City Comptroller Elizabeth Hotzman and city Finance Commissioner Carol O'Cleireacain have written German Chancellor Helmut Kohl, saying they are concerned about "the security" of the city's pension fund investments in Germany due to the rise of neo-Nazism.

In a two-page letter dated Dec. 7, Holtzman and O'Cleireacain wrote, "The security of our investments depends upon a Germany that is democratic and nonviolent.

"We therefore are asking you to inform us of any actions that the German government or any other responsible parties have taken to curb neo-Nazism and other right-wing extremist movements in Germany."

A news release announcing the letter says both city officials are speaking out "in their individual capacity," not as representatives of the pension fund management.

New York City has invested $265 million of its pension fund proceeds in German securities, according to the letter. The city's pension fund owns $110 million in government bonds and $155 million of stock in 71 German-based companies. Holtzman and O'Cleireacain are trustees of the $45 billion city pension fund.

Holtzman is seeking reelection as comptroller when New Yorkers are concerned about the rise of anti-Semitism in the city following events in Crown Heights in Brooklyn, where racial disturbances between blacks and Jews have increased in recent months.

O'Cleireacain was appointed by Mayor David N. Dinkins, who has received criticism from some Jewish groups over his handling of the unrest in Crown Heights.

Jennifer Kimball, a spokeswoman for Dinkins, said the major has no comment on the letter's suggestion that a rise in neo-Nazism is affecting the political stability of Germany and the security of the city's pension fund investments. "The mayor is obviously concerned about the rise of neo-Nazism," she said. "But his response is a social response. He defers all responses about the finances to Commissioner O'Cleireacain."

Since 1989, Germany has experienced a rise in neo-Nazi activities associated with the economic problems of the reunification of East and West Germany. However, the letter of Holtzman and O'Cleireacain appears to be one of the first to suggest that these actions are destabilizing investments in Germany, which has one of the world's strongest economies.

Aberhard Koelsch, Germany's deputy consul general in New York, said the concern expressed in the letter is "unjustified."

"I have seen the letter, and I don't have a reaction yet from the federal chancellor," Koelsch said. "But I can say that the German political system is a stable one."

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