AJCongress shutters quickly, pays debts slowly

NEW YORK (JTA) — When the board of the American Jewish Congress decided to suspend its operations last week, it didn’t give its staff much notice.

Employees were notified on Tuesday, July 13, that Thursday, two days later, would be their last day and that they then would receive their final paychecks. Whereas those laid off in previous rounds of cuts received severance pay and compensation for accrued vacation, the employees who lasted till the last round were told they would not receive the same benefits — at least until September.

Some employees who spoke to JTA on condition of anonymity are crying foul, saying the AJCongress still has money remaining from the 2004 sale of its building — an amount they believe adds up to about $2.5 million left in the bank — out of which the organization can pay the estimated $500,000 it owes employees.

Board members insist that employees will get all that is owed them and that there’s just a holdup while the money, which is restricted and cannot be touched unless the board approves the move in two separate votes, is made available by board votes.

According to the AJCongress constitution, the first of those votes cannot happen until 20 days after a proposal is made to unrestrict the funds, and the second vote cannot take place until 30 days after the first vote. Each vote requires at least 75 percent board approval.

“The employees have been kept up to date on every aspect of the finances of the organization. Nothing came as a surprise to them,” AJCongress President Richard Gordon told JTA.

“This has been discussed for months. They knew exactly the financial situation of the organization,” he said. “Shortly after the Madoff situation happened, we let a lot of people go. They were made whole with severance, vacation, etc. I have always believed that those who stayed on should be treated no worse than those let go initially.”

But employees are miffed that the board did not take the votes to unrestrict the money before making the layoffs.

“We never doubted leadership’s assertions and desire to pay the staff,” one employee said. “What was really surprising to us was to learn that the money was restricted and requires a lengthy constitutional process that could take weeks or months before we see the money owed to us.”

Marc Stern, the organization’s co-executive director and its legal counsel, said the board was made aware that it had to unrestrict the money to pay employees, but it chose not to.

Gordon said he didn’t think 75 percent of the board would have voted to unrestrict the money.

“There was a sense that if other things had unfolded in a different manner, we would not have had to do this,” Gordon said. “I might have done things differently. I also thought we would be at a different point and could have reconstituted or merged by now. We were all looking at the finances, and no one said we need to vote on this.”

Board members including Gordon and AJCongress chairman Jack Rosen say they are confident the board will unrestrict the money and take care of its employees as the process allows.

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