Chabad headquarters in Sydney.
Chabad headquarters in Sydney. Photo by Mendy’s Photography
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The two major branches of Chabad-Lubavitch in Australia are in the grip of separate crises that threaten to tar the movement's reputation and undermine much of the work the Hasidic organization has invested in the six decades since it began operating here.

In Melbourne, a judge last week set the date for the trial of an Orthodox man who stands accused of 41 counts of child molestation at a Chabad-run school as several other separate child sex abuse cases continue to embroil the organization.

David Cyprys, a former security guard contracted to Yeshivah College, the Chabad boys school in Melbourne, has been ordered to stand trial next July. He pleaded not guilty to the charges, which include several counts of child rape allegedly perpetrated on students in the 1980s.

In a statement, principal Rabbi Yehoshua Smukler expressed his sympathy to the victims and said the college was cooperating with police. The college "loudly and clearly" condemns sexual abuse, he said, and has "robust policies and procedures that govern staff and student interaction."

And in an unrelated case in Sydney, Chabad's chief rabbi, Pinchus Feldman, who was sent here from Brooklyn by the late Lubavitcher Rebbe in 1968, has been desperately trying to stave off a financial crisis that could force the closure of several of its operations in the Harbor City.

A spokesman for the Sydney Chabad organization, Rabbi Eli Feldman, confirmed to Haaretz that without a multimillion-dollar injection it would be unable to meet its mounting debts, which comprise A$13 million (roughly equivalent to the same number of U.S. dollars ) in mortgages plus unconfirmed amounts owed to individuals.

Several of those individuals refused to comment when contacted by Haaretz. But one Chabad insider believes that some of those involved "are scared to talk because they're owed money and if they help contribute to the place closing, they won't get their money back."

The crisis has already prompted the Feldman family to hand over financial control of the Chabad school, Yeshiva College Bondi, to a committee run by parents to "independently ensure its continued financial viability," according to Rabbi Eli Feldman. Yeshiva College Bondi is on the premises of the Sydney Chabad headquarters; other Chabad Houses dispersed around the city are financially independent of the central organization.

He also confirmed that the organization is still in discussions with the federal government over an A$400,000 grant for the expansion of the Chabad school that has not yet been completed.

And last week, representatives of the Sydney organization were in the Supreme Court, where part of an A$500,000-plus tax bill is still being contested.

Rabbi Eli Feldman said that current economic hard times had a serious impact: "Servicing those mortgages only became a problem at the onset of the global financial crisis and we are grappling with that now."

While he conceded it was a "difficult time" and acknowledged the "stress caused by the large mortgages on our buildings," he said the organization was not in panic mode.

"Our activities continue to go from strength to strength," Feldman said, pointing to thousands of people in the city and beyond whom the religious, educational and outreach organization helps annually through its variety of programs, which include the Yeshiva Synagogue, the rabbinical college, the school, Chabad Youth, Young Adult Chabad and Yeshiva Welfare.

But amid the storm hovering over Chabad's headquarters in Sydney, one ray of light is generating positive press. Our Big Kitchen, a charity-based food initiative, has won acclaim inside and outside the Jewish community since its doors were opened in 2007.

"Food is the common denominator," said Brooklyn-born Rabbi Dovid Slavin of his kosher cook-for-a-cause kitchen, which was also registered as a Muslim halal facility in 2009.

Last week, to mark Nelson Mandela's 94th birthday, about 100 volunteers prepared more than 700 kosher meals for the needy in the presence of a cluster of dignitaries, including a government senator, the local mayor and politicians from both major political parties.

"Mandela's life very much reflects what we do every day in Our Big Kitchen," said Slavin, who was approached with the idea by two former South Africans now living in Sydney. "We also want to empower people and food has that ability."

Among those who have visited the kitchen include Kevin Rudd when he was prime minister; Governor-General Quentin Bryce; Jewish kids who were caught with drugs and sent there for community service; and former criminals who came to the kitchen to begin rehabilitation. It's one of the few places where Jewish and Muslim schoolchildren meet.

