May 19, 2006

Jewish Chronicle takes on the Holocaust Industry

I don't know how long the JC has been running a "subscription free" zone but I've only just discovered it. Here's today's front page.

The man on the left earns $437,811 a year handling Shoah claims. So why are so many survivors pleading poverty?


By Jenni Frazer and Simon Rocker

This story is from – the website of The Jewish Chronicle Newspaper.

The international body primarily responsible for distributing compensation to Holocaust survivors is under pressure to explain its spending policies and the remuneration of its officials.

Writing in today’s JC, British academic Michael Pinto-Duschinsky questions the salaries paid by the New York-based Conference on Jewish Material Claims Against Germany to its senior staff. In particular, he highlights the $437,811 (£240,000) in salary and pension awarded to its highest-paid official, executive vice-president Gideon Taylor, according to the latest available figures from 2004, revealed for the first time today by the JC.

Dr Pinto-Duschinsky, who advised British survivors in compensation claims in the 1990s, insisted: "It is wrong for the executive vice-president to earn annually the same as the compensation for several hundred former slave labourers. The moral authority of the leading Jewish organisations is gravely weakened by excessively high salaries for top officials."

Another veteran campaigner on behalf of Holocaust survivors, London businessman Martin Stern, said: "The salaries are not commensurate with the figures which are being paid to the people who suffered."

But Abe Biderman, chairman of the Claims Conference’s personnel and management committee, said the salaries were "at and below the equivalent salaries of comparable Jewish organisations." A large part of the senior staff salaries were reimbursed "from funders of the programmes administered by the Claims Conference." Total administrative expenses, he said, were less than 2.5 per cent of funds distributed in 2004.

There has been criticism, too, of the way the Claims Conference spends money on funding educational and "remembrance" programmes when many believe that the increasing needs of ageing survivors are not being met. The committee in charge of the allocations meets in New York next Monday to decide on the next cycle of distributions.

Chief among the critics, remarkably, is the treasurer of the Claims Conference, Roman Kent, who told the JC: "Survivors are suffering. Our only priority should be the survivors, and everything else should be secondary. We are spending money for thousands of projects, but the health of the survivors can't wait. They are dying daily." Mr Kent, himself a survivor, added: "I'm not saying that these are bad programmes, but they can wait - or else they should be the responsibility of the world Jewish community, not the Claims Conference."

Mr Stern agreed. Querying whether the Claims Conference should be making £9.1 million of grants to educational organisations rather than to survivor care, he pointed out: "At the moment in Israel alone, we have a 65 million shekel shortfall (£7.8 million) in home care for aged Holocaust survivors who are ill. That should be a priority."

In a separate controversy, New York lawyer Professor Burt Neuborne has applied for $4.1 million in fees - charging $700 an hour — for work he did in applying a complex $1.2 billion legal settlement against the Swiss banks.

Some Holocaust survivor organisations in the US have filed an objection to Professor Neuborne's claim, suggesting that he had announced that he was ready to work pro bono (free). Leo Rechter, of the National Association of Jewish Child Holocaust Survivors, called the fees claim "a mockery" and "tragicomic."

But an angry Professor Neuborne told the JC that the criticism was "absolutely unwarranted," insisting that he had waived a $10 million fee for securing the settlement, and that he had put in "seven years and 8,000 hours to make the settlement work. It is a flat-out lie that I said I would do [the latter] work pro bono. The criticism is truly disgraceful."

Claims Conference executive vice-president Gideon Taylor told the JC that there were "two schools of thought" on the allocation of restitution funds. "One says all the money should be used entirely for social welfare needs

"The other says that this is money from those who perished, not from those who survived and that we need to acknowledge and remember those who died.

