Tuesday, February 9, 1999 Published at 21:16 GMT
Business: The Company File
Holocaust claims threaten bank merger
Deustche Bank helped fund the construction of Auschwitz
Pressure is growing on Deutsche Bank, Germany's biggest bank, to settle compensation claims from Holocaust victims.
Alan Hevesi, the New York City Comptroller and the US politician that it leading the fight for compensation, said that he would not withdraw his objections to Deutsche Bank's huge banking merger with US rival Bankers Trust unless there is a written agreement to settle the claims.
His comments came as Deutsche Bank chairman, Rolf Breuer warned that the $10bn Bankers Trust deal, the biggest-ever takeover of a US bank, could be thwarted if it was delayed too long.
Immunity from litigation
Jewish leaders, Mr Breuer and a representative of Chancellor Gerhard Schröder are holding prolonged talks in Washington aimed at defusing the growing controversy over German firms' role in the Holocaust.
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.
Bank merger threatened
Mr Breuer is hoping his trip will help smooth the way for the takeover of Bankers Trust.
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 Hevesi, say they will try and block the merger until Deutsche Bank offers compensation for Holocaust victims.
Mr Hevesi 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 Hevesi 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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