Money-Shifting Uproar Shakes World Jewish Congress
By STEPHANIE STROM
Published: November 30, 2004
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The World Jewish Congress is in turmoil, two decades after the
billionaire Edgar M. Bronfman Sr. rescued it from crushing debts and
propelled it to remarkable successes.
With just a few dozen employees and an $8 million annual operating
budget, the congress, a nonprofit organization, brought to light the
Nazi past of Kurt Waldheim, the former United Nations chief, and forced
Swiss banks to pay more than $1 billion to settle Holocaust-related
Now the organization that criticized those banks for their lack of
transparency and accountability finds itself under attack on similar
accusations - and from within the Jewish community.
An odd series of money transfers totaling $1.2 million first to a Swiss
account and then to one in London has critics crying foul and
questioning whether the money was improperly moved by Israel Singer, the
62-year-old rabbi who has generally led the organization since 1985.
Four people who pressed for a full audit of the money transfer have left
the congress or been dismissed, and another has been suspended from a
The Geneva accountant who, together with Rabbi Singer, signed for the
money's transfer to an account in London has been fired for paying
himself roughly $1,900 a month more than his approved salary. The Geneva
office was then ordered closed - although after two employees who raised
questions were let go, the organization has since decided to keep it
None of the transferred money is missing, and a review of the paper
trail by the congress's auditor uncovered no irregularities, said
Stephen E. Herbits, who was brought in by Mr. Bronfman in September to
complete an overhaul of the organization that began last year. The only
financial wrongdoing, he said, were the accountant's payments to
himself, which he attributed to that man's possible dementia.
Mr. Herbits said he was concerned that the uproar over the money
transfer threatened to destroy the organization and that it had
complicated efforts to strengthen oversight and rewrite the group's
constitution. "I am horrified by the time and cost and embarrassment and
potential damage that this is doing and for reasons that are not
substantive and have come up by pure desire for influencing politics and
having prestige," Mr. Herbits said.
Isi Leibler, a retired Australian businessman, said the Geneva money
transfer was symptomatic of the organization's feeble controls over
management and money. Mr. Leibler was ousted in September from the
organization's steering committee but remains senior vice president, a
"I want a clear investigation," Mr. Leibler said. "If people have done
wrong things, they should go, and the organization should establish
financial transparency, accountability and checks and balances over its
Mr. Bronfman, who built the Seagram Company Ltd. into one of the world's
premier purveyors of liquor, was virtually the organization's sole
backer at one point, and he continues to contribute about $2 million a
For years, Mr. Bronfman and Rabbi Singer ran the congress as a fief, Mr.
Leibler said. "I accepted that because I felt that Mr. Bronfman was
himself giving the bulk of the funds," Mr. Leibler said. "I'm now aware
that about 80 percent of money comes from 400,000 donors who provide
money to the American section, but the organization is still effectively
controlled by Rabbi Singer, who operates under jurisdiction of Mr.
Rabbi Singer, who is responsible for billions of dollars in Holocaust
reparations and restitution through his leadership of the Claims
Conference and the World Jewish Restitution Organization, declined to
comment. So did Mr. Bronfman, the president of the congress. Mr. Herbits
said he was speaking on their behalf.
The $1.2 million was moved out of the congress's New York account into a
numbered UBS account in Switzerland in five installments from October
2002 through February 2003.
The people running the Geneva office were unaware of the account,
according to a letter to Mr. Herbits from Daniel Lack, a lawyer who had
worked for the congress in Geneva for 29 years.
But the Geneva office did discover a problem with the accountant's pay
soon after a young lawyer, Maya Ben-Haim Rosen, took its helm. She told
the man his services would no longer be needed, and briefed Rabbi Singer
and another official about the problem in London in July 2003, according
to Mr. Lack's letter.
Two days after that meeting, Rabbi Singer flew to Geneva. He coaxed the
accountant out of a medical center, where he was recuperating from a
heart problem, and took him to the bank to sign the order transferring
the $1.2 million to a London account of Zvi Barak.
The transfer order describes the money as "for the pension." Mr. Barak,
a lawyer in Israel who has handled pension business, is a friend of
Rabbi Singer and declined to comment on the matter.
According to the letter, Mr. Lack and Ms. Ben-Haim Rosen learned of the
account only when they received a statement in October 2003 showing that
it had been overdrawn by $40 because no money was left in the account to
cover the transfer charges.
Mr. Lack's letter, dated Sept. 19, 2004, was supplied to The New York
Times by Facts, a Swiss news weekly against which the congress has begun
legal proceedings. Mr. Lack, whom Mr. Herbits described as a disgruntled
former employee, declined to comment.
Ms. Ben-Haim Rosen and Mr. Lack were dismissed when the Geneva office
When questions arose about the transfers, Rabbi Singer was quoted in a
Jewish publication as saying that the money had been given to the World
Jewish Congress by the Jewish Agency for Israel, possibly to create a
pension for him. In later publications, he said the money was for
pensions for the organization.
But Mr. Leibler and other critics say they suspect he was trying to
create a personal pension account. Rabbi Singer is paid $226,000 a year
as an "ex gratia pension" for his previous work and now serves as
chairman of the governing body.
The Jewish Agency denied that the money had been set aside for pensions.
"That is totally incorrect," said Michael Jankelowitz, a spokesman for
the agency, which helps immigration to Israel. He said the agency sent
$1.5 million in 2001 to the congress's general account in New York.
Mr. Herbits said that the bulk of that money was transferred to
Switzerland to broaden its pension plan. Only the employees in Geneva
had pensions, and the organization wanted to cover all its roughly 30
employees, some of whom are part time.
He said the money was put into a dormant account - not a secret one - to
avoid giving discretion of so much money to a new employee.
"A statement went to the office each month and was opened by the
secretary," Mr. Herbits said.
Ultimately, he said, the plan to build a pension program in Switzerland
failed. The money was then transferred to Mr. Barak because he is an
expert in pensions, Mr. Herbits said. Mr. Barak is chairman of the
Jewish Agency's employee pension fund.
The transfer was retraced by Loeb & Troper, a New York accounting firm
that has done work for the congress for years. "Based upon our review of
the documents, we are not aware of any irregularities," the firm wrote
in a letter to the congress.
Mr. Herbits said that report, which was repeated by German and Belgian
law firms, established that the $1.2 million never left the
organization's control, as critics have contended.
But some others say that these reports merely traced the movement of the
money and lacked independence because of Loeb & Troper's history as the
"We also asked why this money movement was done and who had ordered it,"
said Alfred Donath, a retired professor of nuclear medicine who is
president of the Swiss Federation of Jewish Communities. The Swiss
group, with Mr. Donath, has been suspended from the governing body of
the European Jewish Congress because of its persistent demand for more
information. "Those questions were not answered."
Mr. Herbits said he had answered all the questions of the Swiss
Federation and had addressed all the critics' concerns. He also noted
that Mr. Leibler had voted to close the Geneva office in his previous
The restructuring at the Congress is starting to take hold. Mr. Herbits
has created a personnel manual with guidelines on travel spending, has
installed a cash management system, has put together a finance committee
that will meet next month and has created new policies to govern the
hiring of consultants and the disbursal of money.
"Governance and financial management have been weak," he said, "and I'm