THE THEFT OF TITAN |
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Introduction
In the early 1920’s, Max Ausnit, who became one of Romania’s principal
industrialists, took over a wire and nail manufacturing factory in
Galati founded by his father, and built it into a steel mill complex
called Uzinele Metalurgice Titan Nadrag Calan (“TNC”). It included a new
steel mill at Ferdinand, now known as the Oţelu Roşu which, along with
numerous subsidiaries such as Magazinele Unite, and Socomet, employed
about 10,000 people. He had substantial holdings in the steel industry
well beyond TNC, but all of his properties were commandeered by
Romania’s pro-Nazis regime simply because he was Jewish, and then again
by the communist regime that followed. Max Ausnit was hunted as a Jew
and a capitalist by a series of Romanian governments and fled Romania in
danger of losing his life twice – only to now have his son and heirs
subjected to the same bigotry and injustice, this time through the
indolence, hostility, and prejudice of more recent Romanian governments.
While the families of virtually every major Romanian industrialist have
received acceptable compensation for the wholesale theft of their
properties, the heirs of Romania’s only major Jewish industrialist have
received only a small part of what was stolen from them, and their major
claim has been deferred and hindered by the apparent misfeasance of
Romanian bureaucrats intent on depriving this family of what has long
ago been adjudicated as rightfully belonging to them. |
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Romania Hides Evidence in the TNC Case |
The restitution process for the shares owned by the Ausnit Family in TNC
began in 2001 when, in compliance with the provisions of Law no.
10/2001, Steven Ausnit and his brother Robert – both U.S. citizens --
filed their restitution claim with the Romanian authorities. The Ausnit
family then provided the requisite documentation that was at the time
available to them to prove their claim to the Authority for State Assets
Recovery (“AVAS”), which is the agency that by law renders decisions on
restitution claims. Of course, forced to flee Romania, Max Ausnit had
little opportunity to collect documents to prove his vast ownership
interests, so his family did not possess all of the proofs that might be
required by the Romanian state. Despite the fact that Max Ausnit’s
ownership of TNC was an open, well-known and significant historical fact
and all of the documentation to prove it had been in the complete
control of the Romanian government since TNC’s confiscation, Romania
nevertheless demanded that the Ausnit family produce the proofs that
were in the State’s possession. On several occasions, at several of
their offices, requests were made to the Romanian National Archives to
deliver documents relating to TNC and on each occasion, the family was
told that the requested documents did not exist.
In 2007, six years after the process began and two years after
submission of all of the requisite documents, AVAS rejected the
restitution claim for TNC specifically grounded on the fact that there
were not enough documents submitted in the file for AVAS to be able to
establish the value of the net assets and, consequently, the amount of
the restitution to which the family would be entitled. The Ausnit family
contested AVAS’ decision in court. The Bucharest Tribunal agreed with
the family, cancelled AVAS’ decision and ordered AVAS to render a new
decision. Both the Ausnit family and AVAS appealed the decision of the
Bucharest Tribunal for differing reasons. During the ensuing trial, the
Bucharest Tribunal issued a subpoena to compel the National Archives to
produce all TNC-related documents in their files, apparently assuming
that in a matter as significant as TNC, some documentation had to exist.
On the return date, the court was formally advised by the Romanian State
that the National Archives had absolutely no records regarding TNC.
Still not satisfied with this response, another effort was made through
different sources to test the veracity of the National Archives claim.
This effort put the lie to the assertions of the Romanian State and
resulted in the production of 18 separate large dossiers concerning Max
Ausnit – not one easily mislaid folder, but 18 volumes of records –
leaving one to ponder the motivations and the veracity of the National
Archives when they advised the family that there was nothing in their
files concerning Max Ausnit. The new documents proved the number of
shares held by Max Ausnit, the value of the shares and the value of
TNC’s assets – which would thereby undeniably enable the family to
obtain the restitution which it was so obviously entitled too. Nine
years after filing the TNC claim, the Bucharest Court of Appeals
rejected the appeal filed by AVAS and affirmed the order to AVAS to
render a new favorable restitution decision based on the findings of the
Court.
Nevertheless, in early 2011, AVAS filed a second appeal with the High
Court of Cassation and Justice –Romania’s highest court -- to overturn
the Bucharest Court of Appeals decision. The High Court set the hearing
date for November 4, 2011. However, in February 2011, after having
lodged the second appeal, but also after another analysis of the
documents submitted both in the court file and in the administrative
file, AVAS rendered a new restitution decision (Decision no. 29) by
which it calculated and proposed compensation for 29% of the net
interest in TNC.
