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The judge presiding over the $1.3 billion Swiss Holocaust settlement has rejected criticisms that the distribution formula he used favored survivors in the former Soviet Union over those in the United States. At issue is the formula for distributing $184.5 million to Jewish survivors around the world whose assets were looted by the Nazis. Objections lodged by the Holocaust Survivors Foundation-USA took issue with Eastern District Chief Judge Edward R. Korman’s decision issued Tuesday to allocate to survivors in the former Soviet Union 75 percent of the $184.5 million distributed so far. Under the approved settlement formula, survivors living in the United States receive 4 percent of those funds, with the remainder going to survivors living in Israel, Europe and elsewhere. The apparent disparity was more than fully justified, Judge Korman wrote, because of the extreme poverty of Soviet Union survivors compared to those in the United States, a discrepancy that has become even greater since the 1991 collapse of the Soviet Union. In addition, he concluded in In Re: Holocaust Victim Assets Litigation, 96-4849, U.S. survivors had access to resources and benefits unavailable to those in the former Soviet Union. Soviet survivors by and large have not had access to prior compensation programs primarily because the post-war German government refused to deal with nation’s behind the Iron Curtain. Also, Judge Korman noted, survivors make up a far smaller portion of the U.S. Jewish community than they did in the Soviet Union, which means the Soviet survivors have far fewer community resources to draw upon. In addition, he reasoned, the social services “safety net” in the United States is well developed, while it is practically non-existent in the former Soviet Union nations. Judge Korman’s views on the looted assets formula take on added significance because a substantial portion of the $800 million the settlement set aside to compensate Holocaust survivors and their families for funds deposited in Swiss banks and never returned, may well remain unclaimed. To date, about $650 million of that amount has not been claimed, and a special master appointed by Judge Korman has recommended that the unclaimed bank funds be distributed to the “looted assets” subclass defined by the settlement. Judge Korman has set a hearing for April 29, at which he will consider proposals from about 75 groups for the distribution of the unspent funds. By the hearing date, Judge Korman noted, Special Master Judah Gribetz of Bingham McCutchen should have a more precise figure for the undistributed bank funds. Judge Korman signaled an inclination to stick with the existing formula for distributing the unclaimed bank funds in rebuffing criticism from Samuel Dubbin, the lawyer for the U.S.-based Holocaust Survivors Foundation. Mr. Dubbin had complained that application of the existing formula to the projected hundreds of millions of unspent bank deposit funds would produce a “fantastical” outcome. Judge Korman responded that “if, after reviewing the many proposals submitted, the ‘fantastical’ outcome that Mr. Dubbin fears proves to be how the needs of the class are best satisfied, there would be nothing fantastic about it. It would be an honest and tragic reflection of current levels of need.” In addition to the $800 million allocated for lost bank deposits, the original distribution plan recommended by Mr. Gribetz and approved by Judge Korman called for the payment of $200 million to survivors who were slave laborers, $200 million to those who attempted to flee to Switzerland and were mistreated, and $100 million to the looted assets subclass. Because the Nazi’s systematically liquidated the assets of all their victims, the “looted asset” class is both huge and virtually unascertainable, Judge Korman observed. Those problems are further compounded, he added, because of the difficulty of determining “the nature and value of the loot traceable to Switzerland and Swiss entities.” For that reason, he wrote, the decision was made to devise a formula that would distribute the “looted assets” component of the settlement to the most needy survivors. In justification of the 75 percent/4 percent division, Justice Korman offered a plethora of statistical evidence. Approximately, 19 percent to 27 percent of all Jewish survivors live in the former Soviet Union, while 14 percent to 19 percent live in the United States. But, he pointed out, survivors make up 32 percent to 40 percent of the Jewish Soviet community and only 2.5 percent of the American Jewish community, indicating far greater community resources in this county. The judge noted that so far, all compensation efforts, including those under the Swiss settlement, have resulted in the distribution of $14.8 billion, or 28 percent, of the total, to survivors in the United States, and $444 million � only 0.8 percent � to those in the former Soviet Union. Compared with the extensive network of Social Security and medical benefits available in America, Judge Korman cited reports that survivors received pensions ranging from between $9 and $55 a month in various republics before the collapse of the Soviet Union. Hyperinflation has further eroded those benefits, he wrote. Additionally, he referred to reports of patients in the former Soviet Union having to pay for their own medicine, bedding and food while in the hospital.

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