Frankfurt am Main, Germany, January 25, 2001

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Court Decision Threatens to Delay Compensation for Forced Laborers

BERLIN. Payments to Nazi-era slave and forced laborers could be delayed as a result of a decision by a U.S. federal judge in New York not to dismiss the last of the class-action lawsuits that had prompted German companies to address the long-ignored issue.

Dieter Kastrup, chairman of the board of trustees of the foundation set up to administer the planned DM10 billion ($US4.7 billion) fund, said on Thursday that the court decision meant the German parliament could probably not vote to release funds until March.

Mr. Kastrup expressed regret over the delay, given the advanced age of the estimated 1 million survivors. Hopes that lawmakers could consider the matter as early as next month were dashed on Wednesday, when District Court Judge Shirley Wohl Kram said she needed more time to decide whether to dismiss a class-action lawsuit against German banks.

"In the current situation, the parliament is not in a position to do this," Mr. Kastrup said at a news conference during two days of meetings by the fund's board. "We're very disappointed with developments."

He said he hoped Ms. Kram would reject the suit in the next eight to 10 days. Mr. Kastrup also said the judge expressed doubts that German companies would make good on their pledge to raise half of the funds.

Business could help sway Ms. Kram by transferring now the DM3.6 billion it has collected so far, Mr. Kastrup added. Wolfgang Gibowski, spokesman for the initiative collecting corporate donations, said Mr. Kastrup had made an "interesting suggestion," but cautioned that the initiative had promised not to transfer the funds until the parliament made its ruling.

"The money will be there when it is due, and I hope Judge Kram will also hear this," Mr. Gibowski said. The corporate money in question, however, is still DM1.4 billion short of the business community's pledge. The German government will provide the other DM5 billion to the foundation. Fund officials, who had originally aimed to begin payments last year, said that each year about 10 percent of those entitled to compensation die.

Michael Jansen, president of the foundation, said about 650,000 applications for compensation had been received. But German officials insist that payments can only begin once the last class-action suits are dismissed and the parliament declares it is satisfied that German companies will not face further claims. Other U.S. class-action suits were dismissed late last year.

It is unclear whether a handful of other Holocaust-related lawsuits filed in the United States by individuals could lead the parliament to hesitate. Ms. Kram said on Wednesday that she also wanted to be sure the funds would be distributed fairly and that any victims who were not part of the lawsuit would still be able to seek legal justice.

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