Simultaneously with the issuance of Decision no. 29/2011, AVAS
irrevocably waived the second appeal in the TNC case and submitted to
the High Court of Cassation and Justice a waiver of the trial in the
second appeal. The Ausnit family concurred and, since the matter was now
irrevocably ended and neither party could alter the result, AVAS
properly transferred the entire file to the National Authority for
Property Restitution (“ANRP”) for the issuance of the compensation title
that could then be used by the family to obtain shares in Fondul
Proprietatea as restitution. That was in February 2011. It was only
after many futile attempts to contact ANRP and, inconveniently, after
the Courts had recessed for the summer, that in July 2011 a letter
informing the Ausnit family arrived from ANRP informing them that ANRP
had delayed the issuance of the long overdue compensation title until
the High Court of Cassation and Justice rendered a final decision and
closed the case – despite the fact that this was a purely ministerial
act that had no actual consequence since what had already transpired was
irrevocable and unalterable. |
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Institutional Dysfunctions Plague the
Process |
Although the Ausnit restitution claim was duly filed with AVAS in 2001,
it took them six years to arrive at a determination in the TNC case.
That it took two years alone to examine the file for just its contents
is an unconscionable and unjustifiable delay under any circumstances --
but when AVAS finally acted, it rejected the claim solely because there
were not enough documents in the file to establish the value of the net
assets and, consequently, the amount of the restitution. It took Romania
all that time just to advise the Ausnit family that, in its opinion, the
file was insufficiently documented! And who controlled those missing
documents? The Romanian State had them in its exclusive possession, all
the while denying their existence.
It is beyond peradventure that people who had their properties
confiscated by the Romanian state and were thrown out of the country had
no opportunity to obtain, take with them and hold for all these years
even a fraction of the documents required to be lodged in a restitution
file in order to make such a claim successful. Indeed, Romanian law
often prevented the victims from leaving the country with such
documentation. The documentation remained in Romania and was lodged at
the National Archives -- the institution which Romania had created to
house such information. Unfortunately, the Romanian National Archives
has consistently proven itself ill-equipped and less than willing to
fulfill its vital role in the restitution process.
But even after overcoming ten years of a less than transparent process
administered by obtuse, deceitful and biased bureaucrats, through
disingenuous travails at the National Archives, meetings and
negotiations at AVAS and two full court trials, the Ausnit family simply
could not overcome ANRP’s unique brew of sham, treachery, perfidy,
stupidity and bureaucracy. Although ANRP is not permitted to change the
amount of compensation, and its sole function is to verify whether the
claim is fully documented and then issue the restitution title providing
the same amount of compensation set forth in the AVAS decision (unless,
of course, ANRP can prove that the evaluation was made in breach of the
law), from the moment in February 2011 when it received the TNC file
from AVAS until the date of this article, ANRP has done everything
possible to delay the issuance of the TNC restitution title to the
Ausnit family. Only a fool could miss their true intentions.
The
Romanian government was rapidly running out of shares in Fondul
Proprietatea (the closed-end mutual fund created to provide restitution
to claimants where in-kind restitution was no longer available), while
the TNC case moved glacially along its gloomy path. By July 2011,
Romania had less than a 12% interest remaining in Fondul Proprietatea
out of which to provide restitution to thousands of victims. Moreover,
Romania was doing nothing – and, to this day, has still done nothing --
to add assets to the fund to obtain more shares or devise a fair plan to
compensate those claimants who had legitimate claims that they had
actively pursued for so many years. Time was of the essence. But from
February 2011 until July 2011, ANRP ignored the Ausnit family. Requests
for meetings with ANRP were met by stone cold silence. When ANRP’s
letter finally arrived in July, it demanded documentation from the
Ausnit family demonstrating that the litigation with AVAS had been
resolved through a final and irrevocable decision – despite obviously
having AVAS’ request in its hands to issue the restitution title for the
very reason that the matter had been irrevocably and finally resolved.
Nevertheless, the family dutifully submitted to ANRP all the requested
documents including the waiver of the trial of the second appeal
submitted by AVAS. They explained to ANRP what it should have known on
its own -- that the court’s sole remaining function and the only thing
it can actually do by law is to acknowledge the waiver of AVAS. Indeed,
the court case no longer had any point to it or any attainable objective
since AVAS fully complied with the provisions of the appellate court
decision by issuing Decision no. 29. Although this must have been
obvious to ANRP, it stubbornly refused to issue the compensation title
in the TNC file. It willfully and wrongfully ignored the irrevocable
waiver submitted by AVAS and the fact that neither AVAS nor the Ausnit
family nor the Court could, under Romanian law, change the award in any
manner whatsoever.
Providentially, during the May 26, 2011 meeting of ANRP’s Central
Commission for Establishing Compensations, unbeknownst to the family, it
voted to approve the issuance of the decision in the TNC file. But still
nothing happened. Four months of attempts to meet with ANRP officials
finally led to a meeting in early September at ANRP where Mr. Ausnit’s
counsel was advised by the then President of ANRP, and her counsel, that
the ANRP Board had already approved the restitution and that there was
no further action required by ANRP for the issuance of the compensation
title in the TNC file other than filing with ANRP of the final decision
of the High Court of Cassation and Justice. ANRP’s President further
assured Mr. Ausnit’s counsel that immediately upon receipt of the High
Court’s decision and without any further delay, ANRP would issue the
restitution title for TNC.
Although in total disagreement with the ANRP President’s position, the
Ausnit family had no other recourse but to wait until the November 4,
2011 hearing on the docket of the High Court. The final and irrevocable
decision of the High Court was routinely issued on November 7, 2011, and
it was immediately filed the same day with ANRP.
