Senate Banking, Housing and Urban Affairs Committee

Hearing on the Swiss Banks and the 1946 Washington Accords

Mr. Chairman and Members of the Committee:

Thank you for giving me the opportunity to share with you the Clinton Administration's views on Holocaust assets issues and to continue the dialogue we have enjoyed with this Committee on these important and painful issues.

Let me commend the Chairman once again for his leadership in this area, including his sponsorship of legislation together with members of both parties in both houses of Congress establishing the U.S. Holocaust Assets Historical Commission. President Clinton signed the bill last month, and he will appoint the chair and private citizen members of this presidential commission shortly. The Commission will become the major vehicle for addressing the fate of Holocaust assets in this country. Its creation symbolizes, and its work will demonstrate, the determination of both the Clinton Administration and the Congress to leave no stone untumed in our efforts to bring justice to Holocaust victims, survivors and heirs.

Today, I want to address two sets of issues: first, our view of the situation in Switzerland; second, several other key dimensions of our diplomatic efforts to bring justice to Holocaust survivors. Let me note, though, Mr. Chairman that early last month we released our second interagency historical report on U.S. wartime policy toward and postwar negotiations with the European neutral countries -- Portugal, Spain, Sweden, and Turkey -- as well as Argentina. While our first interagency report focused largely on Nazi-looted gold and its movement to and through Switzerland in particular, our second report focused on the uses to which that looted gold was put -- especially its use in financing the wartime trade in critical supplies conducted by many of the European neutrals with Germany. I presented these key findings at a press conference in the State Department on June 2 and to Chairman Leach and the House Banking Committee two days later. Mr. Chairman, I will not present the new report at today's hearing, instead I will briefly summarize the findings of our first report with respect to the 1946 Washington Accord with Switzerland.

The Washington Accord

Mr. Chairman, you very pointedly and purposefully included the reopening of the 1946 Washington Accord within the scope of today's hearing. The Washington Accord of May 1946 between the Allies and Switzerland has become a focus of controversy over the past year or two in light of its historic role as the foundation agreement for the recovery and disposition of gold and other assets looted by the Nazis during World War 11. Debate has arisen particularly with respect to the efficacy of the agreement and its relevance to current relations with Switzerland: could or should the Allies have negotiated more favorable terms with the Swiss for the return of monetary gold looted by Nazi Germany that passed to and through Switzerland during the War? Could or should the Allies have obtained a larger share of German assets in Switzerland that were subject to the Washington Accord?

Two studies completed in the last 18 months have shed considerable light on these issues. Our preliminary interagency study released in May 1997 focused on American efforts to recover Nazi looted gold and other assets, based largely on U.S. records. In May 1998 the Swiss Independent Commission of Experts headed by Professor Bergier released an Interim Report based largely on Swiss records. These two studies together give us a comprehensive view of the flow of looted gold to and through Switzerland during the War and the postwar negotiations between the Allies and Switzerland that culminated in the 1946 Washington Accord.

Mr. Chairman, I would like to submit for the record an annex to my written testimony -- taken from our interagency report released last month -- that the negotiating history of the 1946 Washington Agreement.

There is little doubt that with the hindsight of history the 1946 Allied-Swiss Accord was an unsatisfactory one in terms of the return to the Allies of only a small percentage of the looted gold and other German assets in Switzerland. It is clear that the Washington Accord was neither adequate in its commitments or in its implementation by the Government of Switzerland. Let me try to distill very briefly why this result occurred:

• First, Switzerland -- and many of the other neutrals -- contested the legality under international law of Allied claims to external private German assets invested in their country. It should be noted that there were some well-known legal scholars in the United States who also questioned the legality of Allied claims.



• Second, the primary reason that more gold in particular was not returned to the Allies by the Swiss was an intransigent Swiss negotiating position which proceeded from the initial claim of the Swiss National Bank that it had not received any looted gold. The Swiss argued that even if the gold the Swiss National Bank received from Nazi Germany was indeed looted, Germany as an occupying power had the right during the wartime to seize the gold from the countries they occupied. The Swiss further argued that they had acquired gold from Gennany in good faith and that it had come from pre-war stocks of German gold. These assertions are disproven both by our two U.S. Government reports and by the Bergier Commission Report of Switzerland which demonstrated conclusively that senior Swiss National Bank officials were aware as early as 1941 that gold received from Germany had been obtained by the Nazis illegally. Nonetheless, these denials forced Allied negotiators to continually lower their request for the amount of monetary gold for restitution.



