Battle Over Control of Key Zionist Fundraising Organization Pits Jewish Donors Against Netanyahu

Lawsuit filed by board members of Keren Hayesod, which raises about $200 million a year for Israel from around the world, is challenging an agreement to oust its world chairman, Sam Grundwerg

Judy Maltz
Judy Maltz
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File photo: A World Zionist Congress meeting in Jerusalem, 2006.
File photo: A World Zionist Congress meeting in Jerusalem, 2006.Credit: Tomer Appelbaum/Baubau
Judy Maltz
Judy Maltz

Signaling the growing rift between Israel and Diaspora Jewry, representatives of leading Jewish donors to Israel took their battle for control of the country’s official global fundraising organization to court on Tuesday.

In their suit against the World Zionist Organization, Keren Hayesod trustees allege that a deal recently reached to oust the world chairman of their organization was unlawful. Keren Hayesod is effectively a subsidiary of the WZO and fundraises for Israel in all the world’s major Jewish communities, with the exception of the United States.

The decision to remove Sam Grundwerg from his position as Keren Hayesod chairman was taken without consulting them and without their consent, as required by the bylaws of Keren Hayesod, the plaintiffs maintain. The suit was filed in the Tel Aviv District Court.

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The lawsuit notes that the world chairman of Keren Hayesod has always been appointed through a consensus agreement between representatives of the trustees in Israel and representatives of the trustees in the Diaspora. Never before had the decision been dictated in this manner, according to the lawsuit.

During the World Zionist Congress, held two weeks ago online, an agreement was reached over the allocation of senior positions in the WZO and its affiliate organizations, including Keren Hayesod. The agreement stipulates that Grundwerg must leave his position in six months, and that Kahol Lavan, the centrist party headed by Benny Gantz, will decide who replaces him, unless Prime Minister Benjamin Netanyahu has his own candidate – in which case, Kahol Lavan would be given another senior position in one of the Zionist institutions.

Typically, it is the Israeli prime minister who recommends candidates for the position of world chairman of Keren Hayesod.

The trustees claim, however, that a day before the agreement was announced, they had already struck a deal with WZO leaders that would have allowed Grundwerg to remain in his post for at least another year and a half.

“Operating unilaterally, representatives of the WZO blatantly violated the agreement reached with the plaintiffs, cynically working behind their backs and politically driven by a desire to ‘hand out jobs,’” according to the lawsuit.

The plaintiffs are demanding either that Grundwerg be allowed to complete a full five-year term, until the next World Zionist Congress, or alternatively that he be allowed to stay on in the job for another 18 months, as had been agreed.

The newly installed chairman of the WZO, Yaakov Hagoel, is a representative of the ruling Likud party. On the first day of the World Zionist Congress proceedings, Netanyahu notified the executive board of the WZO that he had two candidates for Keren Hayesod world chairman: Avraham Neguise, a former Likud lawmaker who immigrated to Israel from Ethiopia, and Shifra Shahar, the director of a small nonprofit that advocates for the rights of soldiers, particularly those with no families to support them in Israel. Shahar is known to be a close friend of the prime minister’s wife, Sara Netanyahu.

The lawsuit was filed by three members of the World Board of Trustees of Keren Hayesod – the current board chairman, Steven Lowy, and his two predecessors as chairman, David Koschitzky and Mark Liebler. Lowy and Liebler are from Australia, while Koschitzky is from Canada. The World Board of Trustees is made up of 16 representatives of the Diaspora communities and 16 representatives from the WZO. The lawsuit notes that all 16 representatives of the Diaspora communities – also known as the “appeal trustees” because they run Keren Hayesod’s fundraising campaigns and represent the donors – supported the decision to sue the WZO.

Grundwerg, a former Israeli consul general in Los Angeles, was appointed world chairman of Keren Hayesod two years ago. He replaced Moodi Sandberg, who was forced to step down over his alleged involvement in corruption and bribe-taking in Israel’s purchase of submarines and other naval vessels from Germany.

Sam Grundwerg.Credit: Willy Sanjuan/Invision/AP

Grundwerg had been appointed to the job by Netanyahu, upon the recommendation of Ron Dermer, Israel’s ambassador to Washington. Grundwerg and Dermer grew up together in Florida.

But Grundwerg fell out of favor with Netanyahu and his close associates when he decided earlier this year to appoint a well-known critic of the prime minister as chief executive officer of Keren Hayesod. The announcement in March that Polly Bronstein, a prominent left-wing activist, would assume this top position at Keren Hayesod was met with great surprise in the Jewish organizational world and with concern in right-wing circles.

The day she was supposed to assume her new position, on June 1, Bronstein was notified that the job had been scrapped as part of new cost-cutting measures. But sources at Keren Hayesod maintain that the real reason she was fired was because of pressure from Netanyahu. The prime minister has been determined ever since to remove Grundwerg from his position as well.

Keren Hayesod was established 100 years ago and raises on average $200 million a year for causes in Israel. A significant share of the money it raises is funneled through the Jewish Agency.

Asked for a response, the WZO said the World Zionist Congress has the exclusive authority to appoint the world chairman of Keren Hayesod. “All the decisions in the World Zionist Congress and the national institutions are taken in accordance with the rules and its constitution, as was this one,” it said in a statement. “It is not our intention at this point to be dragged into organizational and/or personal disputes that are not relevant. We have not yet received the lawsuit, if it was indeed filed, and we will of course respond in detail to the court and present it with all the relevant facts."

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