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Accounting Shift at Claims Conference

As the Conference on Jewish Material Claims Against Germany held its annual board meeting this week, it took a step that may help it fend off recent charges of financial mismanagement.

A few days before the annual meeting of the Claims Conference — the international body charged with negotiating Holocaust restitution settlements — the organization announced that it would be more direct in the accounting of its real estate assets. The Claims Conference owns hundreds of millions of dollars worth of unsold Jewish properties in East Germany.

The move comes after independent auditor Ernst & Young recommended in late June that the body start declaring the actual value of its property assets on its balance sheet, rather than the estimated value in a note attached to its financial statements.

While the procedural shift may seem like a technical detail, it appears to be part of a larger push on the part of the Claims Conference to demonstrate financial transparency.

The Claims Conference was recently fingered by newspaper reports that suggested it had problematic dealings with the March of the Living program, which is being investigated by the authorities in Israel. In addition, the newly elected president of the World Jewish Congress, Ronald Lauder, has in recent weeks made public statements to the press that the Claims Conference, with its reported $1 billion in assets, is in need of sweeping financial reform.

Some critics say that the Claims Conference may be trying to avoid the fate of the WJC, which was recently laid low by allegations of financial mismanagement.

“They’re getting scared because of all the scandals that took place with the World Jewish Congress, and they’d rather pre-empt any investigation by the attorney general,” said Leo Rechter, president of the National Association of Jewish Holocaust Survivors.

A spokeswoman for the Claims Conference, Hillary Kessler-Godin, said that the matter is a straightforward accounting issue. She explained that East German real estate holdings, which have been among the Claims Conference’s assets since 1994, were not previously as well documented because of the difficulty of determining the precise value of a property before it is sold.

According to the Claims Conference’s financial statements, in 2005 the total value of its unclaimed properties was about $50 million.

The Claims Conference has long been charged with failing to be upfront about its monetary worth, primarily by organizations of Holocaust survivors. In another indication of the Claims Conference’s apparent effort to rebuff critics, the group’s executive vice president, Gideon Taylor, delivered an unprecedented presentation to its 54-member board of directors, defending the organization’s financial transparency. Taylor addressed the board on the first day of its two-day meeting, held July 10 and 11 at the offices of New York’s UJA-Federation.

At that meeting, the board also approved the establishment of a search committee to find a replacement for outgoing president Israel Singer.


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