly higher than that. But there is a very close coincidence of views between the U.S. position and the German position, but there is no agreement yet on that.

Question: In public, the participants in the meeting have said -- given conflicting statements on what the agreement was in December on whether to include the insurance. I wonder if Mr. Eizenstat, in his neutral capacity, could explain how he understood the agreement in December and explain how this misunderstanding arose.

Deputy Secretary Eizenstat: There was always a decision to include a humanitarian component of several hundred million deustchmarks within the 10 billion deutschmark figure. That is something that was always understood. We had thought that the claims part of insurance would be covered outside of the 10 through the ICHEIC process.

What we are now trying to do is to resolve a conflict in which the German insurers and German industry is insisting that claims be resolved inside. This gets to difficult issues of how you define the German market, how you treat Central European claims, how you treat subsidiaries who were acquired after the war who have claims that were written in Central Europe. And so we're trying to determine how those claims can be resolved in terms of both the Foundation initiative and the ICHEIC process, what goes in which part, and that is the basis for the difficulty here. This is a very, very difficult issue and unless the insurance issue is resolved, it's difficult to see how we can go forward with the remaining Foundation initiative.

Question: Can I just have a follow-up on that? If the original understanding was that the claims would be settled through ICHEIC, what is the obstacle to sticking to that plan and having ICHEIC deal with all these claims?

Deputy Secretary Eizenstat: Because the German side contends that they had a different opinion, and so resolving that difference of opinion is what we've been trying to do over the last several sessions.

Count Lambsdorff: If I may add something, we had assumed from the outset that the claims would be fully included in the 10 billion marks, and we made that very clear at our meeting in Berlin. We feel that the correspondence between President Clinton and Chancellor Schroeder had made that very clear as well.

I think that this disagreement can, nevertheless, can be resolved, and I am hopeful that we can do that at the next meeting.

Deputy Secretary Eizenstat: We are trying now not to look at past disagreements. As one who participated in the drafting of the President's letter, the President's letter simply reinforced what had always been the cases; that is, that there would be a humanitarian component in insurance. All the draft agreements which had been submitted up to that point had assumed, in very clear language, that claims would be outside.

But what we're trying to do is put that disagreement behind us and try to come up with some practical ways in which this can be resolved in ways that will permit the initiative to go forward and, as the same time, for people who have insurance claims to be paid in a fair way.

Question: A question directed to Count Lambsdorff. You indicated that possibly the German side will have to decide allocation. You mentioned that various representatives from the Central and Eastern European countries approached you and said, well, it might be necessary for you to put down your foot to impose a decision. Does that mean that by the time of March 21-22 you will try to push agreement in such a way that you might say on the 21st, well, given the fact that we have to complete the law by summer, the German side has resolved to make this suggestion, and can you then assume that you'll get support for that?

Count Lambsdorff: No, Mrs. -- [inaudible] -- that's not what I said. I didn't say that the German side would propose allocation. I just said that I had been approached and Secretary Eizenstat had been approached by people, and that all of us together, including Herr Gentz, will come up with a proposal.

Deputy Secretary Eizenstat: If there is a proposal, it would be a proposal from the Count and myself, but we're not there yet.

Question: I'm sorry, but I'd like to go back to this question on the insurance. It seems incredibly unbelievable to me that such a massive disagreement could arise out of something that at least two sides were so convinced -- that being the U.S. side and a large portion of the victims -- were so convinced of one thing and that the Germans were so convinced of another, to the point where the leaders of two of the most powerful countries on the face of the earth exchanged correspondence about this with this understanding in mind. I'm a little worried -- I'm not worried, but how can you give us any kind of assurance that this kind of misunderstanding isn't going to happen again in the past, and doesn't this indicate that perhaps in some way the German side is not completely trustworthy if this understanding was so certain in the minds of the U.S. President and the attorneys for the claimants?

Deputy Secretary Eizenstat: I think that it's certainly not something where either side feels that there is bad faith. There was an insurance component always within the 10 billion which we believed -- and we believe the documents indicate -- was to cover the humanitarian; that is, errorless insurance component, and that that would be passed through to the Eagleburger process, and that claims would be handled outside so that there was always an insurance component. We had one understanding, evidently, and the other side, we found out, had another.

But, again, I think the important point is not to engage in recrimination. I think that the one thing that has resulted from this extended process that now has taken over a year and ten negotiating sessions is that it has built up confidence rather than destroyed it, notwithstanding this disagreement. This is such an unbelievably complex issue that, frankly, the fact that we've had only one significant disagreement is itself remarkable. I have been involved in many international negotiations. I believe that the complexity of this one, the number of different interests, the technical complexity of it, equals or exceeds anything I have been involved in.

So the fact we've come this far, I think is testimony that we've developed a mutual trust and confidence. Count Lambsdorff and I have known each other for, now, 23 years. We have complete and utter confidence in each other, but when you're working under these kinds of pressures with these kinds of complexities, there will be differences of opinion. And I think that no one now wants to go back and try to prove in a court of law who was right and who was wrong. What we're trying to do now is see if we can resolve the issue in a satisfactory way.

And one of the problems we have -- and this we knew from this start, on this there was no disagreement -- that at some point the Eagleburger process which preexisted our Foundation initiative, and our Foundation initiative were going to have to merge. That is further complicated by the fact that the Eagleburger ICHEIC process involves only one German insurer -- we wish it involved all -- and four non-German insurers. And so making the ICHEIC process compatible with our process is exceedingly difficult. That we always knew.