But the saga did not end here. In the interim, the president of ANRP had
been replaced and the new president chose to stone-wall all efforts at
inquiry. Eventually, two counselors at ANRP with responsibility for the
TNC file, but who both refused to disclose their identities, told the
family’s counsel that, despite the fact that the TNC decision had
already been approved by the Board of ANRP, since the document was
transcribed with the signature of the former president, the entire file
had to be resubmitted to the Board once again. Even a casual reader
knows that this is beyond absurd – it is illegal, immoral and without
legitimacy.
ANRP is an institution and not the personal fiefdom of its current
administrators. A decision legally approved by an appointed commission
cannot be undone simply because the President of the institution has
changed. Moreover, in this particular matter, a final decision rendered
by Romania’s highest court required Romania to deliver the restitution
title to the Ausnit family. It was ANRP and its new President who
determined to tinker and trifle with justice.
ANRP’s new President insisted that the entire file must once more be
submitted to the analysis of the Central Commission of ANRP. Indeed,
ANRP suggested that its new president was not legally able to sign the
decision of the Central Commission for Establishing Compensations until
the Prime-Minister issued his decision replacing the former president
with the new president of ANRP. When the decision of the Prime-Minister
in this respect was finally published in the Official Journal of Romania
on December 9, 2011, the Ausnit family was told that the issuance of the
TNC restitution title was on the agenda of the next meeting of the
Central Commission for Establishing Compensation which was scheduled for
December 14, 2011.
Guess what? From that date to the present, every meeting of the Central
Commission of ANRP has lacked a quorum and was adjourned without any
business being transacted. The issuance of the TNC compensation title
that had actually been approved by the Central Commission of ANRP a year
ago has been postponed, sine diae, without any legal and
certainly no moral justification. |
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Another Proposed Taking |
And then came Mr. Ungureanu’s government. Although it only lasted three
months, it managed to propose a draft law that would have confiscated
85% of the property rights of thousands of victims of Romanian communism
including the Ausnit family – inviolable rights that were granted to
them twelve years ago by law – by taking without compensation 85% of the
value of all pending claims by owners of properties that were seized by
Romania's Communist government between 1945 and 1989. Although in total
disregard of Romania’s constitutional provisions prohibiting such acts
and in violation of Protocol One of the European Convention of Human
Rights to which Romania is a signatory and which recognizes property
rights as human rights, the Ungureanu regime blithely suggested that
principles of justice and decency must give way to those of misguided
economic expediency. Prime Minister Mihai Razvan Ungureanu actually
acknowledged the "injustice" created by the draft law but blamed
previous governments for not solving the issue earlier. To his great
credit, the new Prime Minister, Victor Ponta, derided Mr. Ungureanu’s
draft law before Parliament for the abomination that is it, but while it
may well be dead, those who thought that they could perpetrate such an
act are still very much alive. It must be made clear to them that they
can neither take back restituted property nor the right to receive such
property. |
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Conclusion |
On March 13, 2012, the Ungureanu government officially suspended the issuance of
restitution titles alleging serious irregularities in the compensation process
and suggesting that approximately 3 billion Euros (cash and shares) expended by
the state did not reach the persons entitled to it. The government’s spokesman
was quoted in the media as saying that “there are extremely numerous suspicions
in relation to what has happened at ANRP during the past years”. So after eleven
years of efforts, armed with the legal and moral right to obtain the restitution
title for TNC based on a final decision of Romania’s High Court, and the
decisions of AVAS and of ANRP’s Central Commission, the Ausnit family has
received nothing. In effect, the family has been penalized by the Romanian State
for ANRP’s perverse conduct and questionable practices even though those very
practices are to blame for the failure of ANRP to produce the restitution title
for TNC.
Romania’s institutional dysfunction cannot be grounds to deprive the Ausnit
family of the restitution rights that they were already awarded. Among other
things, the theory of “already acquired rights” applies to the TNC matter,
meaning that the state must respect the right which has already been recognized
and quantified and which has already become the claimant’s property. To do
otherwise would contravene the principle of acquired rights, as well as the
principles of non-discrimination and non-retroactivity of law. Indeed, ANRP’s
dysfunction has been cited by the European Court of Human Rights as one of the
main grounds for the issuance of the pilot judgment against Romania. The
Romanian government cannot avoid its responsibility to claimants such as the
Ausnits by using the very basis for the nation’s censure to avoid payment and it
cannot evade its own courts and agency rulings for any reason.
But still, the Ausnit family has been blocked at every turn by specious legal
contentions and venal motives calculated to prevent the heirs of Romania’s great
Jewish industrialist and philanthropist from ever receiving a single leu.
Whether done out of greed, indolence, sheer prejudice, or a combination of all,
the result of Romania’s conduct for the family is tantamount to yet another
confiscation of the property of Max Ausnit. |
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Editors Note: It is our policy not to mention our clients by name in
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should be sought from us, however, before investment or other decisions
are made.
Copyright 2012 Rubin Meyer Doru & Trandafir, societate civila de avocati.
All rights reserved. No part of The Romanian Digest™ may be reproduced,
reused or redistributed in any form without prior written permission
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