Claims Conference gets deeper in the Mire…writes Isi Leibler

June 2, 2013 by Isi Leibler
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Julius Berman has circulated members of his Board with an 11 page diatribe in response to the recent flood of criticisms relating to the flawed management, lack of oversight and absence of transparency in the Claims Conference.

Isi Leibler

Isi Leibler

Regrettably, as in the past, he has concentrated on personally discrediting his critics but failed to respond to the issues.

Even after both Jewish Agency chairman Natan Sharansky and World Jewish Congress president Ron Lauder had called for an independent investigation and review of the Claims Conference, Berman continued procrastinating, stating that he would pass on the suggestion to a “select leadership committee” he had hand-picked to recommend a course of action.

Treating his Board members like kindergarten children he made the preposterous statement that the FBI and Department of Justice prosecution of the criminals had exonerated him and his management from any accountability. He asked: “Can anyone come out with a more independent public body than the United States Department of Justice and the Federal Bureau of Investigation to handle the investigation, which by the way, resulted in 28 guilty pleas and three convictions after trial – a 100% victory?”

Needless to say, the role of the FBI and Justice Department is to prosecute criminals, not to review the auditing and oversight procedures of a charity from whose head office, criminals, including senior managers, stole $57 million over a 15 year period.

Throughout his long-winded self-justification, Berman goes to great lengths to seek to discredit me. He refers to a meeting that did indeed take place between us during the middle of the previous decade regarding the role of the then president of the Claims Conference, Israel Singer.

He relates that I was forced to leave the World Jewish Congress, but conveniently omits that this was because I refused to forego my demand for an independent audit in relation to financial irregularities. He also failed to mention that I was totally vindicated by the New York Attorney General and that Israel Singer was forced to step down from his role in the WJC.

It is absurd of Berman to state that he was unfamiliar about the case of the World Jewish Congress and Israel Singer which was then extensively covered by the Jewish media and the New York Times. His sanctimonious remark that he did not wish to engage in Lashon Hara and his boast that he refused to review the documents I provided is consistent with his failure to adequately follow up the 2001 allegations of fraud which mushroomed under his chairmanship.

At the time, Berman’s response prompted me to publicly question his moral compass.  It was inconceivable that as chairman he saw nothing wrong with a senior officer – let alone the President – having been found by the NY Attorney General to be in violation of his fiduciary duties and misappropriated public funds, to head an organization disbursing sacred restitution funds. What did this say about the management, governance and transparency of the Claims Conference?

I make no apologies for then researching the Claims Conference. I soon became convinced that the Claims Conference was operating as a personal fiefdom for Berman and a few of his colleagues. I was especially shocked when I became aware of the contemptible manner in which ailing survivors were treated.

Before the $57 million scandal had been exposed, I drew attention to calls for greater oversight. I discovered an outrageous payment made via March of the Living to a consultant linked to Israel Singer, purportedly for work on behalf of the March of the Living. Yet he was unable to explain why he received this vast amount of money and the Claims Conference closed the book on the issue without divulging what happened.

I discovered that payments were being made to organizations which were unrelated to the Holocaust and questioned the procedures adopted in disbursing funds. I concluded that the board had effectively become a rubber stamp for management and I doubt whether it ever challenged or declined to endorse a single allocation. And contrary to what Berman states in his letter, all umbrella organizations represented on the board have in fact indirectly received or dispersed grants from the Claims Conference.

Over the last year, aside from failing to divert sufficient funds to ailing Holocaust survivors, the principal challenge confronting the Claims Conference was the failure of its leadership to accept any accountability whatsoever for the $57 million fraud.

Over the past month, there were shocking revelations that as far back as 2001, a letter had been circulated to senior management warning them and depicting the nature of the fraud being perpetrated. Further investigations disclosed that the current Executive Vice President Greg Schneider had been copied in relation to the letter. Desperate and contradictory statements were released by Claims Conference spokesmen in an effort to cover this up. Ultimately they laid the full responsibility for the breakdown on a deceased official located in Berlin.

The final straw was the disclosure that in 2001 – a year before Berman was appointed to the post of chairman –  in his capacity as counsel for the Claims Conference, he had in fact actually reviewed the letter exposing the fraud and was requested to oversee an investigation.  The rest is now history and the fraud continued under his chairmanship until late 2009.

The real scandal is not Berman’s failure to follow up on the 2001 letter, but that he actively sought to hide its existence and his personal role, not only from the public but even from his own board.

I stand by my statement that Berman and his cronies orchestrated “Stalinist” resolutions praising themselves instead of enabling an independent commission to determine who, if anyone, was accountable for the breakdown. For a public body to carry a resolution praising its outstanding performance in response to a $57 million scam operated from its own head office, is classic Stalinism.

When the scandal was initially exposed, Berman deflected calls for an independent review by announcing that he had retained K2 consultants for this purpose. He was obliged to subsequently admit that its role was to introduce mechanisms for the future but not to investigate what had happened and who was responsible. Indeed the K2 review was rejected by the German government.

Likewise, the Deloitte report, cited by Berman as an independent review, merely recommended future procedures and controls to avoid such a scam, without reviewing the past. In the absence of a genuine external independent review we still have no idea whether there are other skeletons to be unearthed.

There is a groundswell of distress in the media and amongst the Jewish public –– and a belated recognition even amongst board members that the organization must be reformed. Global bodies such as the World Jewish Congress and the Jewish Agency demand independent reviews.

Berman has been in office for over 10 years but he still insists that he has no intention of stepping down and dismisses our concerns as a  “hullabaloo”, “nonsense”, “stupidity” or “phony issue”. Clearly, even now, he still fails to appreciate the gravity of the scandal and his own personal accountability for what transpired under his watch. Should the directors at the annual meeting of the Claims Conference in mid-July not demand that Berman step down and appoint an independent review body, they will have failed in their fiduciary responsibilities and will be inviting external intervention.

Isi Leibler lives in Jerusalem. He is a former president of the Executive Council of Australian Jewry.


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