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Audit Clears Jewish Agency over Transfers to World Jewish Congress

March 28, 2005
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The Jewish Agency for Israel is hoping an external auditor’s report will put to rest allegations that it transferred funds to the World Jewish Congress for the pension of a top WJC leader. The assessment also faults JAFI for shoddy record-keeping.

The report is the latest development in the case of accusations of financial impropriety at the WJC that has roiled the organization.

Carried out by the Tel Aviv office of the accounting firm Ernst & Young, the inquiry “did not find a linkage” between JAFI’s 2001 transfer of $1.5 million to the WJC and a 2002 deposit by the WJC of $1.2 million into an account in Switzerland.

In recent months, the WJC has been embroiled in a vitriolic internal squabble over accusations of financial wrongdoing made by Isi Leibler, a former WJC vice president.

Among those accusations, Leibler charged that WJC officials may have tried to hide $1.2 million in an undisclosed Swiss bank as a pension fund for the group’s chairman, Rabbi Israel Singer, following JAFI’s $1.5 million payment. WJC officials accused Leibler of using the accusations to try to take control of the organization. The Ernst &Young report found that JAFI did not earmark its transfer of the $1.5 million to the WJC for any specific use.

“There is now an official document, commissioned by the chairman of the Jewish Agency from a reputable, worldwide, recognized accountancy firm, that shows openly that the Jewish Agency’s relationship with the World Jewish Congress is a transparent operation between two international organizations,” JAFI spokesman Michael Jankelowitz told JTA. “And there was nothing sinister or underhanded or secret in the relationship.”

Though the report seemed to exonerate the Jewish Agency with regard to the money transfer, it faulted the organization for sloppy record-keeping practices regarding its budgets.

“Irrespective of our conclusion regarding the designation of the transfer, we found that the level of documentation of the mode of making decisions and of the bodies involved in them was deficient and hampers proper budgetary control,” the report said.

Jankelowitz said JAFI Chairman Sallai Meridor, who commissioned the report, ordered the group’s comptroller to investigate the assertions. Meridor asked that the probe be finished in time for the agency’s board meeting in late June, Jankelowitz said.

Since 1983, JAFI had been providing the WJC with annual assistance of up to $500,000, the report said, but did not make such payments between 1998 and 2000. The auditor said it could not find documents to determine why that was the case.

In 2001, the agency made the $1.5 million payment, which included $500,000 for each of the years no money had been given.

“There is no difference of opinion between the Jewish Agency and the World Jewish Congress that the $1.5 million that the Jewish Agency sent in January 2001 was not designated for any specific purpose but was given to the general fund” of the WJC, said the WJC’s secretary-general, Stephen Herbits.

Herbits also said the WJC was giving its “full cooperation” to an informal investigation into its financial dealings launched by New York State Attorney General Eliot Spitzer.

“We’re working with them and are hopeful for an early and satisfactory conclusion,” he told JTA.

The WJC’s steering committee will hold its third meeting in seven months in April, where it will review the recommendations of a task force on constitution and governance. The group’s report includes “a series of options for revisions of the constitution for the first time since 1976,” Herbits said.

The recommendations address topics ranging from the group’s formula for allocating money to how its leaders are elected. Edgar Bronfman, the WJC’s president, called for the task force’s creation in 2003.

The steering committee also will discuss the major issues on the WJC’s agenda.

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