Editor’s note: This story has been updated with new information.
The Zionist Organization of America has canceled its annual fundraising dinner because of the loss of its tax-exempt status, the organization has confirmed.
The fundraiser, usually held in late November or early December, is a key annual event for the group. Recent galas have drawn such high-profile speakers as conservative talk show host Glenn Beck and Republican Rep. Eric Cantor, the House majority leader.
The event could still be held sometime next spring, according to David Drimer, the ZOA’s executive director. But the cancellation comes as internal critics continue to raise questions about the handling of the crisis, and as the ZOA makes cuts to some programs.
As the Forward first reported in September, the IRS revoked the 115-year-old Zionist group’s tax-exempt status in February after the ZOA failed to file financial disclosures for three consecutive years. The ZOA’s national president, Morton Klein, received a 38% pay raise during the years the group failed to file. (Drimer previously worked as associate publisher of the Forward.)
According to Drimer, the group decided in September that it would not hold a winter gala this year. In 2011, the gala drew 800 guests, each paying $550 per plate. Casino magnate Sheldon Adelson attended, as did Beck and Rep. Michele Bachmann, then a candidate for the Republican presidential nomination.
Financial complications related to the loss of the tax exemption made the annual dinner untenable, Drimer said. Following the loss of its exemption, the ZOA set up an outside account to accept donations. The ZOA can’t access the funds in that account until its tax exemption is reinstated. Any amount raised through the dinner beyond expenses would have gone to the outside account.
Drimer said that the group was considering going ahead with the dinner anyway, but decided not to after Klein fell ill. Klein is now back in the office after taking time off to deal with a medical condition.
Drimer asserted that the ZOA does not always hold an annual dinner in the winter, though research indicated that the group has hosted the New York event each year in November or December since at least 2003.
In the meantime, debates are continuing within the organization over how it handled the information that the group had lost its tax-exempt status. Orit Arfa, the Los Angeles-based executive director of the ZOA’s Western Region, has emerged as a leading internal critic. The Forward has obtained a copy of an October 12 memo that Arfa distributed to the ZOA’s national leadership. The memo raised concerns about the ZOA’s handling of the exemption issue. Arfa declined to speak with the Forward.