Facing Up to the Fraud

Editorial

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Published June 10, 2013, issue of June 14, 2013.
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When board members of the Conference on Jewish Material Claims Against Germany gather next month at their annual meeting, they must seriously consider the continued leadership of their chair, Julius Berman.

Berman is a rabbi, a lawyer — first in the class of 1960 at New York University Law School — a longtime communal volunteer and leader who, in addition to being chair of the Claims Conference, is chairman emeritus of the Rabbi Isaac Elchanan Theological Seminary of Yeshiva University. In other words, a man devoted to the religious, educational and social welfare of the Jewish people. No one disputes this.

But as we learn more about the back story of the $57 million fraud committed over a period of many years at the Claims Conference, Berman’s leadership record grows increasingly problematic. His most recent attempt to defend that record raised more questions than it answered. He still has time to make amends, and should find the opportunity to do so, or he can step aside and allow his organization to fully recover and continue its important work.

At issue is whether Berman and others in leadership at the Claims Conference should have identified and halted the fraud years earlier — specifically after an anonymous but highly detailed letter was sent to them in 2001 with information about the scheme and some of the people involved. Since the Forward revealed the letter’s existence, Berman has resisted growing calls for an independent inquiry to investigate what happened in 2001; instead, he appointed a four-person select committee of board members whose actual task is uncertain and whose neutrality can reasonably be questioned.

The 11-page letter that Berman sent on May 30 to members of his board is rife with accusations and false assertions. Berman lashed out at communal leaders such as Ronald Lauder, president of the World Jewish Congress, and Natan Sharansky, chairman of the Jewish Agency for Israel, for questioning the internal probe. He roundly criticized the media (including the Forward’s coverage).

Unfortunately, many of his statements were just plain wrong. And his attempts to portray himself as above the fray, and therefore not responsible for reacting to serious charges of malfeasance at the Claims Conference, defy logic.

One example: Berman claimed that his role in 2001 was confined to that of pro bono counsel, obliged to attend one meeting a year and, possibly, receive “a rare call for advice from time to time, but that would be kept to a minimum.” He further asserts, accurately, that he did not become chair of the Claims Conference board until April 2002.

But, as our Paul Berger has reported, in addition to his role as counsel in 2001, Berman was a board member who served that year on two important and relevant committees: the control (or audit) committee and the executive committee. This information came from the Claims Conference’s 2001 annual report, but for some reason is omitted from Berman’s letter to the board. Why?

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Another example: In the letter Berman also acknowledged that “sometime in the mid 2000’s,” when he was Claims Conference chair, a known critic of the organization gave him “a dossier about an inch thick” with accusations of misconduct against Israel Singer, then president of the organization. “I must admit I never read the papers he gave me,” Berman wrote.

Too bad. Singer, who also ran the World Jewish Congress, was subsequently barred by the New York Attorney General from taking any role in WJC’s finances and was required to repay “inappropriate disbursements.” Singer later left his Claims Conference position. One could have expected Berman to display much more curiosity about the conduct and performance of the leader of his organization.

Even if Berman can be excused for mounting a sloppy self-defense, there are deeper concerns. He claims an independent inquiry isn’t necessary because federal authorities already did their investigation — the one that led to 28 guilty pleas and three convictions. But that’s mixing the proverbial apples and oranges. The feds never sought to probe the official response to the 2001 anonymous tipoff and whether the fraud could have been stopped much, much earlier.

Instead, Berman appointed a select committee of loyalists and gave them the unenviable task of looking into the actions and statements of their longtime colleagues. Is it possible for anyone to have faith in the outcome?

It’s not uncommon for leaders of organizations in crisis to resist outside intervention and to act on the belief that their problems can best be solved at home, within the family. It’s only human to want to fix a mess and move on. Berman has said repeatedly that his foremost concern is ensuring that the dwindling number of needy Holocaust survivors get the care they require, and there’s no reason to disbelieve him.

Why, then, preside over an enterprise whose billions of dollars of relief have been overshadowed by millions of dollars of fraud? Why not care about every penny?

A hint of an answer may be found in Berman’s May 23 interview with JTA (on whose board he also sits). When asked if the Claims Conference should apologize for the fraud, Berman adamently refused, arguing that Holocaust survivors would have misinterpreted an apology to mean that they had somehow been injured by the fraud. In fact, JTA reported Berman as saying, the cost of the fraud was borne entirely by Germany.

“I never sat down and considered whether there was a need to make some public contrition,” he said.

But a fraud is a fraud. To excuse it because the offended party is a nation with a seemingly limitless treasury to atone for its past sins strikes us as morally bankrupt and, truth is, embarrassing. Is this how the Jewish community should view Holocaust restitution?

This is the second time in several weeks that the Forward has editorialized about mismanagement at the Claims Conference. In his May 30 letter, Berman said the first editorial “may be the longest…the Forward has ever published.” In fact, editorials are exactly the same length each week, a discipline imposed by writing for dedicated space in a print newspaper.

But we understand what he meant: Why devote so much ink and effort to this issue, especially when the bad guys have already been caught and convicted, and the German government hasn’t complained publicly about the broad misuse of its funds, and the events in question happened years ago?

Why? Because everything the Jewish community and its representatives do in relation to the Holocaust must be above reproach, or we lose some of the moral authority to make our claim for restitution and recognition of suffering. If the Claims Conference leadership allowed fraud to fester and isn’t willing to examine why, then a breach of trust has occurred between it and the very people it seeks to serve, and has served for decades. There still is time for Julius Berman to do the right thing and restore his reputation. We implore him to do so.


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