The U.S. government agreed yesterday to pay $25.5 million to settle a suit by Holocaust survivors over goods that were stolen by the Nazis...

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The U.S. government agreed yesterday to pay $25.5 million to settle a suit by Holocaust survivors over goods that were stolen by the Nazis in 1944 and then disappeared after they were recovered by the U.S. Army.

The case of the so-called “Gold Train” is the only Holocaust-related litigation in which the U.S. government was a defendant.

If the deal is approved by a judge, most of the money will go to social welfare programs for survivors in the United States, Israel and Hungary, according to documents filed yesterday in federal court in Miami. No money will go to individual survivors.

The events in the case began in May 1945, in the closing days of World War II. As Allied armies advanced, the Nazis occupying Hungary loaded a 24-car train with goods seized from Jews who had been imprisoned in concentration camps.

The Nazi goal was to ship the looted property — gold, jewelry, Oriental rugs, clothing and artworks, among them paintings by Rembrandt and Dürer — to Germany.

But according to U.S. government reports, the Nazis abandoned the train in a tunnel about 60 miles from Salzburg, Austria. American soldiers took control of it there. Some of the booty immediately vanished. The rest was sent to U.S. military warehouses in Austria.

What happened to much of the property remains a mystery, according to the President’s Advisory Commission on Holocaust Assets, which studied the case and published reports in October 1999 and December 2000.

The commission said Maj. Gen. Harry Collins, the chief U.S. military official in western Austria at the end of the war, had placed orders from the warehouse for enough china and silver for 45 people, as well as a dozen silver candlesticks, glassware, 30 sets of table linens, carpets and furs for his villa and a personal railroad car.

Collins died in 1963, and the fate of the goods he requisitioned remains unknown, said Jonathan Cuneo, one of the three lead lawyers for the survivors.

The case, filed in 2001, was one of a string of Holocaust-related claims to go to court in the past decade. But among the suits against Swiss banks, European insurance companies and firms that had used forced laborers, the Gold Train case stood out because the defendant, the U.S. government, was the same entity that had saved the lives of thousands of European Jews by liberating the Nazi concentration camps.

Lawyers close to the case said Justice Department officials, who had resisted the suit strenuously over the past four years, had been dismayed at the idea that the government was being lumped into the same category as those who had murdered and exploited Jews.

In a letter filed with the court endorsing the settlement, Rabbi Israel Singer, president of the World Jewish Congress, took pains to emphasize the role the United States had played in winning the war.

“The United States was not only the liberator of Europe, it was also the rescuer of a devastated European Jewry after the Holocaust,” Singer wrote. “Thousands of Americans died in this heroic effort. I believe that this settlement will be an appropriate acknowledgment of this isolated episode.”

Gideon Taylor, executive director of the Jewish Conference on Material Claims, the New York-based group which will administer the settlement fund, called the Gold Train controversy “one isolated chapter in a glorious history of an era when but for the U.S., many Holocaust survivors would have perished.”

“That sometimes gets lost,” Taylor said. “Wrongs deserve to be righted, and mistakes should be acknowledged, but good deeds must have their acknowledgment, too.”

The survivors and their heirs, who originally sought $200 million, agreed to settle for the smaller figure for several reasons, including the fact that “there is no certainty as to the value of the goods on the gold train when it came into the hands of the U.S. Army,” plaintiffs’ lawyers said.

The two sides also concluded that “attempting to provide compensation payments directly to class members would be impractical” in part because sorting out who had owned what might eat up much of the available money, the lawyers said.

The settlement proposal will allot about $21 million to cover basic humanitarian services — including health care — for Hungarian Jewish Holocaust survivors throughout the world, 42.5 percent in Israel, 22.7 percent in Hungary, 20.1 percent in the United States, 6.1 percent in Canada, 2.5 percent in Australia and 6.1 percent elsewhere.

The settlement also includes $500,000 to build and maintain an archive documenting the destruction of the Hungarian Jewish community as well as the Gold Train incident. A panel of three experts will choose a major Holocaust museum, still undetermined, to house it. The rest will go for attorney fees.

“I’m not cheering yet. I am optimistic,” said survivor Alex Moscovic, of Hobe Sound, Fla., who is active in survivors groups. “The $25.5 million is just peanuts. The whole issue was not about money.”

He wants to hear an apology. “For this agreement to go through, they will have to give an apology to the survivors, that what they did was all wrong,” Moscovic said.

The U.S. government has not made a formal apology, although an unusual “statement of acknowledgment” is expected.

“It’s going to be addressed in the future, but it’s the government’s own discretion,” said Sam Dubbin, the plaintiffs’ lawyer.

Material from Knight Ridder Newspapers is included in this report.