• Third, there was a lack of agreement from the Allies on the best way to pursue the negotiations with the Swiss. For example, Great Britain had a strong interest in pursuing normal trade relations with the Swiss as soon as possible.



• Fourth, the terms of the Paris Agreement reached by the 18-nation Paris Reparations Conference of November 1945-January 1946 (which authorized the Washington Accord negotiations) stipulated that the monetary gold obtained by the Allies from Switzerland under the 1946 Accord would go to the Tripartite Gold Commission for redistribution to the countries from whom it was stolen and ultimately returned to central banks -- not to Holocaust survivors. The proceeds of liquidated German assets under the Accord went to the Inter-Allied Reparations Agency (IARA) for the reconstruction of war-torn Europe. If more gold or German assets had been obtained from the Swiss, the additional sums would not have gone to Holocaust survivors.



• Fifth, the only benefit given to stateless refugees resulted from the 1946 Paris Conference where the United States took the lead in providing for a $25 million fund to benefit stateless refugees. The requirements for this fund were satisfied by contributions from Switzerland and other wartime neutral countries.

Mr. Chairman, I just had the benefit very recently of discussing this negotiating history of the 1946 Accord with our deputy negotiator of the time, Seymour Rubin, who is present here this morning. Mr. Rubin gave distinguished service to our country across a halfcentury career in and out of governinent. Our report is consistent with his judgment that despite the grave shortcomings of the Accord, the U.S. simply could not do better given - the combination of intransigent Swiss attitudes and the limits of our negotiating position.

But whether this conclusion can or should lead to a renegotiation of the Agreement is another issue. However well-intentioned, those who would seek to reopen the Washington Accord at this time would harden positions further-probably irreversibly in the current climate -- and would only add to the downward spiral of threats and distrust which now unhappily prevails. Frankly, I fear that reopening the Accord now would likely prove to be a diversion that could delay not by months- but by years-the resolution of these issues which people of good will on both sides of the Atlantic fervently seek. Ultimately, such proposals will undermine the progress that has already been made -- progress which, however belated, is finally moving toward our shared goals of justice and closure. What we need now to right the mistakes of the past are today's answers, not yesterday's.

Mr. Chairman, let me be clear. We are not ruling in or out the ultimate option of seeking such a reopening of the Accord. We believe that a far more productive way of dealing with this problem now remains through the dialogue and cooperation. This will prove to be a more speedy route at this time than seeking to renegotiate the agreement. I hope that the Swiss will recognize their interest in sustaining and even accelerating that cooperation and the progress made to date.

Positive Steps by the Swiss

Since I last testified before this Committee in May of last year, there have been many positive, although incomplete, steps taken by the Swiss -- although these positive developments have not always in my view received the recognition they have merited. Switzerland has made concrete, continuing progress in four key areas in particular:

The Volcker Process. Mr. Chairman, there is no question that private Swiss bankers took a legalistic and at times even callous approach to those seeking information about their dormant accounts or those of their relatives, apparently believing that, regardless of the unique dimensions of the Holocaust, they should not have to adjust their procedures and bank secrecy to accommodate the victims, the survivors, or their heirs. Under considerable pressure, the Swiss commercial banks finally established the Volcker process in 1996 to redress past injustices.

The Independent Committee of Eminent Persons under the direction of Paul Volcker has announced that it intends to complete the major elements of its investigation of Swiss Bank records relating to dormant accounts by the end of this year.

• The Volcker Committee has three international accounting firms conducting its forensic audit of bank records from the Holocaust era, with some 375 auditors involved. This number excludes other auditors on the internal staff of Swiss banks. The administrative costs of these audits, and other administrative costs, are expected to be some $300 million for Credit Suisse and the merged UBS alone. The total cost for all Swiss banks will be substantially higher.



• These audits have led so far to the publication of 5,570 names of dormant account owners. Those dormant accounts contain about $70 million, although not all are Holocaust related. About 7,000 individuals have filed claims to the dormant accounts published last year.



• In addition, some 6,160 claims have been submitted which relate to names that do not appear on the list of known and published accounts. The Volcker Committee will investigate these claims and will try to locate the account that the individual in question claims. The costs of the investigations will be funded by the banks.



