World Congress Embroiled in Fight Over Swiss Bank Account: Its Own

By Nathaniel Popper

Published November 26, 2004, issue of November 26, 2004.
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The president of the Swiss Jewish community was suspended from the European regional affiliate of the World Jewish Congress this week after he refused to drop his demand for a new audit of a controversial WJC bank account.

The dispute over the account is the latest WJC drama to make headlines in Switzerland, where the world organization played an instrumental, and often contentious, role in the restitution of Holocaust-era bank accounts.

The audit has become a rallying cry for critics of the WJC’s veteran leader, Edgar Bronfman Sr., and his chief lieutenant, Israel Singer. The organization previously conducted an audit of the account, but a Jerusalem-based WJC leader, Isi Leibler, was stripped of most of his positions in the organization in September after persistently calling for a new audit of the $1.2 million account, which was moved from a Geneva bank through London to New York last year.

The deposed Swiss Jewish leader, Alfred Donath, a retired medical professor, said he had been pressing for an audit of the WJC account since last April, months before Leibler went public with his criticisms of Bronfman and Singer, the New York-based WJC leaders. However, Donath told the Forward, he received a phone call from Singer about three weeks ago, shortly after the showdown with Leibler, insisting that Donath drop his demand for an audit and threatening to “destroy” Donath and his family if he did not.

Singer has denied threatening Donath, according to WJC officials.

The dispute has received front-page coverage in the Swiss media in the last month, fueled in part by continuing tensions surrounding the WJC’s battle with Swiss banks over Holocaust-era bank accounts, which began in the mid-1990s.

The struggle for restitution of Holocaust-era bank deposits embarrassed the Swiss government and angered many Swiss citizens, who viewed the campaign as linking them unfairly to the Nazi atrocities. The embarrassment of the WJC leadership in recent weeks over its own Swiss bank account has been received with broad hints of glee in some Swiss media accounts. One Swiss magazine, Facts, began its coverage with the words: “Such a proud organization! In 1998 the World Jewish Congress humiliated Switzerland, extracting $1.25 billion from its banks.”

The WJC’s aggressive tactics also piqued the ire of many in the Swiss Jewish community during the dispute over Holocaust-era assets, observers say. Swiss Jewish leaders had been dealing with the banks in their own fashion before the WJC entered the scene and took the dispute public, according to Jacques Picard, director of the Institute for Jewish Studies at the University of Basel.

WJC leaders have maintained that the $1.2 million now in dispute was intended to fund pensions for the organization’s staffers, including Singer. Swiss newspaper and television journalists have highlighted apparent inconsistencies in WJC explanations of the funds, including the pensions’ intended beneficiaries and the reason for moving the money between banks.

Officials with the WJC now indicate that the organization might consider doing a new audit. But the showdown between the World Jewish Congress and one of its member communities over the open flow of information has exposed the broader difficulties that the WJC is going through right now, as it struggles, like many other Jewish organizations, to reform its organizational structure to deal with a changing Jewish community and become more open. A former president of Tel Aviv University, Yoram Dinstein, is currently heading up an effort to write a new constitution for the world organization and restructure its governing bodies.

“The idea is to have more democracy and more transparency,” Dinstein said. “Some people think I have invented the whole thing in Switzerland to show what has gone wrong, and how it can be better in the future. I must say I could have done things much more easily without the atmospherics.”

The current dispute erupted after Leibler, the organization’s Jerusalem-based senior vice president, issued a series of challenges to Bronfman over the organization’s governance and finances. Bronfman’s defenders say that Leibler, an Israeli hawk, began his campaign only in response to public statements by Bronfman that he viewed as too dovish.

The Swiss Jewish community first ran up against the New York-based WJC leadership when the head office shut down its operations in Geneva last April — weeks before Donath issued his call for an audit. The former counsel at the office, Daniel Lack, had raised questions about the account before he lost his job and the office apparently closed. The WJC’s new administrator, Stephen Herbits, a longtime Bronfman aide, said that the Geneva office has in fact continued operating with a secretary while Herbits looks for new staff.

The World Jewish Congress was founded in Geneva in 1936 by Swiss Zionist leader Nahum Goldmann to mobilize opinion against the Nazis. Since World War II, the organization has structured itself as a confederation uniting local Jewish communal bodies around the world. Many observers say the reality has always been that of an organization run by strong leaders who set the agenda on their own, with little input from constituent communities. For the last two decades the leaders have been Bronfman, the billionaire beverage heir who has been president since 1981, and Singer, who recently retired as secretary general and took the title of chairman.

This was not considered a problem as long as the organization was pursuing a clear project. Recently, though, the WJC has struggled to find a defining mission. The WJC has held many meetings and conferences about global antisemitism, but it is one of dozens of groups leading the way on this issue. Now, more questions are arising about the structure and purpose of the organization.

“It’s the crisis of an organization that does not have a big topic that they are going after,” said Andreas Mink, the former editor of the transatlantic newspaper Aufbau, who co-wrote a lengthy article about the Donath dispute for the leading Swiss daily, Neue Zurcher Zeitung.

But the Swiss actors involved in this drama also have come to the table with their own histories. One of the most critical and widely read Swiss journalists covering the $1.2 million account has been Daniel Ganzfried, an editor at Facts. Ganzfried is a Jewish journalist who attracted notice for exposing Holocaust memoirist Binjamin Wilkomirski as a fraud. In interviews, Ganzfried voices suspicion of much of the Jewish community’s tactics in dealing with the Holocaust in the last decade, at one point voicing approval of historian Norman Finkelstein’s highly critical book, “The Holocaust Industry.”

“My motivation stems back from 1998,” Ganzfried told the Forward. “The whole business about remembering the Holocaust — about discussing it and debating it — became a deal of blackmail.”

A Swiss Jewish weekly, Tachles, also has pursued the issue of the WJC bank account aggressively. Swiss newspapers have not turned up much beyond the initial information reported in Jewish newspapers, including the Forward, in September. But they have focused more attention on the period during which the account came under the custodianship of Zvi Barak, a Tel Aviv lawyer, who has worked with Singer on restitution matters in the past.

Herbits, the WJC administrator, traveled to Geneva last week to talk with lawyers about possible legal action against some of the Swiss journalists.

The WJC has had an audit done by the accounting firm it normally employs, which was also reviewed by two European financial firms. A few weeks ago, Herbits showed this audit to Donath, who was unsatisfied and asked for a new audit by a company that had never done business with the congress. Herbits said Donath’s rejection of an approved audit showed his motivations were “political.”

The European Jewish Congress has lined up behind the world organization and said that if Donath did not withdraw his objections before Monday, Switzerland’s “mandate as a member of the EJC Presidium will be suspended.”

Swiss journalists have pointed out that the European Jewish Congress receives $500,000 yearly from the WJC. Unlike many organizations, the WJC helps pay for many of its members, rather than the other way around. Dinstein, who is helping to reform the WJC, said this is a problem beyond the situation in Switzerland, as it gives communities less influence with the congress. Dinstein said he hopes to change that in his reforms.






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