In Blow to Netanyahu, Keren Hayesod Chairman Holds on to Job Following Court Settlement

Then-Prime Minister Benjamin Netanyahu tried to force Sam Grundwerg out last year, but Keren Hayesod chairman will stick around under court-sanctioned deal

Judy Maltz
Judy Maltz
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Consul General of Israel Sam Grundwerg arrives at the Israeli Consulate in LA event to Celebrate the 70th Anniversary of Israel at Universal Studios on Sunday, June 10, 2018, in Los Angeles.
Sam Grundwerg in Los Angeles in 2018.Credit: Willy Sanjuan/Invision/AP
Judy Maltz
Judy Maltz

The chairman of Keren Hayesod, Sam Grundwerg, will hold on to his position for at least another nine months as part of a court settlement reached between representatives of leading Jewish donors to Israel and the World Zionist Organization, sources familiar with the deal have confirmed to Haaretz.

The settlement, sanctioned by Tel Aviv District Court last week, is a blow for former Prime Minister Benjamin Netanyahu, who had tried to push Grundwerg out of the job.

Last November, a group of Keren Hayesod trustees, representing Jewish communities abroad, sued the WZO, alleging that a deal it had reached to oust Grundwerg, concocted by Netanyahu behind the scenes, violated Keren Hayesod’s bylaws. The then-prime minister had tried to get one of his political loyalists appointed to the high-profile position.

The WZO, which is effectively the parent company of Keren Hayesod – the fundraising arm of the State of Israel in all the world’s major Jewish communities, with the exception of the United States – ultimately agreed to the plaintiffs’ demand that Grundwerg remain in his position through April 2022. As a result, the case has been withdrawn.

Moodi Sandberg in the Rishon Letzion District Court in 2017 after being detained in the submarines affair.Credit: David Bachar

Sources involved in the negotiations said the deal became possible after the new Israeli government was formed last month.

Grundwerg, a former Israeli consul general in Los Angeles, was appointed world chairman of Keren Hayesod in late 2018 for a five-year term. 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.

Grundwerg had been appointed to the job by Netanyahu upon the recommendation of Ron Dermer, Israel’s then-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 early last year to appoint a well-known critic of the prime minister as chief executive officer of Keren Hayesod. The announcement in March 2020 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.

Polly Bronstein in her previous role as CEO of political NGO Darkenu in 2016.Credit: Tomer Appelbaum

The day she was supposed to assume her new position in June 2020, Bronstein was notified that the job had been scrapped as part of cost-cutting measures. But sources at Keren Hayesod maintain that the real reason she was fired was due to pressure from Netanyahu. He then attempted to remove Grundwerg from his position.

Since Bronstein’s ouster, Grundwerg has been filling in as chief executive officer of the organization as well.

During the last World Zionist Congress, held in October, senior positions in the WZO and its affiliate organizations, including Keren Hayesod, were divvied up among the various political parties and movements that comprise the forum as part of a so-called “coalition agreement.”

The agreement stipulated that Grundwerg would have to leave his position in six months, i.e., by April 2021, and that unless the prime minister proposed his own candidate to replace Grundwerg, the centrist Kahol Lavan party (part of Netanyahu's governing coalition at the time) would have the right to choose the next leader of the organization. Typically, it is the Israeli prime minister who recommends candidates for the position of world chairman of Keren Hayesod, subject to the approval of the board of trustees.

Ron Dermer, Israeli ambassador to the United States, walking through the Capitol in Washington, Wednesday, Sept. 11, 2019. Credit: J. Scott Applewhite / AP

It is not clear whether Prime Minister Naftali Bennett, who replaced Netanyahu in office a little more than a month ago, has had time to think about who his candidate will be. But the trustees from abroad are very satisfied with Grundwerg and will likely propose that he stay on beyond April and be allowed to complete his full five-year term, which is due to end in October 2023.

The trustees claimed in their suit that a day before the World Zionist Congress coalition 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, through April 2022. The announcement of the coalition agreement dividing up the positions caught them by surprise and violated this earlier agreement, they stated. They demanded in their suit that Grundwerg be allowed to complete his full five-year term, or alternatively be allowed to stay on the job for another 18 months, as had been agreed.

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 Leibler. Lowy and Leibler 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.

Established more than 120 years ago, the WZO is the umbrella organization of the Zionist movement. The World Zionist Congress, often referred to as the “parliament of the Jewish people,” convenes every five years to vote on who gets control of key positions in the WZO and its affiliate organizations. The delegates to the congress include representatives of political parties and movements in Israel and abroad.

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.

The World Zionist Organization did not respond to a request for comment by press time.

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