Claims Conference at Crossroads as Fiery Meeting Looms for Holocaust Group

Critics Want Answers on Botched $57M Fraud Probe

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By Paul Berger

Published July 07, 2013, issue of July 12, 2013.

(page 2 of 4)

Leaders of the Claims Conference no doubt hoped this year’s meeting would be an occasion to finally put the group’s recent troubles behind it. The organization has been reeling since it revealed in 2010 that it was the victim of a fraud facilitated by about a dozen current and former employees. A lengthy investigation by the FBI and the Office of the Manhattan District Attorney revealed a 15-year conspiracy, aided by co-conspirators across North America who helped thousands of people in the Russian-speaking community fraudulently claim at least $57 million in Holocaust funds.

The Claims Conference hoped to find closure on the scandal this past May with the conviction of three people, including a top Claims Conference administrator, for their part in the fraud, after 28 people had previously pleaded guilty to fraud charges.

Instead, the Claims Conference faced deeper controversy when it was revealed during the trial that top Claims Conference officials were alerted to the fraud in 2001 by the anonymous letter but failed to adequately investigate that warning.

Now the organization stands at a crossroads.

The main focus of the upcoming board meeting will be whether Berman manages to keep his post.

Berman, who has led the board for 11 years, was a member of the Claims Conference’s executive and audit committees when the anonymous letter was received in 2001; he became the group’s chairman less than one year later.

Berman oversaw one of two investigations in 2001 that largely confirmed the letter’s allegations, but for some reason no further action appears to have been taken until further evidence came to light, in late 2009.

Berman’s fate will be in the hands of more than 50 board members drawn from Jewish organizations from around the world whose first order of business will be the election of officers. About a half-dozen board members, including Ronald Lauder, president of the World Jewish Congress, and Natan Sharansky, chairman of the Jewish Agency for Israel, have been critical of Berman’s handling of the episode.

The board’s judgment of Berman’s role will be based largely on a report by a four-man committee, appointed by Berman, to look into the matter. That committee in turn has tasked the Claims Conference ombudsman, Shmuel Hollander to investigate the handling of the 2001 letter.

In addition to Berman’s role, Hollander will also have to assess the roles of past Claims Conference officials and the current executive vice president, Greg Schneider, who worked at the Claims Conference in 2001 and was alerted to the letter then.

Christine Letts, an expert in not-for-profit management at the Kennedy School, said the Claims Conference should not rely on its staff ombudsman to investigate such a serious matter.



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