"Holocaust education is important for future restitution negotiation. The obligation to meet the needs of victims of Nazi persecution is not just that of the Claims Conference, but that of the entire Jewish community. The Jewish world also has to balance its priorities."
The leader comment (also sub free) is here and it's more fascinating than the front page.
The compensation gap

Why is the Jewish Chronicle today giving space to a debate that will make many of our readers instinctively flinch? How could a responsible Jewish newspaper raise questions on sensitive matters that will be seen to offer succour to this community’s enemies? And why, when there are far bigger challenges facing British Jewry, are we appearing to point fingers at a small number of individuals serving in respected and senior roles in well-established institutions mostly based thousands of miles away? Our readers deserve a few answers. When we were presented with some recent salary figures relating to organisations established to further the interests of Holocaust survivors, we were surprised, to say the least, that these apparently generous salary-and-benefits packages had gone unremarked in normally vigilant serious newspapers, both here and overseas. When, further, we discovered the wider pattern of remuneration in the larger, Holocaust-related charities, we became deeply curious. Some of these organisations, whose mission it is to negotiate and distribute compensation for Nazi-era crimes to Holocaust survivors, seemed at the same time to be compensating their own top people somewhat generously, to say the least. And yet… by even choosing to question how these salaries could be justified, when survivors themselves have each typically received only a few thousand pounds, we knew that we would risk causing offence not merely to those banking the paycheques, but to senior communal leaders and a significant part of our readership. So let us explain why, after a great deal of thought and discussion, the JC today questions whether those working to represent survivors’ interests are being as accountable and transparent as they should about the manner in which they distribute their own resources internally.

In highlighting the gross disparity between survivors’ compensation and the pay of those working for them, we are not suggesting in any way that these salaries in themselves are being paid at the expense of monies disbursed to those still burdened with memories of atrocities six decades ago. But we do want to see an honest and informed debate about whether resources are being distributed fairly and openly by those in positions of power. Our concern lies with the survivors, now elderly and often impoverished people whose personal circumstances, in many cases, would shame those of us who profess to care about our fellow Jews. For most of the 700 or so survivors thought to be living in the UK, life is relatively good: they have a National Health Service and in many cases live among warm and generous families and benefit from social support networks. But some of those living in Israel or the United States are facing real hardship in their declining years. As their needs for support and healthcare grow, shouldn’t we all, as a global community of Jews, be anxious to ensure that these welfare needs are met?

The Claims Conference needs to clarify not simply its scale of salaries — which, in the scheme of things, is of limited significance — but how it allocates its funds. With survivors now typically in their 70s and 80s, ought it not to be thinking seriously of freezing those of its programmes which do not directly relate to survivors’ welfare? The Claims Conference should focus on the essential work for which it was set up — looking after survivors. Dr Michael Pinto-Duschinsky, in drawing attention to the disparity between the salaries (and benefits) of some officials and survivors’ restitution, will be accused of making false comparisons. Unlike him, we are not asking executives to take salary cuts simply to demonstrate good faith. However, if they are to retain the trust and respect of the wider Jewish world, they will need to reinforce public confidence that the survivors’ immediate interests are at the heart of their mission. And if our readers have the survivors’ interests at heart, they will join us in our call for transparency and accountability. After the enormous negotiation successes of the mid-1990s, perhaps there has been a sense that the restitution battle has been won. But, for many survivors, the struggle is far from over. As for the criticisms likely to be addressed to this newspaper for putting these matters on the agenda: we are sensitive to these concerns, but see our larger responsibility as one of casting light and spurring debate.
And here's a word from a child survivor (who survived thanks to Rudolph Kasztner):
In the 1990s, I worked for several years with Holocaust survivors in London - former slave labourers of German corporations in Auschwitz and elsewhere - in their quest for compensation and, more importantly, an admission of legal guilt by the corporations themselves. As a baby of 12 months, I had been lucky enough to escape deportation to Auschwitz from a staging camp north of Budapest. I was a member of one of only 20 families (out of 17,000 people who had been rounded up) who had been ransomed as part of the controversial Kastner negotiations with the Nazis.

