For the WJC, the Investigation Has Only Begun

The World Jewish Congress met this week in Brussels in part to resolve the public fighting that has overtaken the organization. But the stepping down by the organization's leading critic has not resolved the issues

Yair Sheleg
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BRUSSELS - The heated clash that has thrown the Jewish institutional world into an uproar in recent months seemed to be dying down this week, at least temporarily. It has been a wrestling match between three ranking officials of the World Jewish Congress, the political umbrella organization of world Jewry. The brawl pitted the chairman of the organization's governing board, Israel Singer, who enjoyed the backing of the WJC's president, millionaire Edgar Bronfman, against the organization's senior vice president, Isi Leibler.

Leibler voiced complaints about an irregular transfer of WJC funds from New York to a Swiss bank account and from there to a trust account in London, and has demanded an independent investigation of the affair. Bronfman and Singer had spearheaded the campaign in which Swiss banks were asked for restitution of Jewish assets dating to the Holocaust era. Thus, suspected financial irregularities - involving a Swiss bank account, no less - had the makings of a particularly embarrassing scenario.

But what had seemed in the Jewish and Western media to be a wrestling match between rivals of equal strength was revealed this week, at a plenary assembly of the WJC in Brussels, to be distinctly lopsided: Nobody defended Leibler, who, once he grasped the hopeless balance of forces arrayed against him, opted to resign rather than submit to the humiliation of failing to be reelected.

Even the representatives of the Swiss Jewish community, who until now were Leibler's biggest supporters in his campaign to investigate the affair (in actual fact, they raised it before him), made no effort to defend him, and essentially accepted a report submitted by the newly appointed "transition director" of the WJC, Stephen Herbits, who cleared Singer of all suspicions.

Will Leibler's resignation put an end to the affair? Maybe not.

On December 31, the New York Times reported that the office of the attorney general of New York State, Eliot Spitzer, had begun a preliminary inquiry of allegations against the WJC, the first round of what could evolve into a full investigation.

The WJC is treating the development with the utmost seriousness and has already retained Robert Abrams, a former attorney general of New York, to plot its defense. In addition, representatives of the organization were promising representatives of the Swiss Jewish community only last week, on the eve of the WJC's plenary assembly in Brussels, that a comprehensive examination would be made of the operation of the Geneva branch over the past decade, Herbits' report notwithstanding.

Herbits, who was appointed as the new secretary-general of the World Jewish Congress this week, admits that the organization has suffered from transparency and management problems, and that he intends to effect changes in the WJC as part of his new administrative role.

"A new finance committee has to be appointed, with outside members," he said. "A new bookkeeping system is required."

Between the lines of this statement, there may be hints of criticism by Bronfman's handpicked representative toward Singer - the WJC's key administrative executive for the past 20 years. Herbits' appointment as secretary-general further underscores the criticism.

Leibler now says that despite his resignation, he is pleased by this managerial accomplishment.

"I believe that the changes announced by Herbits will eventually demonstrate that I was right," says Leibler. "There is a need to transform the entire management system of American Jewish organizations. True, in this regard there is no worse organization than the congress, where one person [Bronfman] decides everything. But a lot of organizations are not managed properly, and I am hoping that what happens in the congress will be a signal to all of the organizations to improve their management culture."

The entire affair has elements of a dramatic film. In April 2003, then-secretary general of the WJC Avi Beker appointed a new manager of the organization's Geneva branch: Maya Ben-Haim, an Israeli attorney living in the city. Shortly after she took up her post, Ben-Haim discovered that Jacques Chamach, the veteran comptroller of the branch - who had also once served as comptroller of the entire organization - was drawing close to $2,000 a month more than the salary he was supposed to receive. Ben-Haim decided to fire the 79-year-old Chamach, despite the fact that he was then recovering from a heart attack. She informed Beker and Singer of the move at a meeting in London in late June 2003.

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.

Trust account for whom?

There are differing versions for whom the trust account was held. According to the Swiss-Jewish weekly Tachles, the personal beneficiaries of the account were Singer and his wife, Evelyne. According to the report released this week by Herbits, the beneficiary of the trust was the WJC. Barak refused to answer questions from Haaretz on the affair, citing attorney-client privilege, but stressed that the client he is representing is not Singer, but the Congress.

In any event, the account was evidently closed so hastily that sufficient precautions were not taken: the bank's transfer fee was not paid, and the account became overdrawn.

In October 2003, Ben-Haim was informed by USB that the account was overdrawn by $40, leading to her discovery of the account about which she had no previous knowledge. She reported this to Beker, who asked her to look into the subject. A month later Beker abruptly left the organization and was awarded a severance of $1 million for his 13 months of work at the organization's headquarters in New York (this compensation was awarded independently of arrangements related to his employment in the organization's Israel branch).

Needless to say, the retirement agreement obliges him to refrain from interviews or to speak publicly on matters concerning the WJC. Indeed, Beker refused this week to be interviewed by Haaretz on this matter. A senior WJC official claimed this week that Beker was dismissed not because of the inquiry into the Swiss account, but due to his refusal to side with Singer in the squabble with Leibler, and his tendency to "maintain neutrality".

Ben-Haim continued to pursue her inquiry. In March 2004 she was informed of the immediate closure of the Geneva office and the dismissal of all the employees, including herself. The legal advisor of the branch, Daniel Lack, who was among the discharged employees, called for an independent investigation of the matter. He was backed by Professor Alfred Donath, president of the Swiss Federation of Jewish Communities, the community's umbrella organization. Donath sent a memorandum on the matter in April 2004 to senior WJC officials.

