US embassy cable - 04FRANKFURT6334

C O N F I D E N T I A L SECTION 01 OF 02 FRANKFURT 006334 
 
SIPDIS 
 
DEPARTMENT FOR EUR/OHI 
 
E.O. 12958: DECL: 07/22/2014 
TAGS: PHUM, PGOV, KCRM, GM 
SUBJECT: RHEINLAND-PFALZ AGREES TO REINSTATE PENSION 
BENEFITS TO SATMAR HOLOCAUST SURVIVORS 
 
REF: A) MAY 19 SHEMANSKI E-MAIL (NOTAL) B) APRIL 26 
 
     BODDE/CLOUD BRIEFING MEMO C) JULY 9 
     GILMAN/MILLER/HODGES/MATHAI CONFERENCE CALL 
 
Classified By: Consul General Peter W. Bodde, reasons 1.4(b) and (d) 
 
1.  (C) SUMMARY: As of July 1, the Rheinland-Pfalz (R-P) 
state government reinstated full payment of pensions to all 
Holocaust survivors involved in the Satmar payments dispute 
(reftels) and will refund all funds withheld to date.  R-P 
took the move in response to a meeting between Consul General 
and R-P Finance Minister Gernot Mittler.  The Finance 
Minister signaled his state's willingness to work with Post 
to bring the matter to a satisfactory conclusion.  END 
SUMMARY. 
 
2.  (C) On June 8, Consul General met with Rheinland-Pfalz 
Finance Minister Gernot Mittler (accompanied by R-P 
Reparations Office head Juergen Pauly and senior Finance 
Ministry official Reinhold Bott) to discuss allegations that 
Holocaust survivors in the Satmar Community (an orthodox 
Jewish group) filed fraudulent claims for Holocaust-related 
medical treatment.  R-P officials maintain that from the 
early 1990s to 2002, Satmar survivors (represented by New 
York Rabbi Sandor Katz and California chiropractor Dr. Paul 
Ross) submitted more than 180 claims for medical treatment at 
non-existent medical facilities.  The Reparations Office 
begun withholding funds (150-200 euros monthly) from survivor 
pensions to recoup the amounts from allegedly fraudulent 
claims already paid.  Former House International Relations 
Committee Chairman Benjamin Gilman contacted the R-P 
government and Post several times on behalf of the survivors. 
 
3.  (C) During the meeting, Consul General stressed the 
politically sensitive nature of the dispute and underscored 
our interest in finding a fair and equitable solution that 
did not penalize innocent survivors.  He offered ConGen's 
assistance and suggested that Post Legatt could work with the 
R-P government to further investigate the matter. 
 
4.  (C) Summing up the R-P legal position, Reparations head 
Pauly maintained that his office performed due diligence in 
investigating the claims and was convinced that they were 
fraudulent.  He suggested that Rabbi Katz and Dr. Ross might 
have exploited survivors and kept the claim money for 
themselves, noting several letters from surprised Satmar 
survivors indicating that they were outside the U.S. at the 
time of the alleged treatments.  Pauly remarked that the R-P 
Reparations Office spoke with the FBI in the United States to 
request a formal fraud investigation. 
 
5.  (C) Acknowledging the delicacy of the situation, Finance 
Minister Mittler accepted the CG's offer to work together to 
end the dispute.  He indicated that the Finance Ministry 
would suspend action against all Satmar survivors pending 
cooperation between the ministry and the consulate. 
 
6.  (C) Mittler stated in a subsequent letter to Consul 
General that the R-P government would resume payment of all 
Satmar pensions and refund any money already withheld from 
Satmar survivors beginning July 1.  He underscored that the 
R-P government took action against Satmar individuals only 
after giving them numerous opportunities to respond to the 
fraud allegations.  Mittler ended the letter by welcoming USG 
involvement while leaving open both the nature and extent of 
our possible cooperation. 
 
7.  (C) In a July 9 conference call (ref D), ConGen Poloff 
related to former representative Gilman the R-P government's 
decision to reinstate Satmar pensions.  Poloff emphasized 
that the decision did not signify a change of heart regarding 
the alleged fraudulence of Satmar claims.  Gilman promised to 
work together with Rabbi Katz to provide additional 
information to the R-P government exonerating Satmar 
survivors.  In response to Mittler's concerns over the dearth 
of Satmar replies to R-P government correspondence, Gilman 
stated that he would advise Rabbi Katz to encourage Satmar 
members to answer inquires in a more timely manner.  Gilman's 
attorney David Miller floated the idea of enlisting local 
counsel in R-P to act as liaison with the state government in 
settling the dispute. 
 
8.  (C) COMMENT: Mittler's executive order to resume survivor 
pensions and refund withheld compensation indicates that the 
R-P government now realizes the political sensitivity of the 
issue.  Nevertheless, Mittler and other R-P government 
officials stand by their belief that Satmar claims are 
fraudulent.  As proposed in the Mittler meeting, Post 
enlisted the aid of its resident Legatt to investigate the 
dispute.  On the political level, we will continue to work 
together with Embassy Berlin and OHI to formulate avenues for 
cooperation with the R-P government that ensure fairness and 
transparency.  END COMMENT. 
BODDE