A Specious Claim
by Clay Risen

Lost amid the hullabaloo over affirmative action and anti-sodomy laws during the closing days of the Supreme Court's 2002 session was a 5-4 decision striking down California's Holocaust Victim Insurance Relief Act. The law, passed in 1998 but caught up in the courts ever since, required insurers licensed by the state — many of which, these days, are merely arms of stalwart European giants like Italy's Generali and Germany's Allianz — to make public their lists of policies issued during and just before World War II.

The court ruled that the HVIRA interfered with the executive branch's right to make foreign policy, a position strenuously advocated by both the Clinton and Bush administrations. "The express federal policy and the clear conflict raised by the state statute are alone enough to require state law to yield," wrote Justice David Souter for the majority. Indeed, even though for years European insurers have hemmed, hawed and outright refused to provide restitution to hundreds of thousands of Jewish policyholders and their families, the State Department has consistently pushed voluntary, industry-led solutions, in particular the International Commission on Holocaust Era Insurance Claims.

It's hard to argue, legally, that the states have much leeway in controverting the federal government's right to set our country's foreign policy. And yet, paradoxically, it is the continued failure of the ICHEIC that makes laws like California's so necessary — and which makes the administration's dogged support of the insurance industry so fatuous. In her dissent, Justice Ruth Bader Ginsburg noted that the "ICHEIC's progress has been slow and insecure," noting, among other shortcomings, that the commission represents only a fraction of all European insurers, and has only recently come anywhere close to comprising a majority. Nor have those few participants made much headway: In November 2001, three years after its founding, the commission had received only 77,000 claims and settled a mere 797 — out of the more than 500,000 potential claims. And by April 2003, it had only offered $38.2 million to claimants — $1.8 million less than its operating tab.

Even worse, payouts are contingent on the release of claims' lists — something the ICHEIC refuses to require its members to do. And Ginsburg's not alone in attacking the ICHEIC from the bench. In 2002, writing on a related case in New York's Eastern District, Judge Michael Mukasey said that the commission "is entirely a creature of the six founding insurance companies ... it is in a sense the company store." He noted, among other things, that several companies had actually withheld funding from the commission — its only source of cash — when it made a decision counter to their wishes.

The commission's slow progress might be more acceptable if it weren't for the limited timeframe for restitution. To put it baldly, Holocaust survivors aren't getting any younger; the youngest are almost 60 years old. And while their relatives have the option of taking their places, the already tenuous paper trail justifying the claims gets much weaker the further one gets from the initial policyholder — in fact, one of the reasons California passed the HVIRA in the first place was because insurance companies were refusing to honor many claims by family members. And yet, for all this, the administration continues its dogged support of the current system.

Even the majority, led by David Souter, referred to Bush's current tack as "kid gloves," but argued nevertheless that it is the job of the State Department — not the State of California — to implement a viable solution. Now the pressure is on the White House to muscle the ICHEIC into producing real results. Unfortunately, given its track record on the issue, it's hard not to believe the administration won't pull more punches down the road.

E-mail Clay Risen at risenc@yahoo.com.

— graphic by Alison Paddock (arpdesigns@hotmail.com)