Jewish World Weighs the Impact of Financial Impropriety at the Wjc

When a top official of the World Jewish Congress was relieved of financial management responsibilities after an investigation found financial impropriety, some members of the Jewish community saw it as a wake-up call to other Jewish groups. As non-profits grow, they said, their leaders ought to stand back and evaluate how their finances flow.

Others, though, saw the situation at the World Jewish Congress, which was found to have lacked “appropriate financial controls” and to have made “inappropriate disbursements” to top WJC officials, as unique, and unlikely to lead to any significant re-evaluation of current practices.

Either way, word that Rabbi Israel Singer, the most public face of the world body, will no longer be allowed to take part in the group’s fund-raising and financial management, was creating a buzz in the halls of U.S. Jewish organizations.

“I think when any such thing happens, it’s the kind of thing that makes you kind of stand back and say, ‘This is a wake-up call, how are we doing in this regard?” said Susan Shevitz, former director of the Hornstein Program in Jewish Communal Service at Brandeis University.

“It calls attention to the need for really good practice — responsible, competent practice in these arenas.”

“Jewish organizations need to focus much harder than they sometimes do on issues of management,” said Jacob Ukeles, president of Ukeles Associates, which does management consulting and policy research for the organized Jewish community.

“If this is a wake-up call, great. I’m not sure that people look at it that way, because I think that, at some level, each situation is idiosyncratic. This is a complex melange of personalities and facts. I don’t know objectively if there are lessons to be learned,” he said.

In an agreement reached with the New York state’s attorney general, whose office conducted the investigation, Singer has also stepped down from his position as chairman of the group and has agreed to repay some $300,000 in personal expenses he had charged to the WJC.

The investigation uncovered no criminal wrongdoing or loss of charitable funds.

It is too early to know the impact of the investigation on the organization, which has constituent bodies around the world, and is best known in recent years for negotiating Holocaust restitution agreements around the world , most of them by Singer himself.

New York’s attorney general, Eliot Spitzer, launched his investigation in 2004 after Isi Leibler, a former senior vice president of the WJC, went public with a 12-page memo detailing allegations of financial wrongdoing by WJC officials.

The attorney general’s investigation found that in 2003 Singer made a series of unusual money transfers totaling $1.2 million to European bank accounts in an effort to launch an employee pension fund. He did so, the report said, without seeking authorization from any of WJC’s governing bodies or keeping a record of the fund in the group’s files.

And while Spitzer’s report found that these and other questionable financial moves at the congress highlighted a lackadaisical approach to financial controls, the irregularities did not compromise the group’s core mission.

Spitzer’s investigation found that the WJC had made inappropriate disbursements to some of its officials. One executive received compensation for a child’s school tuition and taxes were not paid on it. Other officials submitted credit card bills that were not properly scrutinized.

In Singer’s case, the Attorney General’s Office said, the inappropriate disbursements totaled over $300,000. Among other such payments, Spitzer’s office said, Singer had charged some personal expenses to the WJC on a credit card he used principally for congress business; and had used WJC funds for car lease payments and insurance for family members.

Singer has repaid close to $215,000 already and was expected to return an additional $132,000 this week, the WJC said.

In addition to Singer, WJC’s former executive director, Elan Steinberg was barred from playing any future role in group’s finances.

Steinberg, who is no longer associated with the group, could not be reached for comment.

Singer, who was traveling in Greece, could not be reached for comment, but he said in a statement: “I sincerely regret that at times my almost exclusive focus on execution of our mission diverted my attention from important administrative activities.”

. The group’s secretary-general, Stephen Herbits, who was brought on as the WJC was grappling with the allegations, said the group has already made significant changes.

“There was a wide variety” of such disbursements as a “result of sloppy record-keeping,” Herbits told JTA. “That was true of all of the executives here.”

“The time and resources that have gone into reforming the WJC’s governance processes over the past 16 months have been necessary and well-spent,” Herbits said. “The organization is now stronger than ever and moving forward with its vital mission.”

At the attorney general’s urging, the WJC has agreed to — and begun — implementing a series of steps to ensure better financial oversight, including forming an audit committee, hiring a chief financial officer, computerizing records, implementing travel and reimbursement procedures, and creating a new fund-raising entity to improve solicitation practices.

In an effort to ensure continued compliance, the WJC will remain under tighter scrutiny than most other non-profits, a spokesman for Spitzer told JTA.

“We find it’s a common problem with not-for-profit organizations — the people involved are dedicated to good work but sometimes they lack the expertise or they lack the proper commitment to following a fairly rigorous set of rules an procedures that all not-for-profits must follow,” Darren Dopf told JTA.

For his part, Singer now has a new role as chairman of the newly created WJC policy council.

Singer “will be free to focus on the political, diplomatic and issue-based matters of the organization,” Herbits said. “Those responsibilities have always been Israel Singer’s greatest strength and passion.”

Herbits said that “the need to fight a barrage of baseless and vindictive allegations being thrown about by” Leibler required a “shameful waste of critical resources” by the WJC.

This week the WJC sued Leibler in Israel for defamation.

Leibler, for his part, said he was vindicated by the report.

It “goes well beyond anything that any of those who raised questions even implied, and the facts set out in the report are damning and speak for themselves,” he told JTA from his home in Israel.

“The report has exposed the malpractices and the chaos in the administration of Israel Singer and has at least forced the WJC to choose the reforms which I’ve been calling for.”

In the wider Jewish world, Jeffrey Solomon, president of the Andrea and Charles Bronfman Philanthropies, said that the public airing of WJC’s troubles may serve to confirm an impression of Jewish organizations already held by some critics.

“For many people they have a thousand reasons why they don’t want to be involved in organized Jewish life, organized charitable life. This rationalizes that lack of involvement,” he said. “For people who are involved it really makes no difference. It is what it is.”

One Jewish official, who spoke on condition of anonymity, said that the lack of financial oversight at the WJC was so extreme that it was unlikely that other groups would take lessons from it.

“Everybody should be looking at” their financial controls, “but I think that most places have pretty good safeguards,” he told JTA. “They do not operate in a parallel way.”