New York Times
December 15, 1999
Germans Agree to Establish $5-Billion
Fund to Compensate Slave Laborers
By EDMUND L. ANDREWS
BERLIN -- After months of bitter negotiations, German industry
and government officials agreed on Tuesday to establish a fund of
$5.1 billion to compensate people who were slave laborers during the
Although important details were still being negotiated, people on both
sides of the negotiations said Tuesday night that they had reached an
agreement on the central question, to raise the amount of money that had
been proposed. They settled the figure at 10 billion marks.
The scope of the effort could ultimately affect more than one million
surviving victims of Nazi Germany's systematic use of forced labor,
although nobody is sure how many people may ultimately file claims.
American officials estimate that there are 240,000 surviving slave
laborers, about half Jewish, who were held in concentration camps and
forced to work under nightmarish conditions.
The fund would also compensate a much larger number of "forced"
laborers, most of whom were not Jewish and were brought from the
Soviet Union, Poland and other East European countries.
Officials estimate that group at 700,000 to 1.5 million.
Although fewer than 100,000 of the former forced workers are
Americans, the negotiations were driven almost entirely by American
class-action lawyers and Jewish groups, as well as the United States
German executives have been worried about the suits, but even more by
the prospect of a conflict with American customers and business
American and German officials said they hoped to finish negotiating the
main elements of the plan on Friday in Berlin. German corporations
would pay at least half the money for the new humanitarian fund and the
German government the rest.
American companies with German subsidiaries, including General Motors
and Ford, are also expected to participate.
In principle, the fund could provide up to $7,500 for each surviving slave
laborer, and most likely smaller amounts for forced laborers.
But lawyers involved in the talks predicted bruising disputes about the
rules on how former workers would qualify for the payments.
"We have an agreement, there is absolutely no doubt about that," said
Michael Witti, a lawyer in Munich for former workers. "But anybody
who thinks this will all go through smoothly is living in a dream world."
Although three-quarters of the money from the fund would compensate
forced workers, the settlement is also intended to resolve other open
claims arising from the Nazi era. The fund would also be used to
compensate Jewish victims of so-called "Aryanization" programs, Jews
and other non-Germans who were forced by the Nazis to sell their
property at fire-sale prices.
And the fund would be used to handle lingering claims against insurance
The deal was reached after marathon bargaining over the telephone
among Jewish groups, American lawyers, German industry and the
It was mediated by Stuart Eizenstat, the United States deputy treasury
secretary, and Otto Lambsdorff, a former economics minister in West
Germany. The two men are to arrive in Berlin on Friday to work out final
details and formally announce an agreement.
In exchange for paying the fund, German companies like
DaimlerChrysler, Siemens and Volkswagen would receive immunity from
future lawsuits over the use of forced labor. German banks would be
freed from claims arising from the "Aryanization programs."
All companies would give money to a common fund set up by an
independent German foundation, which would transfer money to
designated organizations that represent surviving workers in the United
States, as well as in Central and Eastern Europe.
"I can confirm that an agreement has been reached," said a spokesman
for the German industry foundation, Wolfgang Gibowski. "I hope that the
money will come relatively quickly to the surviving victims."
Part of the total compensation will probably come from American
companies with German subsidiaries that used forced labor in the war.
The most notable of those are likely to be Adam Opel, a company that
General Motors bought more than 70 years ago.
Both companies have long acknowledged that their German factories
used forced laborers in the war, but had argued that they had no liability
because the Nazi government took over the businesses.
Lawyers for the former workers, who stand to make many millions of
dollars in fees from the settlement, said they thought the German
government would provide some of the money being added to bring the
settlement to 10 billion marks.
Lawyers for the former workers had sought 20 billion marks.
German negotiators, as well as Chancellor Gerhard Schroeder, had
insisted as recently as last week that there would be no money beyond
the 8 billion marks proposed last month.
Tuesday, advocates for former workers said they were satisfied.
"This is a measure of justice for slave laborers who have waited a very
long time," said Gideon Taylor, executive vice president of the Jewish
Conference on Material Claims Against Germany.
The group has been collecting and distributing money from Germany on
behalf of forced workers for several decades.
In a telephone interview, Eizenstat was optimistic that there would be a
definitive acceptance of the 10 billion mark figure, but he cautioned that
the German government had yet to accept the plan officially. "It would be
a wonderful way for Germany to make a moral statement at the end of
the century that would have lasting effects into the next century," he said
of the emerging terms.
Eizenstat is to meet Lambsdorff in Berlin on Thursday and Friday in the
hope of wrapping up the details, according to Susan Elbow, a
spokeswoman for Eizenstat.
Melvyn Weiss, an American class-action lawyer, said he was unhappy
about accepting 10 billion marks, but felt he had no choice.
"I don't feel good about it," Weiss said. "But it is a pragmatic decision. At
this point, we don't have a choice because of the needs of aging victims
and the pressure from governments to get this resolved."
Copyright 1999 The New York Times Company