• Finally, the Volcker Committee has established the Claims Resolution Tribunal to adjudicate all claims. The decisions of the Tribunal with respect to individual claims involving Holocaust victims will be subject to a significant upward adjustment based on the recommendations of the interest and fees panel chaired by Henry Kaufman.

The Volcker process is an enormous and unprecedented undertaking. It is chaired by a person whose integrity and probity is beyond reproach. It is a process which is moving forward toward completion of the audits by the end of this year -- and of the entire process by early next year. Finally, it is a process that will lead to the return -- plus appropriate interest -- of dormant bank accounts to their rightful owners.

Special Fund for Holocaust Survivors. This $200 million fund has been making direct payments to survivors. It has received contributions from the major Swiss banks and from other Swiss private sector companies, as well as a $70 million contribution from the Swiss National Bank.

• This Fund has already made an initial allocation of $53 million for individuals and distributed $20 million. Most of the $20 million distributed thus far has been to Holocaust survivors in Hungary, with Latvians and Albanians among the recipients thus far as well.



• The $33 million remaining from the initial allocation is intended mainly for survivors in Israel and the United States.



• We have been told that the New York State Holocaust Claims Processing Office, in conjunction with the WJRO, will be announcing a toll-free number at the end of this month for U.S. residents wishing to apply for benefits.

It appears that the earlier delays in making distributions from the Holocaust Fund have been resolved in the United States. Whatever the cause, it is critical that these issues are . resolved now so that the Fund's intended beneficiaries can be helped without further delay.

Bergier Historical Commission. No country is undertaking more comprehensive research on the history of its relationship with Nazi Germany than Switzerland. The Bergier Commission is charged with examining thoroughly and objectively Switzerland's political, economic and financial dealings with Germany prior to and during the Second World War. The Commission's second interim report released on May 25, "Switzerland and Gold Transactions in the Second World War" (to which I referred earlier in connection with the Washington Accord), was rigorous, bold, and extraordinarily candid.

• The Bergier Commission's report provides a detailed overview of Swiss gold transactions with Nazi Germany, and in fact demonstrates that Switzerland received greater amounts of looted gold than we were able to establish in our reports.



• The report also sheds additional light on the movement of "victim gold" to Switzerland. In particular, it traces more clearly the movement of gold from the socalled Melmer Account to the Swiss National Bank, although the Commission found no evidence that bank officials were aware of the origin of such victim gold shipped by the Reichsbank to Switzerland.



• In comes to the harsh conclusion that the Swiss National Bank knew as early as 1941 that it was accepting looted Nazi gold and categorically rejects the Bank's claim they dealt in good faith on Nazi gold.

The importance of the Bergier Commission's efforts should not be underestimated: it is a process which the Swiss themselves have established, of which they can be proud and which the Swiss people should assess and absorb in their own way.

Solidarity Foundation. Finally, the Swiss Government remains committed to the establishment of a Solidarity Foundation, using up to seven billion francs ($4.7 billion) in gold transfer-red from the Swiss National Bank.

This Foundation will be a forward-looking humanitarian effort addressing a wide range of issues. There have been questions raised about the Swiss Government's commitment to assure Holocaust survivors benefit from the Solidarity foundation. I understand from Swiss political leaders that the Foundation can indeed benefit Holocaust survivors, as well as other victims of poverty, hardship and violence.

In a statement last month, the Swiss Federal Council explicitly included Holocaust survivors among the recipients of the Foundation. The statement declared that in the course of attempting to mitigate poverty, hardship, and violence, it "expects the Foundation to support projects relating to the ongoing effects of the Holocaust/Shoa." - Such possible projects would include programs to help survivors deal with their traumatic experiences, but also education for successor generations and research projects connected with the Holocaust.

Two days following this statement, the upper house of the Swiss parliament voted to require the Solidarity Foundation and the existing Humanitarian Fund have separate boards and administrations. This non-binding vote does nothing to alter the Foundation's mandate. The Swiss government always intended that the two ftinction separately.

I understand that the Swiss Government remains committed to this course despite some opposition at home to this Foundation. The continued leadership of the Swiss Government will be essential in building a public consensus in support of the Foundation prior to a referendum that is expected to take place in 1999.