At this point, the affair was woven into the old difference of opinion between the right-leaning Leibler and the left-leaning Bronfman and Singer. The three have had some vociferous arguments in recent years at WJC gatherings and in the media. At one of these heated discussions, Singer, known for his no-holds-barred style, called Leibler a fascist.

The dispute made headlines in August 2003, after Bronfman sent President George W. Bush a letter in which he criticized Israel's construction of the separation fence and even called on Bush to pressure Israel and the Palestinians to move ahead on implementation of the road map. At the time, Leibler issued a public call for Bronfman's resignation, arguing that the leader of a Jewish organization may not express political criticism of Israel in public.

Vice-presidents Leibler and Elan Steinberg joined those demanding an investigation. In July 2004, the WJC's "operations committee" demanded that the money be transferred back to the organization's bank account in New York, and this was done several weeks later.

Committee's failures

But a month later, Bronfman made a change in the make-up of the operations committee, claiming that it was in response to criticism from Jewish communal leaders of the committee's failures. He expanded it under a new name - "steering committee" - by adding local leaders, and threw vice-presidents Leibler and Steinberg off the committee. Steinberg lost his job soon afterward; Leibler, who was not an employee of the organization but an elected official, could not be fired.

The affair was made public in September, first in the American Jewish press and then in newspapers such as The New York Times and the Swiss newspaper Facts. A battle of differing versions of who leaked the affair to the media also broke out. WJC officials were pointing their fingers at Leibler, while Leibler counter-charged that it had been a sophisticated ploy by Singer, intended to represent Leibler as a "mole" and damage his standing in the organization.

There was also agitation within the WJC against Leibler and Donath, the two elected officials who continued to call for an investigation. The European Jewish Congress - a branch of the world organization, to which the Swiss Jewish community belongs - demanded Leibler's resignation.

In order to engineer Leibler's dismissal, an assembly of the organization was convened this week in Brussels, at which all of the senior officials were supposed to run for re-election to their posts. The assumption was that given the overwhelming criticism, Leibler would have no chance of reelection.

Leibler saw it coming, and hastened to announce his resignation even before the vote could be held. He later told Haaretz that he would soon take up a new post, as head of an Israel-Diaspora relations unit of the "Jerusalem Center for Public Affairs," a policy research institute headed by former Israel ambassador to the UN Dore Gold.

The pension account

Bronfman appointed his friend Stephen Herbits in late August to manage the affairs of the Congress during the "transition period," until the organization could be reorganized and a new charter prepared. Herbits was also asked to draft a comprehensive report on the Geneva bank account affair. He approached four international accounting firms, which confirmed that at no stage had the money left WJC control, and therefore, "there is no indication or experience of irregularities."

However, this does not explain the various transfers of funds, or the mass firings. Herbits himself supplied an explanation this week, in the comprehensive report he submitted to the WJC assembly.

Singer, as well as other senior WJC officials, refused to answer questions on this matter, referring all inquiries to Herbits.

In conversation with Haaretz, Herbits summed up the highlights of his investigation: the money did not come from the ongoing budget of the organization, but from a $1.5 million sum that was allocated by the Jewish Agency to the WJC. Herbits says that Singer decided to use the money to ensure his pension and that of several other employees at the organization's office in New York, due to concerns that upon his patron Bronfman's retirement from the organization - Bronfman is now 75 - these pension funds would not be guaranteed.

Singer transferred the money to Switzerland, with the aim of adding it to a pension fund already set up there for officials of the organization in New York. However, when the Swiss insurance company refused to do so, Singer decided to withdraw the funds. The panicked emptying of the bank account was, according to Herbits, intended to "prevent a situation in which a new employee, who is not a certified public accountant, would control such a large sum." Herbits says that Singer carried out the transfer through Barak's trust account, "because Barak is an expert on pensions and is the chairman of the Jewish Agency's pension fund."

Herbits argues that all of the people raising allegations only did so after being discharged. Conversely, Leibler argues that at the time he wrote the memo, he was still on the "operations committee" and was only thrown off it after writing the memo.

In any event, it is abundantly clear that the echo of the affair through the Jewish and Western media was generated not only by the allegations - after all, Leibler raised mainly questions, not explicit charges of criminal violations - but by the status of the WJC in general, and of Bronfman and Singer personally.

In 1986, the two men were behind the disclosure of the Nazi past of former UN secretary-general Kurt Waldheim, spearheading the international struggle against him. In the mid 1990s, Edgar Bronfman and Israel Singer headed the campaign for restitution of Jewish assets dating to the Holocaust. They waged the drawn-out campaign against the Swiss banks and were responsible for threatening sanctions against these banks in the U.S.

It is easy to understand, then, why suspicions of financial irregularities in the World Jewish Congress found such a warm reception among those who were never too pleased about the aggressive campaign pursued by the organization, and in particular the suspected irregularities in a WJC account in a Swiss bank.

Avraham Burg, former speaker of the Knesset and former chairman of the Jewish Agency - and an old friend of Singer's - attended the assembly in Brussels. He said this week that he had already heard comments from colleagues in Switzerland who said, "So it seems that our money is actually good - when it is controlled by a Jewish organization."

Among the parties involved in the affair, it was conjectured that the Swiss Jewish community's demand to investigate the affair partly stemmed from their past objections to the WJC's campaign against the Swiss banks (for fear that it would cause anti-Semitic reactions, as indeed did happen).

Donath denies the claim. Personally, he supported the campaign against the banks in the past, although, he says, "It is true that several of my colleagues in the community were opposed to it."