So, quite frankly, with or without this there would have been a need to make those two processes compatible,. We are now in an intensive process to try to do so, but it is a devilishly difficult and complex process where the interests involved are very intense.

The last point I would say is that every issue that has presented itself to Count Lambsdorff and myself, the German side and the U.S. side, has proven capable of resolution. The ICHEIC process is one in which neither of us are a participant, and so we are at the mercies of forces beyond our control to try to resolve the insurance issue and we have a very minimal capacity to affect that process.

We expect and hope that the good offices of the former Secretary of State and the goodwill of all the parties will make this possible, but it is important to realize that our process, the Foundation process, does not have anything like a significant control over it.

Question: Good afternoon. Can you tell us please how looted art and cultural property will be treated or not in this agreement?

Deputy Secretary Eizenstat: This is one of the issues that has to be negotiated on the legal side, but we've been assured by the German Government that the very aggressive and ongoing art restitution process that Michael Namon has been engaged with will not be in any way negated or undercut by this process; that is to say, if there are families that have [inaudible] -- that process would continue and that the Foundation initiative would not in any way impede that. And nor is their intention -- this is one of the, I think, great things the German Government has done in the post-war period but most particularly in the last year or so. Under Mr. Namon's leadership there has been a real effort to return cultural property.

Question: How much have the U.S. parent companies of the German subsidiaries agreed to pay in compensation to the plaintiffs?

Deputy Secretary Eizenstat: I think that there are a number of things that one should consider in addition to this 10 billion deutschmark figure. One is that we will be commencing discussions on March the 20th with Maria Schaumayer on Austrian slave and forced labor -- completely separate from this, but many of the forced laborers in the Central European countries could be potential beneficiaries.

Second, there have been discussions with some U.S. companies, and those continue but they have not yet borne any specific fruit.

Count Lambsdorff: Let me add that the parent companies of German subsidiaries -- and I think this is agreement that they should be part of the legal closure, legal piece. And this is not just a problem for U.S. parent companies but this is a general problem of parent companies which might also be located in Europe and who also have assets in the U.S. and also need the legal closure in the U.S. because it doesn't make sense if you've got a German -- if you can't sue the German subsidiary but you can sue the parent company and there can be litigation against the parent company in the U.S. court because of wrongs committed during the Second World War Nazi regime.

Therefore, we need to find an arrangement to include foreign parent companies within the legal closure. I hope that the final wording we'll be able to achieve on the 22nd and 23rd of March as regards the matter at hand. We basically have a general consensus agreement on that already, so as regards the foreign parent companies there's very little incentive to create their own fund but there is sort of the clear expectations on our part that German subsidiaries should contribute to the German Foundation initiative.

Deputy Secretary Eizenstat: And one point. I think we have made a great deal of progress in terms of defining those companies, parent and subsidiaries, who are covered. I think it's a totally incorrect statement to say that they, therefore, have very little incentive to contribute. The German companies have made it a great source of pride that they're doing this as a moral, not a legal, gesture. And I believe that there are a number of U.S. companies who wish to do the same.

Question: Since you brought up Austria, Secretary Albright said that you had been having discussions with this new government on their commitment to continue to recompense people who, you know, from the World War II being in camps and slave labor. What have you found from those talks with Austria?

Deputy Secretary Eizenstat: I've had discussions at an expert level in Austria. The discussions at a senior level will only commence on the 20th when Mrs. Schaumayer comes to Washington.

But from the Chancellor's own statements publicly, his commitment in the Austrian parliament, my discussions with experts in the Austrian Government and my preliminary discussion with Mrs. Schaumayer in arranging her meeting, I found a great willingness to be responsive to Austria's past in terms of dealing with slave and forced laborers, and I am convinced that they go in with a great deal of goodwill to resolve this in a positive way. We will obviously know the extent to which that is the case when we actually begin discussions, but certainly everything that's been said publicly and privately leads us to believe that they come in to this with a great deal of goodwill.

Question: May I be permitted to ask a German question concerning legislation? Is it the case that that split 80% forced slave labor/future fund, is that the basis for the legislation or can legislation only proceed once the groups are clear on allocation among themselves?

Count Lambsdorff: Well, the law can be passed without any kind of mention being made of that issue. Then the law would simply say that the board of trustees will decide on allocation. But that is something that nobody wants. Rather, people want the result of our negotiations to be incorporated into the law, and the more detailed our agreement, the more detailed the legal provisions can be. And that would be appropriate and that would be helpful in order avoid future disagreement.

Deputy Secretary Eizenstat: Just to add to that, I agree with everything that the Count has said. We have had five German parliamentarians participating in this session in Washington and in the previous session in Berlin and in several others. Their dedication and devotion and knowledge of this process is nothing short of remarkable. It is a great testament to the German Bundestag that five such senior representatives of all the political factions would take this kind of an interest and engage and involve themselves. They have been very important participants, and I believe the fact that they have been will facilitate the passage of legislation. And as the Count said, they have made it clear to us that they will do everything they can to try to incorporate the agreements that we reach, including on allocation.

Thank you very much.

[end of document]

Flag Bar

Bureau of European Affairs
Department of State