Wednesday, January 12, 2005

The speech the WJC does not want members to hear


At 6:41 AM, Blogger jewishwhistleblower said...

Hat tip to Mentalblog for the link.


The speech the WJC doesn't want its members to hear
By Isi Leibler January 10, 2005

The following speech was written for delivery to the WJC Plenary on January 10, 2005. Leibler, Sr. Vice President of the organization, was not allowed to address the plenary before or after being summarily dismissed from his position.

Many of you do not know me personally. I have served the WJC faithfully for over 40 years, longer than nearly all of you in this hall. During those years, I was head of the Australian Jewish community for three terms and one of the earliest Diaspora Jewish leaders to become involved with Lishkat Hakesher in the struggle for Soviet Jewry, well before it became fashionable to do so. I was also directly involved in negotiations leading to diplomatic relations between Israel and China and India.

I have a record of fighting for what I believe is right, no matter how unpopular. I have never been one to give in to threats or intimidation.
Five years ago when I first raised alarm bells about governance at the WJC, I was literally howled down.

18 months ago, I learnt that Mr. Bronfman was no longer the primary financial backer of the WJC and that the bulk of funding came from American donors. I realized that managing a publicly funded body without a semblance of financial transparency -- not even submitting a balance sheet to an Executive for review - meant that the WJC was in blatant breach of American law. I therefore decided once more to raise the issue of governance and financial transparency.

Israel Singer begged me not to proceed. He undertook to work with me to ensure that genuine reforms would be implemented. I demanded, and it was agreed, that a Task Force on Governance be set up to ensure that a proper system of checks and balances be introduced. In return, I was reluctantly persuaded to concentrate on the future and not to analyze or examine the past. The President invited me to join an Operations Committee with Elan Steinberg and Singer to manage the WJC on an interim basis until the Task Force completed its work.

In June 2004, after 6 months of trying to come to grips with the financial basis of the WJC and being continuously stonewalled by Singer, the Operations Committee moved a resolution demanding access to all payments.

It was only then that Steinberg and I became aware that unauthorized payments, salaries and expenses were still being incurred in a manner no reputable body claiming to adhere to financial transparency could tolerate. We also realized that we shared a fiduciary responsibility to ensure that the WJC was not breaching any statutory regulations.

Let me give you a few examples.

Since Israel Singer had retired as a professional and assumed a lay role as Chairman of the Governing Board, he repeatedly announced to the media - and everyone willing to listen to him - that he no longer received a single cent from public funds. Yet we discovered that in fact he was receiving an income equivalent to his former salary. Initially he told us it was paid by Bronfman. But we discovered that the funds were in fact being paid from a WJC payroll. Mr. Herbits subsequently creatively described Singer's income as "ex gratia payments for a pension". However, this arrangement was concealed from me when he asked me to sign yet another pension agreement for $150,000 per annum with Mr. Bronfman and Ms. Sommer. More importantly, nobody on the Executive was ever aware of these arrangements.

We learnt that Singer authorized a termination payment of over a million dollars to our former Secretary General, Avi Beker, for a position occupied for just over one year. Yet just over a year earlier, Beker had already received full and generous compensation for his services in Israel. Once again, Singer told me that that Bronfman paid this amount personally. But later it transpired that these payments also came from the WJC. The Executive was also unaware of this.

We also learned that Singer facilitated substantial donations from WJC funds to organizations some of whose representatives sit on the Executive and are present here. Worthy organizations and worthy causes, but not directly related to WJC programs or approved by the WJC.

There were also other questionable payments without authorization, e.g. one consultant received $200,000 per annum yet if I named him I wager that none of you would even recognize his name. I could go on about other major expenses not formally ratified.

I never sought to assume the role of a judge on such matters and that is why I called for a comprehensive independent audit of the organization.