But now its future is uncertain because the industrial-sized kitchen is housed in the basement of Chabad's headquarters in Bondi. "The very real risk is that the building could be lost," Slavin conceded. "That could be a very real problem."

This is not the first time Chabad in Sydney has faced a crisis. In 1994 it owed the bank about $20 million. Among those who bailed it out was Rabbi Pinchus Feldman's brother-in-law "Diamond Joe" Gutnick, a Melbourne-based mining magnate and Chabad rabbi who is best known in Israel for bankrolling Benjamin Netanyahu's controversial 1996 election campaign pitch, "Bibi is good for the Jews."

But in 2003 a bitter battle erupted over whether Gutnick's $5 million was a charitable donation to Chabad or a loan. The family feud wound up in the Supreme Court, with Supreme Court Judge Peter Young eventually ordering Rabbi Feldman to repay the loan, which had grown to $15 million with interest and costs.

As a result, sheriffs padlocked the gates of Rabbi Pinchus Feldman's headquarters, which also housed a boys' school, rabbinical college and a synagogue. The family eventually bought the center back thanks to a Chabad philanthropist from California.

The Feldmans now face another financial crisis. "Yes, it is indeed a difficult time," Rabbi Eli Feldman said. "But the spirit of Chabad is to persevere despite the challenges that we face."

In the unrelated Melbourne case, meanwhile, the alleged child sex abuse scandal that exploded into the public arena last year continues to drag Chabad's name through the courts. On July 13, a County Court judge set next July 29 as the date for the trial of alleged child molester Cyprys.

At pre-trial hearings, the 44-year-old pleaded not guilty to the charges, which were allegedly perpetrated over two decades ago on 12 students - three of whom now reside in the United States.

Only two of the alleged victims have spoken publicly. In a statement, one of them expressed relief last week that "the wheels of justice are finally in motion." But he added: "There are many victims who are still suffering."

During pre-trial proceedings, documents presented in court revealed that some parents confronted U.S.-born Rabbi Yitzchok Dovid Groner, Chabad's spiritual leader in Melbourne prior to his death in 2008, with the allegations, but that he reportedly failed to inform authorities.

But David Werdiger, a grandson of one of the pioneers of Chabad in Australia, wrote on a local Jewish blog: "Even with 20/20 hindsight, we cannot understand the cultural challenges of dealing with the scourge of sexual abuse in a closed, tight-knit community in a time before mandatory reporting."

In a dramatic turnabout, Rabbi Avrohom Glick, principal of the college from 1986-2007, told the magistrate in May that he wanted to change a statement he had previously made to police. He had stated that Rabbi Groner never disclosed to him the names of alleged victims. But under oath he said that was not accurate. "There were two times when he named individuals," Glick told the court.

Several other cases have fueled the Chabad alleged sex scandal in Melbourne: Aron (Ezzy ) Kestecher, a 26-year-old former Chabad youth leader, was charged last year with four counts of indecent acts on a minor. He is due in Melbourne Magistrates Court for a hearing on October 29.

Meanwhile, moves are afoot by police to extradite David Kramer, a former Yeshivah College teacher, who fled Melbourne in the mid-1990s - first to Israel, then to the United States - amid accusations he sexually abused boys at the college. Kramer was imprisoned in Missouri in 2008 for molesting a minor and released three months ago. He denies multiple accusations that he molested children at Melbourne's Yeshivah College.

And last week Haaretz was shown a signed statement to police by an alleged victim who claimed he was sexually abused in the late 1980s by a different Chabad-related individual who has also relocated to America.

A senior member of the Orthodox community in Australia, who declined to be named, said regardless of the outcomes of the two crises, Chabad's "vital work" will continue, since most of the Chabad Houses in both cities are independent of the headquarters.

"Of course it will survive," he said. "But the Chabad brand is damaged."