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The longstanding president of the Jerusalem Foundation (JF), Ruth Cheshin, says she is "satisfied" with the resignation of three leading American philanthropists, among them publisher Martin Peretz, from the foundation's New York board. "It is excellent for us," said Cheshin. "Peretz has had arguments with us for years over how to run the foundation."

The resignation of New York JF board chairman William Ackman; Sylvia Hassenfeld, founder of the U.S. toy empire Hasbro; and Peretz, the editor-in-chief and chairman of the New Republic magazine, was sparked by a disagreement over distribution of funds and a perception that the foundation in Jerusalem, headed by Cheshin, was blocking the American board from exerting any influence over the organization's goals.

Speaking to Anglo File this week from his home in Cambridge, Massachusetts, Peretz laid the blame for the JF rift squarely at the feet of Cheshin, calling her "an established tyrant," and warned that the three will not be the last to leave the board.

In his five-page letter of resignation to the board, Peretz termed Cheshin's leadership of the foundation as "megalomaniacal, patronizing and disdainful." He added: "She never lets any of the foreign board members have anything to do with a project except pay for it." (See box)

The JF, founded by former Jerusalem mayor Teddy Kollek in 1966, has raised funding for and built some of the city's most notable landmarks, including the Walter and Elise Haas Promenade in East Talpiot, the Tisch Family Zoological Gardens, the Rebecca Crown Auditorium and Henry Crown Symphony Hall at the Jerusalem Theater, and the Teddy Stadium. It has also funded numerous educational, social welfare and coexistence projects. The JF has a number of branches around the world, the largest one being the Jerusalem Foundation, Inc. in New York.

Cheshin, a member of a veteran Jerusalem family and wife of Supreme Court Judge Mishael Cheshin, for her part dismisses Peretz's accusations: "The dispute with him was not personal, but he sees me as the head of the Jerusalem Foundation in Israel. I stood against his ideas, so I was the target. We had very bitter differences in the past," she said. "He thought he could sit in New York, coming here three times a year and tell us what to do, what is best for Jerusalem. We have a professional board for just that purpose - of deciding what the best direction for the Jerusalem fund is, for culture, construction and coexistence projects."

Peretz has suggested that Cheshin herself may be out of touch with the needs of the city. "Three meetings ago, at the board, a member asked her about unemployment in the city. She said, `What - do you want the foundation to give out bread?' No one is suggesting that we go into the bread business, but to give so coarse an answer ..."

Reached by Anglo File for a comment on the situation at the JF, a spokesperson for Jerusalem Mayor Ehud Olmert said this week: "The Jerusalem Foundation played, in the past, an important roll in the life of the city. Unfortunately, in the past eight years, the foundation has refused to accept the democratic decision of the city's citizens and ignored the elected mayor."

Therefore, the spokesperson continued, "instead of reaching all people with goodwill toward the city, the foundation is involved with projects that are not within the current priorities of Jerusalem."

The mayor "is not happy with the resignation of Mrs. Hassenfeld, Mr. Peretz and Mr. Ackman; they all have been great supporters of Jerusalem. It is a loss for our city, yet, it is a direct result of the behavior of Mrs. Cheshin and some members of the foundation's leadership, that chose to abuse their power and turn a foundation that `belonged' to the people of Jerusalem into a private foundation."

Olmert has meanwhile established an alternative to the JF, called The New Jerusalem Foundation for its Residents, which he says will enable "people of good will to assist the city and its inhabitants."

Who controls the purse strings

The JF has managed to avoid struggles over donations in the past because funds raised were traditionally earmarked for specific projects by the donors. Problems arose five years ago when a New Jersey businessman named Edelstein, a friend of Kollek's, died and left the organization one-third of his estate, totaling $10 million. For tax reasons, the money from the Edelstein legacy was channeled through the Jerusalem Foundation, Inc. in New York, which then had to determine how best to allocate the funds.

"For the first time, we had to decide what to do with the money," said Kenneth Bialkin, deputy chairman of the New York JF board. "Mr. Edelstein had no family, so it fell on the board to decide." A prominent New York lawyer and philanthropist, Bialkin threw his weight firmly behind Cheshin.

"If we did not have faith in our friends in Jerusalem, we should not be on the board. We have an excellent, professional staff in Jerusalem who know what the needs of the city are better than we do," he said in a phone conversation this week.

In February, nine proposals were brought before the New York board. After an extensive debate, the board voted 19 to five in favor of the Jerusalem position. For Peretz, Hassenfeld and Ackman, this was the last straw.

Said Bialkin: "He [Peretz] was outvoted, took umbrage and left, which represents a certain petulance, regrettably, because I think he considers his intentions to be sincere."

Cheshin, who views the outcome as a vindication, was not upset by the resignations: "You can say that I am satisfied [with their resignations.] If these arguments were causing bad feelings on the board and the other board members agreed with us, then it is good that they have left. We don't need them anymore."

She also feels that the resignations were not entirely due to board policy.

"Peretz saw that he had no influence and so he left. Hassenfeld has not been an active donor for many years. Maybe Sylvia was tired of it all. She is not a young girl anymore, maybe she had just had enough," speculated Cheshin.