Two weeks after these revelations, we were stunned when Daniel Lack, the Legal Adviser of the WJC in Geneva for almost 30 years, drew our attention to the existence of a secret bank account containing $1.2 million, transferred in installments from the NY office, by Singer. Nobody - neither myself, Prof. Dinstein, Elan Steinberg, the Geneva office and its legal adviser, or any executive member - was aware of the existence of that account despite having asked Singer on numerous occasions to provide us with a full breakdown of local and international WJC accounts. The only person aware of the account (beyond Singer) was a WJC bookkeeper in Switzerland who had been dismissed for financial irregularities.

The saga included a lightning secret visit by Singer to Geneva during which he dragged the dismissed bookkeeper from his hospital sick bed in order to liquidate that account which was transferred to London. Were it not for a technicality which exposed the account to the Geneva office, we would still be in the dark. Singer's initial explanation for transferring the account from Geneva to London was that Avi Beker would have misappropriated the funds. More recently Herbits claimed that the director of the Geneva office was too young and inexperienced and the funds were placed in a secret account in Geneva in order to prevent her having access to it. Incredible nonsense! In fact the money was transferred from New York to Geneva even before the director Maya Ben Chaim had been installed. Besides, even, the Secretary General Avi Beker claims that he was unaware of the account or only learnt about it just before his dramatic retirement.

According to press reports, the account was transferred to Singer's friend Zvi Barak and deposited by him into a custodian account in Singer's name or in the joint names of Singer and his wife. We have still not been informed who authorized Singer to carry out these strange transactions. Nor have we been told on behalf of whom Barak held the account. I therefore challenge you. Tell us, in whose name Barak held the funds in his custody and tell us who authorized these bizarre transactions. We are entitled to straight answers.

The money returned intact. But be under no illusions. This money was not included in any breakdown of WJC assets prior to its discovery and although Herbits keeps repeating that it remained at all times under the control of the WJC, the fact remains that no WJC officer had signatory rights and we had to pursue Barak for three weeks until it was recovered.

Then Daniel Lack provided Herbits with more details. Apparently the Geneva Office Director had been instructed by Avi Beker to carry out an investigation. That seems to have preceded Beker's retirement with the golden handshake. Herbits refused to pass the information from Lack to the Executive dismissing it as the ravings of a "disgruntled former employee". I have these extraordinary incriminating documents here!

If we are to be genuinely transparent, I ask why has the former Legal Adviser been silenced? Why was he been specifically ordered by an unelected official not to disclose any information or documents to any party including WJC executive members? What kind of body refuses to consider allegations of financial irregularities from its own Legal Adviser? Are we to totally disregard our fiduciary obligations?

I therefore call on this body to reject such a blatant breach of transparency and to invite Mr. Lack and Ms Ben Haim, both of whom are here today and were excluded from even entering the hall to address us. Mr.Lack could explain to you directly the circumstances which led him, in his capacity as legal adviser, to demand that the organization hold an independent audit in order to protect the WJC from allegations of impropriety and financial irregularities.

Aside from that, lies, more lies and contradictions were conveyed about the account. Singer could not even get his own story straight. Initially he and even his lawyer insisted that the account, provided by the Jewish Agency, was earmarked for his personal pension -- but he had to backtrack when the Jewish Agency denied the story.

On the day the money was finally repatriated to the WJC, the giant cover up began. The Geneva Office had already been closed with both Ben Haim and Lack dismissed. Steinberg and I, not realizing Singer had another agenda, endorsed his recommendation to close the Geneva office based on misleading information, including a highly overstated budget.

Realizing that these awful issues could develop into a serious crisis, I prepared a memorandum and requested a meeting with Mr. Bronfman to alert him. Despite efforts by Professor Dinstein and others, the meeting never eventuated. Instead, Singer went to the Jewish media with copies of my memorandum and other documents obtained illegally from my computer. Singer was unable to explain to the media how he had access to confidential material from my computer especially since I never used the WJC network for these communications.

I stress that I have irrefutable evidence conclusively proving that Singer was unquestionably the first to approach the media with these issues, providing them with copies of my memorandum before I had even distributed it to the Executive. If any of you doubt me, I invite you to communicate with the Jewish Week and Forward who initially broke the story.

