Sufficiency of Evidence To Support Claims to Proceeds of Foreign Claims Settlement Commission Award

GAO was asked about the sufficiency of evidence to support a number of claims to proceeds of a Foreign Claims Settlement Commission award to the American Club, Inc. The Commission is authorized to determine the validity and amount of claims of United States nationals for losses resulting from the nationalization or expropriation of their property by or under the authority of the People's Republic of China. The club owned real and personal property which was taken by government authorities. The People's Republic agreed to provide monies for payment of Commission awards to be paid over a 5-year period beginning in 1979. The award was to be distributed to club members in proportion to their holdings of club debentures. A portion of the award was paid in 1979 and 1980. At the end of the 5-year period a remainder of the funds will be paid to whichever claimants have come forward on a proportional basis. GAO was asked to determine if certain awards could be made since the claims were not supported by debentures. One of the claims was supported by affidavits and a settlement order, one was supported by an affidavit, the others were supported only by uncorroborated statements. Both GAO and the Foreign Claims Settlement Commission require all claims against the Government to be supported by the best evidence obtainable. Payment of claims cannot be authorized based solely on standards submitted by the claimant. The Commission recognized that there would be instances in which primary evidence supporting a claim might not be available because of loss or destruction during the time which elapsed between the expropriation and the passage of the Act or because of political conditions. Thus, secondary evidence was acceptable to explain the unavailability of primary evidence. GAO found that two of the claims were payable because the claimants presented sufficient evidence to support their claims. However, GAO required the awardees to sign an agreement to reimburse and hold the United States harmless should a lost debenture be presented and paid. The claims based on uncorraborated statements could not be paid. If in the future these claimants provide evidence that adequately corraborates their assertions, GAO will reconsider its decision.