Committee Report
 

Interim Report of The Parliamentary Enquiry Committee into the Location and Restitution of the Assets of Holocaust Victims

Presented by MK Colette Avital, Committee Chairman
2 August, 2000 (1 Av, 5760)

1. Introduction
2. Historical Background
3. Establishment of the Committee and the Letter of Authority
4. Members of the Committee
5. The Work of the Committee
6. Partial Findings Regarding the Handling of the Issue by Official Institutions
7. The Banks in Israel
8. Conclusions and Interim Decisions

 

 

1. Introduction

I have the honour to present this Interim Report of the Parliamentary Enquiry Committee into the Location and Restitution of the Assets of Holocaust Victims in Israel.

I proposed establishing this Parliamentary Enquiry Committee following research studies and investigations published in recent years regarding property located within the State of Israel belonging to Jews who were killed during the Holocaust. It seems that some of this property is being held by the Custodian General, some by banks, some by various real estate agencies and other institutions.

The State of Israel must take the same steps that we demanded from other countries when it became known that there was property of Holocaust victims in their countries. Although the first revelations regarding the property of Holocaust victims in Israel was published in 1997, nothing was done by the government to clarify the truth, to try to assess the extent of the property in question, or to investigate ways of returning it to its legal owners.

The Committee has taken on the task of investigating the truth so as to do justice to the Holocaust victims. The Committee's mandate, which will be described in detail later in this document, limits its operation to a period of six months. It now appears, however, that we shall need a longer period to cover this issue and to present the Knesset Plenum with detailed recommendations for action.

This Interim Report summarizes the operation and achievements of the Committee from the time of its appointment in February 2000 to the end of July 2000.

I should like to take this opportunity to thank the members, Director and the staff of the Committee, and the legal adviser of the Knesset for their dedicated work.

 

MK Colette Avital

Committee Chairman

2. Historical Background

During the twenties and thirties of the twentieth century, many European Jews invested in Eretz Yisrael, Palestine. These investments were transferred for a number of reasons, whether Zionistic, economic, in preparation for their future immigration, or as an attempt by central and eastern European Jews to rescue their assets during the dark period in Europe from the mid nineteen thirties. These investments included the purchase of dwellings and urban or agricultural land as well as financial and banking investments.

Later, it became clear that many of these investors were killed during the Holocaust. From 1939 on, a large part of these investments were taken over by the British Custodian for Enemy Property; part by the Custodian General (who began operating in 1944, by a special order); some remained in the banks; some remained in the hands of the companies who sold the land. Regarding some of the land parcels belonging to missing persons, the JNF worked to take them over or to transfer them to their daughter company “Himnuta” so as “to keep them in Jewish hands”.

Towards the end of the British Mandate, the British Custodian for Enemy Property transferred a large part of the financial reserves to England. However, following an agreement with the government of Israel in 1950, part of the sum that had been taken from Israel was returned to the Israeli Custodian of Enemy Property at the Finance Ministry.

Over the years, survivors and heirs of victims (who could prove their legal right to the property) applied to the Custodian of Enemy Property and the investments were returned to them (later in the Report, we shall relate to the question of the evaluation of the returned investments).

In 1968, all the property remaining in the hands of the Custodian of Enemy Property (money, real estate and other assets) was transferred to the Custodian General at the Ministry of Justice. The function of the Custodian of Enemy Property was never cancelled and today this role is filled today by the Accountant General of the Ministry of Finance.

As mentioned earlier, additional assets belonging to Holocaust victims are held by the JNF, real estate agencies, banks and the Custodian General (not only due to his having inherited the assets held by the British Custodian of Enemy Property, but also by force of the Order of the Custodian General, 1944 and the Law of the Custodian General, 1978, which transfer to him the care of all property whose owners are unknown).

3. Establishment of the Committee and
the Letter of Authority

Following a Motion for the Agenda by MK Colette Avital on 15 February, 2000, the Knesset Plenum voted unanimously to establish a Parliamentary Enquiry Committee into the Location and Restitution of Assets of Holocaust Victims in Israel according to Section 21 of the Basic Law: The Knesset.

The Knesset decided that the Committee would have the authority of a Parliamentary Enquiry Committee, according to the Enquiry Committees Law of 1968.

The Committee's Letter of Authority determines that it should deal with the following:

  1. An examination of all aspects related to dormant accounts in Israeli banks and property, principally land, held by various bodies in Israel.
  2. The hearing of witnesses and the collection of surveys, expert opinions and any other written material required by the Committee to formulate its recommendations on these issues:
    1. Ways of expanding the search for and discovery of assets in Israel of Holocaust victims.
    2. Establishing principles for realizing the said assets and for their allocation to assist Holocaust survivors and to deepen awareness and ensure the memory of the Holocaust.

