Backroom Battler for Rumsfeld and Bronfman Finds Himself Centerstage in High-stakes Struggle

By Nathaniel Popper

Published March 30, 2007, issue of March 30, 2007.
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Stephen Herbits has moved through many halls of power during the past decade: He worked at the side of secretary of defense Donald Rumsfeld at the Pentagon, then jumped into the fray of gay activism in Miami and finally ended up as head of the World Jewish Congress, one of the most storied and influential Jewish organizations in the world.

At each of these stops he was brought in as a short-term fixer, valued for his organizational prowess and his willingness to crack heads. In each case, Herbits quickly assumed more influence than expected, ultimately colliding with other big players at the top. This may explain why, after two top officials at the WJC were fired last week, many insiders focused their attention on Herbits, the organization’s top professional.

“Herbits is in charge,” said Pierre Besnainou, president of the European Jewish Congress. “He is not the chairman or the president. He has been acting as though he is, but he is not, and that is a problem.”

The firings last week were part of a larger battle for control of the WJC — with multiple billionaires pushing to succeed billionaire beverage heir Edgar Bronfman as president. While this public battle has simmered, people on the inside say that it is Herbits, a longtime business consultant of Bronfman’s and now the WJC’s secretary general, who has been running the organization with a firm hand.

During his two-year tenure at the organization, Herbits has filed multiple lawsuits, sparred with regional branches — leading one to pull out of the WJC — and fired longtime employees. In recent months, he has moved beyond administration to play a key role in the organization’s high-profile efforts to fight Iran’s nuclear program. All this, despite having hardly any prior experience in the Jewish organizational world.

Herbits’s willingness to take on big responsibility in new areas was also evident in his work at the Pentagon. During his most recent stint at the Defense Department, Herbits wrote up a memo calling for Rumsfeld’s deputy, Paul Wolfowitz, to become America’s top man in Iraq. According to a new book on Rumsfeld by Andrew Cockburn, the proposal contained an intriguing wrinkle: Herbits would be Wolfowitz’s right-hand man in Iraq, running the day-to-day operations there.

The details are in dispute — Herbits says the idea for him to come along was actually Wolfowitz’s — but not the portrait of Herbits as a man who generally works behind the scenes and is not afraid to offer up bold proposals.

“The reason that people like Rumsfeld and Bronfman have me is because I’m willing to say, ‘Hey, stop, listen to me; you’ve got to think about this differently, ’” said Herbits in an interview with the Forward at the WJC’s Manhattan offices on the day the recent firings at the organization were announced.

Perhaps the most remarkable thing about Herbits’s string of high-powered jobs is that they have come since he retired from the career that took up most of his professional life, at Seagram, where he was Edgar Bronfman’s business lieutenant. At 64, Herbits has charged ahead with youthful insouciance.

It is a youthfulness that comes across in person. He has the taut frame and closely cropped hair of a much younger man. During the interview with the Forward, in which he frequently tipped back in his chair, Herbits rolled up his sleeves to reveal a beaded wooden bracelet and a plastic orange band imprinted with the word “compassion.”

At the WJC, as at the Pentagon, the man at the top brought in Herbits personally. At the WJC, it was Bronfman, his boss from Seagram. The two men have long been close. In addition to serving the WJC, Herbits has continued working with Bronfman on business deals they started at Seagram. Last fall, the two traveled to China together to check up on a juice project.

Bronfman brought Herbits into the WJC after critics began claiming that the former beverage mogul had run the organization like a personal fiefdom with his lieutenant on Jewish issues, Rabbi Israel Singer — the man fired by Bronfman two weeks ago. The allegations soon led to an investigation by the New York attorney general.

Herbits used his administrative prowess to guide the organization through the probe, which ended with a final report criticizing past practices at the WJC but praising reforms instituted by Herbits. But if Herbits’s brash style helped the organization weather the investigation, critics say it has only exacerbated concerns that the WJC is run with too much control in the hands of Bronfman and his loyalists.

Since the firings last week, both the European and Israeli branches have threatened to withdraw from the organization, pointing to Herbits’s managerial style.

“With Mr. Herbits, it’s ‘Either accept what I want — or you are not my partner for anything,’” said Shai Hermesh, chairman of the Israeli branch. Hermesh is also a member of the Knesset. “From the moment I came on here,” Hermesh said, “everything is Mr. Herbits.”