Likewise, the suggestion that I am responsible for the Attorney- General's intervention is rubbish. Those who are perceived to have engaged in questionable activities only have themselves to blame.

On the other hand the efforts by Singer to derail a serious internal investigation by making the issue public initially succeeded. But even before Singer went to the press, on the day the money was repatriated to New York, the Operations Committee was dissolved. Elan Steinberg the senior professional and key architect for our campaign against anti-Semitism was brutally excluded from the newly created Steering Committee and I was effectively marginalized and unceremoniously expelled from the Steering Committee at its very first meeting. At the same time, the third remaining member of the former Operations Committee, Singer, the central figure in the Geneva account, was elevated and began spearheading a campaign to discredit and expel his former colleagues.

Then Mr. Herbits, described by Mr. Bronfman as his "right hand man", was appointed to manage the WJC. At first, he claimed that after reviewing the accounts he was satisfied that apart from a few inconsequential errors, all was in order. Today, no doubt encouraged by the interest displayed in the WJC by the New York Attorney General, Herbits concedes that governance and financial transparency were lacking.

After the Swiss Jewish community intensified their demands for an independent audit the cover up campaign was accelerated. Every single person who raised questions about financial transparency was demonized, intimidated or expelled.

But worse still. In a disgusting politburo style resolution, which will go down as one of the most abominable acts ever undertaken by a WJC body, Professor Donath, the President of the Swiss Jewish Community was censured and threatened with expulsion from the EJC Presidium unless he withdrew his request for an independent audit. Those involved in that resolution should hang their heads in shame.

What kind of organization refuses to address serious allegations presented by its own legal adviser? What kind of organization becomes hysterical in resisting a genuine independent audit if it has nothing to hide?

I am delighted that we have ended the nonsense of referring to money trail documents as audits. I am pleased that Mr. Herbits has finally acknowledged that contrary to earlier statements, until now no genuine comprehensive audit has taken place.
I am also gratified that the WJC has finally agreed to conduct an audit in accordance with the demands of the Swiss Jewish Community.

But I am under no illusions. The audit must be genuine and independent. An independent audit should not even be indirectly conducted, scoped or supervised by Mr. Bronfman's appointee.

The most fundamental questions raised in respect of Geneva relate to who authorized the bizarre series of transactions? Why was the existence of the Geneva account and the funds transferred from that account to Advocate Barak hidden and not disclosed in a breakdown of all assets of the WJC, including bank accounts. What was the explanation for the conspiratorial sequence of events following the termination of the book-keeper? Why did Singer rush behind everyone's back to Geneva immediately after learning of the termination of the book-keeper for financial irregularities? What was so urgent that he had to pull the book-keeper out of a hospital bed, knowing that he had been dismissed for financial irregularities, to empty the secret account. Why couldn't he advise Geneva staff members to effect any transfer? Why the secrecy? In whose name, did Barak hold the custodian account? What about the details set out by the WJC Legal Adviser, Mr. Daniel Lack in his memorandums to Mr. Herbits? Although Mr. Herbits refused to disclose them to members of the Executive claiming that such facts were not material, these issues must be covered by the auditors.

A few additional observations. Contrary to the disgusting lies being disseminated, I never sought to displace Bronfman or anyone else. Nor have I indulged in character defamation. My only crime was to dare to expose the utter lack of governance and transparency in this organization and to endorse the call of our own legal adviser for an independent audit.

What humbug it is to allege we are motivated by malice or ambition when the central party involved in these bizarre affairs personally threatened to "destroy" the President of a Jewish community together with his family unless he withdrew his demand for an independent audit.

I have also been subject to intimidation. Each time the issue of governance arose, threats both implied and overt, were made to me. I was strongly urged that it would be in my best interests not to attend this Assembly. That I would be "destroyed".

You just have to see the public billboards in Jerusalem this Shabbat to get a flavor. Here is a poster I obtained just before boarding the flight from Israel. Headed "Beware an Informer", a bogus non-existent rabbinical council calls for a Cherem -- excommunication -- for having sold my soul to the devil. It concludes by saying "World Jewry must not rest until Isi Leibler, the contemptible evildoer -- the disease -- is eradicated from our midst." I leave it to you to guess who initiated this filth?

