I recently joined the increasing calls for the Conference on Jewish Material Claims against Germany (Claims Conference) to reform its outdated structure and implement greater transparency in its modus operandi and financial activities.
I also echoed the prevailing frustration that the Claims Conference, by far the richest Jewish foundation in the world, has still failed to provide adequate financial assistance to elderly and sick Holocaust survivors who live in abject poverty in the twilight of their lives. An organization which boasts that it currently holds in trust $900 million in assets, yet fails to rectify such a condition, must be held accountable for one of the greatest scandals in contemporary Jewish life.
In his rebuttal, published in these pages, Julius Berman, chairman of the Claims Conference, accused me of promoting errors and inaccuracies based on “ancient shibboleths,” and adamantly insisted that Claims Conference affairs were being conducted in an entirely transparent manner. He then outlined the vast area of activities encompassed by the Claims Conference, which were never in dispute. However, he failed to respond to the tangible issues I raised, in particular the current plight of impoverished survivors.
In stating that the net assets of the Claims Conference in 2005 amounted to $900 million, Berman failed to specify whether that sum included the vast real estate holdings acquired since German reunification, which allegedly today makes the Claims Conference one of Germany’s greatest landowners.
The dogged refusal to disclose detailed information concerning these properties to heirs, survivors and journalists and operate in a financially transparent manner has led to increasing concerns about possible real estate shenanigans and fuelled allegations of incompetence, impropriety and cover-ups.
The fundamental problem is that since its inception in 1951, the board of the Claims Conference, comprising primarily non-elected representatives of the 24 founding organizations, has routinely endorsed all distributions recommended by the allocations committee. Whereas the allocations committee presumably comprises reputable people, in the absence of an independent board critically reviewing allocations, bureaucratization and domination by a small clique was inevitable.
The time is ripe for a discourse throughout the Jewish world to determine criteria for heirs and survivors and resolve ground rules of eligibility for providing grants to worthy organizations or projects, especially those that do not clearly qualify for inclusion within the framework of survivors or Holocaust-related educational activity.
Previous grants have generated controversy because, despite representing deserving causes, some appear to lack any genuine relationship with the Holocaust: e.g., the Tel Aviv Yiddish Theater, sprinklers in Israeli nursing homes, Jewish cultural centers in St. Petersburg, Hatzolah volunteer ambulance services in Brooklyn, Bnei Brak women’s organizations and birthright israel.
There may be valid explanations for these allocations. But in the absence of open debate and transparency in determining the criteria for allocating funds, and given the dire needs of impoverished survivors, some seem bizarre and do create grounds for concern. Today the prevailing impression is that a few machers, in consultation with a handful of key constituents, behind closed doors, determine where the funds should be distributed and discourage broader discussion on how allocations should be prioritized.
There is also need for a complete restructure of the Claims Conference board, which is now truly outdated, with defunct or minor organizations like the Jewish Labor Committee and the British-based Anglo Jewish Association still represented, while other bodies now occupying important roles in Jewish life are excluded. Israel, with the largest number of Holocaust survivors. is massively underrepresented.
Berman continues to resist calls for his board to remove his president, Israel Singer, who was condemned by a government authority for breaching his fiduciary responsibilities as custodian of charitable funds and, more recently, was dismissed by the World Jewish Congress for ongoing financial improprieties.
Last week a shocking new scandal relating to the New York/New Jersey-based group handling the global March of the Living program was exposed in a joint investigation by the New York-based Jewish Week and Globes, an Israeli business daily. It has serious ramifications for the Claims Conference, one of the principal donors to this body.
The March of the Living was founded by Avraham Hirschson, the former finance minister currently under investigation for embezzlement. Hirschson transferred its headquarters to the United States and arranged for a certain Curtis Hoxter to be appointed as a consultant to the project.
Hoxter received in excess of $700,000 allegedly for “fundraising” activities. However, it is clear that the bulk of the contributions were provided to the March of the Living by the Claims Conference and ICHEIC, the Holocaust-related insurance commission.
When asked by The Jewish Week and Globes why the March of the Living paid him $700,000, Hoxter replied that he did not have the records accessible and could not recollect why he received the money.
Hoxter, who paradoxically also represented German industrial groups and Swiss banks, was closely associated with Israel Singer, who arranged for him to be paid consultancy fees in excess of $200,000 per annum from the World Jewish Congress. These unauthorized payments were not disclosed by Singer to the WJC Executive and were terminated after the funding arrangement was exposed.
The payments to Hoxter from the March of the Living commenced approximately the same time that Singer was forced to stop the WJC payments.
Hoxter was also involved in an unconsummated draft memorandum of understanding with Singer to form a three-tiered partnership in a consultancy company in which Singer was to provide $2 million to qualify as a full partner. The third party was Israeli lawyer Zvi Barak, who collaborated closely with Singer on restitution activities and also served as his personal lawyer.
Barak was condemned by the New York attorney-general’s office for refusing to cooperate in relation to the investigation of the $1.2 million which Singer moved out of the WJC to a custodial account under Barak’s control. Barak was also a partner with Avraham Hirschson’s son in a disastrous failed business venture.
The Claims Conference has much to answer for in this latest scandal. It stands exposed for having neglected to exercise oversight after allocating substantial funding for a worthy venture and thus indirectly enabling a questionable consultant, closely associated with their own president, unconscionably to receive massive payments from March of the Living funds.
If the Claims Conference could so badly fail to oversee the utilization of funds in such an important Holocaust-related institution, its oversight in relation to allocations for other enterprises must be reviewed. It would therefore be appropriate to launch an independent forensic audit to cover the broad operations of the organization in order to allay concerns and instill confidence that the Claims Conference is being managed in an appropriate manner.
This latest scandal also highlights the urgent need to introduce new leadership into the Claims Conference, restructure its board and ensure that the public is satisfied that restitution funds are being managed in an exemplary manner. There is surely no other organization more in need of impeccable transparency than the Conference on Material Claims against Germany.
The writer, a veteran international Jewish leader, headed the Australian Jewish community for many years and was a former chairman of the Governing Board of the World Jewish Congress.