Father's Past Haunts French Billionaire

France's richest resident, cosmetics heiress Liliane Bettencourt, is in desperate need of some concealer. The 82-year-old controlling shareholder in L'Oreal , worth some $17.2 billion, is fending off allegations of ugly behavior by her father, L'Oreal founder and alleged Nazi sympathizer Eugene Schueller.

Paris-resident Edith Rosenfelder, 76, filed a $30 million criminal suit against L'Oréal and German insurance company Badischer Gemeinde Versicherungs-Verband (BGV) in Paris in 2001 and is still awaiting her day in court. According to the suit, the Rosenfelder home in Karlsruhe, Germany was illegally seized in 1938 by BGV, before the transport of Rosenfelder's parents to Auschwitz. (Her mother died there. Her father died in Geneva in 1945.) According to the complaint, in 1954, BGV sold the plot of land once housing the Rosenfelder family's Victorian estate (the house was bombed during the war) to Schueller--Bettencourt was 31 at the time--though he knew it had been confiscated from its Jewish owners. By that time, German restitution laws mandated that property seized from Jews during the Nazi era must be returned to their rightful owners.

In France it is commonly believed that Schueller had close ties to the Nazi regime. During the 1930s, he is said to have hosted meetings of La Cagoule, a fascist group with Nazi sympathies, at L'Oréal's headquarters on rue Royale in Paris. Schueller eventually transformed the Rosenfelder land into L'Oréal's German headquarters. The site also stood behind the Gestapo and La Cagoule's headquarters. In 1991, he sold the property for $3.8 million to a German governmental agency.

Rosenfelder hasn't had much success recovering any monies from L'Oréal. In 2001, she sued the company for extortion and receipt of stolen property. In a written response, Lindsay Owen-Jones, chief executive of L'Oréal, responded in French, saying "Beyond the accusations, which wound me personally, the threatening tone of your demands, unusual for a lawyer, raises a number of questions."

That case was eventually dismissed due to jurisdictional issues. (Rosenfelder's appeal was also dismissed last November). L'Oréal has since had no further comment on the case and Bettencourt is notoriously press shy. BGV has also stayed mum, with the exception of a 2001 letter saying that it had settled with the Jewish Restitution Successor Organization.

While Rosenfelder awaits another day in court, she has been busy publicizing her claims against L'Oréal. Her story has appeared in French newspapers and last year her daughter, Monica Waitzfelder, published L'Oréal a pris ma maison (L'Oréal Took my House). The book details Rosenfelder's fight with L'Oréal, replete with detailed documentation. Though Bettencourt isn't a named defendant in the case, she may be compelled to provide testimony. "During all these years they were in our house without paying us anything, and sold it for an enormous profit," says Waitzfelder.

The case marks the first time that a large French company has been prosecuted for seizing Jewish property. But similar cases are in front of other European courts. Last December Germany's Highest Administrative Court ruled that land formerly owned by the Wertheim family, descendants of a Berlin department store dynasty, is governed by the country's restitution laws. The Wertheims claim that after the Berlin Wall fell in 1989, German retail giant KarstadtQuelle illegitimately acquired land in Berlin that the family owned during the Nazi era. KarstadtQuelle then sold the property to German billionaire Otto Besheim in 2000 for $150 million. On March 4 the Berlin Restitution Authority, through the Jewish Claims Conference, awarded the Wertheim family $17 million. KarstadtQuelle is hoping to appeal.