Duking It Out In Court

The longstanding battle between the World Jewish Congress and Isi Leibler, an ousted senior vice president, has moved to the Israeli courts, and grown even more heated. With the WJC having filed a $6 million slander suit against him some weeks ago, Leibler responded in court papers this week, asserting that his charges of financial improprieties against the charity were born out by the recent findings of the New York Attorney General. Both sides blame the other for the fact that the WJC has suffered from a loss of donations. The financial allegations against the WJC by Leibler has "undermined" its reputation, the group acknowledges, and cost it at least $5.5 million in lost donations and expenses fighting the charges. It hopes to recoup that money with the $6 million suit.

But Leibler, who lives in Israel, said in court papers in response to the WJC’s suit that it was the actions of Israel Singer, the WJC’s former top official, that triggered the accusations he raised in the summer of 2004. Leibler said the loss of donations (the WJC estimated a loss of at least $3 million in gifts) was to be expected because of the "inordinate" size of the $1.2 million pension fund Singer created and sent to a bank in Geneva, and the "luxurious and ostentatious lifestyle" he maintained using donors’ money.

"Singer’s eyebrow-raising behavior and outrageous culture of hedonism should not be at the expense of the donors," Leibler said in court papers.

"Further, the public donors cannot be expected to remain indifferent in respect of someone who has ‘violated his fiduciary duties as a trustee of charitable assets,’" he added, quoting from a report on the WJC released by New York State Attorney General Elliott Spitzer three months ago.

Leibler contended in his papers, filed in Tel Aviv-Jaffa District Court, that the suit against him is a "shameful and grievous example of improper use of public funds" and just another example of the WJC’s attempt to "cover up the severe financial irregularities" that he said Spitzer confirmed in his report. "The Spitzer report revealed clearly that the questions that the defendant [Leibler] raised regarding the bank account in Geneva … in fact only touch the tip of the tip of the iceberg of public corruption that was buried for a long time in a sea of other serious financial irregularities," Leibler said in his court papers.

Stephen Herbits, the WJC’s secretary general, said in response to the filing that Leibler’s "unrelenting and unfounded public attacks on the WJC and its officers are outrageous and irresponsible."

"The World Jewish Congress is seeking damages from Leibler for the cost of having to respond to his campaign and damage done to the reputation of the WJC and its leadership, and we expect to get it," he continued. "We have chosen to show the facts of this case in court, where a neutral party can judge Leibler’s actions. If Leibler believes he has behaved appropriately, then he should appreciate the opportunity to respond on the merits of the case."

The WJC, founded in 1936, is an international organization whose main mission is "to address the interests and needs of Jews and Jewish communities around the world." Some branches of the group are questioning the suit against Leibler, insiders say, because they see it as overkill. The Australian branch, which Leibler once served as president before moving to Israel, has called for the WJC to discontinue the defamation suit. The organization said the suit would "divert WJC resources away from its core mission" and prolong the dispute and "thereby further damage the reputation of the WJC."

In a letter responding to the branch, Herbits insisted that Spitzer’s report "specifically rejected several of Leibler’s allegations" and said that the Australian group’s belief that Spitzer’s report vindicated Leibler "is a clear misreading of the report and the scope of the attacks Leibler launched."

Herbits argued in his letter that the "costs of Leibler’s behavior were proportionately greater than the costs associated with any findings" by Spitzer. He pointed out also that Spitzer said the administrative deficiencies in the WJC office did "not affect the core mission of the WJC." The Spitzer report concluded that there was no evidence of criminal wrongdoing by the WJC, though the charity "lacked financial controls to safeguard charitable assets." In addition, Singer was barred from any position of "financial management or oversight," required to pay back $300,000 he received over the years, and forced to step down as chair of the WJC governing board. He is now chairman of the newly formed WJC Policy Council.

Menachem Rosensaft, a New York attorney and former WJC official, said the suit against Leibler was "a stupid act on the part of the WJC" because it revived the nasty controversy "just when it seemed it would die down," following the release of the Spitzer report, which each side in the conflict pointed to as a vindication of its position.

But Herbits said the WJC had evidence it is Leibler who seeks to prolong the dispute by continuing "to send derogatory communications about the WJC" and engage private investigators on WJC matters. Questions were raised this week about who approved of the decision to file the slander suit against Leibler, and when. Evelyn Sommer, chair of the WJC American Section, said the possibility of a suit was discussed at a meeting of the WJC’s steering committee in January. She said the Board of Governors was told of the suit at its meeting in Jerusalem in February and that she supported it.

"It had been a year of great turbulence and we wanted to stop the public attacks on the WJC in order to continue with our important work," she said. "The libels were continuing. Even when we were meeting in Jerusalem, all sorts of information was still coming out. Everybody wanted this whole thing to stop. They figured that because of the suit, he [Leibler] would display more responsible behavior."

Sommer said her recollection was that the Board of Governors authorized the filing of the suit sometime after Spitzer’s report was released because Leibler’s attacks still continued. The Spitzer report was filed Jan. 31, the same day the WJC suit against Leibler was filed in Israel.