Recent Setbacks

Despite all this progress, Mr. Chairman, there have also been serious setbacks, most notably the fact that the talks to settle the class-action lawsuits against the-then three, now two, large commercial banks have not resulted in an agreement. This development precipitated the unfortunate decision on the part of state and local entities to lift the moratorium on sanctions against Swiss banks and Swiss companies beginning September 1, a subject to which I will return later in my testimony.

Class Action Lawsuit. Let me be clear about what these suits were about. They were brought by Holocaust survivors and their heirs, many of them U.S. citizens, against thethen three major private Swiss banks. Neither the Government of Switzerland nor the Swiss National Bank was a party. At the request of both parties, we initially sought an out-of-court settlement on these class action suits against the defendant private Swiss banks rather than broader closure on all the Holocaust assets issues pertaining to Switzerland.

This distinction became bluffed late last month when, at the request of the plaintiffs, and with the knowledge of the representatives of the three private banks, I made an approach to both the Swiss Government and the Swiss National Bank to see if they could help narrow the gap between the parties to the class action suit in the hope of achieving a settlement. It became quickly apparent that the leaders of those institutions were unwilling to go against the grain of public opinion in their country.

However it is important to point out with our help, the parties made significant progress in several key areas:

• in agreeing on a detailed structure for a potential settlement;



• in obtaining a coordinated negotiating position by the plaintiffs 'attorneys and major NGOs, including the World Jewish Congress; and



• in achieving some narrowing of their major differences on the settlement amount.

Nonetheless, despite painstaking efforts, the parties have not been able to bridge their remaining differences.

Mr. Chairman, no one is more disappointed than my U.S. Government colleagues and I that the parties were not able to reach an agreement given the amount of time, effort and energy all of us, including the parties, have put into this, and far more significantly, the profound matters at stake in this litigation. I appreciated the opportunity of working since December 1997 in trying to facilitate these settlement discussions. We fully understand the legitimacy and urgency of the issues raised in these cases by the plaintiffs, many of whom are U.S. citizens. These talks presented an historic opportunity for resolving this matter -- an opportunity that may not come again soon. In my view, the alternative of lengthy and contentious litigation serves no one's interests: not the interests of the plaintiffs or the banks; not the interests of Switzerland or the United States.

On June 30, the plaintiffs informed the Court that the settlement negotiations under my auspices had concluded without a resolution. I wrote the Court on July 8 to inform it that the settlement talks had made significant progress but had not been able to bridge the gap. I therefore consider my role in this phase of the matter closed. At the same time, the U.S. Government continues to have important interests in seeing this matter resolved both in order to obtain prompt justice for aging Holocaust survivors and in order to maintain positive relations with Switzerland. I will continue to take appropriate steps to advance those interests in whatever way is appropriate. In doing so, I will of course adhere to the terms of the confidentiality stipulation and order.

The present suspension of the talks reinforces the importance of a thorough and prompt conclusion to the Volcker process of reviewing dormant accounts in Switzerland that may have belonged to Holocaust victims. This is an objective to which Chairman Volcker and his Committee are committed.

Sanctions. The U.S. Government favors ajust and prompt resolution of these issues at stake with the major Swiss banks and other Swiss institutions. Sanctions -- however well-intentioned or carefully calibrated -- will not make it easier to achieve closure in this complex and sensitive matter. They will have precisely the opposite effect. We continue to believe that state and local sanctions in this matter are wrong both in principle and practice: wrong in principle because they are unwarranted and because our nation should speak with one voice in matters of foreign policy and international commerce; wrong in practice because they are counter-productive and fail to advance the goal of a prompt and just settlement. Punitive measures by either side will only slow down the efforts to achieve promptly a negotiated settlement of the class action lawsuit.

Far from compelling the banks to do more, threats of imposing sanctions together with . various other allegations over the past several months have led to an opposite reaction in Switzerland. Unintentionally but predictably, the lifting of the moratorium on sanctions by the Hevesi Committee has already reinforced an unfortunate climate of inflexibility in Switzerland. Imposing sanctions now would delay still further the resolution of these issues by making it more difficult for all Swiss institutions -- private and public -- to take the necessary steps to achieve closure.

