New York Times
December 31, 2004
An odd series of money transfers ordered by the leader of the World Jewish Congress, the tiny nonprofit that has wrested billions in Holocaust restitution from banks, companies and governments in Europe, has provoked an informal inquiry by Attorney General Eliot Spitzer of New York, people contacted by Mr. Spitzer's office said.
Officials from Mr. Spitzer's office have been contacting organization insiders and others in the United States and abroad, and the organization appears to be working to head off a full-blown investigation.
Toward that end, Stephen E. Herbits, who has been hired by Edgar Bronfman Sr., the organization's chief patron, to overhaul governance and financial management, has traveled to Israel and Europe courting support for plans for better internal oversight of the organization.
The congress has formidable legal representation in the form of Robert Abrams, a former New York attorney general, and the Jewish Week reported yesterday that Mr. Herbits had been negotiating with Isi Leibler, the organization's senior vice president and most vigorous internal critic.
Mr. Leibler, who declined to comment, has demanded an independent audit of the organization and extensive reforms in governance and financial management.
Among the actions he has questioned are the transfers by the group's leader, Rabbi Israel Singer, which totaled $1.2 million.
In a telephone interview, Mr. Herbits declined to say whether he had met with Mr. Leibler in Israel, but said the overhaul he was hired to produce was going forward. Several changes, like the creation of a finance committee and a nominating committee, will be presented for approval by the organization's general assembly at a meeting in Brussels on Jan. 10 and 11.
"You can't turn around an organization overnight, but I would say well over 70 to 80 percent of the changes have been initiated," Mr. Herbits said.
He said that Mr. Spitzer's office had not contacted him but that he would fully cooperate. "I'm more than happy to give them anything and everything they may want to see," he said.
Mr. Spitzer's office declined to comment, citing its practice of refusing to confirm or deny investigations. Those who have been questioned by staff members from its charity bureau, which oversees charitable affairs in the state, said they had been told that articles in Jewish news outlets and in The New York Times about the money transfers had provoked the office's interest.
From October 2002 to February 2003, Mr. Singer, the Orthodox rabbi who has led the organization since 1985 and is a close friend and mentor of Mr. Bronfman, ordered the transfer of a total of $1.2 million from the congress's New York account to a numbered account at a UBS branch in Geneva.
He quickly transferred the money to an account in London controlled by Zvi Barak, an Israeli lawyer, after the new manager of the congress's Geneva office alerted him that the longtime accountant in that office had been paying himself roughly $1,900 a month more than his approved salary.
The people in the Geneva office have said they did not know of the account and learned of it a few months later, when the manager, Maya Ben-Haim Rosen, received a bank statement showing that a UBS account she was unaware of had been overdrawn by $40 when Mr. Singer transferred the money to Mr. Barak.
The congress says that the money was transferred to Switzerland with the intention of creating an employee pension plan and that it was put into a dormant account to avoid giving discretion over so much money to Ms. Ben-Haim Rosen, a new employee.
The group says the money never left its control, and its auditor, Loeb & Troper, concurs, even though congress officials had to call Mr. Barak while he was on a cruise to get him to send the money back to New York, Mr. Leibler has said.
Alfred Donath, president of the Swiss Federation of Jewish Communities, which has demanded an audit of the Geneva office's accounts, said he was contacted by a representative of Mr. Spitzer's office last week. "She asked me about the letter we wrote, and I told her about it," Mr. Donath said. "It wasn't a long conversation."
Jeremy Lack, a lawyer who serves as spokesman for his father, Daniel Lack, the lawyer for the congress's Geneva office for three decades, said he knew Mr. Spitzer's office was making inquiries, but he would not confirm that his father was contacted. Daniel Lack raised concerns about the money transfers in a letter to Mr. Herbits.