WJC Fights Publication Of Articles On Its Woes

By Nathaniel Popper

Published January 20, 2006, issue of January 20, 2006.
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The World Jewish Congress is fighting to block publication in Switzerland of a series of magazine articles that reportedly will contain damaging new allegations about the organization’s management and handling of funds.

An Israeli-born Swiss journalist, Daniel Ganzfried, is scheduled to publish a series of articles in the Swiss newsmagazine Weltwoche, detailing what he calls the “infighting” and “implosion” at the WJC. Ganzfried, who achieved international prominence in the 1990s by exposing a fraudulent Holocaust memoir, said he is planning to turn the articles into a book and is also talking to American magazines about publication. Last month, the WJC asked a Swiss judge for an injunction blocking publication of Ganzfried’s articles — a request that is pending.

Ganzfried says he intends to bolster his research with internal WJC documents that he has obtained as a result of a defamation lawsuit filed against him by the WJC in 2005. The suit was filed over articles he published in another magazine in November 2004. Those articles discussed controversial money transfers to and from the organization’s Geneva bank account, which have subjected the organization to public criticism and prompted a state investigation in New York.

“I was quite happy with the lawsuit, and I still am,” said Ganzfried, who wrote the contested articles for the magazine, Facts, which is paying for his legal defense. “They sent the documents themselves to the court. I got things I would never have gotten by asking them.”

The legal tangles with Ganzfried are just the latest in a series of controversies that have plagued the WJC during the past two years. Press reports in 2004 about the organization’s Geneva bank account, into which $1.2 million was deposited and then removed under disputed circumstances, have led to furious disputes among the organization’s leaders and prompted an ongoing investigation by New York state attorney general, Eliot Spitzer. While Spitzer’s probe appears to have been postponed several times, allowing the spotlight to fall off the WJC, the organization is facing renewed pressure in Switzerland. In addition to the tangle with Ganzfried, the WJC, a confederation of national Jewish groups around the world, is also embroiled in a feud with its Swiss affiliate. The Swiss organization, known by the German acronym SIG, is accusing the WJC of reneging on an agreement to produce a joint audit of WJC finances. The agreement grew out of the furor surrounding the Geneva bank account.

The WJC was founded in Geneva in 1936. It has been in the headlines since the mid-1990s because of its efforts to win back assets lost by Jewish families during the Nazi Holocaust, including assets kept in Swiss banks and never returned. Among the most prominent leaders of the campaign is the WJC’s chairman, Israel Singer, who until recently served as its secretary general, and its longtime president, Edgar Bronfman, the billionaire beverage heir.

Ganzfried, the Swiss journalist, has been sharply critical of Jewish communal efforts to win back Holocaust-era assets, which have roiled Swiss Jews’ relations with their neighbors. He said his upcoming articles will be aimed at documenting the shortcomings in that process. The WJC’s current secretary general, Stephen Herbits, said that Ganzfried has no credibility in dealing with the WJC because of his political agenda.

Relations between the WJC and the Swiss Jewish community have also been tense since the 1990s, as a byproduct of the Swiss banking restitution struggle. More recently, the SIG was among the early critics of the WJC’s handling of its own Swiss bank accounts and of its Geneva office, which was liquidated in 2004.

The SIG and the WJC appeared to reconcile their differences in January 2005 after lawyers from both sides agreed to undertake an audit that would be shared simultaneously with delegations from both organizations. Just last month, however, the WJC’s lawyer informed the Swiss community that the audit had been completed and would be shared only with the president of the SIG, Alfred Donath — and only under highly restrictive conditions. The Swiss organization wrote back, rejecting the offer.

In explaining why the audit was not being shared with the entire SIG board, the WJC’s Herbits said he had decided that the agreement with the Swiss community had been nullified just days after it was signed in January 2005. He said that Donath had violated the agreement by speaking to a Swiss newspaper about the audit.

“I decided on January 14, with that article in the newspaper, that I no longer had an obligation to share the audit with them and to meet with them,” Herbits told the Forward. “I simply said this is not a group of people who are responsible, and I will not deal with them.”

Despite Herbits’s decision, however, legal documents indicate that lawyers for the WJC continued negotiating with the SIG after the controversial January interview. In March, lawyers for both organizations wrote jointly to the accounting firm PricewaterhouseCoopers, asking for an audit that would conform to the original agreement.

