IBM on sticky ground over stalled Holocaust payments

IBM is holding up long-frozen insurance payments owed to Holocaust survivors by demanding $1m (£0.69m) for software, according to the chairman of the commission charged with administering the compensation payments.

Paul Donovan

The accusation comes only two weeks after a law suit was filed in New York alleging IBM shared responsibility for the Holocaust because its World War II German subsidiary had provided "technology, products and services it knew would be used" in the genocide.

The Associated Press has obtained a letter from Lawrence Eagleburger, chairman of the International Commission on Holocaust Era Insurance Claims (IHEIC), which indicates that IBM is demanding the £1m payment from the commission.

However, Eagleberger claims it is the Volcker Commission that owes the money to IBM and not the IHEIC. He stressed that the Volcker Commission, the body which recently conducted an investigation into dormant Swiss bank accounts, was a separate entity to the IHEIC, which was charged with administering compensation payments.

However, IBM's Israeli subsidiary Tadiran said that its contract with the Volcker Commission to provide a database of Holocaust victims' names included a provision for the sublicensing of the database to the Eagleburger group. Tadiran is itself being sued by several Israeli subcontractors involved in the database project, including one firm that is seeking $1.5m.

The compensation commission's Eagleberger said that on 16 November 2000 he wrote to the IBM chairman and chief executive Louis Gerstner pointing out that the $1m debt related to the Volcker Commission.

"The (insurance commission) does not have the funds necessary to pay the Volcker Commission's debt," wrote Eagleburger. "What money we have or will get is to pay claims and to pay Yad Vashem for doing the computer work."

An IBM spokeswoman said: "IBM answered Eagleburger's letter on November 28, indicating that IBM very much wanted to begin discussion of the issue."

A Volcker Commission spokesman confirmed that there was a debt with IBM, which would be paid.