Let me cite a sad indication of how the public mood in Switzerland has soured toward the United States. The Swiss grocery chain, Denner, has just announced and is advertising the fact that it will no longer carry four American products that it normally has in its inventory: canned sweet corn; California wine; and two brands of whiskey, Jack Daniels and Four Roses. What is significant is not that this particular action has an important impact on our export sales; that is certainly not the case, although you may be surprised to learn that Switzerland is our seventh leading trading partner. Rather, the significance of the Denner action is that it is indicative of the hardening of opinion in Switzerland and the obstacle that sanctions create for a prompt settlement of the class action lawsuit. Parliamentarians who were most instrumental in establishing the process and institutions now beginning to bring some measure of justice and facts to light are isolated.

Mr. Chairman, I get paid to make judgments about how our actions affect foreign countries. I can assure you that far from helping Holocaust survivors achieve a just and fair settlement, sanctions will delay and retard the process -- making it more difficult for us to get a measure of justice for Holocaust survivors.

At the same time, I can understand how this criticism, fiustration and distrust have arisen in the United States. It is critical that we break out of this cycle of recrimination and work constructively to resolve these issues and bring justice to the remaining survivors while they are still alive.

Moreover, Mr. Chairman, we also have a responsibility to safeguard the preeminence of the United States as the most open financial market in the world. By imposing sanctions such as those under consideration, New York City and other jurisdictions would risk endangering their own competitiveness in attracting and retaining world-class firms, the income they generate and the jobs they support. They would also, I fear, call into question the openness and attractiveness of all American financial markets.

For all these reasons, I strongly urge state and local entities around the country to refrain from imposing sanctions. While I respect the good intentions of those who would act, I remain convinced that sanctions would be totally counter-productive because they would delay - not advance - resolution of the issues at stake.

A. Time for Brief Reflection... and Renewed Action

Mr. Chairman, no one has a greater sense of urgency about resolving this matter than I do or this Administration does. American citizens, most old and having suffered greatly . during their lifetimes, are our most important concern. Nevertheless, I believe that in the wake of these recent setbacks, we must find ways to break out of the cycle of attack and counter-attack. The next month or two should be a period of calm and reflection, followed by action.

I urge the parties to reflect on the consequences of protracted litigation: to recognize that it means a delay in achieving a measure of justice for the unique class of aging and frail Holocaust survivors who would most benefit from a just and prompt settlement; and it represents a missed opportunity for a major step toward closure of a difficult chapter for Switzerland -- both for the parties to the class action suit, and for Swiss institutions beyond the two banks, as well as on the part of the Swiss people.

I urge a brief pause -- a breathing space -- to allow all sides to rebuild the mutual confidence and trust that is necessary to facilitate a more rapid solution.

I urge both parties to the lawsuit to reconsider whether their interests are not better served by returning to the negotiating table very soon - and to do so with a willingness to demonstrate greater flexibility. The class actions are a legitimate effort by American citizens to seek redress under the judicial system. Only the judicial system can ultimately decide upon the legal merits of the case. I have been a litigator in private life and have great respect for the legal process in our country, but I worry about the time it will take to work through issues of this complexity in the court. It cannot be in the interests of the diminishing class of survivors, the Swiss banks, or the Swiss Government for that matter to allow these issues to be worked out over several years in the lower and appeals courts. It is certainly not in the U.S. Government's interest to allow these matters to fester in ways which delay a measure ofjustice for certain survivors, undermine our diplomatic and trade relations with Switzerland, and threaten the continued participation of foreign firms in this country.

Based on my discussions with Swiss officials in the government and the Swiss National Bank, I regret to say there is no realistic short-term prospect of a broad settlement of the kind that would be broad enough to bring these issues to closure not only for Holocaust survivors but also for all Swiss institutions, public and private alike. But in the short tenn, it may be possible in the coming months to achieve a more limited private sectorbased solution. In this context, we should give the Swiss a chance to follow their best instincts without a coercive and antagonistic atmosphere.

At the same time, the U.S. Government will continue to advance our dual interests which have been at stake in these issues from the outset: supporting prompt and appropriate justice for survivors while maintaining our important diplomatic and commercial relationship with Switzerland. And we remain determined to uphold these interests in the face of pressure from all sides.

