Pressure Growing On WJC

A top official of the World Jewish Congress said Tuesday that he is now “open” to the possibility of hiring an outside firm to conduct a new audit of the embattled organization even as prominent Jewish leaders defended the integrity of its chairman, Israel Singer.
Demands for a complete and independent audit of the WJC made by its senior vice president, Isi Leibler, and representatives of the Swiss and Australian Jewish communities following Leibler’s dismissal in September from the organization’s steering committee have been resisted.
Leibler’s ouster touched off turmoil in the venerable organization, which has gained prominence in recent years by leading the fight against Swiss banks for hoarding the deposits of Jewish Holocaust victims.
“I have spent money on three audits,” said an exasperated Stephen Herbits, the WJC’s transition director since September, referring to financial reports by New York and Belgian accounting firms commissioned by the WJC and a judicial report by a German law firm.
Herbits said each of the reports proved that there was no financial misconduct at the WJC, as implied by Leibler, a former leader of the Australian Jewish community now living in Israel, and other critics.
Herbits complained that the critics are rejecting these reports “not for any substantive reasons but clearly for political reasons. Until they indicate what is acceptable,” he added, “why should I continue spending donor’s money” on another audit?
Leibler contends he was ousted for publicly appealing for improved governance and transparency of WJC finances. He has refused to step down from his post.
Franklyn Snitow, the WJC’s attorney, said Leibler was removed for making “false allegations that Singer appeared to be engaged in some form of wrongdoing” regarding $1.2 million which Singer said he sought to use last year to provide pensions for WJC employees, including himself.
Leibler insists he has only raised questions, not made specific allegations of financial wrongdoing.
The reports traced the movement of the $1.2 million as it was shifted from a bank in New York to one in Geneva, another in London and finally back to New York.
“He [Leibler] has created a crusade to enhance his own posture,” Snitow insisted. “He was dismissed not because he said he wanted greater transparency. Nobody stifled that. … He was subjecting the institution that he supposedly cared for to public ridicule based on nothing but innuendo and baseless allegations.”
Those allegations suggest that WJC finances are run by Singer and Edgar Bronfman, the group’s longtime president and benefactor, without the knowledge of other WJC leaders.
Ronald Lauder, the prominent businessman and philanthropist, resigned as treasurer of the organization two years ago and that position has not been filled.
In a letter to Singer dated Oct. 17, 2002, Lauder asked not to be designated as treasurer because the title “implies that I have executive or fiduciary responsibilities. Since I do not,” he wrote, “the description may mislead others as to the nature of my involvement with WJC which, in turn, could lead to some unanticipated consequences.”
Several national Jewish leaders, who asked to remain anonymous, said they are worried that those consequences could mean embarrassing exposure of unaccounted spending within the WJC in recent years, if the critics are correct. But they are loath to speak out publicly on the issue, fearing the controversy could have a negative impact on other Jewish organizations.
Leibler, in a letter to Herbits this week, dismissed the financial reports that have been performed. He called the initial report, by the New York accounting firm Loeb & Troper, “merely a document which tracks a money trail that was never in dispute.” Leibler also dismissed the other two reports as merely confirmations of the original.
Referring to the Loeb & Troper report, Leibler charged in his letter that Herbits’ “description of this document as an audit can only be described as a blatant misrepresentation to the WJC and the public at large,” and he called on Herbits to retract his statements or resign.
Herbits said he would not dignify such charges with a response.
Leibler said he wants Bronfman to fulfill a pledge he made in a memorandum Aug. 30 in which the WJC president said Herbits would “manage a full operational and functional audit.” Leibler said that “an independent audit is the only way to close this issue, and I still cannot comprehend the reason for the hysterical opposition to such a process.”
He said such an audit is necessary in light of Herbits’ admission to The New York Times this week that “governance and financial management have been weak” at the WJC.
Herbits told The Jewish Week he planned to convene a finance committee meeting soon, but he declined to say who would be on it.
A former chairman of the executive committee of the American section of the WJC, Menachem Rosensaft, said he was appointed in July to chair a restructuring task force of the American section. But he said that except for one consultative meeting, the task force was “never constituted” and the process has come to a halt.
Asked about the audit controversy, Rosensaft said he had not read any of the audits and therefore could not comment on their accuracy or validity.
“I would hope that since an independent audit should put this entire matter to rest, that all concerned should seriously entertain it in the interest of the organization and of the Jewish community,” he added. “It seems to me that an independent audit can and should resolve this entire controversy.”
Meanwhile, Singer has remained silent about the controversy and continues working in his capacity as chief of the Conference on Material Claims Against Germany and World Jewish Restitution Organization, seeking reparations for Holocaust survivors.
The chairman of the Claims Conference, Julius Berman, said negotiations with the German government are expected to be held “shortly” to garner additional financial support for survivors. He said he “cannot imagine” that the current controversy would impact on those talks.
“The principles involved in these negotiations are so far removed from the narrow personal disputes at the WJC that it could have no bearing on it, nor should it, and I doubt it would,” he said. “As a matter of logic, one thing has nothing to do with the other.”
Stuart Eizenstat, a former undersecretary of state who spearheaded the Clinton administration’s efforts regarding Holocaust restitution, said he was unaware of the WJC controversy but has known Singer for more than 25 years and called him a “towering figure” during restitution negotiations with European governments.
“He developed an enormous credibility,” Eizenstat said. “He was tough but reasonable. His whole adult life has been spent trying to deal with justice for survivors and Jews in general.”
Eizenstat added that he was confident that the controversy in the end would “reflect favorably on him and on the World Jewish Congress.”