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ZOA's Uncertain Status

Zionist Group Argues Over Publicizing Loss of Tax Exemption

By Josh Nathan-Kazis

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“It’s really just a technical, meaningless revocation,” Drimer told the Forward. Drimer began work at the ZOA after the organization had already missed the May 2011 deadline.

According to Drimer, the group scrubbed its website of claims to be a 501c3 once it received notice that it had lost its tax exemption.

“[S]ince [February 22, 2012], we have never intentionally represented the [ZOA] as being a 501c3,” Drimer wrote in an email. “[T]he revocation is not a secret, and [I] talk with numerous individuals about it every day.”

As of this writing, the website of at least one regional branch, the San Diego district, continues to state that the ZOA is a tax-exempt entity. Drimer said that the San Diego district’s website is not under the control of the national organization.

Klein said that he personally informed all major donors of the lost exemption. “I was really scared calling some of my major people that they would respond very uncomfortably, but they didn’t, not a single one,” Klein said.

The group’s national website currently refers donors to an outside not-for-profit that accepts donations on the ZOA’s behalf. According to Drimer, the ZOA has no access to those funds until its exempt status is reinstated.

In the email provided to the Forward, ZOA attorney Korn called for an examination of the failures that led to missing the deadline.

Separately, an outside counsel retained personally by Goldberg, the vice chairman, argued in a memorandum circulated to the board that board members could be held personally liable for failing to fully disclose the loss of the group’s exemption. Written by a California lawyer named Kent Seton, the memorandum was emailed to board members by Goldberg in late August.

The ZOA disputes the notion of any potential liability. “I do not agree that the ZOA had or has an affirmative duty to broadly publicize to donors the loss of exemption,” Korn wrote in the email provided to the Forward. “I also do not agree that donors would, in general, have any valid, corresponding claim for damages against the ZOA or its Board.”

Drimer noted that Seton is a California lawyer and the ZOA is a New York corporation, and asserted that the ZOA had done nothing wrong. “We have a legal opinion from our tax attorney that the ZOA has nothing illegal, immoral, or unethical in dealing with this situation from the time we were aware of the revocation,” he said. “There is no affirmative duty required. We didn’t keep it a secret.”

In an August 8 memorandum to Korn and the group’s leadership, Drimer outlined steps the ZOA would take to ensure future compliance with reporting requirements. The memo outlines infrastructure changes to develop consistency in bookkeeping between ZOA regional offices and the hiring of a full time staff accountant.

Contact Josh Nathan-Kazis at nathankazis@forward.com or follow him on Twitter @joshnathankazis