Sunday, 11 July 2010

The Rabbi and the Geneva Account

Reminder by Daniel Ganzfried

The World Jewish Congress is at the brink of disaster. Impropriety, embezzlement, money laundering: these are the accusations directed against Israel Singer, the strong man of the WJC. Singer ordered the transfer of $1.2 million dollars from the WJC to an account owned by his friend. Now Jews throughout the world demand unreserved clarification.

Such a proud organization! In 1998 the World Jewish Congress (WJC) humiliated Switzerland, extracting 1.25 billion dollars from its banks - as compensation for a few dozen million dollars, based on unaccounted Jewish accounts.

It had been a long time since WJC President Edgar Bronfman and his New York-based Secretary General Israel Singer had cause to be so delighted; perhaps as far back as the end of the Eighties, when they succeeded in exposing the Nazi past of the Austrian President. The State Department placed the gaunt statesman on its Black List, and Mr. Kurt Waldheim, former UN Secretary General, was effectively prohibited from setting foot on US soil. Not bad.

Another unforgettable example: In 1952, WJC president Nachum Goldman brokered an agreement between post-war Germany and Israel. The Germans paid compensation for the crimes committed by the Nazis. Thus the young state became the legal successor of the murdered Jews, and at the same time solidified its claim of being the representative of the entire Jewish nation - a doctrine that made Israel immune against criticism and outside involvement. From that point, the World Jewish Congress served as its international promoter.

The WJC's political birth certificate was issued in 1942. On the 20th of January the Nazis, assembled in a Villa on the shore of Lake Wannsee in Berlin and adopted the "Final Solution of the Jewish Question", i.e. the application of mass murder as an industrialized enterprise. Gerhard Riegner, a young lawyer and the Geneva based representative of the WJC since its establishment in 1936, was one of the first to learn of the unthinkable. True, his telegram to the State Department did not have the desired effect, but his act did justify the role of the WJC as the vanguard of the Jewish People.

Today, the roof organization comprising some 80 national and international Jewish organizations is struggling for its survival - and the battle is being waged within the organisation itself. The allegations being made range from impropriety, embezzlement and even money laundering. The conflict takes place in Switzerland. The main roles are played by the two men heading the organisation: Edgar Bronfman, billionaire, former owner of the booze empire Seagrams, who has served as WJC President since 1981; and Israel Singer, ordained rabbi, who has been the WJC's strong man since the mid-Eighties.

The grounds for the conflict relate to $1.2 million, allegedly hived off from a secret WJC account by Singer for private purposes, who acted with Bronfmans approval. What is clear is that on July 1 2003, Singer personally arranged the transfer of that money to a friend in Israel - without informing any relevant WJC personnel in Geneva. As a consequence, the umbrella body of the Swiss Jewish communities (SIG) was effected. The Geneva-based President, Alfred Donath, acting on behalf of the Swiss Jewish community requested clarification as to what had transpired. But the 72 years old Professer and medical doctor was immediately inundated by verbal abuse and insult from Singer which placed him under intense pressure.

What happened?

In 2001, the World Jewish Congress received 1.5 million dollars from its Israeli associate organization, the Jewish Agency. Earlier, due to its own budgetary problems, this semi-governmental organization had decided to terminate all payments to Jewish organizations outside of Israel. But Singer, was concerned with his financial problems. He manages to squeeze this final payment to New York from the Agency. What he does not inform his friends in Jerusalem is that the money is not intended for WJC activities, but for his own personal pension. In September, Singer intended to give up his position as Secretary General to a successor, and would be elected Chairman of the Board of Governors of the WJC, an honorary post. Singer would receive an annual compensation of more than $200,000. But who knows how long that would last? A pension would just be fine. How shall he obtain it?

