SPECIAL ENVOY AND AUSTRIAN MFA LEGAL ADVISOR

UNCLAS SECTION 01 OF 02 VIENNA 000630 SIPDIS SENSITIVE STATE FOR EUR/OHI, EUR/AGS AND L/LEI E.O. 12958: N/A TAGS: KNAR PHUM PGOV AU SUBJECT: SPECIAL ENVOY AND AUSTRIAN MFA LEGAL ADVISOR DISCUSS HOLOCAUST AGREEMENT IMPLEMENTATION REFS: A) 2005 VIENNA 3852 B) VIENNA 136 This message is sensitive but unclassified. ¶1. (U) INTRODUCTION: U.S. Special Envoy for Holocaust Issues Edward B. O'Donnell met Austrian MFA Legal Advisor Ferdinand Trauttmansdorff (successor to Austrian Holocaust negotiator Hans Winkler, now MFA State Secretary) on February 23 to exchange views on the SIPDIS remaining issues in implementation of the January 2001 Washington Agreement. O'Donnell first thanked Trauttmansdorff for Austria's efforts to provide a measure of justice for Holocaust victims, in particular the nearly one billion dollars in restitution and compensation that the GoA had made available through the various funds. O'Donnell praised Chancellor Schuessel for having moved quickly to proclaim legal peace after dismissal of the final class-action suit (ref a). Austria had also done the right thing recently by accepting the judgment of the arbitration panel in the Altmann case and agreeing to restitute the five Klimt paintings (ref b). END INTRODUCTION. GSF payouts -------------- ¶2. (SBU) O'Donnell noted that one fund, the General Settlement Fund (GSF),had experienced long delays, principally because of the lack of legal peace. There were approximately 10,000 U.S. citizens who had filed claims and were now hoping for expeditious settlements. However, press reports were now emerging that placed the settlement amounts in the range of 13-15% of the losses (converted into today's dollars). O'Donnell said that the U.S. had never anticipated that the ratio would be so low; this was bound to cause problems with the victims' groups. ¶3. (SBU) Trauttmansdorff conceded the need to pay more attention to public affairs aspect of the GSF settlements, now that they were underway. O'Donnell recommended greater transparency: the letters going out to recipients were couched in opaque legalese that would be hard for many to understand. It might be better to employ a simpler language that would clarify the different basis for equity-based claims (based on loss of income or education rather than property per se),for insurance claims, etc. ¶4. (SBU) O'Donnell also noted that the interest accruing to the $210 million fund could be the source of an additional special payment, possibly to Holocaust survivors among the 19,000 claimants who could be identified. Curran professional liability policy -------------- ¶5. (SBU) Trauttmansdorff then raised the problem of professional liability insurance for the U.S.-nominated GSF panel member, Dr. Vivian Curran. The GoA had looked into the matter and proposed a policy that would cover legal fees to defend against a possible suit. Curran had responded this was insufficient; the policy must also cover the amount of any eventual judgment. Trauttmansdorff said he had written to John Bellinger (Bureau of Legal Affairs, L) seeking advice. He had also asked GSF panel chairman Frank Berman to look into a UK- based policy. ¶6. (SBU) O'Donnell said that the Office of Holocaust Issues and L were also checking into the insurance policy carried by the International Commission on Holocaust Era Insurance Claims (ICHEIC) to see if it might be a model for this situation. In any case, the U.S. considered this coverage to be Austria's responsibility as part of the administrative costs of the GSF. Trauttmansdorff did not argue the point, but said that is would be in the spirit of the 2001 Washington Agreement if the U.S. did not leave the GoA "alone and exposed to the U.S. legal system." O'Donnell said that the State Department would continue to work with Professor Curran and the GOA to identify a suitable insurance policy that would meet her needs so that she can continue to provide her expertise to reviewing claims. ICHEIC claims -------------- ¶7. (SBU) O'Donnell raised the issue of GSF denial of claims for policies issued by the Prague office of Anker, citing the language of the 2001 Washington agreement and a subsequent (2003) agreement between ICHEIC and the GSF. Both of these tended to indicate that the treatment of insurance claims was an exception to the general principle that the GSF would address injustices committed on the territory of the present-day Austria. Trauttmansdorff said that he would look more intensively into the matter. It was certainly a question of law. As a practical matter, however, there seemed to be very few such cases. The same seemed to apply to other questions regarding the different filing deadlines for the GSF and ICHEIC and differing valuations of certain policies. Trauttmansdorff said it was up to National Fund Secretary General Lessing to explain to the GSF board how the Fund sees these issues; he would try to see that it came up at the March GSF Board meeting. McCAW