How Anonymous 2001 Letter Shook Claims Conference to Foundations

Julius Berman Wins Reelection Despite Botched Fraud Probe

Happier Times: Embattled Claims Conference board chair Julius Berman (left) signs a financial agreement with the German government in May. Reuven Merhav (center) has signed a report that harshly condemns the organization’s management while Roman Kent (right) was one of two members of the four man committee who refused to sign the report.
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Happier Times: Embattled Claims Conference board chair Julius Berman (left) signs a financial agreement with the German government in May. Reuven Merhav (center) has signed a report that harshly condemns the organization’s management while Roman Kent (right) was one of two members of the four man committee who refused to sign the report.

By Paul Berger

Published July 10, 2013, issue of July 19, 2013.
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In a 21-page letter appended to the report, Schneider, who became executive vice president of the Claims Conference in 2009, said the ombudsman’s report was “deeply flawed.” Since the 2001 letter was publicized, current and former Claims Conference officials have blamed the failure to adequately investigate the 2001 letter on Brozik.

Although Brozik oversaw the initial investigation into the letter’s claims, the ombudsman found it “impossible to accept” that Brozik had any authority over Domnitser. But Schneider insisted in his letter that Brozik was responsible.

“The plain fact is that Brozik, while clearly not a manager in New York, was the second most senior staff member of the Claims Conference worldwide and certainly the most respected and knowledgeable about” one of the defrauded funds, Schneider wrote.

Schneider noted that the report “seems to go to great lengths to blame the New York staff, which I find perplexing and inexcusable.”

Schneider also criticized the ombudsman’s comments on the managerial culture of the Claims Conference. He said that such issues were outside the mandate of the ombudsman’s investigation — a fact that the ombudsman noted in his report — and that, given the ombudsman’s limited time and resources, he could not possibly have investigated this topic sufficiently. “I simply cannot accept this rush to judgment,” Schneider said.

The committee noted in its report that the 2001 letter was not disclosed to the Claims Conference board of directors either at the time it was received or subsequently. Rather than attributing this to a deliberate cover-up, the committee found that the failure to disclose the letter was “part of the litany of lack of diligence, competence and judgment that, as the ombudsman has shown, characterized this event throughout.”

“I vehemently object to this language and accusation,” Schneider said.

Later, he wrote, “There is not a day that goes by in the grueling four years since I discovered the fraud that I don’t replay events in my head, wondering what else I could have done.”

“I considered Domnitser a trusted colleague,” he added. “And so, when I say that I was ‘shocked at the discovery in 2009,’ I mean it. I was lied to, fooled, hoodwinked, duped. I missed it. I am sorry.”

Thirty-one people, including 11 former Claims Conference employees, have pleaded guilty or been found guilty of fraud.

The committee requested that after the final person is sentenced — probably later this year — the Claims Conference should conduct a more “comprehensive investigation” of “the general conduct over many years that enabled such a large-scale fraud to continue unimpeded.”

Claims Conference board members Natan Sharansky, chairman of the Jewish Agency for Israel, and Ronald Lauder, president of the World Jewish Congress, demanded on July 9 that, to maintain independence, any such future investigation must be composed mainly of representatives of the State of Israel and of Jewish groups that do not sit on the Claims Conference board.

Contact Paul Berger at berger@forward.com or on Twitter, @pdberger


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