In separate installments to Geneva UBS Account

The legal requirements in New York proved to be too complicated and the Israeli branch also does not provide any attractive options. So he parks the money in an account of the somewhat inactive office in Geneva with only an ailing, eighty year old bookkeeper serving as watchdog over its financial matters. In a number of transfers from the WJC headquarters in New York, a total of 1.2 million dollars are deposited at the Chemin Louis Dunant branch of the UBS bank. The last two transfers of $150,000 and $200,000 are banked on January 10 and February 11, 2003, respectively. The beneficiary account no. 0240-255888.60K is categorized as "SPECIALE". At that point, Singer and the aged bookkeeper are the only persons aware of its existence.

Then, at the turn of the year 2002/2003, the new Secretary General employs a dynamic young woman, Maya Ben-Haim, as office director at the office located by the Rhone. The 29 year old woman has no knowledge of the million dollar deal, but she does discover other "alarming irregularities" in the books. She does not hesitate to inform the bookkeeper on June 24 that she intends to dispense with his services and gives him notice for the end of September. On June 29, 2003, she meets her boss in London and submits a report regarding financial irregularities and the dismissal of the book-keeper. "The most important question seems to be, why he withdraws 2,200 Swiss Francs in cash each month in addition to his salary". Later, a witness would say that Singer looked "somewhat shocked".

However, at that point in time, none of the people present were aware of how much money is in fact involved. And what does Singer do?

Hurriedly he sets out for Geneva. In a lightning operation he drags the ailing bookkeeper from his nursing home to the bank. He is in a hurry: It is July 1st. The terminated bookkeeper's signatory rights will terminate on the following day. Everything works out well. Together they strip the secret account of every one of the 1.2 million dollars. Later this will prove to have been a mistake.

The amount designated as "For the pension", is transferred to Singer's friend, Zvi Barak. The money is henceforth deposited in an account owned by Barak at the HSBC bank in London.

Singer arranges for the Geneva office to close

For an extended period, the money transfer remained unknown by the Geneva WJC office. It could have remained unknown to this day. But on October 2, 2003, the young director's attention is drawn to a strange bank statement: Following an individual international transfer of 1.2 million dollars account 0240-255888.60K closes with a debit balance of $40.73. The account did not have sufficient funds to cover the bank charges. Ms. Ben-Haim is shocked. The attorney of the Geneva WJC office, too, shakes his head in astonishment. She immediately informed New York. Avi Beker, Singer's successor in the position of Secretary General, issues immediately an order to conduct an internal investigation.

Then, in November, the second surprise: Avi Beker retires from the WJC, and WJC management circles say that he was provided with a golden parachute of one million dollars. In the absence of a Secretary General, ongoing WJC business is managed by a newly created Operations Committee which, in addition to Israel Singer, comprises of WJC Vice President Isi Leibler and Executive Director Elan Steinberg. Neither of the latter were aware of the events in Geneva. As part of their "general efforts to restructure the WJC", the gentlemen visit the Geneva office on November 19. Judging by the minutes, they are still ignorant about the Geneva account at this point. The visit is followed by additional visits in December. Neither of them are informed, not even by their colleague Singer.

At Singer's recommendation, the Operations Committee closes the Geneva office on March 30, 2004. All employees are given notice with immediate effect. In a letter to the Geneva director, the Operations Committee declares: "The WJC has decided to discontinue the maintenance of a permanent representation in Geneva". The employees are laid-off with immediate effect. Ms. Ben-Haim turned to the Labor Court, contesting both her dismissal and the office closure. She first obtains a delay and later receives personal compensation.

The one remaining person is the long time legal adviser of the WJC Geneva office, Daniel Lack. It is he who alerts the president of the Swiss Jewish Community Federation (SIG). On April 25, Alfred Donath writes to Edgar Bronfman, requesting in a polite but firm tone, the need to implement an audit. He also asks why the Geneva office is being closed so suddenly and requests that the decision to close the office be reconsidered.

On July 14, attorney Lack writes a letter headed "Confidential" to Israel Singer, talking about "certain potential and serious irregularities". He warns him. "I believe an audit performed by an independent company is required. I understand that the situation may be quite delicate for you, but we must act, act visibly. We must protect the WJC from all kinds of accusations of impropriety, embezzlement and money laundering".

