ON ASSETS AND AUSCHWITZ: SOME JEWS JUST CAN’T BUY DEUTSCHE BANK OR BT

Financial planner Steven Kaye fielded an unusual flurry of calls from investors last week. The concern, for once, was not the daily direction of the Dow, but a decades-old drama that hit some of Mr. Kaye’s Jewish clients close to home.

The flash point: News that Deutsche Bank AG, which is in the midst of a $10.1 billion takeover of Bankers Trust New York Corp., had financed the construction of the Auschwitz death camp during the Holocaust.

“I heard from several of my older Jewish clients who said they just didn’t want anything to do with Deutsche Bank or Bankers Trust,” says Mr. Kaye, who oversees $120 million at American Economic Planning Group in Watchung, N.J.

“These are the same people who say they will never drive a Mercedes,” Mr. Kaye adds. “For them, it’s an emotional issue.”

And not just for older people. One younger customer called him to make sure there were no Holocaust-related holdings in his portfolio.

Mr. Kaye, who had been discussing using a Deutsche Bank European stock fund with some clients and had previously invested clients’ assets in a Bankers Trust Latin America fund, readily agreed.

“What can you say?” he asks. “I’m actually surprised I didn’t get more calls. Ten years ago, I would have. We’re seeing a lot more tolerance — and a lot more Mercedeses in the temple parking lot.”

Maybe so. But perhaps many Jewish investors also are taking a cue from community leaders who, after initially reacting with repugnance, adopted a wait-and-see stance when Deutsche Bank last week moved swiftly to quell opposition by taking the lead in setting up a compensation fund for Holocaust victims and their heirs.

The assets in the fund have yet to be determined, but they are expected to exceed the $1.25 billion settlement signed by leading Swiss banks last month. Deutsche Bank will be joined by other German corporations with Holocaust era responsibilities — such as DaimlerChrysler, Volkswagen AG and Siemens AG, which used concentration camp inmates as laborers.

The World Jewish Congress, the most vocal player in the Swiss case and an early waver of red flags on the Deutsche Bank-Bankers Trust deal, praised the proposal and agreed to curtail opposition while negotiations continue.

Robert Levitt, who oversees $100 million in assets at Levitt Novacoff & Co. in Boca Raton, Fla., says that was enough to appease many of his Jewish clients. For now.

Soon after Deutsche Bank’s wartime actions came to light Mr. Levitt had sent clients a letter outlining their investments in the popular Bankers Trust S&P 500 index fund, as well as fixed-income holdings at the Deutsche Morgan Grenfell subsidiary.

Initially, the response was strongly negative. Several clients — including the South Florida branch of the Jewish Federation — indicated they were likely to move their money out of Banker’s Trust and Deutsche Bank funds, Mr. Levitt reports. But upon learning of the possible accord, most clients decided to hold off.

“They are still concerned, but they’re waiting to see how things shake out,” says Mr. Levitt, who calls the Holocaust issue “a whole area of social responsibility we hadn’t considered before.”

While central to corporate social responsibility movements in Europe, the Holocaust has never been a big issue here because U.S. corporations were not directly involved. But as global mergers increasingly tie U.S. firms to European corporations — and their pasts — it may become more of a consideration.

Socially responsible investor Calvert Asset Management Co. Inc. in Bethesda, Md., for example, says it has no “Holocaust screen” per se, but weighs the issue as part of a company’s human rights record.

“It is absolutely a consideration, and one that we are very aware of right now,” says a spokeswoman.

Calvert has no holdings in Deutsche Bank or Bankers Trust, and thus would not comment on whether either would qualify as a socially responsible investment right now.

A Bankers Trust spokesman declined comment, and Deutsche Bank officials could not be reached by press time.