What does it say about governance and transparency when every person, without exception, who refused to endorse the party line and asked "awkward" questions has been thrown out of the organization? You can spin it any way you like, but the public is not stupid.

A public organization which purports to represent Jews all over the world cannot continue to operate as though it were a personal fiefdom. The WJC has over 400,000 American Jewish donors. We owe them a duty to ensure complete transparency.

Had the steps now being undertaken been implemented at the outset or had the problems been dealt with internally in a constructive manner as was my intention, we could have spared ourselves the awful media exposure, We could also have avoided the enquiries by the New York Attorney General. We would certainly have avoided the incredible cost of this premature Assembly.

This Assembly is in fact constitutionally questionable because in addition to being summoned at incredibly short notice, the American Jewish Community, the largest and most influential Jewish community in the world is not truly represented here. The American Section is in violation of its own by-laws. For example, the Chairman is obliged to rotate every two years, yet the current Chairperson has held office continuously for thirteen years. Elections are obligatory every two years but the American Section has effectively not even held a meeting over the past four years.

Some of you may be aware that two weeks ago I met with Stephen Herbits. There were efforts to come to an understanding. It was suggested that I express public satisfaction with the initiatives to introduce governance being taken by Mr. Herbits which certainly does represent a vindication for what I have been striving.

However, I was not prepared to compromise on the conduct of a truly independent comprehensive audit or be party to any cover up. I would not be willing to once more fall into a swamp if there is a calculated effort to protect any person who may have abused his WJC role for personal gain or as a means to retain power.

Let me reiterate that the Swiss account is not the core problem of governance. It merely exemplifies the breakdowns that inevitably occur when there is a complete lack of governance and transparency in an organization. My concerns are with the overall financial operations of the organization and the complete absence of checks and balances and controls over expenses, payments and disbursements. Those concerns remain valid. The audit must therefore cover all finances of the WJC worldwide. For the sake of the integrity of this organization, we cannot simply sweep under the carpet serious breaches which took place in the recent past which could amount to millions of dollars.

And if an independent audit should determine that any leader in this organization has misused or misappropriated substantial funds, or abused procedures for his own personal benefit or as an instrument of power, such a person cannot be permitted to maintain a leadership position.

I also find it difficult to come to terms with a purportedly new regime of governance when a newly established Finance Committee is headed by Mr. Coby Benatoff, one of the key architects of the shameful campaign to expel Professor Donath, the head of a Jewish community for the "crime" of asking for an independent audit. A person who behaves in this manner is unfit to hold office in any public body and least of all to head a Finance Committee. To have Mr. Benatoff supervise a finance committee and be responsible for the appointment of an audit committee can only be regarded as a sick joke!

We are told in the Torah -- Zedek, Zedek, Tirdof. I call on my former WJC colleagues to do just that. Failing to raise their voices against the expulsion and demonization of all those who call for reform they become accomplices to a cover up. I stand here and condemn anyone who aided, abetted or stood by whilst a few ruthless individuals expelled, intimidated, demonized and tried to destroy the dedicated and honest people who demanded an independent audit.

I have engaged in a struggle against overwhelming odds to achieve governance in the WJC. I am pleased that Mr. Herbits is now admitting that the WJC was operated like a one man band or a feudal principality rather than an organization funded by the public. I have no doubt that in time the WJC will become transformed into a more democratic body. In that context I take pride that I have been fully vindicated.

The WJC, is an organization with historic achievements. But even if I had your support, I would not, in good conscience, remain an office bearer in an organization which remains under the control of the same leaders who led us into this morass.

I take great pride in the realization that Jewish people power is a reality and remain confident that in the not too distant future, this organization will resume its role as a respected spokesman for the Jewish people and I pay tribute to the large number of the Jews throughout the world who have supported me in this otherwise lonely battle.

