Holocaust survivors win right to sue Vatican: Lawsuit seeks assets looted by Croatia's Ustasha regime

Isabel Vincent, National Post

April 29, 2005

A group of Eastern European Holocaust survivors has won the right to seek restitution for their Second World War-era assets, which they allege were laundered by the Vatican Bank and other Roman Catholic institutions immediately after the war.

In a decision handed down last week, the U.S. Court of Appeal in California ruled that a group made up of 24 Serbs, Jews, Ukrainians and Roma now living in Canada and the United States could launch a class-action law suit against the Vatican Bank in the United States.

"The plaintiffs are all victims or the heirs of victims of the Croatian fascists who hid their plunder, mostly in the Vatican Bank," said Jonathan Levy, a California attorney and one of a team of lawyers representing the plaintiffs.

The lawyers, whose initial attempt to sue the Vatican was dismissed two years ago, appealed under the U.S. Foreign Sovereign Immunities Act, which allows Americans to sue a foreign government or its "instrumentalities" in U.S. courts.

According to a post-war U.S. State Department report declassified in 1998, Croatian fascist leaders deposited more than US$80-million -- the entire wartime Croatian treasury -- in the bank. In today's dollar terms, that could be worth more than US$800-million, Mr. Levy said.

"Compared to some of the other World War II restitution claims, this is a fairly small class," he said, adding he was encouraged by successful class actions against Swiss banks and European insurance companies seeking compensation for the loss of the victims' assets and insurance policies during the war.

The lawyers for the survivors say they do not know the exact amount of money that was stolen from victims of the Croatian fascists.

Part of the lawsuit seeks to obtain "a legal accounting of missing funds" as well as to recover assets and distribute them to the survivors and their descendants.

Most of the plaintiffs are Serbs who claim they were victims of the Ustasha puppet regime that held power in Croatia from 1941 to 1945.

The Croatian fascists, who were closely allied to the Nazis, massacred more than 700,000 Serbs, Jews, Roma and Communist partisans in the former Yugoslavia.

After the war, Ustasha leader Ante Pavelic was given refuge by the Vatican and Vatican officials allowed him to escape to Spain. He ended up in Argentina.

Mr. Pavelic and other Croatian fascist leaders were housed and protected in Vatican-owned properties in Europe.

The Vatican reportedly used part of the Ustasha loot to mount a battle against communist forces that eventually seized control of Yugoslavia.

"This is a fairly low-profile case," Mr. Levy said. "But the victims need to be compensated, and they need to have closure."

The Vatican, arguably the world's most secretive state, has repeatedly denied aiding the Ustasha regime by hiding the Croatian national treasury at the Vatican Bank, and is actively fighting the legal challenge against it in U.S. courts.

In the past, the bank known by its official title, Istituto per le Opere di Religione, has refused to open its Second World War-era archives to outside scrutiny.

The Friars Minor, a Franciscan order, is also named in the class-action suit.