AUSTRIA REQUESTS U.S. CONTRIBUTION TO GENERAL

UNCLAS VIENNA 001482

SIPDIS

SENSITIVE

DEPARTMENT FOR EUR/OHI AND EUR/AGS

E.O. 12958: N/A

TAGS: KNAR PREL PGOV AU
SUBJECT: AUSTRIA REQUESTS U.S. CONTRIBUTION TO GENERAL


SETTLEMENT FUND ADMINISTRATIVE COSTS

This message is sensitive but unclassified.


1. (SBU) Ambassador met Parliamentary President Andreas Khol

on May 3, at Khol's request, to discuss progress in claims

processing under the General Settlement Fund (GSF) for

Holocaust victims. Khol reported that decisions on cases

were moving much more quickly now with the additional staff

and new office space that the GoA had provided. The new

U.S.-nominated Claims Committee adjudicator, Prof. Vivian

Curran, was also contributing to the acceleration of claims

processing.


2. (SBU) However, Khol said, Curran's pro bono activity on

behalf of the Fund was now taking so much of her time that

she was no longer able to keep up with her teaching duties at

the University of Pittsburgh. As a result, the University

had had to hire a replacement for her at an annual cost of

more than $50,000. Khol conceded that under the Washington

Agreement and relevant Austrian law, the GoA could pay this

amount out of the GSF as administrative costs. Khol said the

GoA nevertheless wanted to use the GSF funds to pay the

victims, not reduce the total by paying administrative costs.

He thought that some of the victims whom the Fund was

intended to benefit might resent this use of the money, and

in particular, might question why the GoA was paying for the

services of the U.S. Claims Committee adjudicator. Khol

asked the USG to consider funding either all or part of the

University of Pittsburgh request, as well as professional

liability or errors and omissions insurance for Dr. Curran.


3. (SBU) The Ambassador responded that Embassy had been in

close consultation with the Office of Holocaust Issues (OHI)

on this subject. OHI had carefully researched the request.

However, the Department's Legal Bureau had advised that there

was no legal basis for such payments and the Ambassador was

not optimistic that this decision could be reversed. The

Ambassador urged the GoA to make provision for paying such

administrative costs separately, or failing that, to pay them

out of the GSF. Notwithstanding, the Ambassador assured Khol

that he would report the Austrian government's request to the

Department and ask the appropriate offices to reconsider the

possibility of a USG reimbursement to the University of

Pittsburgh.


4. (SBU) Khol said the requirement to reimburse the

University of Pittsburgh and pay insurance would be short

term. Following establishment of legal peace, the GSF funds

would be paid into an interest-bearing account, and the

interest could be used to pay the University as well as

insurance for Prof. Curran. He also told the Ambassador that

the GoA was making progress in its talks with the Austrian

Jewish Community (IKG) and that, in his view, the two sides

were "very close" to a meeting of the minds that could

facilitate the establishment of legal peace in the U.S.

(Embassy comment: Khol was almost certainly referring to the

possibility of a settlement or dismissal of the Whiteman

class action suit pending in Federal Court in New York.)


5. (SBU) In a related development, the subject of an

amendment to the law establishing the GSF came up at a dinner

on May 3 for former Deputy Treasury Secretary Stuart

Eizenstat. Parliament will likely act soon to extend the

deadline for applications for "in-rem" restitution of

publicly owned real property. The deadline had been December

31, 2004, but some municipal governments have only recently

joined the Austrian states and federal government in

subjecting themselves to the in-rem arbitration process.

Austrian MFA Legal Advisor Hans Winkler did not rule out the

possibility that the amendment might also provide for in-rem

restitution before the establishment of legal peace in the

U.S. Winkler said he would seek a discussion of the idea

within the GoA. (Note: the arbitration panel has so far

issued one recommendation in favor of in-rem restitution.)


6. (SBU) ACTION REQUEST: Embassy asks that Department

undertake a review of the Austrian government's request that

the U.S. fund all or part of the reimbursement to the

University of Pittsburgh for Dr. Vivian Curran's work on the

Claims Committee of the General Settlement Fund, and all or

part the cost of professional liability and errors and

omissions insurance.

Brown