Dinitz Steps Down from Jewish Agency After Charges Are Brought Against Him

Closing a difficult chapter for the Jewish Agency for Israel, Simcha Dinitz has announced he will step down as chairman following a decision this week by Israel’s attorney general to indict Dinitz on charges relating to his alleged misuse of Agency credit cards.

The leave of absence was in accordance to an agreement made last summer with Mendel Kaplan, chairman of the Agency’s Board of Governors. That agreement had capped months of speculation about Dinitz’s future at the Agency after allegations of misconduct first surfaced.

The decision to indict Dinitz on charges of aggravated fraud and abuse of public trust was announced Monday, two days before the Agency’s Board of Governors was to begin a week-long meeting in which the Dinitz affair and how to handle the vacancy will doubtless top the agenda and spur heated political wrangling.

“Anything can happen,” one senior Agency official quipped before the meeting.

Meanwhile, reaction from Agency officials appeared to be a mix of regret for Dinitz and relief that there was some resolution of a long ordeal.

Kaplan called the attorney general’s decision “a great personal tragedy for Simcha Dinitz and his family.”

Though Kaplan insists that the “cash flow has never been better,” it is clear the affair has tainted the Agency’s image.

The Jewish Agency, which is the primary recipient of United Jewish Appeal funds raised for Israel, is the largest single recipient of American Jewish philanthropy.

It is also the embodiment of political Zionism, the Diaspora community’s link to the nation-building enterprises largely undertaken now by the Israeli government.

In Israel, the Jewish Agency is considered a quasi-governmental body. Its salaries are pegged to those of Cabinet officials, its actions are coordinated with the state and its leaders come from the ranks of the Israeli political parties in proportion to their strength in the World Zionist Congress.

Kaplan conceded the Diaspora community has been frustrated with the slow pace of the case.

“What they’d like to see now is a definite decision as to permanent leadership in the Agency,” he said. “That’s what they expect from us.”

The controversy surrounding what has come to be known here as the Dinitz Affair began with reports at the end of 1992 that Dinitz had misused the Jewish Agency’s credit cards.

Dinitz has admitted making personal purchases on the cards and not repaying $13,793 worth of charges until the bills were brought to his attention in December 1992.

During the summer of 1993, a police investigation was launched into Dinitz’s activities. The investigation ended in late August, but police officials at the time would not disclosed whether they had recommended that state prosecutors press ahead with an indictment against Dinitz.

The case was subsequently turned over to the attorney general, who had the responsibility of determining whether charges should be pressed. Kaplan has called on Agency Treasurers Hanan Ben-Yehuda to preside over meeting of the executive in the absence of the chairman, as stipulated in the agency’s bylaws.

Ben-Yehuda will continue in that role at least until the Board of Governors makes a decision in the coming days on whether and how to appoint an official acting chairman.

Kaplan refused to mention any candidates, but the likeliest contenders for the temporary post are Ben-Yehuda, Yehiel Laket, head of the Youth Aliyah Department, and Shlomo Hillel, the head of Keren Hayesod.

Such a candidates must be put forward by the World Zionist Organization and may be voted by Diaspora fund-raiser before being elected by the board.

However, the board is not obligated to elect an acting chairman at this time, and they could keep Ben-Yehuda on as de facto acting chairman until the time comes for the election of a permanent chairman.

Laket and his part of the Labor Party camp are expected to be among those pushing for the election of an acting chairman at this week’s board meeting.

Some insiders say he wants a chance to demonstrate his ability to lead the agency and thus be in a better position to run for the permanent post down the road.

Ben-Yehuda has virtually no chance of being a permanent chairman because he is a member of the Likud Party and the post is widely viewed as a Labor post. Indeed, there may be pressure on Kaplan from Labor not to leave Ben-Yehuda in the post even as de facto acting chairman because he is a Likudnik.

Dinitz will be on leave until the conclusion of his trial or until Dec. 31 of this year, if the case is not concluded by then. At that point he will retire, according to the agreement he reached with Kaplan last August.

If he is exonerated before then, Dinitz has said he will retire, although he reserves the right to stay on in the post. He will receive a salary during his leave of absence.

While Dinitz is on leave, said Kaplan, the position is not officially vacant, and so he cannot be permanently replaced. But should a vacancy occur, through a resignation, a conviction or the arrival of the Dec. 31 deadline, a permanent appointment may be made.

Some source believe Prime Minister Yitzhak Rabin could pressure Dinitz to resign sooner than the agreement calls for, paving the way for an election in June for a permanent chairman.

Meanwhile, “We are doing our utmost,” to cope with “a very difficult situation for the Jewish Agency,” said Ben-Yehuda.

“The image of the Jewish Agency was damaged” by the “unhappy” Dinitz affair, he said, and “we have to do all we can to bring things (back) to normal.”

“On a personal level, there is a lot of pathos and personal tragedy involved,” said another senior agency official.

“On the other hand,” he continued, “this is an institution dealing with voluntary donation and public funds and there is an overriding feeling within the whole world of fund-raising that the integrity of the donations has to be maintained and leadership has to be beyond suspicion.

“This has been hanging over us for almost two years,” he added.

The Jewish Agency is “at a crucial juncture,” said another senior agency official. “More than anything else, we need someone here who is a leader and a decision-maker, (as well as) a team player, someone who can bring people together.”

In a prepared statement after the attorney general’s decision, Dinitz said that his decision to go on leave “will enable me to devote my time to prepared for the trial in order to prove my innocence, of which I am convinced beyond any doubt.

“The judicial authority is the only branch of government authorized to determine the guilt or innocence of an individual, who is considered innocent until proven guilty,” he said.