WJC Sues Whistleblower for Defamation

By Nathaniel Popper

Published March 03, 2006, issue of March 03, 2006.
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Following the release of a stinging government report on financial mismanagement at the World Jewish Congress, the organization struck back with a $6 million defamation lawsuit against the whistleblower behind the investigation. Now the hardball maneuver is causing a new set of headaches for the group, with its Australian affiliate threatening to quit the organization.

The Australian affiliate sent a letter Tuesday to the WJC’s president, former beverage magnate Edgar Bronfman, objecting to the suit against the whistleblower, Isi Leibler. A resolution passed by the Executive Council of Australian Jewry called the suit “vindictive” and “vexatious” and asked that it be withdrawn.

Grahame Leonard, the president of the Australian executive council, told the Forward that his country’s Jewish community might stop participating in the WJC — a confederation of national Jewish organizations from around the globe — if the lawsuit is not dropped in 30 days. Leonard also said he would try to rally Jewish communities in other countries that belong to the WJC.

The flap is the latest in a series of controversies that have plagued the WJC, a lead player in maintaining Jewish ties with the Vatican and fighting for Holocaust restitution and reparations. Last month, the office of New York Attorney General Eliot Spitzer issued a report on the WJC outlining serious financial mismanagement, including hundreds of thousands of dollars of improper payments and loans to its former chairman and secretary general, Rabbi Israel Singer. Leibler claimed the report vindicated his calls for reform, but WJC officials highlighted its conclusion that no money had been stolen and filed their suit against Leibler.

Leibler, a former WJC official who was thrown out of the organization after a series of public complaints about Bronfman and Singer, said he is currently preparing his response for the Israeli court and is considering a countersuit against the WJC for defamation.

Leibler was previously the president of the Australian council, but he moved to Israel seven years ago and has received little public support from the Australian executive council during his two-year battle with the WJC. In its recent resolution, however, the executive council’s resolution says that the New York attorney general’s report “vindicates the stand taken by” Leibler.

“If this legal action proceeds it will do harm to the WJC’s reputation, which has already been damaged,” said Leonard, the head of the Australian executive council. “This case will also divert key resources away from the WJC’s mission.”

The WJC had not yet received the letter from Leonard, but a source close to the organization said the WJC is pressing the suit in order to recoup funds lost in the battle with Leibler. The source said that the WJC would look into dropping the suit if another party came up with the money.

The report from the attorney general cleared the WJC of any “criminal conduct” but outlined what it called a number of “failures in the proper administration of charitable assets.” The report was particularly critical of Singer, the former chairman of the WJC’s governing board, who was forced to step down from any positions of financial oversight at the organization. The attorney general’s office began its investigation of the WJC after Leibler publicly raised questions about $1.2 million that had been transferred by Singer from the organization’s Swiss bank account.

Since the attorney general’s office released its report, the WJC has taken steps to revamp its international profile. Singer, now the chairman of the WJC’s policy council, has helped launch a campaign to denounce Iran’s efforts to acquire nuclear weapons and is in talks with the Vatican to organize interfaith talks involving Jews, Catholics and Muslims.

Still, the organization continues to be faced with controversies. In addition to the Australian opposition to the suit against Leibler, the WJC is also facing new criticism in Israel from an accountant who resigned earlier this month.

The accountant, Shmuel Zalait, dealt with finances at the WJC’s Israeli section and the WJC’s research institute in Jerusalem. After leaving his job, Zalait wrote a scathing letter to his bosses in which he complained about a lack of financial accountability in the Israeli operations, according to reports in the Israeli newspaper Globes. According to Globes, Zalait said that a financial report he authored was rejected by officials at the WJC’s Israeli section and replaced with one that left out portions that were critical of the organization.

One of the people discussed in Zalait’s letter is Zvi Barak, an Israeli lawyer who was also a central figure in the report from the attorney general’s office. The attorney general’s report stated that Barak could have no future role in the WJC due to his failure to provide written documentation for what he did with the $1.2 million from the Swiss bank account after Singer put it in his control. The WJC has said that Barak never had any official role at the organization. But Zalait, according to Globes, writes that Barak asked him to pay an employee without deducting taxes.

A spokesman for the WJC in New York, Avner Tavori, said that the problems with Zalait have nothing to do with the international organization because WJC’s Israeli operations are completely independent of the WJC’s New York operations. But Leibler, who was previously on the WJC’s operations committee, said that the Israeli branch had operated as a subsidiary of New York during his time at the organization.

Leibler remains defiant in the face of the defamation lawsuit against him. He says that he was prepared to leave his battle with the WJC behind after the attorney general’s report came out, but he says he now intends to bring forward new damaging information about the WJC in order to beat back the lawsuit.

“If necessary, I intend to expose many things that did not come out in the public until now,” Leibler said. “I’m aware of many other aspects that were not covered by the attorney general’s report.”

Leibler has publicly attacked the WJC for using organizational funds to pursue its lawsuit against him. The suit will cost the WJC close to $150,000 just in filing fees.

The New York attorney general’s office said it was not taking issue with the lawsuit.

“There is no plan for a specific review of the matter, but because of past issues with WJC, we are monitoring the organization,” said Darren Dopp, a spokesman for the attorney general.

Leonard, the president of the Australian executive council, said that he had hoped the battles of the last two years would be left behind after the attorney general released its report. But, Leonard said his concerns began when he attended a governing board meeting of the WJC earlier this month, just days after the attorney general’s report was issued. According to Leonard, the WJC leadership did not provide delegates with a copy of the attorney general’s report, and presented the lawsuit against Leibler as a “done deal” with no “democratic process” behind the decision.

The WJC leadership is also embroiled in a separate legal tangle in Switzerland. After the management scandal first erupted, the WJC sued a Swiss journalist, Daniel Ganzfried, for articles about the organization and recently attempted to win an injunction to stop Ganzfried from writing new articles. Earlier this month, though, Ganzfried published the first in what is being billed as a multi-part series on the WJC in the Swiss newsmagazine Weltwoche. The WJC wrote a letter to Weltwoche this week objecting to Ganzfried’s statements about Singer’s use of the title doctor in official WJC documents. In the letter, the WJC said that Singer had acquired honorary doctorates from Touro Law Center and other schools.

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