Views expressed by the author do not necessarily reflect those of israelinsider.

Isi Leibler , former head of the Australian Jewish community, now lives in Jerusalem. He was a leading personality in the movement to free Soviet Jewry and is a prolific writer on Jewish affairs.


WJC leaders win delegates’ backing,
hope critics’ charges will die down
By Philip Carmel

BRUSSELS, Jan. 11 (JTA) — Delegates to a World Jewish Congress plenary assembly in Brussels have given almost unanimous backing to the organization’s leadership, a possible turning point following bitter accusations of financial mismanagement.
Most of the 500 or so delegates in attendance here this week gave a standing ovation to Rabbi Israel Singer, chairman of the WJC’s governing board, as he detailed the organization’s work in the area of Holocaust restitution and combating anti-Semitism.

But Isi Leibler, the group’s former senior vice president, sat silently, waiting to detail a list of allegations concerning the WJC leadership.

Leibler, who was dismissed from the WJC’s steering committee in September, said the organization has “consistently ignored best practices” and frustrated his demands for financial transparency.

The dispute has shaken one of the major umbrella organizations of world Jewry and led to a vicious public spat among its top officials.

“Anybody who has ever asked questions in the WJC has been brutally eliminated. This has had a catastrophic effect on the organization,” Leibler told JTA.

“I believe in the WJC, but only when it is accepted that it is really moving toward transparency. In 20 years we have never seen a balance sheet and there has never been a financial report.”

Singer told JTA that he didn’t “want to grace these accusations by responding to them.”

“This is a sideshow to the real work of the WJC,” he said, adding that it was of no interest to most delegates at the assembly.

Leibler did not stand for re-election at the three-day plenary, which ended on Tuesday.

Singer was re-elected as WJC chairman and Edgar Bronfman was re-elected as president, a position he has held for two and a half decades.

Leibler’s address followed the presentation of an 800-word report on the WJC’s governance and financial practices by Stephen Herbits, a close associate of WJC President Edgar Bronfman who was hired to run the organization after Leibler’s accusations became public.

Herbits’ report detailed four separate audits the WJC ordered in recent months, by firms including PricewaterhouseCoopers.

“Full audits should be good enough,” Singer said. “There is no witch hunt and it’s a shame that we have to be wasting so much time refuting lies and it’s a shame that Jews are doing it.”

Siding with Singer, many delegates at the plenary blamed Leibler for allegedly wrecking the credibility of the organization, which has been a leader in the fight to win restitution money for Holocaust survivors.

Rabbi Henry Sobel, director of inter-religious relations for the Latin American Jewish Congress and chief rabbi of Brazil, said he was “revolted, to say the least,” by Leibler’s repeated accusations of financial mismanagement.

“I find Leibler’s behavior inexcusable because he’s hurting world Jewry and the organization he proclaims to defend,” Sobel said.

“Israel Singer has dedicated his life to the welfare of Clal Yisrael and the Jewish people. Latin American Jewry stands by his side.”

After months of charges and countercharges, much of which spilled into the media, New York State’s attorney general, Eliot Spitzer, has launched a preliminary inquiry into allegations that the WJC mishandled its finances.

When asked the status of the WJC investigation, Brad Maione, a spokesman for Spitzer’s office, declined to comment.

“I don’t have any comment on the World Jewish Congress,” he said.

Among the issues Liebler raised was a $1.2 million bank account that was discovered in the organization’s name in Switzerland. WJC officials say the money came from a Jewish Agency for Israel grant in 1998 and was set aside for WJC pensions, including Singer’s.

That version of events was confirmed by former Jewish Agency Chairman Avrum Burg, but was contradicted moments later by Burg’s successor, Sallai Meridor, who said the Jewish Agency never had specified that the money go for pensions.

Leibler says WJC officials, including himself, were kept in the dark about the Geneva account. Details of the account emerged after the closing of the WJC’s Geneva office last year and followed requests by the Swiss Jewish Federation to have the organization’s books audited.

