The Wages of Slavery

How much is a slave's labor worth? Minimum wage? The value of what he produces? Should she be compensated for the humiliation of being owned by the employer? What if the work was done 50 years ago? To make setting a figure really difficult, try tossing all that on a negotiating table, mix in lawyers, the governments of more than eight countries, captains of multinational corporations and a ticking clock that kills another aging ex-slave every few hours. The result is the story of negotiations for material reimbursement of Nazi Germany's slave laborers.

Last week in Washington and Berlin, U.S. and German mediators announced a $5.14 billion deal to settle outstanding claims by slave and forced laborers against German companies with names as familiar as Siemens and Volkswagen. Even American companies like General Motors and Ford, which owned German subsidiaries in the '40s, are likely to participate. The deal has all the imperfections one would expect. The amount of money the survivors will get--an estimated $8,000 for slave laborers and $3,000 for forced laborers--is minute compared to the pain and humiliation they suffered. But most sides are happy to have reached a deal--the workers' lawyers because they got money for their clients before they died; the negotiators because they managed somehow to find an ending; and the German companies because with their massive moral and material liability, they are getting off with a token payment.

Take Rudy Kennedy. As a Jew, he was deported from Breslau, then in Germany, to Auschwitz in 1943, where his mother and sister were gassed immediately. Kennedy, then 15, was put to work. For two years he trekked every morning to the I.G. Farben plant nearby where his father--later killed by lethal injection after becoming incapacitated--had got him a job working inside. That probably saved his life. "If you were outside under those conditions you didn't last more than three months," says his wife, Gitti. As the Russians approached, Kennedy was force-marched two-and-a-half days through the snow, ending up at the Dora camp in the Harz Mountains. He was then moved to Bergen-Belsen, where he was liberated in 1945. He received $3,079 compensation by Germany after the war for his suffering, and he draws a health benefit for the half a lung he lost to TB. For the two years of slave labor working seven days a week, he will now be compensated around $8,000.

Even that amount wasn't easy to get. Stuart Eizenstat, Deputy U.S. Treasury Secretary, and German negotiator Otto Lambsdorff spent all year pulling teeth with the German firms--some 40 of them including DaimlerChrysler, Lufthansa and Deutsche Bank--insisting that their maximum payment would never exceed first $630 million and then $1.57 billion. "The trouble is that we could keep pushing them up, but how long?" says New York University law professor Burt Neuborne, a lawyer for some of the claimants who as late as August had been demanding $15.7 billion. The theme of the survivors' advanced ages would overtake the debate--advocates claim that an average of 1,000 former slave laborers die every month.

The breakthrough came four weeks ago in Bonn, when the German government and industry brought their offer up to $4.1 billion from the $3 billion they had previously insisted upon. The claimants came back the weekend of Dec. 11 and said their minimum acceptable amount was $5.14 billion. Eizenstat then brought out the heavy-hitters--National Security Adviser Sandy Berger, Secretary of State Madeleine Albright and Treasury Secretary Lawrence Summers--to contact their counterparts in the German government. Between their squeezing and some creative financing Eizenstat managed to come up with the $1 billion to bridge the gap. "This has been the most difficult, most complex and most emotional matter I've ever been involved in," Eizenstat says.

A number of details remain to be worked out. The claimants' lawyers agreed to a flat fee, rather than the 5% at one point put forward, but this is still undecided. The proportion that will go to often ignored victims in Eastern Europe is still under contention. Making out best are the German firms who have passed the vast majority of the cost on to German taxpayers.

Eizenstat, Lambsdorff and others say doing the deal now is worth it. But even with the breakthrough last week, the soonest the money will begin to flow to survivors is late 2000 or early 2001, after companies have taken four months to raise their money and the German government has sold some state assets and found other ways to fill the kitty. German President Johannes Rau formally declared German regret for the treatment of the workers on Friday, and many of the companies have agreed to open all their files relating to that period for scrutiny by historians and others. Says Eizenstat: "It's important that the last word on this not just be money but be a search for truth."

With reporting by William Dowell/New York and Charles P. Wallace and Regine Wosnitza/Berlin