Mr. Chairman, I have often said that the most important test for any country today in dealing with these issues is not so much what it did -- or did not do -- half a century ago, - but what this generation is doing now to offer a moral and material accounting of the past in ways which are true and just. We should not hold this generation of Swiss responsible for their country's actions -- positive and negative, understandable and inexplicable- in the complex wartime period. Instead, the Swiss and the people of every other country facing these difficult issues should hold themselves responsible for their willingness to address the past openly and honestly now, in the present. The Bergier Report, the Swiss Government's own report, offers the factual basis upon which to act.

Facing the past honestly will be to Switzerland's everlasting credit -- and in its best interests, heeding what Thomas Jefferson called "A decent respect to the opinions of mankind." Its failure to do so would subject it to the harshest sanction, not blunt and counter-productive economic sanctions, but to the judgment of world opinion and of history. There still is time -- time to do the right thing in ways that will keep faith with Switzerland's proud democratic and humanitarian traditions and do justice to Holocaust survivors for whom there is no time left. But the Swiss should have the opportunity to write this last chapter, free from intimidation, in light of the promising start they have made in writing their initial chapter of their recent efforts to come to terms with the past. Switzerland is a democratic nation with a long tradition of self-government and popular initiatives. The Swiss people are capable of drawing the right conclusions.

There is a perception among many Swiss -- a perception which I sincerely hope has not hardened into an irreversible conviction -- that no matter what or how much they do, it will never be enough to satisfy their critics. It is true that the Swiss have taken the comprehensive set of positive steps, and that they have received too little credit for pursuing this course. But it is important both that the Swiss not view themselves as the victims and that those in authority in our federal, state and local governments not give them reason to see themselves as victims. Let me be clear: the only victims here are the victims of the Holocaust.

People of good will on both sides of the Atlantic share an urgent interest in resolving these traumatic issues in ways that prompt justice is done to the victims and positive relations are maintained between the United States and Switzerland. All stakeholders have an important role to play in the critical weeks and months ahead. If we are to achieve these objectives:

• The parties to the class action litigation should return to the negotiating table soon with the support of key NGOs and with an increased determination to reach a just and prompt settlement.



• State and local officials considering imposing sanctions should refrain from doing so at the almost certain risk of heightening tensions, exacerbating a confrontational atmosphere and delaying closure.



• The Government of Switzerland should demonstrate leadership in encouraging the Swiss people to reflect on and act upon the lessons to be learned from their own past as set forth in their own Bergier Report.

Let me elaborate, Mr. Chairman, on the important role I think the Government of Switzerland can play. Just as the Government of Switzerland has called upon us for assistance in dealing with the threat of sanctions, so too we hope that the Swiss govenu-nent will now show leadership. The Swiss Government is capable of this kind of leadership -- leadership of the character that it demonstrated at an earlier phase when it launched the Bergier Commission, supported the creation of the Volcker Commission, helped establish the Special Humanitarian Fund and proposed the Solidarity Foundation.

Let me make several specific suggestions, among others we have recommended through diplomatic channels:

• First, it would be very helpful for the Swiss Government to take a more active role -to issue, for example, a statement of public support for a just and fair negotiated settlement of the private lawsuit. It will be critical for the Swiss Government to exercise leadership to urge its people to move past their anger and renew their support for continuing along a self-confident, positive path.



• Second, it would also be very helpful if more attention is paid to the recent Bergier gold report. Reflection on the report's findings may crystallize a consensus in Switzerland that further action should be taken. Greater efforts on the part of the Swiss government to distribute the report could help give the Swiss people the chance to consider the report's findings in their own way.



• Third, the time has come for reinforcing efforts on the moral as well as the material dimensions of restitution. Over the last year, Swiss citizens have made important gestures of solidarity, large and small, to Holocaust survivors. But the most enduring form of demonstrating an understanding of the Holocaust is to perpetuate its lessons through education and memory. Indeed, there have already been significant steps in this direction taken by the Swiss cantons in their schools. I am hopeful that there may be further steps along this path. Sweden offers a new example of Holocaust education we can all emulate.

Once again I understand well that the spotlight of the world, the sting of threatened sanctions, and the anger at receiving little credit for their own actions of the past two years -- all make it difficult for Swiss institutions to continue down the same positive path that they have been on, let alone to do even more. But we hope they will do both.