Hermesh and other critics say that Herbits’s litigious approach to conflict has also created new financial concerns for the organization. In Herbits’s first year, the WJC spent $3 million more than in the previous year, and $7 million more than the organization brought in, according to tax documents. A large chunk of this money went to lawyers.

Other big-ticket items were Herbits’s own $420,000 salary — making him one of the top-paid professionals on the Jewish communal scene — and the salary for a new development director, who is Herbits’s old friend.

Herbits says he has since taken a pay cut, but he argues that his old salary was justified by the 24-hour days he put in during the investigation. He dismissed the criticism as unavoidable collateral damage for questioning the sloppy finances of others.

“Start asking yourself, ‘Why are people saying things when they’re not true?’” Herbits said. “What’s their story here? What’s their agenda, that they’re putting this bullshit out there?”

The new head of the WJC’s American section, Rabbi Marc Schneier, said that Herbits is exactly the aggressive personality that WJC has needed in a time of change.

“Steve can be a real pit bull. He’s very determined,” Schneier said. “He has a mandate to clean up this organization, and when you do that you do ruffle feathers. Some people are not very happy. But the proof is in the pudding. The most critical task was to restore the financial integrity and the good name of the WJC.”

Herbits grew up in Massachusetts in what he has described as a “classic liberal Jewish family.” His habit of moving between positions of power began soon after college, when he bounced from business school to a congressional job and then finally to the Pentagon, where he was an assistant to Rumsfeld in his first tenure as secretary of defense.
After law school at Georgetown University — and the demise of the Gerald Ford administration — Herbits moved over to Seagram, which was owned by the Bronfman family. During his time at Seagram, Herbits took occasional breaks to serve on the transition teams of Republican administrations, but he devoted most of his time to Seagram, where he remained until his first retirement in 1997.

In a hopeful development for aging go-getters everywhere, it has been in post-retirement that Herbits has done much of his most exciting and world-changing work — a turn of events that he said was totally unexpected.

“Only two people in the world could have gotten me to go back to work,” Herbits said.

One of them, Rumsfeld, called Herbits after being tapped by President-elect Bush for a second stint as secretary of defense. The plan was for Herbits to serve as “transition director,” whipping the Pentagon personnel into order and then leaving.

The most complete chronicle of this stint in Washington is contained in Bob Woodward’s book, “State of Denial,” in which Herbits plays a recurring role as a “one-man think tank” as well as “a management fix it man somewhat as Karl Rove did for President Bush.” According to Woodward, in one of Herbits’s first days at work he told Rumsfeld, “You’ve got to fire somebody.”

“You’ve got to let people know who’s boss here,” Herbits said.

Herbits got into trouble when he pushed against an appointment made by then-Senate majority leader Trent Lott. Socially conservative elements in the Republican Party were already gunning for Herbits because he was gay. When Lott’s appointment came up, Lott demanded that Herbits leave the administration.

Herbits returned to Washington after the September 11 terrorist attacks and quickly became a central player in the run up to the Iraq War. He helped choose the presidential envoy to Iraq, Paul Bremer, after his initial suggestion of Wolfowitz was turned down. He was also one of the few people to openly question the administration’s postwar planning. In the end, no one escaped Herbits’s critical eye.

In a memo he wrote about his own boss, cited in Woodward’s book, Herbits said Rumsfeld was “often abusive,” “trusts very few people” and would not “accept that some people in some areas were smarter than he.”

One sacred cow that Herbits did not take on in Washington was the ban on gays serving openly in the military (the law did not apply to Herbits, who was a civilian employee). Herbits told the Forward that he did not want to enter into an endless argument with his superiors, particularly given that he knew Rumsfeld and Vice President Cheney did not agree with the regulation.

“Both of them would change it in a second if the president changed his mind,” Herbits said. “It would be gone in a second — I know that.”

Herbits left the Pentagon for good in 2004 and gave Rumsfeld three reasons: One was that the Pentagon chief had stopped taking his advice; the second was “the administration policy of breaking down the wall between church and state,” and the third was his concern with Bush’s “anti-gay” stance .

Herbits said he told Rumsfeld: “I know for a fact that the president is not personally anti-gay, and yet he’s so cynical that he’s willing to use that as an issue in the election to get elected.”