She added that Ackman, a venture capitalist and a former student of Peretz, may have left because he felt obligated to him, noting that in Ackman's letter of resignation, he said his primary reason for stepping down was a feeling that he could not function properly as board chairman without visiting Jerusalem frequently. "He has two young children and many business commitments, so he has not been able to come to Israel for nearly two years now," noted Cheshin.

An `edifice complex'

In the last year, the Jerusalem Foundation has completed a number of projects including construction of the Konrad Adenauer Conference Center at Mishkenot Sha'ananim, the major expansion of the Bloomfield Science Museum, and the creation of the Noah's Ark sculpture project at the Tisch Zoo.

Peretz is vehemently opposed to these projects, citing them as an example of the city's "edifice complex." He would rather see more money invested in educational projects similar to two programs currently being run by the JF. "The Caring Community" is a holistic program aimed at helping children in Jerusalem's disadvantaged neighborhoods, providing them with hot lunches, tutoring and other assistance. "The City as a School" is a JF-sponsored program that uses institutions in the city, like the Knesset and the Supreme Court, as a means to educate schoolchildren.

Peretz added that he believes that the JF is too quick to hand out money to finance buildings and for cultural activities. "This is not a `get rich quick and spend' idea of a foundation. The most effective foundations are those that give out the money carefully."

He is also irked by what he sees as improprieties in the behavior of the board members, and cites the JF's allocation of $550,000 to enable Jerusalem's Schechter Institute of Jewish Studies to hold an architectural competition - when one of the JF board members who approved the allocation also sits on the Schechter board and did not reveal his position during the discussions.

Following Peretz's resignation, Bialkin also sent a letter to the JF board, where among other things, he addressed these allegations. "Regarding the appropriation for the Schechter Institute, I do not think Marty's criticism is warranted," he wrote. "The `interest' of one of our board members was fully disclosed and understood and his participation in that discussion served to enlighten the membership more than is usual ... This is not a situation where a board member has a personal commercial interest or pecuniary benefit in a matter coming before the board. Our colleague stood to obtain no further personal benefit from approval of the request."

In the end, Bialkin wrote that he remains supportive of the JF and its board: "I have every confidence that the Jerusalem Foundation will continue to earn the reputation for accomplishment that it has so far deservedly earned."

The Herodian view of life

Anglo File has acquired copies of Martin Peretz's letter of resignation, addressed to the board of the Jerusalem Foundation in New York, and a copy of a subsequent letter to the board responding to his allegation, from Kenneth Bialkin. The following are excerpts.

Peretz writes: "For all the foundation's good works, its chief in Jerusalem [president Ruth Cheshin] did not trust us with any initiative. (Have you ever wondered why so many people who were so close to us, including former chairmen, have simply walked away from us?) She thought her precise agenda to be by right the agenda of all of us active in the Jerusalem Foundation of the United States. Her agenda has for several years now been megalomaniacal, patronizing and disdainful of the very people whom the foundation once cared for so tenderly. At the last meeting, she and her allies won a victory. It will be pyrrhic.

"In truth, the Jerusalem Foundation in Jerusalem is a one-person organization, and that one person presides over mostly cowed personnel and, of course, also over a board dexterously picked for its passivity. She also wants to dominate the board in the U.S., choose its officers, hire its employees (she said as much in the last meeting of the executive committee), and in effect, make all its important decisions ...

"Much of the rest of the money [received] is earmarked to satisfy the foundation's obsessive `edifice complex.' In the last two years, in a city that is not short of auditoriums and meeting places, it has built a sumptuous, probably eight-digit-cost conference center at Mishkenot (maybe 500 yards from another new such facility at the Hebrew Union College.) ...

"Jerusalem is, after all, a small city. Does it need another park designed by Nikki de Saint Phalle? ... This is the triumph of the mausoleum conception of the Jerusalem Foundation. It is the Herodian view of life: build, build, build. But the people of Jerusalem are sweet and brave people, needing jobs and classrooms, teachers, care-givers, safety, common space, human and material solidarity with their concrete needs ... Herewith is my resignation. Some of you may welcome it. I will now find other ways to express my love for Zion."

Bialkin responds: "Marty did make a few observations which deserve brief comment. Over the years, the role of the American board has changed from one of supporting the remarkable initiative of Teddy Kollek and Ruth Cheshin in identifying donors and serving as the principal solicitors to a broader, more conventional function of undertaking fundraising efforts wholly apart from the initiative of Teddy and Ruthie. It has not been smooth or easy to develop in that changed mode, but I believe progress has been made in that direction and I am confident that the initiatives which have begun will ultimately bear fruit. Our board is filled with men and women of great dedication, intelligence and determination to fulfill our mission and I have no doubt that future events will demonstrate those talents.

"Marty's letter does, in fact, reflect a strong difference of opinion regarding the relationship with the Jerusalem Foundation in Israel and, indeed, those differences have been the subject of extensive discussion and debate at many board meetings. Those discussions have been healthy and difficult, but they have succeeded in producing a consensus on the board which will make it a stronger body and certainly more capable of moving forward in a unified fashion.

"There is no doubt that Marty sincerely holds his point of view and he has had every opportunity to persuade others. The decisions that were made were the result of a full exploration and discussion and the results are a reflection of a democratic process, however imperfect." (G.R.)