Shortly after Bronfman’s presidential report to the plenary, Leibler demanded time to present his case. Many delegates argued that he should not be given a half hour, as he requested, and he ultimately was granted 15 minutes to speak. He later circulated a copy of his full speech.

Herbits told JTA that the matter had been cleared up.

“The auditors have found that the money was transferred from Geneva to London and then back to Geneva and then to New York, and none of them are aware of any irregularities,” he told JTA. “This issue is closed. It’s a non-issue. It never was an issue.”

Herbits’ report also noted correspondence from Leibler to various figures in the WJC arising out of the crisis. Leibler told JTA that the correspondence had been “purloined” from his personal computer, and said he had asked police to investigate the issue.

“I don’t want to personalize this more than it needs to be,” Leibler said. “I believe that my fight is responsible for seeing the beginning of the reform process go through.”

At 7:43 AM, Blogger sol said...

do you give credence to anything that any self-anointed "whistleblower" has to say? Is there any vetting process that the allegations have to meet or can anybody with a beef get your attention? I don't really see the meat in this story. This seems like much ado over an accounting anomaly. Doesn't there have to be more than that to cast aspersions on someone who has done so much for world jewry?

At 8:32 AM, Blogger jewishwhistleblower said...

>I don't really see the meat in this story. This seems like much
>ado over an accounting anomaly.

If I understood this comment, I could respond to it more fully.

I don't understand how a hidden $1.2 million bank account in Geneva originally intended as a Jewish Agency for Israel grant is an accounting anomaly.

>Doesn't there have to be more than that to cast aspersions
>on someone who has done so much for world jewry?

Like a preliminary inquiry into allegations that the WJC mishandled its finances by New York State’s attorney general, Eliot Spitzer?

You can be assured, I will continue posting articles on this either way the investigation goes.

At 12:39 PM, Anonymous Anonymous said...

I think that the Whistleblower should enlighten himself about this case to see that even the Leibler and Rosenblatt team acknowledge that there is no money missing. I think that we will find out very soon from the AG that there is nothing going on here and that this has not event risen to the level of an "inquiry" (indeed all we know is that the AG's office has made some phone calls and we only know that from the same people who called the AG in the first place) I hope that Rosenblatt and the Whistleblower will then admit some of their failures to perform even a rudimentary investigation of this issue.

At 12:49 PM, Blogger jewishwhistleblower said...

>I hope that Rosenblatt and the Whistleblower will then
>admit some of their failures to perform even a rudimentary
>investigation of this issue.

I'm reporting on the controvery by simply linking available news items on this. I will post all items til the conclusion regardless of the findings.

A hidden/unknown/forgotten bank account, regardless of the circumstances, indicates significant failure of mangement and its accounting system. As do some of the inappropriate/suspicious/unauthorized financial transactions described.

At 2:55 PM, Anonymous Anonymous said...

Hidden/ Unknown/ Forgotten? That seems to be conjecture. The auditors have cleary stated that at no point was the money out of the control of WJC. Where is the malfeasance? Has Leibler or Rosenblatt ever offered proof for their charges? Are we in the business of manufacturing scandal?

At 4:43 PM, Blogger jewishwhistleblower said...

>Hidden/ Unknown/ Forgotten? That seems to be conjecture.

Which is why I used several terms. There needs to be an external independent audit to determine the facts.

Two days after that meeting, Singer flew to Geneva and forced Chamach to leave his sickbed in order to sign a bank order to close down a special account of the WJC - of which Ben-Haim was unaware - that contained some $1.2 million, in the Swiss bank USB. The funds were transferred to an account in London, which was held in trust by a friend of Singer's, Israeli attorney Zvi Barak.>The auditors have cleary stated that at no point was the money
>out of the control of WJC.

Internal auditors, not independent, external auditors.

>Where is the malfeasance? Has Leibler or Rosenblatt ever offered
>proof for their charges? Are we in the business of manufacturing

The whole point independent, external audit is to determine those issues. You don't need proof of malfeasance to have a proper audit, suspicious transactions are enough. There is plenty of that.


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