  3. The time the Committee would serve was set for six months.

 

4. Members of the Committee

According to the decision of the Knesset Plenum of 15 February 2000, the committee will have the following Members:

MK Colette Avital - Chairman

MK Avraham Hirchson (Likud)

MK Yosef (Tommy) Lapid (Shinui)

MK Avraham Ravitz (United Torah Judaism)

MK Yuri Shtern (Yisrael Beiteinu)

MK Michael Kleiner (Herut - National Movement)

MK Yoel (Yuli) Edelstein (Yisrael Ba'aliyah)

MK Nahoum Langental (National Religious Party)

MK Nissim Ze'ev (Shas)

Staff

Betty Shamir, Director

Shoshi Leon, Parliamentary Assistant

Kobi Barda, Parliamentary Assistant

Consultants: Prof. Yosef Katz

Adv. Avi Barak

Adv. Arbel Astrachan, Legal Adviser at the Knesset

 

5. The Work of the Committee

The Committee held nine meetings from the time it was established up to the end of July 2000. The following people appeared before the Committee:

The Custodian General, Adv. Shmuel Tzur

Director of the Dept. for the Management of Property, Office of The Custodian General, Adv. Elisheva Farkash

Deputy Director of the Dept. for the Management of Property, Mr. Aharon Shindler

The Accountant General at the Ministry of Finance, Mr. Nir Gilad

Deputy Accountant General, Mr. Eldad Frescher

Inspector of Banks, Mr. Yitzhak Tal

Governor of the Bank of Israel, Dr. David Klein

Chairman of the Committee for the Restitution of Property in Israel of Holocaust Victims of the Center of Holocaust Survivors' Organizations, Adv. Ariel Edelist

Former MK and Chairman of the Knesset Subcommittee on Banking, Adv. Yona Y

Representatives of the Center of Holocaust Survivors' Organizations

Secretary General of the World Jewish Congress, Dr. Yisrael Singer

Director General of the World Jewish Congress in Israel, Dr. Avi Becker

Deputy Chairman of the World Jewish Restitution Organization, Mr. Naftali Lavie

Heads of Banks:

Director General of Bank Leumi, Ms. Galia Maor

Chairman of the Board of Bank HaPoalim, Mr. Amiram Sivan

Director General of Bank HaMizrachi, Mr. Viktor Medina

Director General of Israel Discount Bank, Mr. David Granot

Deputy Director General of Bank Mercantile Discount, Mr. Zvi Katz

Deputy Director General and First Legal Advisor, First International Bank if Israel, Adv. Hanah Levron

Director General of World Investment Bank, Mr. Gamliel Wiessbach

Director General of Bank Lamischar, Mr. Moshe Leibovitz

Director General of Poalei Agudat Yisrael Bank, Mr. Yaakov Tanenbaum

Director General of Bank Massad, Mr. Gidon Eilat

Manager of Bank Polska Kassa Opiki (Pakau)

The Committee also held consultations with the Knesset Speaker, MK Avraham Burg

 

At the Committee's first meeting on 14 March, 2000, the Committee heard surveys on the subject from MK Colette Avital, the Committee Chairman; MK Avraham Hirchson, Chairman of the Knesset Subcommittee on the Restitution of Jewish Property; former MK and chairman of the subcommittee on Banking Affairs, Adv. Yona Yahav; Prof. Yossi Katz, who carried out a comprehensive study on the assets of Holocaust victims in Israel, and Adv. Zvi Barak, member of the Walker Committee.

Following these reviews, it became clear to the Committee that most of the assets that are the subject of its enquiry consist of two principle elements:

  1. Monetary deposits, securities and safety deposit boxes - These were deposited/invested in banks in Palestine during the period of the British Mandate. The majority of these deposits/investments were transferred to the Custodian of Enemy Property by the Trading with the Enemy Bill of 1939, and eventually came under the management of the Custodian General. Some of the deposits have been returned to their legal owners over the years. However, some of the deposits, including safety deposit boxes and securities remained in the banks.
  2. Real Estate - Agricultural land, urban building plots, fruit orchards, houses and apartments. These are held by the Custodian General, the JNF, other real estate agencies and private holders. Apparently, some of the real estate was requisitioned by the State over the years or handed over to the State by the Custodian General.

In light of the complexity of the issue, the Committee decided to concentrate initially on monetary deposits, securities and safety deposit boxes, and defer the real estate and land issue to a later date.

The Committee dealt almost exclusively with the first category up to the end of the Knesset's Summer Session, i.e. 2 August 2000.

At its first meeting, the Committee decided to use the medium of the press and of the Knesset Internet site to call on the public and organizations to send in written material to assist the Committee in formulating its recommendations. A large number of applications were received - most of them from people describing the difficulties they faced from the establishment when trying to investigate the fate of their property or of the property of their dear ones who were killed in the Holocaust.

