Germany to compensate workers

BERLIN - The German government announced yesterday that 12 of the country's largest banks and businesses will contribute money to a new fund designed to compensate hundreds of thousands of workers, mainly from Eastern Europe, who were enslaved by the Nazis during World War II.

The formal pledge to establish the fund, which is expected to be worth at least $2 billion and possibly much more, follows months of intensive talks to head off a flurry of lawsuits that threatened to inflict serious economic damage on Germany's largest corporations and disrupt their expansion plans in the United States.

Many of the corporations feared that unless some kind of compensation fund was established, they could face the kind of international business boycott that threatened Switzerland's two largest banks last year until they reached a $1.25 billion settlement signed in January.

Deutsche Bank chair Rolf Breuer, who has been a rallying force in setting up the fund, started pushing the idea when he realized that a proposed $10 billion purchase of Bankers Trust in the United States could be derailed unless some kind of deal was achieved.

Breuer called yesterday's commitment a "milestone" in settling the slave labor dispute. But he warned that "there are still a lot of details to sort out," notably the total value of the fund and how the contributions will be shared among the donor companies.

In addition to Deutsche Bank, the companies that plan to take part in the fund include some of the biggest names in German banking and industry. They are the automakers Volkswagen, BMW and Daimler-Chrysler; chemical and pharmaceutical companies Bayer, Hoechst, and BASF; Dresdner bank; industrial firms Degussa-Huels, Friedrich Krupp and Siemens; and the Allianz insurance company.

At a news conference, Chancellor Gerhard Schroeder acknowledged that the purpose of the fund was to counter the risk of class-action lawsuits "and to remove the basis of the campaign being led against German industry and our country."

He praised the firms that signed up to provide the financing and said the initiative "shows that German business can deal responsibly with its history."

Since taking office in October, Schroeder has tried to accelerate a resolution of the slave labor controversy.

While Bonn has paid out more than $60 billion in reparations since the war to Jews and other victims of Nazi crimes, it excluded slave workers because they were technically "employed" by private companies, such as Siemens or Volkswagen.

Historians say that as many as 800,000 Poles, Czechs, Russians and Ukrainians were subjugated by the Nazis and forced to perform backbreaking tasks in inhumane conditions to sustain concentration camps, factories and chemical plants during World War II. While lump sum payments were made to Poland and other East European countries during the 1970s and 1980s, Communist rule in those nations largely prevented the victims from seeing any of the money.

Nine out of 10 surviving victims of the camps are believed to be non-Jews.

As the first German leader with no direct personal experience in World War II, Schroeder says he wants this country to enter the new millennium having paid off its debts to history. He has dispatched his chief trouble-shooter, Bodo Hombach, to the United States and Israel to broker a solution to the slave labor question.

But the biggest factor that may have broken the impasse has been a new willingness by German companies to confront the past and settle accounts left over from the Holocaust. As in politics, a new generation of German business managers is striving to clear up Nazi era injustices that their parents and grandparents failed to resolve.

Many German companies have hired independent experts to sift through wartime archives. Only two weeks ago, Deutsche Bank historians released documents showing that former bank managers were fully aware that loans they disbursed helped finance the construction of the Auschwitz concentration camp in southern Poland.

Michael Witti, a lawyer in Munich who represents some of the slave labor claimants, said there are dozens of other firms that profited from the Nazi forced-labor regime and have a moral obligation to contribute to the fund. He said that as many as one million people may have legitimate legal claims to compensation and that the amount of money now being discussed could prove "insufficient."

In their joint declaration, the German firms recognized that many of the victims were reaching the end of their lives and vowed to expedite assistance to them in a manner that is "fair, cooperative, unbureaucratic and above all fast." The German government, which will supervise the fund, wants the first payments to be approved by Sept. 1, the 60th anniversary of Germany's invasion of Poland.

02-17-99