Pressure mounted Monday on the Claims Conference to launch a new probe into how the organization handled a tip in 2001 about fraud within the organization — eight years before the fraud was discovered at a cost of $57.3 million.
In a letter to Julius Berman, the organization’s chairman, the American Gathering of Jewish Holocaust Survivors and their Descendants added its voice to that of Jewish Agency Chairman Natan Sharansky in calling for an independent review.
The American Gathering letter came the same week that Reuven Merhav, chairman of the executive of the Claims Conference, is slated to lead an internal probe.
“While we do not question the integrity of Ambassador Merhav and the members of his committee, the process of providing answers to the entire board to the critical questions asked by World Jewish Congress President Ronald S. Lauder in his letter of May 17, 2013, must be able to withstand any and all scrutiny,” wrote Max Liebmann, senior vice president of the American Gathering.
In his letter, Lauder asked whether the 2001 tip — which came in the form of an anonymous letter — as well as subsequent communication about it among Claims Conference staff, was ever disclosed to the organization’s board of directors and/or the executive committee or other key professional staff. If yes, Lauder asked, when did that occur and was it noted in the minutes?
“If not, why not?” he asked.
Liebmann said in his letter that the American Gathering, which is a member organization of the Claims Conference, would like to know why the Claims Conference failed to follow up on the tip and why the board was not told of its existence.
“At the very least,” Liebmann wrote, the matter should be “referred to the Claims Conference ombudsman.”
The ombudsman, Shmuel Hollander, said the issue has not been referred to his office.
Liebmann said his members are “deeply concerned” by reports that the tip about the fraud may have come to the attention of a limited number of senior leaders of the organization in 2001.
“An independent inquiry by the ombudsman should therefore not be time-consuming or burdensome and could be completed well before the Claims Conference board meeting that will take place next month,” he wrote. “That way, the ombudsman will be able to give a comprehensive report to the Claims Conference board of directors in July.”
Liebmann’s letter was sent after Berman last Thursday wrote an 11-page letter to the Claims Conference board in which he explained what he did after learning of the 2001 tip. He said that as pro bono counsel to the organization at that time, he was asked to have two things done and that he sent to the results to the organization “to follow through.”
He did not specify what he did, but sources have said he asked a paralegal in his firm to meet with the Semen Domnitser, who was convicted last month of fraud in connection with the embezzlement of funds from the two funds he oversaw. The paralegal also is said to have examined the operation of the claims processing office and to have recommended that Domnitser be questioned further.
Berman wrote that he was puzzled by Sharansky’s request for an outside probe because “you must be aware that we had two of the most independent public entities in the world handling the investigation of the ‘embezzlement of funds’ — the United States Department of Justice and the Federal Bureau of Investigation.”
“Is it even possible to identify more public, independent and effective bodies than those?” he asked, adding that an international auditor hired by the German government developed corrective procedures to make sure there is no reoccurrence.
Although the FBI was given a copy of the 2001 anonymous tip, it is believed to have concentrated on the fraud and not how the Claims Conference handled the tip.
In his letter, Sharansky had written that the Claims Conference “must not only be honest, effective and transparent, it must be universally seen as above suspicion and without personal interest.”
He said recent allegations surrounding the fraud have “now cast questions on the degree of alertness and vigilance of the higher levels of management and leadership [that] could severely damage the public trust in the important mission of the Claims Conference.
“I write to urge you in my capacity as executive vice president of the Claims Conference to establish an independent public committee composed of distinguished individuals who are not connected to the board or its beneficiary organizations. The committee should examine Claims Conference procedures and its structure in addition to examining all the relevant events and circumstances.”
Although noting that Berman had appointed a committee of the board to investigate the matter, Sharansky said it is “not enough to dispel the unfortunate and harmful cloud of suspicion raised in the public discourse. We cannot investigate ourselves or our colleagues or our benefactor and expect to resolve the doubts and concerns.”
Although Lauder has not asked for an independent investigation, he has established a task force headed by Michael Schneider, the WJC’s secretary general, its new CEO, Robert Singer, and general counsel, Menachem Rosensaft to monitor the work of Merhav’s committee and its recommendations.
“We will then act accordingly,” Rosensaft told The Jewish Week.