The Claims Conference says it will not release any more funds to the March of the Living until the Holocaust education program proves that it runs a “clean operation,” according to the chairman of the Claims Conference.
Julius Berman made his comments days after the New York Jewish Week reported that the March of the Living disbursed some $700,000 in questionable payments to a close associate of Israel’s suspended finance minister and of Israel Singer, the president of the Claims Conference.
Curtis Hoxter has ties to Israeli Finance Minister Abraham Hirchson, who has stepped down while being investigated for corruption, and Singer, who was fired from the World Jewish Congress in March over allegations of financial impropriety.
Singer remains president of the Claims Conference, an umbrella organization that oversees the allocation of restitution payments from the Holocaust-era.
The money comes from governments and institutions that were complicit in victimizing Jews during and after the Holocaust. Billions of dollars have been allocated to survivors and their heirs, with a small percent going to groups involved in Holocaust education and research.
March of the Living, a Jewish identity program that takes Jewish teenagers to Holocaust sites in Poland and then to Israel, receives major funding from the Claims Conference — more than $7.4 million since 1998.
According to The Jewish Week’s joint investigation with the Israeli business publication Globes, March of the Living began payments to Hoxter totaling $709,000 in 2003. That was the same year Singer “was instructed to stop funneling unauthorized payments to him via the World Jewish Congress — payments that by then had totaled $657,600,” The Jewish Week reported.
Tax records showed that March of the Living payments to Hoxter took place over three years and purportedly were for fundraising services. But Hoxter has never registered with the New York state attorney general as a fundraiser or fundraising counsel, and said he did not recall specifics of what he did for the payments he received.
It was a minor activity, Hoxter, 85, is quoted as saying. I did fundraising, basically an activity to advise them to run a campaign in the U.S.
Singer has denied any wrongdoing. His son Eliezer relayed a statement from his father to the Jewish Week saying, I m not involved in allocating Claims Conference funds, and certainly have no say or interest in any consultants that grant recipients might choose to hire.
Claims Conference officials say Singer has never had any role in its allocations process. His primary role is to negotiate with governments on restitution issues.
The Claims Conference, which supplied grants to March of the Living even before Singer was president, provides funds to the group exclusively for scholarships to bridge the gap between what the trip costs and what a student can pay, said Berman, the Claims Conference chairman.
Last week, the Claims Conference announced its in-house financial controller, Yigal Molad, was launching an in-depth audit of grants it had made to March of the Living in response to the Israeli police investigation of Hirchson and other allegations.
“On the whole we feel very comfortable that the money is being used for the proper purposes,” Berman told JTA, “but we want to confirm that in fact this is true.”
Berman, a past president of JTA, did not specify what the March of the Living needed to show to determine the funds would continue flowing, but March of the Living is going to “have to prove” that the funds are going where they are supposed to.
Menachem Rosensaft, the founding chairman of the International Network of Children of Holocaust Survivors, expressed outrage over the revelations in The Jewish Week report.
“This is an absolute abuse of public funds, made worse by the fact they are Holocaust restitution funds that should benefit Holocaust survivors or at the very least further Holocaust remembrances,” he told JTA.
At a time “when elderly, needy Holocaust survivors in Israel, on the Lower East Side of Manhattan and in South Florida are unable to afford proper medical care; hundreds of thousands of Holocaust-related funds are being wasted on at the very least utterly inappropriate purposes.”
Among other key findings of The Jewish Week report:
Hoxter was hired by March of the Living allegedly under pressure from Hirchson, the group’s founder, according to David Machlis, international vice chairman of the New Jersey-based March of the Living. Hirchson’s attorney, Yakov Weinrot, said Hirchson was unaware of Hoxter’s salary. Machlis did not return JTA’s calls, but he told The Jewish Week that Hoxter was involved in fundraising but did not specify what those activities were.
Then-New York state Attorney General Eliot Spitzer uncovered Hoxter’s payments from the WJC in a 2006 investigation that found Singer responsible for financial mismanagement of the group.
Hoxter’s accountant told Spitzer that there was no documentation regarding Hoxter’s services to WJC during 2001-03. WJC tax records bear no mention of the payments.
During Hoxter’s long public relations career, he represented, apparently simultaneously, both the WJC and Swiss banks charged with withholding funds from Holocaust survivors after World War II.
The Jewish Week’s investigation also raised questions regarding a fourth individual, Zvi Barak, who had links to all the parties involved. Barak was Singer’s attorney, an associate of Hirchson and his Hirchson’s son Ofer’s business partner in the Hirchson-Barak Corp.
Spitzer’s investigation revealed that Singer had funneled $1.2 million in WJC funds from a Swiss bank to a custodial account in London controlled by Barak, according to the report. He also found that Barak was involved in negotiations, along with Singer, to join Hoxter’s P.R. firm.
Barak sparked outrage as part of a Knesset committee investigating Israeli banks that were withholding $172 million in restitution funds from survivors when, ignoring the advice of five Israeli accounting firms, he said the banks should be able to keep some 90 percent of the funds.
It w as discovered later that the Hirchson-Barak Corp. was $26 million in debt to the banks being probed. Barak claimed there was no conflict of interest, as he did not owe the money personally.
(JTA Editor Lisa Hostein, news editor Abigail Schwartz and staff writer Jacob Berkman contributed to this report.)