Tuesday, February 9, 1999 Published at 05:33 GMT
Business: The Company File
Holocaust talks off to 'good start'
Deutsche Bank's overseas expansion plans could be blocked
Talks between Jewish leaders, the head of Germany's biggest bank and a representative of Chancellor Gerhard Schröder aimed at defusing the growing controversy over German firms' role in the Holocaust have got off to a "good start".
The meeting in Washington was organised to talk about setting up a compensation fund for survivors of Nazi slave labour camps.
Immunity from litigation
WJC leaders said further progress would enable them to call off the threatened boycott.
The aim is to achieve a breakthrough on the size and workings of the fund before the German Chancellor, Gerhard Schröder, visits Washington on Thursday.
Deutsche Bank admitted last week it was involved in funding the construction of Auschwitz, the concentration camp in which 1.5 million people, mainly Jews, were killed by the Nazis.
Bank merger threatened
Mr Breuer is hoping his trip will help smooth the way for the takeover of Bankers Trust, one of the biggest banks in the US.
Deutsche Bank has agreed to participate in a compensation program sponsored by the German government that would be funded by numerous private businesses in Germany.
However, sources close to the talks say an initial $1.3bn offer by Deutsche Bank for the fund has been rejected as too low by US negotiators.
Threats from Big Apple
US politicians, led by Alan Hevisi, the comptroller of New York City, say they will try and block the merger until Deutsche Bank offers compensation for Holocaust victims.
Mr Hevisi said: "Federal and state officials should take no action on the proposed merger between Deutsche Bank and Bankers Trust until these issues are fully resolved."
Although he does not have the power to block the merger himself, Mr Hevisi was influential in organising a coalition which led to a boycott of Swiss banks last year until they agreed a $1.25bn settlement with Holocaust survivors and their heirs.
Private funding for Hitler
Rabbi Marvin Heir, a founder of the Wiesenthal Centre, said that Germany's largest bank had made large contributions to Adolf Hitler's private fund used to support the dictator's pet projects.
Deutsche Bank, along with German competitor Dresdner Bank, already face $18bn lawsuits accusing them of profiting from gold and other assets stolen from concentration camp victims during World War II.
A 1946 investigation by the US military that recommended Deutsche Bank be liquidated and its top officials tried as war criminals.
The bank has denied a central claim in that 1946 report that it was as guilty of using slave labourers in the industrial enterprises it controlled.
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