Posted Monday, May 6, 2002

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Monday 6 May 2002

Accountants' bill dwarfs payouts after Holocaust

By David Millward and Ohad Gozani


FOUR leading accountancy firms, including the disgraced Andersen, have charged Swiss banks £430 million to track down dormant accounts of Holocaust victims - a sum likely to dwarf any payouts to survivors or descendants. The amount was described as "beyond belief" by Lord Janner, a Labour peer and chairman of the Holocaust Educational Trust. Politicians in the Israeli parliament condemned it as "outrageous".

The banks will pay the bill and other professional fees will not be deducted from the £892 million they have set aside to settle claims. The Zurich-based Claims Resolutions Tribunal has received 32,000 claims. In addition, a New York court has sent 580,000 questionnaires to other potential beneficiaries.

One critical observer believes that only about 1,000 cases will be settled because of the continuing difficulty in identifying those who have genuine links to the Swiss accounts.

Swiss banks identified nearly 16,500 dormant accounts in 1997, of which just over 5,570 were held by non-Swiss nationals. The files had been lying in vaults for decades.

A second investigation carried out by a commission headed by Paul Volcker, the former head of the American Federal Reserve, found a further 21,000 accounts, which could have been linked to victims of the Nazis.

"It was probably the most thorough work that has ever been done to identify past banking relationships," a Swiss banking source said.

None of the firms involved - Arthur Andersen, KPMG, Price Waterhouse and Coopers & Lybrand (now Pricewaterhouse Coopers) - was able to comment because of strict Swiss commercial confidentiality laws.

But it is understood that their costs have been accrued because of the complexity of the work, which entailed trying to reconstruct the history of individual accounts from fragmentary records and to ascertain whether clients had survived the Holocaust.

The three-year investigation involved hiring 650 forensic accountants from international firms, mostly from outside Switzerland.

Further costs were run up by the need to bring retired Swiss accountants back into service, because they were the only people capable of reading the old Gothic German script and transcribing it into a form that could be read by the modern generation.

There was also the task of repairing files which were falling apart and wading through leather-bound ledgers.

Further expense arose after the collapse of communism, which brought a ave of claims from eastern Europe. Confusion often led to several claims being made for the rights to a single account.

The cost of the audit was also attacked by Gregg Rickman, the author of Swiss Banks and Jewish Souls.

"The audit figure is truly absurd," he said. "The work sheets and back-up information from these audits must be made available for public inspection as soon as possible." 

  Norman Finkelstein: The Holocaust Industry
  "Holocaust survivor" Abe Foxman: How we bludgeoned the Swiss Banks
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