Washington Conference on Holocaust-Era Assets

In order to build on the landmark London Nazi Gold Conference held last December, and continue the international search for truth, the Department of State and the U.S. Holocaust Memorial Museum will co-host from November 30 to December 3 the Washington Conference on Holocaust-Era Assets. The objective will be to review our . progress on the gold issue, to share research on other assets (especially artworks and insurance), and to renew the drive to open archives.

As at London, the Washington Conference will not be a forum for governmental decision-making. But we plan to use the Conference and our preparations to work with a wide range of governments and nongovernmental organizations to help shape a nonbinding international consensus on principles and processes for redressing injustices in these categories of assets. We hope that this consensus can give new impetus to the encouraging initiatives already underway in many countries and that this intergoverm-nental forum can be a catalyst for many other related efforts to address this great unfinished business of the twentieth century. To help shape the agenda for November, I hosted a day-long preparatory meeting in Washington on June 30, attended by 38 countries and 11 NGO's.

The U.S. Government has a great interest in seeing issues related to Nazi-confiscated artwork addressed fairly and expeditiously. We want the international art market to be open, stable, and free of uncertainty that it might be trading in works whose history is tainted by Nazi depredations. And we also have a great responsibility to Holocaust survivors, and their heirs and families, to shed light on these issues and to encourage appropriate means of addressing them.

Similarly, on insurance, there is also a grave responsibility to see justice done, and there is legislation, either passed or under consideration, in several states which reflects widespread concern with this issue in the United States. In response to such concern, the National Association of Insurance Commissioners (NAIQ has formed a task force, which will represent all fifty states, to address Holocaust-era claims. The NAIC has been working with European insurance companies, the World Jewish Congress, and the Conference on Jewish Material Claims to establish a process for doing so. Negotiations on a formal Memorandum of Understanding are ongoing. While the NAIC's work is separate from what we are doing to prepare for the Conference, we support their efforts and will continue to be as helpful to them as we can.

We also used the June 30 seminar to highlight the progress on gold issues which the international community has made since the London Conference. I am pleased to report that we have concluded the work of the Tripartite Gold Commission, established an international Nazi Persecutees' Relief Fund, agreed with most of the countries which had gold on deposit with the TGC that they would donate their shares to the Fund, obtained further pledges for contributions from other countries, and are now arranging for transfer to the Fund of the first portion - $4 million - of a total U.S. contribution of $25 million. Fourteen countries have now made commitments totalling $57 million to the Fund with more likely to come. I want to commend our international partners and especially thank the U.S. Congress for its support in this endeavor.

Mr. Chairman, my own involvement in issues of Holocaust-era assets began with matters of property restitution, which remain highly important today and on which I continue to work. In early 1995, while I was serving in Brussels as U.S. Ambassador to the European Union, I also became the State Department's Special Envoy for restitution issues, looking at such points as local laws in Central and Eastern Europe; previous restitution and compensation programs or the lack thereof-, and the current and urgent needs of Holocaust survivors and heirs. In the last several years, I have made a number of trips to Central and Eastern Europe to work on these matters with the governments of the region. There has been some progress, but much more needs to be done. I remain personally deeply committed to this effort.

I returned just last week from a trip to Europe, during which I had meetings on this subject in Vilnius, Lithuania, and Warsaw, Poland:

• In Lithuania, the laws for returning religious and private property are quite narrow. Even some claims which appear to be valid have not been satisfactorily resolved. Notably, Lithuania is setting up a historical commission to examine the World War II and Cold War periods, and I believe President Adamkus intends to pursue these issues as fairly as possible.



• Poland has broader legislation for the return of religious and secular communal property, but more work on the process of restituting such property needs to be done. The Polish government is also working on legislation that would enable anyone who was a Polish citizen at the time his or her property was seized to reclaim it or receive at least some compensation.

My conclusion from this trip, despite this inevitably uneven picture, is that both of these democratic governments are making progress coming to terms with this agonizing legacy, but much more needs to be done.

Mr. Chairman, the examination of the complicated issues of Holocaust-era assets is a difficult undertaking. While archival research and international conferences have provided the framework for achieving a greater understanding of the fate of Holocaust assets, these issues have naturally had a vast public political impact beyond the academic and diplomatic arenas. They have come to command the attention of the world and touch the conscience of humanity.

Mr. Chairman, you and the Committee play an important part in this historic effort.

Thank you very much for your consideration and I will be happy to take your questions.

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