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A well-known New York litigator, Stroock & Stroock & Lavan partner Charles G. Moerdler, has been accused of having a conflict of interest by plaintiffs’ lawyers pressing Holocaust-related claims against the Austrian government and Austrian companies. The plaintiffs’ lawyers, joined by the World Jewish Congress, have objected to Moerdler’s entering into the negotiations as the lawyer for the Austrian Jewish Community because he represented a major Austrian bank that agreed last year to pay $40 million to settle Holocaust claims. Moerdler, who escaped from Nazi Germany at age 4, dismissed the conflict charges, saying that he would be “happy to have a court decide the issue.” “The only parties that could raise a conflict — the Austrian Jewish Community and Bank Austria — have given me waivers and encouraged me to participate in the talks,” he said. But Michael D. Hausfeld, of Cohen, Milstein, Hausfeld & Toll who is representing a class of Austrian Holocaust victims, said, “The appearance of collusion is obvious and is potentially jeopardizing any ultimate resolution.” Elan Steinberg, the executive director of the World Jewish Congress, said it was “disgraceful” for Moerdler “to represent the Jewish side in litigation to recover for the financial crimes of the Holocaust” after having defended Bank Austria. The controversy has spilled over into the international negotiations that are under way to hammer out a global settlement of Austrian Holocaust claims similar to the $5 billion deal that was reached with Germany in July. Moerdler first sought to enter the talks on behalf of the Austrian Jewish Community — which is formally organized in that country — at a two-day negotiating session in Washington, D.C., beginning Nov. 13. The November talks focused solely on the resolution of property claims arising from the Nazi era, since a $400 million figure to resolve slave labor claims had been publicly announced in October. The property claims primarily relate to the theft, or “Aryanization,” of Jewish property by the Nazis. The class-action lawyers participating in the talks bitterly objected to Moerdler’s position, as did the Conference on Jewish Material Claims against Germany, an umbrella group of 24 organizations representing the interests of Holocaust survivors, according to several sources who were present at the negotiating session. The Claims Conference, which has exclusively represented Holocaust claims with the German government since World War II, has participated in a coalition of groups in the Austrian talks that have included the Austrian Jewish Community and an organization of Austrian survivors and heirs no longer living in Austria. Both groups are members of the Claims Conference. EIZENSTAT’S ROLE A spokeswoman for U.S. Deputy Treasury Secretary Stuart E. Eizenstat, who was co-hosting the session as the lead U.S. official at the talks, said Eizenstat had publicly acknowledged the complaints to the extent of telling Moerdler that his participation “could be a potential issue of conflict.” The spokeswoman, Helaine Klasky, added that Eizenstat recommended that Moerdler restrict his role to that of an advisor rather than a lawyer. Several persons present said that Eizenstat further restricted Moerdler’s role to that of an “observer,” and that he spent the session slipping notes to members of the Austrian Jewish Community delegation and U.S. government lawyers participating in the talks. Moerdler, who is working on the case pro bono, acknowledged that he took on the role of an “observer” on the second day of the talks as a “favor” to Eizenstat, who was seeking to avoid disruption of the talks. NEGOTIATIONS IN VIENNA But the extent to which the objections to Moerdler have actually gained traction with Eizenstat and his aides from the Justice and State Departments is very much in doubt. Moerdler, for instance, was recognized by Eizenstat and permitted to speak in the most recent negotiating session, which took place in Vienna on Nov. 30 and Dec. 1, sources connected to all sides report. One of the lawyers present repeatedly objected to Moerdler’s speaking, according to one source, but Eizenstat sidestepped the issue by saying that any disagreements over Moerdler’s participation should be worked out between the Claims Conference and the Austrian Jewish Community. The lead attorney for the Claims Conference is Stanley M. Chesley, of Waite, Schneider, Bayless & Chesley in Cincinnati. According to sources familiar with the dispute, the Claims Conference is objecting to the right of the Austrian Jewish Community to have independent representation in the negotiations. Those sources point out that the Austrian Jewish Community is a member of the Claims Conference, as are four other groups who are also representing the interests of Holocaust victims in the talks. Substantively, those sources asserted, the Austrian Jewish Community is seeking to retain control of properties that were expropriated from it during the war. There were many wealthy Jews in Vienna before the war and their organization, the Austrian Jewish Community, owned significant assets, such as a summer camp, a ski resort and a stadium, as well as a number of schools, hospitals and synagogues. Some of the properties have been demolished, but others, such as the stadium, which before the war hosted the Macabee Games, continue to be used. The Austrian Jewish Community wants to control those portions of the settlement relating to the properties that it owned before the war, sources close to the plaintiffs’ side said, while the Claims Conference and plaintiffs’ lawyers want to see the proceeds made available to Austrian survivors and their heirs worldwide. Those sources close to the class action plaintiffs also assert that there are 23,000 Austrian Holocaust survivors worldwide, but only 800 who continue to live in Austria. The next negotiating session is set for Dec. 21 in Washington, D.C.

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