Considering future, Claims Conference weighs shutting down vs. Holocaust education

NEW YORK (JTA) - A special panel tasked with examining the governance and strategic vision of the Claims Conference is recommending that the organization shift its long-term focus to Holocaust education and remembrance, JTA has learned.

The panel was appointed last year following a scandal involving the Claims Conference's failure to detect a $57 million fraud scheme there that persisted until 2009. It also recommended cutting in half the size of the board's executive committee and the number of special board committees.

The special panel did not, however, recommend any changes to the composition of the Claims Conference's board, which critics have complained is unrepresentative because it does not include enough Israeli or survivor groups and includes too many once-robust Jewish organizations that are quite small today.

The new recommendations, outlined in two hefty documents sent to Claims Conference board members last week and this week and obtained by JTA, will go to a vote when the board holds its annual meeting in New York on July 8.

Consisting of board members and outside experts and guided by Accenture consultants, the special panel was charged with reviewing the administration, management and governance structure of the Claims Conference, which obtains Holocaust restitution and compensation from Germany and Austria. The central question the panel examined was what the Claims Conference should do after the last of the survivors dies.

Three possible courses of action were given serious consideration: shutting down; funding education and remembrance projects; or shifting its focus to general Jewish educational programming, helping victims of other genocides obtain restitution or preserving Jewish cultural sites in the former Soviet Union.

Given the Claims Conference's successes at convincing Germany to increase its funding for survivors, the panel concluded that "to close down without attempting to leverage its position and significant experience in the service of Holocaust education and remembrance would be to miss a major opportunity."

In an interview with JTA, the Claims Conference's chief executive, Greg Schneider, emphasized that Holocaust education isn't new to the Claims Conference: The organization currently funds education and remembrance to the tune of $18 million per year with money obtained from the sale of unclaimed Jewish properties in the former East Germany.

"The Claims Conference has always dealt with the consequences of the Shoah," Schneider said of the board's mandate for the organization. "When that meant direct payments to survivors, we did that. When that meant rebuilding communities, we did that. When that meant home care [for elderly survivors], we did that. Educating people about the Shoah and confronting Holocaust denial all deal with consequences of the Shoah. To be faithful to our mandate, we should continue to do that. And we are uniquely qualified to do so."

The new vision for the Claims Conference hinges on the organization's ability to get material support for it from the perpetrators of the Holocaust-namely Germany, but also Austria and companies complicit in the Nazi genocide. If that funding cannot be secured, the Claims Conference should go out of business once there are no survivors left, Schneider said.

"If we're unable to get money from perpetrator governments, and the survivors have all died, we should close down," he said. "We should not try to reinvent ourselves into something else."

Stuart Eizenstat, a lead Claims Conference negotiator and special assistant to Secretary of State John Kerry on Holocaust issues, said he's optimistic about getting Germany to support the proposed new focus, noting that the country already does so through mandatory Holocaust education in German schools.

"There's every reason to think that they would be supportive of this," Eizenstat said. "After all the survivors are gone this is the right thing to do."

Though survivors are dying, their overall need for aid actually is rising because of their growing infirmity and relative poverty. The Claims Conference estimates that survivor needs will peak in about two or three years, followed by a progressive decline.

Globally there are an estimated 500,000 living Nazi victims-a category that includes not just survivors of concentration camps, ghettos and slave labor camps but also those forced to flee the Nazi onslaught, compelled to go into hiding or who endured certain others forms of persecution. About half are expected to die in the next seven or eight years, according to a new demographic assessment that was part of the special panel's work, and survivors of some kind or another are expected to be around for another 20-25 years.

The debate about what to do about the Claims Conference once the last of the survivors dies is not new. Established in 1951 to secure compensation and restitution from Germany, the Claims Conference has negotiated successfully for an estimated $70 billion for survivors and survivor needs over the course of its existence.

Most of that money has come directly from Germany in the form of pensions and compensation payments, with the Claims Conference acting only as the processor of payments and verifier of claims (this latter area is where the $57 million fraud occurred). As each survivor dies, these payments cease.

The Claims Conference also has a bucket of discretionary funding: billions generated from the sale of heirless Jewish property from the former East Germany. But that bucket, known as the Successor Organization, is expected to run dry by 2020 at its current annual allocation rate of about $118 million to groups that aid survivors and $18 million to Holocaust education and remembrance.

In 2004, the Claims Conference managed to get Germany to begin to fund a new area: home care for survivors, including food, transportation and medical care. Berlin has steadily increased the amount of money it provides the program, from $42 million in 2009 to $190 million in 2013. Last year Germany agreed to another $800 million in funding through 2017.

If the Claims Conference board adopts the new plan next month, the question for Claims Conference negotiators is whether they'll be able to get Germany to move into another new area-one that, unlike aid to aging survivors, has no particular expiration date.

"I believe the good will is there," said Julius Berman, the Claims Conference's chairman. "Their issue is more in terms of budget rather than concept. If we do a correct job to explain the need, I think we'll have a receptive audience on the other side."

The mandate for reexamining the Claims Conference's future and governance grew out of a public storm a year ago over the discovery that the organization had conducted two investigations in 2001 into questionable conduct that failed to uncover a massive fraud scheme being perpetrated by a senior Claims Conference official. The fraud continued unabated until Claims Conference leaders discovered it in late 2009. In all, 31 people pleaded guilty or were found guilty in connection with the scheme, which resulted in $57 million in illegitimate payouts by Germany.

A Claims Conference probe last year into the bungled 2001 investigations proved highly controversial when it was disavowed by two of its four committee members and then rebutted in a 21-page missive by Schneider. In the end, the Claims Conference board elected to end its reexamination of the 2001 episode and rebuffed proposals to open up to any additional outside oversight.

The committees that oversaw this most recent Claims Conference reexamination process were, however, led by outsiders. The strategic vision committee was chaired by Jeffrey Solomon, CEO of the Jewish Community Relations Council of New York, and the governance committee was chaired by Michael Miller, president of the Charles and Andrea Bronfman Philanthropies. The committees themselves included outsiders as well as Claims Conference board members.