Spitzer Set To Urge WJC Reforms

In late February, Joel Sprayregen, a national Jewish lay leader, briefly met New York State Attorney General Eliot Spitzer at an American Jewish Committee dinner in Chicago. Sprayregen, a Chicago attorney and honorary national vice chairman of the Anti-Defamation League, recalled that when he told Spitzer he was glad to have learned that the attorney general’s office was investigating the World Jewish Congress, “the attorney general replied, in effect, that to call it an investigation would be an overstatement.”

But that’s no longer the case.This week a spokesman for Spitzer told The Jewish Week that the attorney general office’s charities unit was nearing completion of an “ongoing and active investigation” of the WJC — the first time the probe, which had been described until now as a preliminary inquiry, was being characterized in a more serious manner.In addition, spokesman Darren Dopp offered assurances that Spitzer’s office “won’t just walk away” from this case, despite the controversy surrounding it.Sources close to the probe say it most likely will result this summer in demands for reforms in the WJC’s financial control and board oversight, as critics of the group have called for, though criminal prosecution is unlikely.

Several officials in the Jewish community think Spitzer, who is running for the Democratic nomination for governor, may be signaling that he is not avoiding the case, as some had speculated, because of its delicate nature. The longtime president of the WJC is the politically influential Edgar Bronfman, and a vigorous pursuit of the case could result in an embarrassment for the Seagrams heir, his organization and the Jewish community at a time when Spitzer is seeking support for his candidacy.

A number of recently disclosed documents and allegations under review by the attorney general’s office raise questions about the actions of the WJC and particularly its longtime top professional, Israel Singer, now chairman of the governing board.The new information includes: a WJC fundraising letter pledging that Bronfman will match donations, allegedly not fully acted on; a draft of a memorandum of understanding — unsigned — detailing a proposed consulting firm to be formed by Singer, his Israeli friend and attorney Zvi Barak, and Curtis Hoxter, a public relations consultant and longtime associate that, according to critics of the WJC’s operational practices, offers a possible explanation for the much-discussed transfer of $1.2 million that went from the WJC in New York in 2002 to a Swiss bank account, to London, and then again to New York last year; news reports in Switzerland and Israel stating that the money transferred to London was in a custodial account held by Barak in the name of Singer and his wife.Singer and Stephen Herbits, the secretary general of the WJC, were in Spain at a conference this week, but Hank Sheinkopf, a spokesman for the organization, vigorously denied any implication of wrongdoing on the part of the WJC and blamed Isi Leibler, the most outspoken critic of WJC practices who was ousted as senior vice president of the group this year, as the source of “these lies.”

Intensified ProbeIt was the discovery of the Swiss bank account last summer and questions raised about it that precipitated the controversy over the accountability of the WJC, the venerable Jewish defense organization noted in recent years for its success in gaining hundreds of millions of dollars in restitution funds from Swiss banks for Holocaust survivors.Leibler wanted to know who authorized the Swiss transaction, what the money was for, and why no one other than Singer seemed to know about the account. Leibler said the account was but one indication of the WJC’s lack of proper checks and balances, and he raised questions about Singer’s business and policy decisions without adequate consultation.Bronfman, angered by the charges, pledged to oust Leibler from his post and run for another term as president, a position he has held since 1981.Singer has maintained that the funds in question were for WJC pensions, including his.

He has said that $1.5 million in contributions from the Jewish Agency to the WJC — three years’ worth of longstanding $500,000 annual charitable payments — was set aside for the pensions, attested to by former Jewish Agency chairman Avraham Burg. But Sallai Meridor, the current chairman, said the contribution was for the WJC in general and not earmarked for pensions. Meridor’s version was corroborated by an Ernst and Young financial report commissioned by the Jewish Agency.The Swiss bank allegations were reported last September in The Jewish Week and elsewhere, prompting the attorney general’s office to launch an inquiry. But WJC officials had hoped they had put the matter to rest in January when Bronfman, presiding at a hastily called plenary of the organization in Brussels, formally dismissed Leibler from his volunteer post. Bronfman also received a vote of confidence for himself and Singer from the delegates, who were “hostile” to Leibler, according to Herbits, a longtime Bronfman business associate who was elected secretary general.