The campaign by British Holocaust survivors, led by Rudi Kennedy, Roman Halter and other members of Claims for Jewish Slave Labour Compensation, was a sad failure. They were badly let down by senior Jewish organisations, by the Israeli authorities, and by class-action lawyers in the US. The payments achieved for former slave labourers at Auschwitz and other camps are far smaller than the pensions of SS guards. The German companies which had used their slave labour were not obliged to recognise their legal responsibility. Nor were they obliged to release documents about their wartime roles. Deutsche Bank, Volkswagen and Bertelsmann have all refused to provide me with such access.

One complaint of the survivors was that the organisation which had the formal responsibility of representing them - the New York-based Conference on Jewish Material Claims Against Germany - was more interested in trading in heirless properties in what had been East Germany than it was in pressing their case. In particular, there was a complaint that the head of the German office of the Claims Conference, now dead, had become too closely associated with the German authorities, who were ultimately responsible for providing his salary.

We never managed to find out how much he was paid. Yet it turns out that information about Claims Conference salaries - a closely guarded secret - is now publicly available, if only to those willing to explore deep inside a vast online database of charities’ finances. Spend a little time in the Guidestar database ( and you can download annual returns submitted by US-registered charitable bodies like the Claims Conference. Deep within its latest entry, you can find the salaries of its officers and of its five highest-paid staff.

This information is, for me, pretty devastating. In 2004, the executive vice-president of the Claims Conference took a salary of $360,000 plus nearly $80,000 in pension payments (£240,000 at today’s rates). This compares with the maximum £6,000 compensation for years of slave labour in Auschwitz for a survivor. Considering that the compensation was paid 55 years late, it actually was worth far less - a few hundred pounds when compound interest is taken into consideration.

I appreciate that there are good arguments for the view that the high salaries of top officials of organisations concerned with the Holocaust are (a) justified, (b) do not matter, or (c) ought in any case to be kept confidential. On balance, I am unconvinced by them. I hope that these officials will consider taking significant salary cuts in the interests of the Jewish community.

First, there is the matter of accountability and transparency. It emerges that even Claims Conference board members were unaware of the salaries and benefits of senior staff. Certainly, the Board of Deputies has been unaware of them, even though it sends two representatives to sit on the New York board on behalf of Anglo-Jewry. At the World Jewish Congress, secrecy has gone hand in hand with financial controversy. The WJC is riven by accusations and legal writs, and received a severe reprimand this year from Eliot Spitzer, the attorney-general of New York State. Does the Claims Conference wish to be weakened amid similar accusations of secrecy and controversy?

Second, the salary issue does matter. The moral authority of the leading Jewish organisations is gravely weakened by excessively high salaries for top officials. Even though the Claims Conference devotes less than 3 per cent of its spending to administration, there needs to be some correspondence between the amount of compensation for each survivor and officials’ pay. It is wrong for the executive vice-president to earn annually the same as the compensation for several hundred former slave labourers.

The argument that “you get what you pay for” is invalid. Those engaged in public service should not expect the same financial rewards as those at the top of the commercial and professional trees. A sense of mission and duty is called for in those accepting leadership roles in the community. They should be paid reasonably but not so handsomely that doubts arise about their motives.

This applies with special force to organisations involved in aiding Holocaust survivors. Potential donors need the assurance that the bodies receiving their charitable gifts are transparently run by officials motivated by a sense of dedication.

Finally, what of the argument that Jews ought to refrain from publishing criticisms - even in the Jewish press - of leaders of Jewish organisations? I am painfully aware of the fact that Holocaust denial and far-right websites avidly reproduce such discussions. But self-censorship can be taken too far and can prevent the mature discussions that are needed for the well-being of Jewry. I believe that the Jewish Chronicle is performing a service by reporting the facts that will set in motion a sensible and productive debate about the management of the institutions responsible for representing Holocaust survivors and for safeguarding the memory of the unique crimes committed by the Nazis.

Dr Michael Pinto-Duschinsky, senior research fellow at Brunel University, has written and lectured widely on the financing of political and public bodies
So, a remarkable edition of the Jewish Chronicle and possibly a personal statement by the new editor: Jeff Barak. So what was all that fuss about Norman Finkelstein then? Perhaps it's the way he tells them.

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