“The attorneys of the WJC and the SIG are in constant contact,” the WJC’s lawyer in Switzerland, Thomas Esslinger, told the Forward.

The SIG’s Donath said his organization has never been told that the agreement from last January was nullified. He said his organization is still waiting to see the audit to which it agreed. “We didn’t get any answers so far,” Donath told the Forward. “We are still waiting now, since nearly two years.”

There is also anticipation in America as observers await the release of the New York attorney general’s report. The attorney general’s office announced that it was launching an inquiry into the WJC at the end of 2004. In September 2005, Spitzer spokesman Darren Dopp told the Forward that a conclusion was expected “soon, perhaps as early as next month.”

Last week, Dopp told the Forward that his office had no comment, “except to say that our office continues to investigate certain issues that have been brought to our attention.”

In the interim, Spitzer’s office has been accused, in the Forward, of soft-pedaling its investigation of another Jewish organization — an allegation Spitzer’s office strongly denied. Separately, the New York Post reported in June 2005 that The New York Times was probing whether Spitzer was reluctant to investigate the WJC because of Bronfman’s political connections, but The Times did not publish an article.

If the range of people called in for interviews is any indication, the attorney general’s probe has been wide ranging. Most recently, the investigators’ attention appears to have been focused on a lawsuit in Israel involving several figures who have close ties to the WJC (see accompanying article). The plaintiff in that case, Menachem Kahn, said he was contacted by the attorney general’s office last month.

In Switzerland, Ganzfried said he shared his court documents with lawyers from Spitzer’s office; Donath said he was also interviewed in the probe. However, Daniel Lack, the first person to raise questions about the controversial Geneva bank account, said the attorney general’s staff had not interviewed him, despite his invitations. Lack was the WJC’s attorney in Geneva until March 2004, when his position was terminated.

Since the attorney general first began probing the WJC, several new allegations have surfaced in publications in Israel, Switzerland, England and America regarding the organization’s financial oversight. Herbits said that each of the new allegations originated with one person — Isi Leibler, a former WJC senior vice president who has turned into the organization’s most persistent critic.

Leibler, an Australian businessman now living in Israel, first fell out with the WJC leadership after Bronfman, the president, wrote a letter to President Bush in August 2003 that Leibler considered critical of Israel. The feud quickly escalated when Leibler called on Bronfman to resign and Bronfman replied by announcing that he was removing Leibler from a leadership post.

Leibler said he questioned Bronfman’s authority to remove him. He flew to New York to examine the organization’s books, in the course of which he discovered anomalies in financial reporting. He drafted a memo to the organization’s leadership, which was leaked to the press in August 2004. Shortly afterward, the WJC’s steering committee voted to dismiss him.

Herbits said the delays in the attorney general’s report were caused by new allegations that have surfaced each time the attorney general was ready to close the case — each of them traceable, he said, to Leibler.

Herbits said that all the allegations are frivolous, and he is confident that his version will be vindicated.

“When they close this, you will see a very different version of this last year than [Leibler] has produced in writing,” Herbits said. “What you will see is that he has very successfully cost this organization several million dollars in defending ourselves against unfounded allegations.”

The recent disputes with Leibler are only one of the subjects to be touched on in Ganzfried’s planned articles. The writer said he has spent much of the past year researching the articles, in which he plans to tackle the WJC’s role in the Holocaust restitution battles of the past decade. He said he would use the Geneva bank transfer dispute as a window into the organization.

Ganzfried said he intends to show that what happened in Geneva “was business as usual.”

The WJC wrote to Weltwoche — the Swiss magazine in which Ganzfried is planning to publish — in an effort to block publication. But that route was not successful, according to court documents filed by the WJC in Zurich district court. The WJC’s lawyer, Esslinger, said the request for a court injunction is in process. Esslinger did not express concern about Ganzfried’s plans to use documents from the court process in his reporting.

“Quite frankly, all these documents are supportive of the facts presented by the WJC,” Esslinger said.

Esslinger also filed suit against the Swiss Jewish weekly newspaper Tachles, for an article it published about the bank account controversy. After a preliminary hearing in late 2005, the WJC has three months to decide whether it will pursue the case. Esslinger said the WJC is keeping its options open.






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