Leon Dulzin announced Tuesday night that he would not seek re-election as chairman of the Jewish Agency and World Zionist Organization Executives at the next World Zionist Congress in December.
Dulzin made that commitment after leaders of the United Jewish Appeal and Keren Hayesod, the principal diaspora fund-raising agencies, issued a statement that Dulzin had acted with “full integrity” in the recent scandal that shook Bank Leumi, Israel’s largest bank, of which Dulzin is the nominal head.
The exoneration of Dulzin from any blame in the bank scandal followed several days of tension and acrimony at sessions of the Jewish Agency Board of Governors here, which pitted Zionist members of the Board against the non-Zionist members. Many of the latter demanded Dulzin quit on grounds that his connection with Bank Leumi damaged their fund-raising efforts and adversely affected the Jewish Agency’s image.
Dulzin was vigorously defended by the Zionist half of the Board, notably its Herut and Mizrachi members. Other Zionist parties also made clear that they would not acquiesce in the non Zionists’ bid to oust him. Bank Leumi is largely owned by the Otzar Hityashvut Hayehudim (Jewish Colonial Trust), a body appointed by the WZO. Dulzin, as WZO chairman, is the ex-officio Governor of the Bank, though he stressed repeatedly that he had no hand in the day-to-day operations of that institution.
Last month the entire Bank Leumi Board of Directors resigned, and was promptly replaced, after disclosure that Ernst Japhet, the bank’s former chairman and chief executive officer, was granted $5 million severance pay and a $30,000 a month pension when he was forced to quit last spring.
Japhet was ousted on the recommendations of the Beisky Commission, a panel appointed to investigate the 1983 bank shares collapse which triggered a financial panic in Israel. The Commission found that Israel’s five largest banks had, over a long period, illegally inflated the value of their shares to mislead the investing public. The heads of all the banks were ordered to resign and barred from holding positions of responsibility at any Israeli bank in the future.
Dulzin maintained that he learned of Japhet’s severance terms only after they were approved by the bank’s Board. Keren Hayesod Board chairman Mendel Kaplan of South Africa is credited with engineering the compromise that resulted in Dulzin’s announcement and the exoneration.
In an emotional speech to the Board of Governors, Kaplan called for an end to the “blood-letting.” He declared he was convinced that Dulzin acted in complete innocence and was not responsible for Bank Leumi’s problems.
JTA has documented Jewish history in real-time for over a century. Keep our journalism strong by joining us in supporting independent, award-winning reporting.
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