Lack also informs the WJC. Thus for the first time, the Operations Committee is informed about the events in Geneva. On July 18 Singer, Leibler and Steinberg meet again. According to the minutes, Singer assures his colleagues that the $1.2 million constitutes an "authorized money transfer to the benefit of WJC pension". However, they insist on the reimbursement of the 1.2 million dollars, and the transfer of all the money to a special WJC account in New York. Singer is disqualified from involvement in the issues because of his personal interest. At that point the money had earned $12,000 dollars interest, a fact that is "acknowledged with satisfaction". But Leibler's and Steinberg's satisfaction does not last long.

After comprehending the content of the letter from Lack they demand information from their colleague Singer regarding the suspicious transfer of money. The response does not take long: On August 16 they are informed by an email headed "private and confidential" from WJC president Edgar Bronfman, of a decision to dismantle the Operations Committee, and to substitute it with a Steering Committee.

Bronfman launches counter attack

Bronfman installs "my right hand at Seagrams", Stephen Herbits, to head the brand new committee. The 62 year old was at one time a US Department of Defense official under Donald Rumsfeld. Bronfman trusts him to "fight off all attacks against the WJC", and prophetically warns his colleagues in a memorandum: "I consider all these attacks as attacking my office, my integrity and my person. No effort should be too great, no expense too high, in the battle against these disgusting libels."

But the annoying Swiss will not be easily placated after Singer's attack on their leader, Alfred Donath. They demand a thorough audit in Geneva. Vice president Isi Leibler, too, keeps on nagging. With his soft-spoken voice uttering sharp words, the 70 year old Leibler in Jerusalem demands clarification. "I believe that I am speaking on behalf of the majority of 400,000 donors, who are entitled to request responsible management, transparency and accountability. The times when leaders and managers handled their organizations as their personal fiefdoms are over."

In fact, in the light of the Geneva affair many donors suspect that other questionable business transactions may emerge from behind the secret account. Together with Isi Leibler and the Swiss Jews, they demand a comprehensive and independent audit of all of the WJC's financial operations conducted during recent years; and they also insist that the publication of all financial reports for those periods be released and insist on transparency in respect to all assets and bank accounts everywhere in the world.

This could mark the end of this non-profit organization that disposes of an annual $8 millon budget, and that has been run by Bronfman and Singer like their own little business for too long. Just like their main sponsor Edgar Bronfman, the other 400,000 donators also deduct their contributions from their taxes. Now they must be concerned about the income tax inspectors' interest in the WJC.

In order to at least appease the Swiss, Bronfman sent his new head man Stephen Herbits across the ocean. Amongst his luggage he was carrying a hastily assembled auditors report on the Geneva account, prepared by the accounting firm Loeb & Troper. On October 28 he meets the SIG delegation in Zurich. But having regard to the fact that this firm has been working for the WJC American section for years, there were doubts regarding the New York auditors' independence. Consequently at the end of the evening meeting, the Swiss Jewish group refused to sign the "mutual agreement" prepared in advance by Herbits.

The Swiss Jews reiterated their demand for unreserved clarification of Singer's "Geneva-Gate" (The Jewish weekly "Tachles"). Herbits was able to provide his dissatisfied Swiss Jews only one little piece of comfort: "The Geneva office of the WJC will not be closed. Quite the contrary, I am currently recruiting a new team." But here, too, the other side senses a trick: Who can guarantee that the relevant files stored in the deserted office in the Rue de Varemblé will be left intact until then?

What remains is the involvement of the authorities. Until now, the spokesperson for Geneva's district attorney's office says, they had never dealt with the WJC in relation to this matter. However, Isi Leibler concedes that this could be a possible outcome. Until then, the truth regarding the WJC account is well kept in the Geneva UBS branch, protected by the Swiss banking secrecy, which Singer to this day claims was the main reason, why the $1.25 billion settlement amount agreed on in 1998 is proceeding so slowly.

Who would have thought that the fate of the World Jewish Congress would one day be determined by a secret account in a major Swiss bank?

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