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In her memo, Arfa accused Klein of instructing her to play down the loss of the tax exemption, even after the Forward’s original story was published. Arfa writes that Klein asked her not to explicitly mention the lost exemption in a solicitation letter. “He said mentioning the loss of the tax exempt status will only increase the number of people who know about it, and that not ‘everyone in America’ knows about it,” Arfa wrote.
In a memo sent in response, provided in part to the Forward, Drimer addressed Arfa’s complaints. “I have already been unambiguous with you that neither you nor any other ZOA employee should ever misrepresent the ZOA’s tax status,” Drimer wrote. “We are acting in accordance with independent tax counsel’s advice and direction and we expect you and all other ZOA employees to do the same.”
In an attachment to her original memo, Arfa distributed an email from Jesse Rosenblum, president of the ZOA’s Orange County chapter. In it, Rosenblum stated that he did not know that the ZOA had lost its tax exempt status until he read about it in the Forward.
In a subsequent conversation with the Forward, Rosenblum confirmed the facts stated in the email. He said that the Orange County chapter, which is covered by the national organization’s tax exemption, has a bank account into which chapter members sometimes make donations. But seven months passed between the time that the national office of the ZOA learned that it lost its exemption and the time that Rosenblum became aware that his chapter could no longer accept donations. Rosenblum said that no one had made donations to the account during that period.
“I’m sure they had a lot on their minds,” Rosenblum said. “I hope in no way does this affect the excellent work that the ZOA does in protecting the State of Israel and the Jewish people.”
Rosenblum said that one of the members of the Orange County board has stepped down at least in part over the exemption issue.
“If he wasn’t informed, it was an oversight,” Drimer said. He said that the national organization spoke directly to the heads of some chapters, that regional directors spoke to others and that some chapter heads who also serve on the national board would have known anyway.
“It is possible that some people were missed,” Drimer said.
ZOA national vice chairman Steven Goldberg, who unsuccessfully pushed the organization in the late summer to publicly disclose the loss of the tax exemption, alleged that the information was kept quiet on purpose. “Nobody was missed inadvertently. There was a deliberate attempt to conceal the loss of tax exempt status as long as possible,” Goldberg said.
According to tax documents the ZOA shared with the Forward, the group had $6.3 million in assets at the end of 2011. The ZOA also owns a building valued at $18 million. Still, Drimer said, the organization has made some cuts to its budget.
The Los Angeles office is closing, and the regional director is going to be asked to work from home. The number of college students the group is sending on an annual leadership trip to Israel is being cut to 15 from 24. And one campus representative position has been allowed to remain empty.
“We are trying to continue, to pursue our mission as vigorously as ever before, but we’re trying to be prudent with our out-of-pocket expenditures,” Drimer said.
Contact Josh Nathan-Kazis at firstname.lastname@example.org or follow him on Twitter@joshnathankazis