RHEINLAND-PFALZ AGREES TO REINSTATE PENSION

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