Closing a loophole that sparked outrage, new law blocks benefits for Nazi war crime suspects

President Barack Obama on Thursday capped a swift and forceful response to an Associated Press investigation by signing into law a measure that bars suspected Nazi war criminals from receiving U.S. Social Security benefits.

The AP's investigation, which was the impetus for the No Social Security for Nazis Act, found that dozens of former Nazis collected millions of dollars in retirement benefits after being forced to leave the United States. Recipients ranged from the SS guards who patrolled the Third Reich's network of camps where millions of Jews died to a rocket scientist who helped develop the V-2 rocket that Nazi Germany used to attack London.

The speed with which the legislation moved underscored the outrage the AP's findings triggered among lawmakers on Capitol Hill — and American taxpayers. The House unanimously approved the bill Dec. 2 and the Senate passed it by voice vote just two days later.

Mike King, a Vietnam veteran and a retired police officer in Baton Rouge, Louisiana, gets a Social Security check of $900 a month. That's less than half of what he could be getting based on his years in the workforce. But his benefits are reduced because of a rule that docks retirees who simultaneously collect a public pension. It's "appalling," he said, that former Nazis collected benefits when he and others in his position are forced to accept less.

"It is a slap in the face, not only to every American citizen but to every American veteran," King said.

The bill signed into law by Obama terminates Social Security payments for individuals stripped of their American citizenships due to their participation in Nazi persecutions during World War II. U.S. law previously mandated a higher threshold — a final order of deportation — before a person's Social Security benefits could be terminated.

By lowering the threshold to loss of citizenship, a step known as denaturalization, the bill effectively shuts a loophole that for years had allowed suspected Nazis to continue receiving benefits even after being expelled from the U.S. for their roles in Third Reich's atrocities.

The AP found that since 1979 at least 38 of 66 suspects removed from the United States kept their Social Security benefits. Many of these former Nazis got in to the U.S. after the war by lying about their pasts and eventually became U.S. citizens.

Rabbi Marvin Hier, founder of the Simon Wiesenthal Center and an outspoken advocate for closing the loophole, said he felt vindicated.

"I'm delighted and I think it's the right thing to do," he said in a telephone interview from his office in Los Angeles. "As I've said before, for those who say it's a form of collective punishment that also punishes their families, that's the problem of the Nazi who lied about his past and not our problem."

Among those whose benefits will be cut off because of the new law are Jakob Denzinger, a former Auschwitz guard, and Martin Hartmann, a former guard at the Sachsenhausen concentration camp in Germany. Their cases were described in the AP's investigation, which was published in October.

Denzinger, who owned a successful plastics business in Akron, Ohio, fled the U.S. in 1989 as the Justice Department prepared to denaturalize him. The AP located him in Croatia, where he was living comfortably and receiving a Social Security payment of about $1,500 each month. Hartmann, who was living in Berlin and also collecting Social Security, left the U.S. in 2007, just before a federal court issued an order to revoke his citizenship.

The Justice Department wanted the loophole retained because it gave the department leverage to convince Nazi suspects to leave the country, according to the AP's investigation. If they signed a settlement agreement with the department, or simply fled the United States before being deported, their Social Security payments would keep coming. They'd lose their citizenships, but keep their benefits.

That meant the Justice Department could expel Nazis relatively quickly to countries where they would be prosecuted. Many of the suspects were aging and the department didn't want them to die in the United States before they stood trial.

Only 10 suspects were ever prosecuted after being expelled from the U.S., according to the Justice department's figures.

The Justice Department denied using Social Security payments as a tool for expelling former Nazis.

Peter Carr, a Justice Department spokesman, said in an emailed statement last week that the department "supports the goal of terminating federal public benefits to individuals based upon a finding that they participated in Nazi-sponsored acts of persecution."

Nathan Moskowitz, the author of "Kuzmino Chronicles," the story of his parents' deportation to the Auschwitz death camp as teenagers, said cutting off the benefits "is a nice start," but more needs to be done. Former Nazis should be forced to return benefits they received, he said, and the Social Security Administration and Justice Department should declassify all documents describing any deals that were made with Nazi suspects.

"It would be nice if the Justice Department would issue an apology. It would be the morally correct thing to do," he said in a telephone interview from Maryland.

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Rising reported from Berlin and Herschaft from New York. Associated Press writer Stephen Ohlemacher in Washington contributed to this report.