Back in Miami, Herbits became involved with a number of different gay political organizations. At the Dade Human Rights Foundation, Herbits “ended up being kind of in charge without any official title,” according to Steve Levin, a board member at the foundation.

His more public work was leading the opposition to a ballot measure that sought to kill a gay rights ordinance. The ballot measure was successfully defeated, but his work still attracted criticism from within the gay community.

Fellow gay activist Steven Baird wrote, in a widely distributed 2002 letter, “Herbits, a relative newcomer both to Miami-Dade County and to openly broad-based community activism, has a penchant for secret deals and an aversion to open, deliberative community process.”

One such quiet deal was the one that led to the hiring of Herbits’s good friend, Herb Juli, to be director of development at the Dade Human Rights Foundation.

“Steve Herbits wanted something — and that is what would happen,” said Levin. “Herbits wanted Herb Juli on the payroll, and so Juli was put on the payroll.”

Herbits acknowledged that the man was an old friend, but he said that Juli, a former insurance agent, was a qualified fundraiser. At the time, Herbits wrote an article in a Miami gay newspaper asserting that the organization’s financial situation was improving, citing Juli’s hiring as one of the reasons.

In the end, the foundation went bankrupt in 2004. There have been no allegations that this was due to Juli’s work.

Questions about Herbits’s pushing Juli for a job have come up again at the WJC. When Herbits created a new fundraising arm for the organization, he again recommended Juli, who now runs the WJC foundation from Miami.

Herbits defended the practice of recommending qualified friends and said that in his many years of helping the White House find personnel he had never shied away from putting forward people he knew personally.

When Herbits came to the WJC, the organization was fighting its own battle against claims of cronyism and insider dealings.

A WJC senior vice president, Isi Leibler, went public in the fall of 2004 with charges that Edgar Bronfman had run the organization with little oversight, and little input, from the national Jewish communities that make up the congress. In particular, Leibler complained about the unmonitored movement of $1.2 million from a Swiss bank account. The allegations eventually led the New York attorney general to open its investigation of the WJC.

Bronfman hired Herbits with little consultation and gave him free reign to deal with the scandal. Herbits’s fiery approach to detractors came out soon after he was hired, when he spoke with a reporter for New York magazine and went to town on other Jewish organizations.

“I’m not going to sit by and let this organization take the rap for their behavior,” Herbits was quoted as saying in the February 28, 2005 issue. “If we get into that kind of pissing match, this organization ain’t going down by itself.”

Other Jewish communal officials called for an apology, but none was forthcoming. Herbits now says that the comments may have been “indelicate” but he does not regret them. “It put a marker down and said someone’s running it.”

Herbits spent the next year taking on all critics of the investigation and instituting reforms in coordination with the attorney general.

“There has been more governance in the last two years than there was in the last 30 years,” Herbits told the Forward last week.

It has been his work since the investigation, however, that has been attracting the most flak within the WJC.

The first point of contention was the decision to sue Leibler, the WJC’s most public critic, for libel. Besnainou said it was primarily Herbits who wanted to go after Leibler.

Herbits denies he was the main agitator, but in his interview two weeks ago with the Forward, he acknowledged for the first time that the suit was a mistake. The suit was withdrawn after Jewish communities around the world protested. The Jewish community in Leibler’s home country, Australia, resigned from the WJC, and the organization was forced to pay Leibler’s legal bills.

Now Herbits has other foes, including leaders of the Israeli branch, whom he has accused of serial financial mismanagement. Herbits cut off all funding to the Israeli offices, and in a conference call last week he said, “It is unreasonable behavior to pretend there is anything going on here but a financial cover up.”

The Israelis have said that Herbits has attacked them because they resisted his efforts to take control of the operations in Jerusalem.

Now, though, the issue is not the control of a single regional branch but rather the entire WJC. Until his firing last week, Singer was viewed as the policy brains behind the organization and as its most effective public ambassador. Herbits said Singer’s dismissal and other recent controversial moves were necessary steps in cleaning up an organization that has struggled for too long.

“Up until I got here, the way the WJC operated was that if somebody had a problem, you would buy them off — or you’d make a deal,” Herbits said. “Well, peace at any cost isn’t peace.”

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