 

6. Partial Findings Regarding the Handling of
the Issue by Official Institutions

  1. The Ministry of Finance - The Accountant General
    1. At the time of the establishment of the State and again following an agreement with the British Government in 1950, significant sums were transferred to The Accountant General at the Ministry of Finance by the Custodian of Enemy Property (in other words - monies, the vast majority of which was the property of Holocaust victims).
    2. The sums were recorded in Palestinian pounds (Lirot), which in 1948 were equivalent to pounds sterling. These sums continued to be listed in Lirot and were not linked to any foreign currency, so that their value in comparison with the pound sterling or the dollar diminished by a significant amount over the years.
    3. At the date of the writing of this report, the Accountant General does not know the exact sum that was transferred to his office as reported in Para. a.
    4. At the date of the writing of this report, the Accountant General does not know whether interest was paid on the principle. It is clear that the principle was not linked.
    5. During the years 1948 to 1968, some of the sums mentioned in Para. a. were returned to those with the right to them according to law, i.e. survivors or the relatives of Holocaust victims. The Accountant General has no information as to whether the sums returned included interest.
    6. In 1968, following a government decision, the Accountant General transferred the remainder of the sums he still held out of the total mentioned in Para. a. to the Custodian General. At the time of the transfer, this sum totaled 692,000 IL.
    7. According to the estimate of the Accountant General, assuming that the deposits were entitled to interest and linkage, the sum mentioned in Para. f, would value about 25 million NIS in the year 2000.
    8. The sum mentioned in Para. f, was invested by the Custodian General from 1968 on, in conformity with the investment policy of the Custodian General's office.
    9. The establishment of the Parliamentary Enquiry Committee accelerated the handling of the issue of evaluating the sums due to the owners of the accounts.
      The Accountant General has made a commitment to settle this matter in the near future with the Custodian General

  2. The Custodian General (Ministry of Justice)
    1. The Custodian General manages, by law, all property in Israel the owners of which are untraceable.
    2. The Custodian General does not have a separate list of files of property owners or of property that belonged to people who perished in the Holocaust.
    3. The Custodian General has information on land which belonged to Jews who perished in the Holocaust and which was taken over by the JNF and/or its daughter company “Himnuta” during the Mandate period.
    4. The Custodian General manages the securities of missing persons (the majority of whom are Holocaust victims) at the “Otzar Hityashvut HaYehudim” Bank (which was then the mother company of Bank Leumi). The value of these securities stood, in the year 2000, at 120 million NIS.
    5. The Custodian General received in 1968 some 15,000 files, some of them closed. The Custodian General now has some 670 files on property which were transferred to him in 1968 by the Custodian of Enemy Property. These files relate to both monies and real estate. The Custodian General did not give the Committee information on the composition or value of this property.
    6. Following the demands of the Committee, the Custodian General was given a team which began to review all the property files managed by him in order to locate those files for which there is a high probability (according to criteria determined by the Custodian General) that they belong to people who perished in the Holocaust. Correct to the day this report was written, 3,000 files out of a total of 15,000 have been reviewed and 12% of them were found to belong to Holocaust victims.
    7. Over the years, Israeli banks have sent the Custodian General lists of dormant accounts they hold. As reported in Para. a. above, to date the Custodian General does not know the scope of the accounts that belong to Holocaust victims.
    8. The Custodian General has no responsibility, according to law, to locate the owners of the property. He therefore did not do this in relation to the property of Holocaust victims.

 

7. The Banks in Israel

  1. It is known that people who perished in the Holocaust deposited money, purchased securities and rented safety deposit boxes in banks that existed in Palestine during the period of the Mandate. The extent of these assets is unknown.
  2. The issue of the closed accounts and property in Israel of Holocaust victims in the banks has never been examined by the Bank of Israel.
  3. Some of the property that was in the banks was transferred during the Mandate to the Custodian of EnemProperty and later to the Custodian General as described above.
  4. The banks have never published information on the dormant accounts they hold.
  5. Bank Leumi only very recently published on the Internet a list of deposits (without details), some of which presumably belong to Holocaust victims. Following the establishment of the Parliamentary Enquiry Committee, Bank Leumi published a public announcement in the press regarding dormant accounts.
  6. We assume that not all the deposits, securities, etc. of Holocaust victims, which were deposited in Israeli banks, were transferred to the Custodian General.
  7. Following the demands of the Committee (as detailed below), the relevant banks agreed to the appointment of an external examiner.

 

8. Conclusions and Interim Decisions

  1. Following the demands of the Committee and a study of the possibility of using legislation, the banks agreed to allow an external inspection, to be organized by the committee, of the issues on which the Committee is seeking information. It should be emphasized that this is the first time in the history of banking in Israel that the banks have agreed to an external inspection.
  2. The document listing the principles of the external inspection of the banks will be completed soon.
  3. The Committee discussed the issue of the cost of the external inspection, and because of the high costs and the lack of other funding sources, decided to ask the banks to bear the cost involved.
  4. The Committee asked the Custodian General to prepare a separate list of property files under his management, for which there is a basis to assume that the owners are Holocaust victims.
  5. The Committee requested the Accountant General to provide clear data on: the scope of the sums received from the British Custodian of Enemy Property and from the British Government; whether interest and linkage was added to these sums; the amount of the monies returned to their owners between 1948 and 1968 and the values; and to provide the Committee with tables of assessments and policy regarding compensation for property owners who received their money in the past in non-realistic amounts.
  6. The Committee now intends to focus its work on the issue of the fate of real estate property.
  7. The Committee requests the Knesset Plenum to extend the period of its appointment for a further period to allow it to continue the subject of its enquiry. The Committee members are conscious of the importance of completing this enquiry in order to ensure historical justice on this sensitive issue as soon as possible.



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