A report of more than 1,000 pages was distributed to delegates in an effort to clarify the situation.Since then there has been speculation in the Jewish community that Spitzer was reluctant to pursue the case vigorously — his spokesman, Dopp, said the attorney general’s comment to Sprayregen in February was true at the time — and that The New York Times has twice prepared articles on the subject but decided not to publish

.A spokesman for the Times said the newspaper does not comment on such decisions.But information that has been given over to the attorney general’s office, and shared with The Jewish Week, seems to have intensified the investigation of late.One issue being explored is a direct mail letter seeking WJC contributions. It is signed by Bronfman and says he “will personally match any contribution of $36 or more that you send to the WJC — up to $25,000 — so your gift will go twice as far if you respond now.”Recent tax statements indicate that Bronfman’s annual contribution to the WJC of about $2 million a year has remained consistent.

Over the past several years, contributions from a growing number of U.S. donors, now estimated at about 435,000, has reached $10 million to $12 million annually.Sheinkopf, the WJC spokesman, said the matching funds letter has been used for 18 years and that Bronfman “has made good on every pledge.” He said Bronfman has contributed more than $75 million to the organization over the years, but noted that not every potential contributor receives the matching grant offer. Sheinkopf did not have the figures available for the amount of Bronfman’s matching grant donations.Sheinkopf vigorously denied the press reports that the London account where the $1.2 million was sent from Geneva was in the name of Singer and his wife, Evelyn. The spokesman said the WJC has explained the $1.2 million issue many times, insisting it was comprised of funds from the Jewish Agency to be used for WJC pensions, including Singer’s, even if the Jewish Agency did not specifically earmark the funds as such.Unsigned MemoA document that offers an alternative explanation to the WJC version of events, according to Leibler, is the draft of a memorandum of understanding among Hoxter, the New York consultant who was instrumental in arranging meetings with Swiss, German and Austrian officials over the years; Barak, the Israeli attorney and former fighter pilot who co-chaired with Singer the World Jewish Restitution Organization; and Singer.

Dated Nov. 14, 2002, the memo outlines an agreement for the three to start a consulting firm that would require financing from Singer. It is unsigned, but the attorney general’s staff is said to be exploring whether the transferred WJC funds — the first installment of which was sent to Geneva the month before — may have been intended as Singer’s capital for the new business and could explain why it was transferred to a custodial account held by Barak, a would-be partner.“There are too many coincidences here for this to be a coincidence,” said Leibler, who noted that the timing of the draft of the memo coincides with the dates involved in the transfer of funds to the Swiss account, and that Barak was to act as a trustee in the proposed business deal and was a trustee for the transferred funds.Sheinkopf’s response was that Singer at the time was no longer a paid employee of the WJC — he became chairman of the board in 2001 and receives an “ex gratia pension” of about 60 percent of his former $280,000 salary.

Besides, Sheinkopf said, the fact that the memo was not signed indicated that the business venture may have been discussed but was never acted on.Hoxter, who received a $200,000 annual WJC consulting payment, also was involved in meetings with several German officials to discuss plans for Singer to give three or four lectures at a university in Frankfurt last year. According to a Feb. 29, 2004 memo summarizing the meeting, Singer was to lecture on religion and modernity that spring or summer at the Goethe University. The summary also mentions pursuing the idea of establishing a Stiftungsprofessur, or chair, and says Singer was “considering the ‘Future Fond’ by the German Industry … as a potential sponsor of his lectures as well as the envisaged Stiftungsprofessur.”The Future Fond was set up by the German government to promote projects to benefit Holocaust survivors and assist them and their heirs, and further the causes of remembrance, international understanding and peace.Since Singer, in addition to his post as WJC board chairman is chairman of the Conference on Jewish Material Claims Against Germany and of the WJC-established World Jewish Restitution Organization, at least one of his associates, who asked not to be named, felt it was a conflict of interest “for the head of the Claims Conference to seek payment for his lectures.”

In addition, the associate said no WJC leaders except for Singer were aware of Hoxter’s paid consulting position.Sheinkopf said there was no conflict of interest since Singer “was not paid for the lectures or the expenses,” and added that Hoxter was well worth the money he received from the WJC.As the attorney general probe nears completion, Jewish leaders have privately expressed mixed emotions about the outcome. Singer is respected for his accomplishments and savvy, but considered arrogant by many, who would not mind seeing him brought down a notch. But these same people worry over what effect a public reform of the WJC will have on the organized Jewish community and their own organizations.If Spitzer does step in, he has the latitude to do so relatively gently — calling for reforms but not insisting on replacing top officials — or more forcefully, taking civil action. His spokesman says such issues are premature, but that a resolution of the case is expected in the coming weeks.