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Joshua Z. Rokach

The cloud over US Holocaust Remembrance Day

US Holocaust Memorial Museum/https://encyclopedia.ushmm.org/en/a-z/photo

This year’s Holocaust Remembrance Day marked the 80th anniversary of the liberation of Auschwitz.  World leaders gathered in Poland, along with the few remaining survivors, for a moving service.  In the US, the Holocaust Museum publicly read the names of the martyrs. Jews everywhere observed the solemn occasion.

To quote Abraham Lincoln at Gettysburg, “It is all fitting and proper that we should do this.”  Lincoln recognized, however, that paying respects requires actions.  He rededicated the US to a “new birth of freedom,” vowing that democratic government  “shall not perish from the Earth.”  Sadly, in the case of Holocaust remembrance, where restitution should form a core goal,  the US seems on the verge of shirking its responsibilities.

In particular, in December, the US Supreme Court heard oral argument in Hungary v. Simon. In an ideal world, survivors – most likely their heirs – would seek restitution of their looted assets (funds, businesses and possessions) in the courts of the offending countries, here, Hungary.  In reality, claimants need better forums. The US Claims Conference described the difficulties dealing with the government in power in Budapest since 2010, even to provide money for social services for needy survivors, https://www.claimscon.org/2013/07/hungary-releases-millions/ Imagine the more complicated issue of restitution, going back over 80 years.

Fortunately US law looks like it provides a remedy.  The Foreign Sovereign  Immunities Act establishes when a party can sue a foreign government in US courts and when immunity attaches.  A section of the law gives jurisdiction over takings “in violation of international law,” if the “property or any property exchanged for such property is present in the United States in connection with a commercial activity carried on in the United States by the foreign state.”  Stated differently, the law seems to say that if the claimants can find the looted property, as with art (which few own), or proceeds from the sale of businesses and possessions in the US and tie them to commercial activity, US courts can intervene.

The families of Simon and the others lost homes and businesses when Admiral Horthy’s fascist government unleashed genocide against its Jewish constituents. The claimants discovered that the government had sold these assets and placed the money in the Bank of Hungary in a general fund.  The plaintiffs found that Hungary sold bonds in the US and used the general fund to pay interest to US purchasers.

Hungary objected.  However, the dispute in the lower courts centered around the obstacle the Supreme Court already had placed into the law. The Court had held, despite the language “in violation of international law,” that phrase meant only expropriation of foreigners’ assets, not genocide. (The Court held that since the section of the law responded to Cuba’s nationalization of American sugar companies, the law applied only to takings against foreign citizens.)  The courts in Simon’s litigation focused on the nationality of the claimants. Hungarians had no recourse.  Citizens of other countries, such as Czechoslovakia, could pursue their lawsuits.

Not so fast.  It appears that, at least, a majority of the justices will slam the door, for all practical purposes. In most instances, the offending governments do not possess the looted items, if they even exist anymore.  For example, the successor Communist governments liquidated private businesses and used the money, or absorbed them into state-run monopolies.  The dictatorships demolished houses, or sold them and put the proceeds into the treasury. Only in rare cases,  confiscation turned villas into state palaces.

That means for the most part, claimants must go for money.  Simon’s lawyer  argued correctly that Hungary deposited proceeds from looted property into its bank accounts and used funds, swollen by those depredations, in the US for commercial activity.  Except in ransoms or bank robberies, we cannot trace the exact banknotes.

Instead, the justices latched on to “exchanged” to approve of one of three restrictions.  Shockingly, the US government said that Simon could recover only from money Hungary received in the 1940s from the sale of the assets.  In effect, the Holocaust lay beyond relief, as the law in question did not exist at the time. Hungary maintained that too much financial activity had occurred since World War II to conclude that the country still had the money.  Several justices favored accounting fictions, as with embezzlement by individual fiduciaries  These fictions would put 80-year old larceny off limits.

Justices feared similar suits against the US in foreign courts.  They should know better. As my mother taught, equal justice for all.

 

About the Author
Joshua Z. Rokach is a retired appellate lawyer and a graduate of Yale Law School.
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