US embassy cable - 05VIENNA1776

UNCLAS SECTION 01 OF 02 VIENNA 001776 
 
SIPDIS 
 
SENSITIVE 
 
DEPARTMENT FOR EUR/OHI AND EUR/AGS 
 
E.O. 12958: N/A 
TAGS: KNAR, PHUM, PGOV, AU 
SUBJECT:  AUSTRIA'S GOVERNMENT AND JEWISH COMMUNITY REACH 
AGREEMENT 
 
REF:  A) 94 VIENNA 4396  B) VIENNA 1482 
 
THIS MESSAGE IS SENSITIVE BUT UNCLASSIFIED. 
 
1.  (SBU) SUMMARY: On May 25, the Austrian Jewish 
Community (IKG) and the GOA announced that pending 
questions regarding the IKG's restitution claims had been 
resolved.  In addition, a solution was on the way to 
address the IKG's demands for the ongoing financing of 
the community.  IKG President Muzicant will now withdraw 
as amicus curiae in the Whiteman case, which is 
apparently the sole remaining impediment to legal peace 
as per the 2001 U.S.-Austrian Washington Agreement on 
Holocaust property issues.  The IKG will also withdraw 
its 777 claims under General Settlement Fund (GSF), which 
will have the effect of increasing the pool of funds 
available to other Holocaust victims with claims against 
Austria.  The GOA hopes to be able to start payments from 
the GSF in early 2006.  Please see action request for 
EUR/OHI in para 9.  End Summary. 
 
IKG-GOA Agreement 
----------------- 
 
2.  (U) Following a meeting of the General Settlement 
Fund (GSF) board of trustees, the GOA and the IKG 
announced on May 25 that the IKG will receive an 
additional 18.2 million Euro as restitution payment.  In 
return, the IKG will withdraw its 777 claims under the 
GSF.  The source of the 18.2 million Euro is the surplus 
from the Reconciliation Fund for the compensation of 
former forced and slave laborers, as agreed by that 
fund's board of trustees in December 2004 (ref a).  In 
addition, the IKG will receive additional support from 
the Interior, Education and Social Affairs Ministries for 
the financing of its security needs and social 
infrastructure.  In return, the IKG will withdraw as an 
amicus curiae in the Whiteman case, which is holding up 
legal peace required for payments from the GSF to begin. 
 
Whiteman Case 
------------- 
 
3.  (SBU) IKG Executive Director Erika Jakubovits told 
Emboffs on May 25 that the IKG will now instruct its 
lawyer to file a brief to withdraw from the Whiteman 
class action case.  In the brief, the IKG will present 
the benefits for the class as a result of the IKG's 
agreement with the GOA.  Jakubovits was hopeful of 
convincing the class of claimants, as well as the court, 
of these benefits.  In a May 25 TV interview, IKG 
President Muzicant said he would do "everything in his 
power" to reach legal peace.  Muzicant stressed that the 
agreement provides a real basis for the existence and the 
future of the IKG in Austria.  Jakubovits also noted 
that, in addition to the 18.2 million payments for the 
IKG's restitution claims, the GOA has committed itself to 
support projects for a school and an old-age home, and to 
defray the IKG's substantial security costs. 
 
IKG Request to USG 
------------------ 
 
4. (SBU) Jakubovits asked for support from the USG for 
two proposals:  Regarding the exchange rate for the 210 
million US Dollars to be paid out by the GSF, the IKG 
suggests that, for payments to claimants, this amount be 
converted according to the exchange rate valid at the 
time of the conclusion of the Washington Agreement, i.e. 
January 17, 2001.  This reinterpretation of the 
Washington Agreement would provide another compelling 
argument for dismissal of the Whiteman case.  Jakubovits 
also suggested that in-rem restitution of publicly owned 
property according to the Washington Agreement could be 
implemented before legal peace. 
 
Seeking ways to accelerate payments under the GSF 
--------------------------------------------- ---- 
 
5.  (U) In a public statement, Parliamentary President 
Andreas Khol, who chairs the GSF board of trustees, 
expressed the hope that payments to claimants could start 
in March 2006.  Khol emphasized that the GSF was doing 
everything to accelerate the processing of claims. 
Should it not be possible to finish processing at the 
beginning of 2006, Khol, as well as MFA Legal Adviser 
Hans Winkler, indicated that the Fund would look for ways 
to make advance payments, at a minimum in the Equity- 
Based Category where a relaxed standard of evidence 
applies.  GSF Secretary General Hannah Lessing noted that 
the Fund will consult with legal experts during the week 
of May 31 regarding the possibility of making advance 
payments. 
Anderman Case 
------------- 
 
6.  (SBU) Regarding the Anderman class action, an MFA 
Legal Affairs officer confirmed Legal Adviser Hans 
Winkler's announcement last week that in the GOA's view, 
the Anderman case had lapsed, since the plaintiffs had 
not filed an objection to the dismissal within the 
prescribed deadline.  IKG Executive President Jakubovits 
agreed with this interpretation. 
 
Altmann Case 
------------ 
 
7.  (SBU) Regarding the arbitration agreement on the 
claim to six Gustav Klimt paintings currently in the 
possession of the Austrian Gallery, the MFA confirmed 
that, under the terms of the arbitration agreement, Maria 
Altmann has undertaken immediately to withdraw her 
lawsuit in California.  The two arbitrators appointed by 
Altmann and the GOA, Professor Walter Rechberger and Dr. 
Andreas Noedl, respectively, are to appoint a head of the 
panel by the end of May.  Should they fail to agree by 
then, the president of the constitutional court is to 
appoint the head.  All Bloch-Bauer heirs have jointly 
concluded the arbitration agreement (in contrast to the 
California lawsuit, where the majority of heirs did not 
join Altmann).  The panel is to render a decision by Nov. 
1.  The agreement stipulates that parties will be bound 
by the Arbitration Panel's decision.  If the Panel rules 
in favor of Altmann, the agreement provides for 
restitution of the paintings.  (The GoA would then 
probably try to negotiate a purchase of the paintings, 
since they do not want them to leave Austria.) 
 
8.  (SBU) COMMENT: The IKG-GOA agreement is a major 
breakthrough and reflects the resolution of a 
longstanding conflict over financial issues.  (In effect, 
it closes the chapter opened by Muzicant on January 17, 
2001 when he declined to endorse the Washington 
Agreement.)  Together with the arbitration agreement in 
the Altmann case, it provides positive momentum which may 
contribute to a resolution of the Whiteman case -- and 
may also serve to accelerate substantially payments from 
the GSF. 
 
9.  (SBU) ACTION REQUEST (FOR EUR/OHI): In connection 
with the current efforts to speed up processing of claims 
filed with the GSF, MFA again approached us on May 23, 
asking the USG to reconsider its position on financing 
the activities of the USG-nominated member of the GSF 
Claims Committee, Professor Vivian Curran (ref b).  It 
appears that the Austrian government is seeking a gesture 
to indicate that the current U.S. administration remains 
fully committed to the process launched through the 
January 2001 Washington Agreement.  Embassy realizes that 
a direct payment from the State Department to the 
University of Pittsburgh in compensation for the loss of 
Prof. Curran's services is not possible.  However, we 
could envision taking some other action - perhaps through 
Public Affairs programs, such as academic exchanges - 
that would indirectly address GoA concerns.  Please 
advise. 
 
BROWN