Holocaust deal faces collapse

FROM ROGER BOYES IN BERLIN

DEUTSCHE Telekom, Germany's giant telecommunications group, has finally agreed to pay £30 million into a compensation fund for Nazi-era slave labourers in a last-minute attempt to prevent the unravelling of an intricate deal with American lawyers and with the White House.

The gesture may be a case of too little, too late. Even with Telekom's contribution, German industry has fallen well short of the sum it promised to pay out for labourers forced to work in the Third Reich.

"No one wants to talk about the issue -- many simply dodge the subject altogether," Manfred Gentz, of Daimler-Chrysler, who has been trying to drum up the money, said. The Clinton Administration agreed to issue a "statement of interest" to discourage American courts from proceeding with billion-dollar class action suits against some of Germany's top brand-name companies, such as Dresdner Bank and Volkswagen, but the German Government and industry have to come up with DM10 billion (£3.3 billion), which would be used for the benefit of Holocaust survivors and for a so-called "future fund" to set up projects in Eastern Europe.

The German Government agreed to pay half the sum and eased the way for German industry by declaring compensation fund contributions to be tax deductible, but most companies are resisting attempts to squeeze cash from them. Erich Sixt, owner of the Sixt car rental company, with a turnover of more than £1.5 billion, says that his company cars were confiscated by the Wehrmacht during the war and he sees no moral obligation to pay up.

The fundraisers are asking for a contribution equivalent to one-thousandth of turnover. "Five million marks is a lot of money to explain away to my shareholders," Herr Sixt said. The Leo Kirch media group has also declined to pay. "Our view is that there is no general obligation on behalf of the whole of the German economy," a spokesman said. Other companies said that they refused to be put under pressure.

The Rewe supermarket chain says it has already given financial support to the distribution of Steven Spielberg's film Schindler's List and saw no need to make a further commitment. Out of 220,000 companies approached for a contribution, only 4,200 have signed up.With Telekom's contribution, the total will be DM3.3 billion, DM1.7 billion short of the promised sum. About DM2 million a week is flowing in.

At that rate the target will be reached only in three years time, but already most surviving slave labourers are well into their 80s. The foundation is to hold a crisis meeting tomorrow. The bulk of the money has come from the 16 founding members, companies such as Allianz, Siemens and DaimlerChrysler. All have tarnished wartime pasts and all have strong interests in the American market. Indeed Telekom's larger-than-expected contribution reflects, in part, its ambitions to buy into the American market.

The climate of approval for German companies in America will sour quickly unless industry produces a more wholehearted response.

There are only two possible options to head off a collapse in the slave labour deal and a serious deterioration in relations with the United States on the eve of a new Administration: the first is that the big companies pay more to make up for the shortfall from medium-sized business; the second is that the Government pays more.

Website photo: German Chancellor Gerhard
Schroeder (second from left) with friends
(right: Paul Spiegel, the new, revered
head of Germany's Jewish community)

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